TaxTMI 
TaxTMI 
2024 (9) TMI 505
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....s and in circumstances of the case, the Ld. CTT(A) is justified in nor appreciating the facts that in respect of cash payment to Devilal Bairwa and Ajay Modi and that the assessee failed to the discharge the onus to prove with explanation of the persons concerned in respect of these transactions. (iii) Whether on facts and in circumstances of the case, the Lil. CIT(A) is justified in deleting the addition of Rs. 9,75,000/- out of total addition of Rs. 20,22,500- on the account of unaccounted investment in agricultural land situated at Mandalia, Jhalawar Road, Keta which was made on the basis of incriminating documents impounded during the survey dated 04.02.2017, without appreciating the facts that the agricultural land belong to SC/ST category which cannot be transferred in the name of Naresh Jain, the assessee made an arrangement to make it registered in name of Devilal Bairwa of SC category and occupied it. (iv) Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in deleting the addition of Rs. 9,50,000/- on account of unaccounted investment in ST land situated at Mandana Kota. (v) Whether on facts and in circumstances of the case, the Ld. CIT(A)....
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....provision of law and facts may kindly be deleted in full. 6. The Id. AO further erred in law as well as on the facts of the case in imposing tax, surcharge, cess etc, as per provision of S. 115BBE of the Act. The invoking of 8.115BBE is contrary to the provisions of law, on facts and without jurisdiction. The appellant totally denies its liability. The tax liability no created, kindly be deleted in full. 7. Rs. 55,490/ The Id. CIT(A) also erred in law as well as in fact to the case in confirming the addition made by the AO u/s 69C on account of the unexplained agricultural expenses. The addition so made and confirmed being contrary to the provision of law and facts may kindly be deleted in full. 8. Rs. 33,43,380/- The Id. AO erred in law as well as on the facts of the case in charging interest u/s 2344 & 234B of the Act. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full.'' 2.1 It may be noted that both the appeals are cross appeals against the order of CIT(A) dt. 25.01.2024. Since the ld. CIT(A) has already stated the relevant facts hence, the same....
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....ase be referred, which is reproduced herein below : "Instances have come to the notice of the Board where assessee have claimed that they have been forced to confess the undisclosed income during the course of the search & seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessee while filing returns of income. In these circumstance, on confessions during the course of search & seizure and survey operations do not serve any useful purpose. It is, therefore advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Departments, Similarly, while recording statement during the course of search & seizures and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, assessing officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant a....
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....idence is found in support of such admission. We are also of the view that the statement recorded at such odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence there is no reason not (sic) to disbelieve the retraction made by the AO (sicassessee) and explanation duly supported by the evidence. We are, therefore, of the view that the Tribunal was not justified in making addition of Rs. 6 lacs on the basis of statement recorded by the AO under s. 132(4) of the Act. The Tribunal has committed an error in ignoring the retraction made by the assessee." 2. Admission retracted / Not acted upon - Hence addition invalid: 2.1 Unfortunately, in present case the AO ignored the settled legal position that a person making a statement is legally entitled to retract from what it had stated earlier. It has been held that an admission, though best evidence against such a person, if shown to be out of ambiguity, under tension or was against the facts or misconception of law, can be validly retracted. The assessee repeatedly submitted that it had prepared a retraction letter supported by affidavi....
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....y. 1, therefore, immediately went to the Income Tax Office, CAD Road, Kota - Room No.217 at around 7 PM but no official who came for survey was present there. Therefore, I rang up Shri Dinesh Gehlot, Commissioner but as soon as I started talking to him about the media news of my declaration of undisclosed income, he disconnected the call. Thereafter, I tried to contact Shri Mukesh Ji Sharma (ITO) but he also did not meet me. Thereafter, I called Mr. Jakhad, Jodhpur who informed me that as per my statement on various points, I have mentioned some amount which amounts to approximately Rs. 9 crs and this is the amount which I have surrendered in my statement. 8. THAT I am not aware that what has been recorded by the survey team in my statement recorded in survey as I was not given any opportunity to understand and read that statement. These statements were recorded under coercion and undue influence; therefore, I disown the statement recorded in course of survey. 9. That I assure that after obtaining the various documents impounded from me and. after analyzing the same, if any unrecorded income is found, I will disclose the same in the return of income. 10. Whatever declaration ....
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....ssure was built on the assessee to make the said statement and all material found during search was duly explained by assessee on which no adverse comments was made by the AO. This decision contains various references and relevant extract quoted from various case laws. 2.4.4 Further kindly refer Polat Marmo Agglomerates Ltd vs. Union of India (1994) 73 ELT 536 (Raj.) wherein it was held that the admission made in ignorance of correct position of law and facts are not binding upon a party. 2.4.5 Similarly, in the case of Ambalal vs. Union of India (1983)13 ELT 1321 (SC) it was held that confessional statements recorded under threat, coercion, inducement or promise are not valid but persons concerned should take care to retract such confessions without delay. Retraction would then be weighed in the light of other evidence available 2.4.6 The Hon'ble Supreme Court in Vinod Solanki v/s Union of India (2009) 233 ELT 157 (SC) makes it abundantly clear that the issue of summons and obtaining statements from the persons summoned, cannot and should not be the only basis to make out a case by the Revenue against the assessee. The Hon'ble Supreme Court took into account the fact that th....
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....iminating material' has been used very often, but the point here is that what is the meaning of 'incriminating material' or in other words what meaning can be attributed to 'incriminating material', as the same is the main bone of contention while framing the search assessment order under section 153A/153C and the same has not been defined under the Act. Therefore, it is imperative to understand the meaning of the word 'incriminating material'. Practically stating it can be stated that the 'incriminating material' can be in any form such as a document, content of any document, entry in the books of account, an asset etc. [Para 8.5] Any fact/evidence which could suggest that the documents/transactions claimed or submitted in any earlier proceedings were not genuine, being only a device/make belief based on non-existent facts or suppressed/misrepresented facts, fulfilling the ingredients of undisclosed income, would constitute an 'incriminating material' sufficient to make assessment for the purposes of the Act. [Para 8.6]" 3.2 PCIT, Delhi-2 v. Best Infrastructure (India) (P.) Ltd.* [2017] 84 taxmann.com 287 (Delhi) Hon'ble High Court o....
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....interpretation of the provisions. 4.3 Reliance placed on: 4.3.1 CIT v. Khader Khan Son (2008) 300 ITR 157 (Mad.) (HC). Affirmed by Apex Court in, CIT v. S. Khader Khan Son (2012) 210 Taxman 248(2013) 352 ITR 480 (SC) / (2012) 25 taxmann.com 413 (SC). 4.3.2 Moreover in a comparatively recent case of Pr. CIT, Central -2, New Delhi v. Meeta Gutgutia [2017] 82 taxmann.com 287 (Delhi) Hon'ble Delhi High Court referred to the decision of the Kerala High Court in Paul Mathews & Sons v. CIT [2003] 263 ITR 101/129 Taxman 416 and of the Madras High Court in S. Khader Khan while considering distinction between statements under Sections 132(4) and 133A held as under: "40. The main plank of Mr. Manchanda's submission was that the disclosure made by Mr. Pawan Gadia in his statement under Section 133A was sufficient to be construed as incriminating material qua all the aforementioned AYs, the assessment for which could be re-opened by invoking Section 153A of the Act. It is significant that while in the written submission dated 26th April, 2017, Mr. Manchanda termed the statement of Mr. Pawan Gadia as "the statement dated 23rd December, 2005 recorded under Section 132(4) of the Act",....
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....nt case, it would be wrong on the part of the Revenue to characterize the statement of Mr. Pawan Gadia as by itself an incriminating material that could be used for making additions in all the AYs in question apart from the year of search." 4.3.3 Covered issue: This Hon'ble ITAT in the case of Unique Art Age v. AO [2014] 50 taxmann.com 194 (Jaipur - Trib.), has also taken similar view holding that: "3.8 Effect of admission made in statements recorded during survey under section 133A of the Act 18. The position of law regarding the evidentiary value of admissions made in such statements is now settled. After considering the rival stands on this issue, we have already discussed the same in the earlier part of this order. No admission made in a statement recorded under section 133A on oath during survey can be relied as evidence against the maker or the assessee. Undeniably, the Assessing Officer has made impugned addition on the basis of the statement of Shri Manohar Lal Agarwal and specifically by relying on his reply to question No. 23 of his statement. As per the assessment order, the excess stock of Rs. 5,08,98,166 has been worked out after giving the benefit of discount an....
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....para 4.5 and finally the ld. CIT(A), after considering the detailed submissions, the remand report, rejoinder made before him, at Page 52, Para. 4.6 concluded in following words: "4.6.1 The discussion on various additions against which appeal has been filed are being discussed as under. i. Addition for payment for land of Rs. 20,22,500/- ( Revised Ground No. 2) In this case, the AO noted that in reply to Q No. 23 of his statement recorded during survey action u/s 133A on 04.02.2017, Sh. Naresh Jain explained that these documents relate to purchase of agriculture land at Khasra No. 495/ 251, Mandalia, Jhalawar Road, Kota. He explained that the total price of land is Rs. 19,50,000/- wherein Shri Naresh Jain holds 50% share only. The remaining 50% share is held by Shri Devilal S/o Bhawani Shankar Bairwa. Shri Naresh Jain again admitted that he paid a sum of Rs. 9,75,000/- towards his share in cash. During the course of assessment proceedings, the appellant stated that the amount given as Advance to Devi Lal Bairwa has been accounted for in the Balance Sheet of Naresh Jain on 31.03.2016 relevant to A.Y. 2016-17 and be appropriated out of income declared Rs. 46,43,094/-. The A....
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.... raised by assessee does not survive. [Para 9]" The ITAT while giving decision has relied upon the decision of Supreme Court and High Courts. It is clearly held that survey was validly conducted, therefore, objection of assessee regarding evidentiary value of statements recorded during survey does not survive. In this case also there is no dispute that survey was validly conducted. Therefore, the statement recorded during survey is a valid piece of evidence. The next objection of the appellant is that statement on oath could not be recorded in course of survey. This issue is covered by the decision of the Bombay High Court in the case of Dr. Dinesh Jain v. ITO [2014] 363 ITR 210/226 Taxman 27/45 taxmann.com 442 and, therefore, this objection raised by assessee does not survive. The appellant also raised the plea that the statement was retracted. On perusal of the facts, it is seen that the retraction was filed late and the same was not supported by credible evidences. The retraction is therefore only assertion without any supporting evidences. It is noticed that various judicial authorities have held that a statement recorded under oath is an important piece of evidence and t....
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....ial discovered at time of search no addition could have been made merely on basis of statement under section 132(4) and (b) that impugned disclosure under admission was obtained forcefully and, hence, not binding - Whether statement recorded under section 132(4) is an evidence by itself and any retraction contrary to that should be supported by strong evidence for demonstrating that earlier evidence recorded was under coercion - Held, yes - Whether assessee retracted from his earlier statement without demonstrating any evidence to establish that statement recorded earlier was incorrect; an allegation of compulsion or coercion must not be accepted merely on a statement if remained unsubstantiated - Held, yes - Whether, therefore, addition made on basis of statement recorded under section 132(4) was to be upheld - Held, yes [In favour of revenue]" In this case also the Assessing Officer made additions in as admitted in the statement under oath. However, after lapse of long period from date of admission, assessee through an affidavit sought to retract from statement made under oath on ground that (a) when there was no evidence or incriminating material discovered at time of search n....
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.... ITO that amount shown in document with regard to purchase of four properties were not actual amounts and he had paid more than that shown in documents - Second addition was with respect to personal expenses - Last additions was of amount of Rs. 3 lakh which assessee claimed as an NRI loan in his cash flow statement and later in a reply stated to be a loan from his elder brother - Later on, assessee retracted from his statement and contended that admissions were made under threat and coercion - Tribunal allowed appeal of assessee and held that no evidentiary value could be attributed to statement under section 132(4) especially in context of there being a retraction and that for making additions, Assessing Officer should necessarily unearth materials during search - Whether on retraction being filed by assessee, there was a burden cast on assessee to prove detraction or rather disprove admissions made - Held, yes - Whether since assessee failed to prove any threat or coercion and had voluntarily disclosed his income by making statement under section 132(4), it could be said that retraction made by assessee was a self-serving after thought and no reliance could be placed on same to ....
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....ustified. In view of these facts, the addition made by the AO is reduced by Rs. 9,75,000/-. The appellant gets a relief of Rs. 9,75,000/-. Remaining addition amount of Rs. 10,47,500/- is confirmed. The appellant gets a partial relief. The ground number 1 is treated as partially allowed." Hence this ground. Submission: 1. At the outset we strongly place reliance upon our detailed submissions made before AO as also before the CIT(A). 2. We also place strong reliance upon the order of the CIT(A) (Pg.62) to the extent his findings and observations are given in the favour of assessee. 3. We respectfully submit that the Revenue's grounds lack merit for the following reasons: 4.1 No evidence found supporting the addition: The undisputed facts are that, Annex-A, Exhibit-4 Pg.1-9 being Purchase agreement registered on 29.06.2015 (APB 34-41) who is the buyer and the legal owner over the agricultural land for consideration of Rs. 19,50,000/- plus expenses of Rs. 72,500/- totaling Rs. 20,22,500/-. The assessee never signed the said document, nor he has been a party to the transaction, which is again an undisputed fact on record. Thus, for all intent and practical purposes, as....
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.... granting relief of Rs. 9,75,000/-. Once he has already granted relief to the extent of Rs. 9,75,000/-, there is no reason why the balance amount of Rs. 10,47,500/- be not deleted, which was a part of the purchase consideration already paid by Shri Devilal to the seller at the time of purchase long back. 5.1 Reply filed during Remand Report (reproduced in CIT(A) order at pg. 37): "vide Exhibit-4, Page 1 to 9 is a registered sale deed in the name of Shri Devi Lal (APB 34-45) for purchase of agriculture land admeasuring 0.64 hectare situated at Mandalia for consideration of Rs. 3,00,000/- and agreement to sell between the sellers and Shri Devi Lal for sale consideration of Rs. 19,50,000/- and Exhibit-9, Page No. 2is related to expense on purchase of alleged land at Mandalia which includes cost of land of Rs. 19.50 Lakhs and expenses of Rs. 72,500/-. The registered sale deed was duly executed on 29.06.2015. (APB 34-41) However, In January, 2016, Shri Devi Lal, on account of financial needs, approached the appellant and expressed his willingness to sell half of his share of the said land. The appellant accepted his proposal at price of Rs. 9.75 lacs as per Ikrarnama dated 01.05.2....
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....hat in respect of cash payment to Devilal Bairwa and Ajay Modi and that the assessee failed to the discharge the onus to prove with explanation of the persons concerned in respect of these transactions." D-GOA-3: Deletion of Rs. 9,75,000/- (out of Rs. 20,22,500/- w.r.t. unexplained investment in purchase of land): Facts: As discussed in AGOA-3 above, Revenue in this ground of appeal raised the following issue: "Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in deleting the addition of Rs. 9,75,000/- out of total addition of Rs. 20,22,500/- on the account of unaccounted investment in agricultural land situated at Mandalia, Jhalawar Road, Kota which was made on the basis of incriminating documents impounded during the survey dated 04.02.2017, without appreciating the facts that the agricultural land belong to SC / ST category which cannot be transferred in the name of Naresh Jain; the assessee made an arrangement to make it registered in name of Devilal Bairwa of SC category and occupied it." Submission: 1. At the outset it is submitted that the assessee vide AGOA-3 had already challenged the confirmation of addition of Rs. 10,47,500/-[20,22....
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....t being pressed) whereas, addition of Rs. 40 lac was deleted, against which the department is not in appeal. The facts as noted by the ld. CIT(A) and his findings at Pg.57 are as under: "ii. Addition of Rs 1,58,00,000/- on the basis of certain documents impounded and statement of appellant recorded u/s131 ( Revised Ground No. 3 and 4) The AO noted that during the survey action u/s 133A of the I T Act at office premises of Shri NAresh Jain some incriminating documents were seized and inventorised. In his statement recorded during survey action, Sh. Naresh Jain explained that these documents relates to agreement for running of Bhagat Public School entered between Shri Naresh Jain and Shri Ajay Modi. This agreement was entered on 16/10/2015(APB49-52). This agreement contains information in relation to payments to Shri Ajay Modi and various expenditures incurred forBhagat Public School, which are analyzed as follows:- -------xxx-------xxx-------xxx-------xxx-------xxx-------xxx-------xxx------- From above chart and further acceptance of Shri Naresh Jain in his statement, a sum of Rs. 1,35,00,00/- was paid through cheque and balance Rs. 1,65,00,000/- was paid in cash. The cash....
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....eged statement does not have any evidentiary value. The evidentiary value of the statement is already discussed in the preceding paragraphs. In view of the discussion made earlier, the outright retraction made by the assessee is not found to be acceptable and rejected. However, the documentary evidence to clarify the admission made is admitted in the interest of justice. It is argued that during the course of assessment proceedings the appellant has furnished the chart of amount paid to Ajay Modi in respect of Bhagat Public School. It is argued that the appellant has given advance of Rs. 65 lacs only out of which Rs. 58 lacs was paid during the same financial year and balance of Rs. 7 lacs in immediate succeeding financial year. The appellant has accepted payment of Rs. 1.65 lacs out of which Rs. 1.58 lacs was paid during this year and balance of Rs. 7 lacs in immediate succeeding year. Hence, there is no dispute on this amount. Therefore, the addition made by the AO of Rs. 58,00,000/- is found to be justified to this extent for this year and confirmed. Rs. 7,00,000/- is considered in the AY 2017-18. The appellant also submitted that amount of Rs. 40 lacs paid by his wife Nis....
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....rther stated that source of such advance of Rs. 58 lacs is treated as application of additional income declared by the appellant on which tax liability has been duly discharged. The claim of the appellant is with regard to giving telescoping benefit for showing availability of cash in the hands of the appellant. This issue is being dealt while deciding the ground number 7 of revised grounds of appeal It is argued that no inquiries have been made from Shri Ajay Modi to whom the alleged amount of Rs. 1.58 crore was alleged to be paid. The argument of the appellant are not relevant for the case of the appellant as the appellant has accepted making payment in cash in his statement. Whether inquiry is made from the receiver or not is of no consequence in the case of the appellant. Hence, the argument of the appellant is not found to be relevant and the same is rejected. Accordingly as discussed above, the addition of Rs. 20,22,500/- is restricted to Rs. 10,47,500/- and relief of Rs. 9,75,000/- is provided to the appellant (ground no. 2). The addition of Rs. 58,000/- and Rs. 60,00,000/- is confirmed (ground no.3). The addition of Rs. 40,00,000/- is deleted (ground no. 4). Ground nu....
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.... specific amounts payable towards a specific job goes to show that the parties agreed for making payment on or in relation to the specific jobs mentioned there against. 2A 1.3 Secondly and pertinently, there is no date mentioned against the entry at serial number 3rd of Rs. 60 lakhs which is left blank as against the other entries when cash payments have been made (either the month or a specific date is mentioned as is the case at serial numbers 5, 6, 8 to 10). The other impounded documentA-11, Pg. 7 backside (APB46) which contains the details of cash payment of Rs. 34 lakhs, is also silent on this aspect. There is no specific question raised by this survey team noticing this fact of absence of the date of cash payment. The law is well settled that evidence has to be read in its entirety and it is not permissible that a part which suits a party is considered but the other part is ignored which doesn't suit him. 2A 1.4 Moreover, the ld. CIT(A) has contradicted its own contention in as much as while granting relief of Rs. 40 lakh, which was not answered while recording the statement during survey, yet it was not objected to (that Rs. 40 lakh was paid by Nisha Jain were record....
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....kam pratham paksh ke pass jama hai" The amount kept deposited means it was already paid prior to agreement dt.16.10.2015. 2A 2.2 The said agreement also refers to some older agreement dated 16.05.2013 entered between the parties which was for the period ending on 31.03.2016. There apart, in the table (AO Pg.5) where other payments have been shown, like the entries of Rs. 3 lakh is dated 24.05.2013, Rs. 10 lakh is dated 15.06.2013, Rs. 5 lakh is dated 05.07.2013 and so on. This goes to show that the parties acted upon the earlier agreement of 2013, which continued and was renewed in October, 2015 for further terms up to 30.09.2019, which supports the contention that Rs. 60 lakhs (even assumed) was paid in FY 2013-14 (AY 2014-15) only and not in this year (although this contention might not have raised earlier but, this being a pure legal plea, based on the facts already available on record, is fully permissible to the parties to take as per settled law). 2B. As regards alleged cash payment of Rs. 58 lacs: On this aspect, the assessee already admitted additional income but requested for giving benefit of telescoping which was accepted by the CIT(A) while dealing with GOA-7 befo....
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....s 133A of Income Tax act 1961 including page No 12 of Exhibit-11, and clarified that the expenses were incurred on agriculture activities by the appellant and Shri Devi Lal on 50:50 basis of total expenses of Rs. 55,490/- being Rs. 27,745/- and the appellant has paid the above said sum of Rs. 27,745/- out of the cash balance/funds available with the appellant" (i) It is very humbly submitted that despite details and page wise explanation for page No 12 of Exhibit -11 submitted by the appellant, L'd Assessing Authrotiy, placing undue importance and emphasis to recorded statement of appellant has added Rs. 55,490/- to the income of appellants, sans any bsis and cause and needs to be deleted. (ii) It is humbly submitted that L'd Assistant Commissioner of Income Tax, Kota has simply stated in his remand report that 'The reply of the assessee has been perused but the same can't be acceptable at this level, as the matter is under consideration before the Appellate Authority. Further, the assessee had also not submitted satisfactory documents in support of his claim. The Assessing Authority has not considered the fact and supporting documents submitted by the appellant. He has simply ....
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....appellant in their Personal Balance sheet as on 31/03/2017. In one palce the appellant is relying on books of accounts and at another place, it is claimed that the books are not maintained. The argument of not maintaining books of accounts is therefore, not found to be maintainable and rejected. It is argued that the appellant has given aggregated advance of Rs. 34.50 lacs to Shri Deva Bhadak Gujar at various dates. The detail of advance given as reflected on Page No. 1 of Exhibit - 9 impounded during Survey proceedings u/s 133A of the Act are as under: ---------xxx--------xxx--------xxx--------xxx--------xxx--------xxx-------- It is stated that the said page was confronted to the appellant while recording his statement during the course of survey and the appellant has replied that he had given advance of Rs. 10,00,000/- on 27/01/2015 and Rs. 9,50,000/- on 04/11/2016 in cash and Rs. 15,00,000/- on 24/03/2015 through Cheque and advance given in cash is not recorded in books of account. It is noted that the advance given of Rs. 10,00,000/- on 27/01/2015 has been accepted by the appellant for AY 2015-16 under the VsVs Scheme. Therefore, there is no reason for not accepting the ....
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....t of telescoping given by the CIT(A) however, it is noticed that the working done by the CIT (A) suffers from some legal & factual infirmities and benefit of telescoping has to be further recomputed based on the result of the ITAT order in relation to various grounds taken by both the parties, hence the following Additional Ground of Appeal, which is a pure legal ground of appeal may kindly be admitted considered and oblige: "Addl-AGOA-10: The ld. CIT (A) erred law as well as on the facts in not properly computing and providing the benefit of telescoping. Moreover, such computation has to be revised in the light of the result of the ITAT Order. Hence such benefit of telescoping may kindly be recomputed in accordance with law and facts and benefit be allowed to the assessee." It is submitted that the above is a purely legal ground of appeal, which do not require any fresh investigation of fact in as much as the same are already available on record. We rely on National Thermal Power Corporation Ltd. 229 ITR 383 (SC). Hence, the above ground may kindly be admitted, considered and oblige. DGOA-5: Telescoping benefits of Rs. 1,00,30,778/-: Facts: The ld. CIT(A) has dealt with a....
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.... during AY 2015-16. Accordingly, the appellant claimed that Rs. 51,84,484/- (63,44,484-11,60,000) was available cash as on 31-032015. The appellant also stated that during the year also the cash was withdrawn by the assessee as under - AY 2016-17 (Rs. 48,46,294/-) Return filed on 31.03.2017. The same assessed on 21-12-2018. The assessee claimed this amount as income from other sources. This amount was in the form of cash withdrawn from excess salary claimed to be paid to employees in Bhagat Public School. The appellant has offered this amount in the assessment proceedings of AY 2016-17. The AO made addition of Rs. 48,46,094/- u/s 69A and taxed the same 115BBE of the Income Tax Act. The appellant has not furnished any appeal on the addition made in this regard. Therefore, it is considered that the appellant has accepted the addition made. Accordingly, the appellant claimed that Rs. 1,00,30,778/- (51,84,484/- + 48,46,294/-) was available with the assessee. Therefore, against the additions confirmed during the year the set off should be given for the cash which is already offered for tax by the assessee. The appellant has also relied upon decisions as discussed above. The a....
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.... could then very well be that the undisclosed income earned in the form of cash which had been offered for taxation constituted the fund from which this application of cash is made. In the case of Addl. CIT v. Dharamdas Agarwal, it was held that when cash credits were treated as income from undisclosed sources, the assessee can take an alternative contention before the Appellate Assistant Commissioner that the cash credits were out of undisclosed income taxed in earlier years and the assessee is entitled to raise such alternative plea before the Appellate Assistant Commissioner for the first time. - [Addl. CIT v. Dharamdas Agarwal- (1983) 144 ITR 143 (MP)] In the case of CIT v. K.S.M. Guruswamy Nadar and Sons, it was held by the Madras High Court that when there are two separate additions, one on account of suppression of profit and another on account of cash credit, it is open to the assessee to explain that the suppressed profits had been brought in as cash credits and one has to be telescoped into the other resulting only in one addition. It was, therefore, held that the Tribunal was right in its view in telescoping the additions made towards the cash credits. - [CIT v. K.S.....
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....he assessee is able to explain the source out of undisclosed cash offered for taxation as indicated above. This ground of appeal is treated as partly allowed." Hence this ground. Submission: 1. In this ground, the Revenue has challenged the benefit of telescoping given by the CIT(A) of the availability of income of Rs. 1,00,30,778/- against the additions sustained by him to the extent of Rs. 28,72,212/-. The facts are not denied that the assessee has surrendered additional income of Rs. 1,00,30,778/- based on the detailed submissions dt. 10.01.2024 reproduced at Pg.65, Pr. 5.1 and another submissions dt. 20.01.2024 at Pg.68, Pr.5.2. 2. The Revenue has not brought anything on record to show that the additional income so offered in various years detailed below stood utilised elsewhere and was not available for the undisclosed income/undisclosed investment made by the assessee in this year to the extent, they were confirmed by the CIT(A). Kindly refer following table showing year wise surrender of income: Sr No. Asst. Year Amount (in Rs. ) 1. 2013-14 5,53,474 2. 2014-15 16,34,573 3. 2015-16 41,56,437 4. 2016-17 48,46,294....
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....issue of telescoping is no more Res Integra and rather a well settled principle because long back in the case of Anantharam Veerasingaiah & Co vs CIT [1980] 3 Taxman 56, the Hon'ble Apex Court has in principle agreed that the undisclosed income in one year will constitute a fund which can be drawn by the assessee later on and can be utilised for acquiring goods or in making investments, etc. and therefore, separate additions on both the counts cannot be made. 5.2 The Hon'ble jurisdictional High Court in the case of CIT v. Tyaryamal Balchand (1987) 165 ITR 453 (Raj) has also held so, following the aforesaid apex court judgement. Consequentially, CIT (A) was justified in principle (but not to the extent of reducing Rs. 11,60,000) and such computation for benefit of telescoping has to be revised in accordance with the result of ITAT order as aforesaid. Therefore, this ground of the revenue may kindly be dismissed. AGOA-6: S.115BBE wrongly invoked: Facts: The ld. AO while making various impugned additions, proposed to tax the income u/s 115BBE listed here under: * Rs. 20,22,500/- : on account of undisclosed income u/s 69 for purchase of agricultural land situated at village M....
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.... added u/s 68 or 69 etc. has to be given a specific head in terms of S. 14, 4.3 The Hon'ble Supreme Court in case of Karanpura Development Co Ltd vs. CIT [1962] 44 ITR 362 (SC) held that these heads are in a sense exclusive to one another and income which falls within one head cannot be brought to tax under another head. Further, the Hon'ble Supreme Court in case of Nalinikant Ambalal Mody v CIT [1966] 61 ITR 428, has held that whether an income falls under one head or another is to be decided according to the common notions of practical man because the Act does not provide any guidance in the matter. Of course, lot of judicial precedents are available to a taxpayer to arrive at a conclusion about determination of appropriate head of income. 4. Binding judicial guideline: The Hon'ble Rajasthan High Court as also Tribunals whose decision are binding upon the assessing officer as a juridical precedence have also been consistently holding so. Kindly refer: 4.1 The Hon'ble ITAT Jaipur, Jaipur in its decision in the cases of Smt. Rekha Shekhawat Vs. Pr. CIT (2022) 219 TTJ (Jp.) 761 & Shri Ram Narayan Birla in ITA No. 482/JP/2015 dated 30.09.2016 has held that unrecorded/....
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....ly the addition sustained by the Hon'ble ITAT in response to cross appeal filed by the assessee and Department can only be considered but that also being suppressed business income could not be subjected to S.115BBE by assessing as Income from Other Sources by any stretch of imagination. Alternatively and without prejudice, w.r.t. these additions, ld. CIT(A) has already granted benefit of telescoping and end of the day he confirmed the balance addition of Rs. 28,72,212/-( 1,29,02,990 less Rs. 1,00,30,778) (at CIT(A) order pg.72-73) upto which extent only it could be considered. In view of the facts & circumstances, judicial guidelines and the statutory provisions, the impugned additions sustained by the CIT(A) could not be subjected to S. 115BBE of the Act. Common submission: The AO and Revenue in its GOA have repeatedly relied upon the Survey statement of Shri Naresh Jain alleging admission made by him w.r.t. different addition which, are wrongly relied upon being survey statement and further once stood retracted, which has been elaborately submitted in this WS and may be considered towards all such grounds. AGOA-8: Charging of Interest u/s 234A & 234B: is consequential an....
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....Y. 2017-18 ITA No 374/JPR/2024(D), Nisha Jain A.Y. 2015-16 ITA No. 377/JPR/2024(D) & Nisha Jain A.Y. 2017-18 ITA No 378/JPR/2024(D) also, the Revenue has raised similar grounds/contentions on this very aspect and therefore, for the sake of convenience we are deciding this issue in this appeal. Accordingly, we have considered the findings recorded by the lower authorities on this aspect, the rival contentions and the decisions cited on the issue in hand at bar, in all these four appeals. Our findings on this issue follow hereinafter: 4.3 The short question raised in the modified ground appeal no. 2 by the assessee, to be decided is whether the statement recorded by the authorities during the course of survey carried out u/s 133A of the Act has evidential value so that the admission made, if any in such statement (whether on oath or otherwise), can be used against the assessee. We find that the statute has provided different provisions looking to the different factual situations w.r.t recording of the statement, which may be recorded with or without administering oath viz u/s 132(4) (in search cases), u/s 133A(3)(iii) (in survey case) and u/s131 (for general inquiry). No doubt, thes....
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....e it as such in the subsequent written submission dated 2nd May, 2017. This was for a good reason. The statement was in fact not under Section 132(4) of the Act but under Section 133A of the Act. There is a difference between a statement made during a survey under Section 133A of the Act and that made during the course of search under Section 132 (4) of the Act. Section 132(4) of the Act states that the authorized officer may, during the course of search and seizure, "examine on oath any person who is found to be in possession or control of any books of account, documents, monies, bullion, jewellery..."and that any statement made during such examination may be used thereafter in evidence in any proceeding under the Act. On the other hand, Section 133A does not talk of the recording of any statement on oath. Under Section 133A (3) (iii), the Income Tax Authority acting under the said provision could "record the statement of any person which may be useful for, or relevant to, any proceeding under this Act." Therefore, there is a considerable difference in the nature of the statement recorded under Section 132(4) and that recorded under Section 133A(3)(iii) of the Act. 41. This dist....
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....g on the statement of one of the partners of the assessee-firm. If the statement of Shri Manohar Lal Agarwal and others are excluded in view of the above legal position, the value of the alleged excess stock can be ascertained in the light of the facts of this case. The legal issue is decided in favour of the assessee" We also find support from Paul Matthew's & sons Vs CIT [2003] 263 ITR 101, S. Kadar Khan Sons [2008] 300 ITR 157 (Madaras) affirmed by Hon'ble Apex court in CIT Vs S. Kadar Khan [2013] 352 ITR 480 (SC). The reliance placed by the ld. CIT(A) on certain decisions are based on the peculiar facts available in those cases only not available in the present case. The ld. CIT(A) in his order in A.Y. 17-18 (in ITA No. 374/JPR/2024(D)) has wrongly placed reliance on the case of Ravi Mathur (RHC) incorrectly stating that the evidentiary value of the statement recorded during survey was upheld whereas, the said decision was rendered in the context of search u/s 132(4) of the Act and the bone contention raised by the assessee was that there is a significant difference between the language of S. 132(4) viz-a-viz S. 131(1) and S. 133A for that reason, which aspect, has been fully ....
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....iz (2019) 111 taxman.com 74 (Ker) . Thus, we find no infirmity in the order of the CIT(A) on this aspect. It is necessary to clarify that we have confirmed the deletions of additions by the CIT(A) on merits independent of these legal aspects. Therefore, the ground of the Revenue, on the aspect of the admission by the assessee in statement is hereby dismissed. 4.5 It is noticed that the alleged admission is claimed to have been retracted by filing affidavit dt. 14.02.2017 (APB 140-143) before the ADIT (INV) on 06.04.2017 i.e within a period around 2 months after the survey when admission was made. The ld. CIT(A) although rejected the claim of the assessee of filing retraction in absence of any evidence brought on record of approaching to the higher authorities. However, he appreciated the contents of the impounded documents and the explanation furnished by the assessee thereon and recorded independent finding, while granting relief. Therefore, he recorded a categorical finding that the retraction from the earlier statement was with sufficient, credible and corroborate evidence to support the claim of the assessee. We have also carefully considered the claim of filling retraction; h....
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....f share in the said agricultural land in favour of the assessee. The assessee explained the said payment to have been accounted for in its Balance Sheet for the year ending in 31.03.2016 and we find that such payment has been shown therein as advance payment (copies placed at ABP Pg. 89). Though the assessee admitted that it was a cash payment not recorded anywhere in the accounts however, no evidence in support of this statement was found and needless to say that, it usually happens for want of availability of the record and because of tensed moments, an assessee is used to admit. But the fact remain that the payment of said advance is recorded in the Balance Sheet which was submitted before the authorities below through a letter dated 28.09.2017 (copy at APB 19). Neither the accounts were rejected nor this contention was disproved by the Revenue and therefore, the same shall prevail over the verbal statement of the assessee. We thus find no force in the addition, so made by the AO. Even there was no occasion for the AO to have made an addition of the entire Rs. 20,22,500/- and since the CIT(A) has already deleted Rs. 9,75,000/-, the balance addition of Rs. 10,47,500/- is also del....
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....d already expired on 31.03.2016. Moreover, there is a reference to various other payment entries on such dates (e.g. Nov 2013, Oct 2013 and 05.02.2014), falling within the financial year 2013-14 (A.Y. 201415). 6.2 We are therefore in full agreement with the contention of the ld. AR that, (alternatively), such addition (if at all required) could have been made only in A.Y. 2014-15, but not in any case in A.Y. 2016-17. Such interpretation is supported by the language of S. 69 of the Act, based on the jurisdictional facts, which could not be disputed by the Revenue. In this view of the matter, we find no justification for making the impounded addition of Rs. 60 lakh, and the same is deleted. This ground of appeal is thus partly allowed (addition of Rs. 60 Lakhs is deleted however addition of Rs. 58 Lakhs is confirmed), for the reasons stated above. 7.1. During the course of hearing and in the Written submission also, the assessee did not press Ground No. 5. Hence the same is dismissed as not pressed. 8.1. In ground No. 6, the assessee has agitated the application of S. 115BBE of the Act which is a provision for applying special tax rates in the cases where the income is assessed u/....
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....k Advertising Company, as per the computation of total income placed at APB Pg. 39 & 40. There is no other known source of income, which could give rise to undisclosed income, under consideration. We find support from the decisions of the coordinate bench of ITAT, Jaipur, in the cases of Ram Narayan Birla (Supra), Rekha Shekawat (Supra) and the decision by Hon'ble Raj. High Court in Bajranggan Traders (Supra). Thus, otherwise also in the facts & circumstances of the present case S. 115BBE could not have been invoked. For the above reasons the invoking of S. 115BBE is therefore, quashed, and this ground taken by the assessee is therefore, allowed. 9.1 In ground no. 7 taken by the assessee, the addition made by the AO u/s 69C on account of unexplained agriculture expenses of Rs. 55,490/- has been agitated. After a careful consideration of the findings recorded by the authorities below, written submissions and counter comments, we find no force in the ground so taken as the ld. CIT(A) has recorded cogent and detailed findings while rejecting this ground taken by the assessee before him. Therefore, this ground No. 7 taken by the assessee is dismissed. 10.1 In Ground No. 8, the assess....
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.... adjudication as indicated above. 14.0 This ground No. 3 of the Department has already been dealt with and adjudicated along with aassessee's ground No. 3 (AGOA-3) herein above. 15.0 In Ground No. 4, the Revenues is aggrieved by the deletion of the addition of Rs. 9,50,000/- made by the on account of unrecorded investment made in the purchase of a land situated at Mandana, Kota, belonging to SC ST person. The ld. CIT(A) did not delete the addition in principle but found that the date mentioned on the impounded document relating to the payment of Rs. 9.50 lakh was 04.11.2016 which fall in F.Y. 2016-17 relating to A.Y. 2017-18 and thus directed accordingly. Before us, the Revenue failed to rebutt this factual aspect that the impounded document shows the date of payment at 04.11.2016, hence, we find full justification in the order of the CIT(A) who rightly deleted the addition in this year on this basis. Hence this ground No. 4 taken by the Revenue is hereby dismissed. 16.1 DGOA-5 & GOA 10 (Addl.): In this ground the Revenue has challenged the benefits of telescoping given by the ld. CIT(A) of the availability of the income of Rs. 1,00,30,778/- against the addition sustained by him....
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....aid, which leaves the balance of Rs. 16,72,202/- as the income not covered even by the telescoping benefit. 16.4 . However, again this is the position only upto the stage of the ld. CIT(A) order, which is further subjected to the result of the ITAT order as the additions sustained by the ld. CIT(A) were challenged by the assessee. Hence, the additions confirmed upto the stage of the ITAT requiring to be set off/telescoped against the available income has to be recomputed. 16.5 It is noticed that while deciding the assessee's appeal in this year (i.e. A.Y 16-17), the additions of Rs. 10,47,500/- (20,22,500/- less 9,75,000/-) challenged in AGOA-3 and of Rs. 60 lakhs in AGOA-4, has been deleted by us and therefore the additions made by the AO and confirmed by the CIT(A) totalling Rs. 1,29,02,990/- should be reduced by these two deletions totaling to Rs. 70,47,500/-, resulting into the additions sustained upto the stage of the ITAT at Rs. 58,55,490/- (1,29,02,990/- less Rs. 70,47,500/-) only. We find that against the additions sustained of Rs. 58,55,490/- as aforesaid, the income available in cash for utilisation remains at Rs. 1,11,90,778/-. Therefore consequently, there remains no ....