TaxTMI 
TaxTMI 
2024 (9) TMI 542
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....tances of case, the Ld. CTT(A) is justified in deleting addition of Rs 33,60,000/- made by AQ on the basis of incriminating documents containing registered document for purchase of property and supported by assessee's statement-by simply relying on dicta from the decision of Hon'ble High Court of Kerala in the case of C.K. Abdul Azeez vs. CIT. Central Circle, Calicut [2019] 111 taxmann.com 74(Kerala) that "Statement on oath made by an assessee to income tax authority during survey proceedings under section 133A is not conclusive, assessee can explain or withdraw admission, if any, made by him in such statement and assessment of tax cannot be made solely on basis of such sworn statement made by assessee under section 133A(3)(iii) and such statement can be used to corroborate other materials before assessing authority, including contents of any document which does not apply directly to present case as the addition was made on concrete evidence. 3 Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in deleting the addition of Rs. 7,10,000/- not considering the fact that it was made on the basis of incriminating documents impounded and the tr....
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....edly alleging that the ld. CIT(A) has ignored the basic fact that the assessee had already admitted income on oath u/s 131, which contention appears totally contrary to the factual and legal finding recorded by the CIT(A: "With regard to evidentiary value of the statement recorded under oath u/s 131 it is held in various decisions that the statement recorded under oath is having evidentiary value. (At pg.25) The next objection of the assessee 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. [Para 9]" (at pg.26) Thus, the CIT(A) clearly held that the statement recorded on oath u/s 131 do have evidentiary value. However, thereafter the ld. CIT(A) also held that statement recorded during survey is not conclusive and also recorded categorical finding of fact that the corroborative material used by the AO wherein the assessee admitted, was fully explained and thereafter, in absence of any other corroborative evidence such a....
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....he Income-tax Act, 1961/ Term "though he may not have appealed" as occurring in rule 27 of the Income-tax(Appellate Tribunal) Rules, 1963" 2. AO cannot blindly rely upon a statement alone: 2.1 During survey dt. 02.02.2017 statements of assessee were recorded u/s 131 and various impugned addition were based on statement of Shri Naresh Jain. However, it's crucial to note that Shri Naresh Jain retracted his statement on 14.02.2017 (APB 8-11). In the light of this fact, our submission are follows. 2.2.1 Sole Statement, not a good basis for Addition: At the outset, we submit that no addition can be made merely and solely on the basis of a statement of a third party. The ld. AO heavily relied upon the statement of the Shri Naresh Jain recorded u/s 131 on dated 02.02.2017 by the Survey Team. However, the credibility of such statements is highly doubtful and not binding for various reasons, as enumerated below: 2.2.2 No addition permissible solely based on statements : Pertinently, the impugned additions have been made solely based on the statement of the assessee without any corroborative evidence, and that too ignoring the retraction. It is settled....
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....evailing attitude of the search parties and consequently remarked very adversely. Reliance is placed on: 2.4.1 The existence of tension and surcharged atmosphere has been recognised even by the courts. Kindly refer Jagdish Narayan Ratan Kumar 22 TW 209 (JP). Such statements, therefore are bound to give a distorted picture and are not fully reliable as such. 2.4.2 On this aspect it will be quite relevant to refer to decision of Hon'ble Gujarat High Court Kailashben Manharlal Chokshi vs. CIT (2008) 14 DTR 257/ (2010) 328 ITR 411 (Guj.) wherein, it was held as under: "22. It is also to be seen as to whether an addition made is merely based on the statement recorded by the AO under s. 132(4) of the Act and whether any cognizance may be taken of the retracted statement. So far as case on hand is concerned, the glaring fact required to be noted is that the statement of the assessee was recorded under s. 132(4) of the Act at midnight. In normal circumstances, it is too much to give any credit to the statement recorded at such odd hours. The person may not be in a position to make any correct or conscious disclosure in a statement if such statement is recorded at....
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.... 4. THAT the Income Tax Investigation Team has visited on 2nd February, 2017 at around 6:30 AM at my residence without prior notice and forced me to open the business premises at the same time. 5. THAT the Officials of Income Tax Department after forcing me to open the business premises started the survey on 2nd February, 2017 at around 7AM which continued till 5th February, 2017 around 3:30AM. The survey was conducted based on some suspicious information about our connection with Allen Career Institute. The Officials of the survey team, recorded my statement from time to time to establish, that we have unrecorded transactions with M/s Allen Career Institute. Having not found anything incriminating with reference to our transaction with Allen Career Institute, they started looking into our personal affairs and pressurised me to give statement about my transactions/properties. 6. THAT I gave the statement as per my information and knowledge without any verification from the books of accounts. This statement continued from 2nd February, 2017 to 5th February, 2017 and my statement was recorded in more than 25 pages. The survey party impounded various document....
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....ies below doubted the fact of filing the affidavit yet however, no positive evidence has been brought on record by them from the office of the ADIT (Inv) denying the fact of receiving in the retraction letter/affidavit. The very fact of filing the affidavit together with the other facts and in absence of any contrary evidence, has to accept that the assessee did retract within a period of just four days from the date of admission during the course of survey statement on dated 02.02.2017. Even the revenue has not taken any specific ground on this aspect nor the ld. DR could controvert these facts. 3.3 There is a sharp contradiction in the findings recorded by CIT(A) because while dealing with the same retraction claimed (i.r.t. statement of Shri Naresh Jain), the CIT(A) in case of Smt. Nisha Jain AY2017-18 has recorded the following finding in para 5.6.2 at pg 38 of order "In this case, the retraction is with sufficient, credible and corroborative evidence to support his claim". 3.4 Legal Principles: 3.4.1 It is trite law that an admission, though best evidence against such person, if shown to be out of ambiguity, under tension or was against the facts or ....
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.... the revenue cannot be dispensed with and the onus cannot be shifted by it to the assessee by obtaining confessional statement. After elaborate judicial analysis of the legal position, the Hon'ble Supreme Court allowed the appeal of the assessee and vacated the orders of all the lower authorities. 3.4.7 Also refer Heirs and LRs of Late Laxman Bhai S. Patel v/s CIT (2009) 222 CTR 138 (Guj). 4. Statement of assessee can't be incriminating material: 4.1 ACIT, Central Circle-1(4), Ahmedabad v. Himalaya Darshan Developers (Gujarat) (P.) Ltd [2021] 128 taxmann.com 435 (Ahmedabad - Trib.) held as under: "Besides the above, the Assessing Officer has also made reference to the statement of the director of 'SJSL' recorded under section 132(4) and statement of another director under section 131(1A), wherein it was admitted that the company namely 'SJSL' is engaged in providing accommodation entries. Thus the same is a paper company. On perusal of the statement recorded under section 133(4) reproduced by the Assessing Officer in his order there was remarks made by such director to the effect that material/document seized during the search doe....
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.....com 287 (Delhi) Hon'ble High Court of Delhi held as under: "38. Fifthly, statements recorded under Section 132 (4) of the Act of the Act do not by themselves constitute incriminating material as has been explained by this Court in Harjeev Aggarwal (supra)...." 5. No evidentiary value of Survey Statement: 5.1 Further as per section 133A, there is nothing which suggests that a statement can be recorded on oath before the commencement of Survey or during Survey. However, if recourse is taken to section 131(1), during the survey, a statement can be recorded on oath, as the powers to record a statement on oath are vested in the authority u/s. 131(1) read with section 133(6) and in the circumstances specified u/s. 133(6) only. Section 133A does not empower any ITO to examine any person on oath, so statement recorded under section 133A has no evidentiary value and any admission made during such statement cannot be made basis of addition. 5.2 Further, the statute has provided different provisions looking to the different factual situations as regard recording of the statement, somewhere on oath and somewhere without oath, u/s 132(4) (in such matters), u....
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.... Gadia as "the statement dated 23rd December, 2005 recorded under Section 132(4) of the Act", he was careful to describe 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 ....
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....nt. As per the assessment order, the excess stock of Rs. 5,08,98,166 has been worked out after giving the benefit of discount and the gross profit rate but mainly relying 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" 6. Statement recorded u/s131 and not u/s 133A(3)(iii)-misinterpretation of law: 6.1 In this regard it is submitted that, such a contention, on a bare perusal of the related provision, is completely devoid of merit and rather a misreading and misinterpretation of the provision. During survey statements are recorded u/s 133A(3)(iii) of the Act only. However, recourse u/s131 (1) can be taken only if S.133A(6) is invoked. For ready reference S. 133A (6) is being reproduced hereunder: "(6) If a person under this section is required to afford facility to the income-tax authority to inspect books of account or other documents or to check or verify any cash, stock or other valuable ....
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.... 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. eg. in Hukum Chand retraction was made after 2 years and in Kantilal C Shah retraction was made after 9 months hence both the cases are not applicable looking to the abnormally long period as against merely 2 months in the present case (04.02.2017) and affidavit towards retraction filed on 06.04.2017 (Pg.54 CIT(A) order). 6.4 It is pertinent to note that the CIT(A) has rejected the claim of filing retraction by the Assessee before him, at the same time, he considered the documentary evidences, furnished by the assessee, with a view to explain the impounded document and clarify the admission made, hence, it can't be said that the CIT(A) granted relief only and only on the legal aspect (that statement recorded during survey u/s 133A(3)(iii) and/or u/s 131, has no evidentary value and not being conclusive, no addition can be made merely on that basis). On the contrary, it is discernible from his findings in all the 4 cases, where he has granted relief, he has extensively dealt with the merits of each case for examinin....
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....50,000/-, Shri Naresh Jain again admitted that only a sum of Rs. 28,90,000/- was paid through cheque and balance Rs. 33,60,000/- was paid in cash. The cash payment is nowhere recorded in books of accounts. This agreement was entered on 13.04.2016 itself. When asked about this investment, the assessee filed his reply on 18.12.2019 (APB 32-37) in which the assessee has stated that the house is not related to him but related to Nisha Jain. The reply of the assessee is considered but not found acceptable. He himself accepted in his statement u/s 131 during survey that some part of the consideration at Rs. 33,60,000/- was paid in cash by him and this payment was not recorded in his books of accounts. This cash payment has not been accounted either by Naresh Jain or Nisha Jain. The entire submission of the assessee is considered an afterthought Therefore, his submission is not found maintainable, the amount of Rs. 33,60,000/- as paid in cash for purchase of house is added to the total income of the assessee as undisclosed income u/s 69. The appellant argued that the said amount was spent for construction of house situated at 7 Wonder Road, Kachibasti, Kota duly....
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....late to any value in Rupee Term. It is also very humbly submitted that page No 68 of the impounded documents is just a rough jotting and does carry any material information. It was stated that detailed submission and relevant clarifications have already been made by the appellant vide reply letter dated 18/12/2019 (APB 32-37) about the facts and circumstances of purchase of house property and the amount of Rs. 5,00,000/- includes the amount Rs. 33,60,000/- spent in cash on 26/04/2016 towards construction/repair of the above said house property, has been duly shown and recorded in the books of Quick Advertising Company, Proprietor Nisha Jain, wife of appellant. It is stated that the impugned house property de-facto and de-jure belongs to Smt Nisha Jain W/o appellant and all the cost of house and construction expenses have been borne by Smt Nisha Jain and the same are well appearing in the books of Quick Advertising Company, Proprietor- Smt Nisha Jain. It is argued that Smt Nisha Jain is also Assessed to Tax, and information to the effect that this house has been purchased by Nisha Jain for Rs. 64,18,000/- and all the payments have been made through the boo....
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....ld by the Hon'ble High Court. The assessee has explained the contents of impounded document as far as addition of Rs. 33,60,000/- is concerned. Therefore, the addition made by the AO to this extent is not found to be sustainable. The appellant has not explained the Rs. 5,00,000/- cash expenditure as admitted during the survey. The admission is also supported by impounded document. The appellant has given only vague explanation that it is also recorded in the books of Mrs. Nisha Jain. However, no credible evidence is furnished. In fact, the appellant argued that the amount of Rs. 5,00,000/- includes the amount Rs. 33,60,000/- spent in cash on 26/04/2016 towards construction/repair of the above said house property. The reply of the appellant is not supported by documentary evidences. How, this expenditure of Rs. 5 lakhs is included in the amount of Rs. 33,60,0000/- is not explained with supporting evidences. Therefore, the explanation of the appellant is not found to be convincing and the same is rejected. The addition made by the AO of Rs. 5,00,000/- is based on admission in statement recorded during the survey and also supported by corroborative evidence in the form of imp....
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....as only Nisha Jain who made the entire payment. 5. Source fully explained: Undisputedly, the assessee submitted all the evidences of the source of payment made to the seller Shri Pradeep Sharma from the books of Quick Advertising Company, Proprietor- Smt Nisha Jain, wife of assessee ( PAN-ABLPJ8118L who is regularly filing her Income Tax Return to the A/O WardCircle 1(1) Kota),. Against total cost of house plus construction/repairs, registration and other relevant charges etc and aggregating to Rs. 64,18,000/-, payment Rs. 29,58,000/- has been made through cheques, drawn on Syndicate Bank Ch No 392110 Rs. 5.00,000/- No 392117 Rs. 10,00,000/- No 392119 Rs. 10,00,000/-, No 557160 Rs. 3,90,000/- No. 557161 Rs. 68,000/- all between 13/04/2016 to 16/05/2016 and the balance amount Rs. 33,60,000/- has been paid in Cash and mainly does cover construction/repairs & registration related expenses etc. paid to Pradeep Sharma. The relevant transactions/entries are appearing in the ledger accounts of Quick Advertising. 6. Voluminous evidences submitted before lower authorities but could not be rebutted by the AO: The assessee in support of his claim submitted following document....
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....uring the survey action u/s 133A of the I T Act at office premises of Shri Naresh Jain some incriminating documents were seized and inventoried as Party no-22 Annexure A, Exhibit 11, Pg no.68, (APB 78) which contained information regarding cash payment to contractor for construction expenses in cash for above said property amounting to Rs. 5 lacs. It was submitted as before ld. CIT(A) as under (also reproduce at Pg31 of CIT(A) order): "B (i) As regards addition of Rs. 5,00,000/- it is very humbly submitted that the issue relates to construction expenses of Rs. 5,00,000/- on the house property situated at 7 Wonder Road, Kachibasti, Kota and Assessment Order refers to the Annexure A-1, Exhibit 11, page No 68 contaning rough jottings (i) 2,85,000 (ii) 4,16,000 (iii) 1,00,000 (iv) 30,000 and thus the total of all the four figures as above works out to 8,31,000/-indicating plain figures, not confirming/indicating that these figures relate to any value in Rupee Term. It is also very humbly submitted that page No 68 of the impounded documents is just a rough jotting and does carry any material information. (ii) It appears that the Survey Team/Assessing Authority placing ....
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....s nowhere use the word paid or payable rather it is the assessee who own the document and explained the correct facts which, the authorities below must have accepted. Thus, under the totality of the facts and circumstances detailed above, the CIT(A) order rightly deleted the addition. Therefore, this ground taken by the revenue also deserves to be dismissed. DGOA-3: Rs. 7,10,000/-: on account of undisclosed income u/s 69 for purchase of agricultural land situated VII-Mandana, NH-76, Kota; Facts: The AO has dealt with this issue at Pg 8 Pr 7 and copied at page no.41 para 7.1 of CIT(A) order. The detailed written submissions dt. 02.12.2022 filed before the CIT(A) are at page no.42 para 7.2, the remand report thereupon by the AO dt. 07.06.2023 is at page no.43 para 7.4, the rejoinder dt. 29.06.2023 at page no. 45 para 7.5 and finally the ld. CIT(A), after considering the detailed submissions, the remand report, rejoinder made before him, at Page 46, Para. 7.6 concluded in following words: "7.6 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for th....
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....ted on 06/10/2008 suo-motu makes it to pertains to A/Y 2009-10 and not to A/Y 2017-18. It is argued that erroneously some rough /irrelevant /erroneous jottings were also made about the deal/cost about the said piece of land and confusion has crept in. It is further argued that actually the land was purchased in F/Y 2008-09, relevant to A/Y 2009-10 and as such does not relate to A/Y 2017-18. All the payments made towards full cost of land through cheque Rs. 6,90,000/- and in cash Rs. 7,10,000/- total Rs. 14,00,000/- is appearing in the books of accounts of appellant in A/Y 2009-10. It is argued that the valid documents regarding sale/purchase of the said agricultural land and the transactions made in cash/cheque towards payment for the said land by the appellant are well appearing in the books of accounts of the appellant. The appellant has been satisfactorily assessed for A/Y 2009-10 and no demand for the said period is outstanding against the appellant. The facts of the issue are considered. Here the transaction of cash is not denied by the appellant but according to the appellant, the relevant AY should be AY 2009-10 and not AY 2017-18. The app....
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....eam and as has already been retracted by the assessee vide affidavit dt. 17.02.2017(APB8-11). Kindly refer detailed submission of DGOA-1 4.4 Documents supporting assessee's claim includes: i. copy of ledger account of Smt. Nisha Jain showing transactions about payment of Rs. 6,90,000/- for agriculture land purchased (APB 111) ii. Acknowledgement of cash payment/receipts Rs. 7,00,000/- (APB 112). Thus, under totality of the facts and circumstances detailed above, the CIT(A) order rightly deleted the addition. Therefore, this ground taken by the revenue also deserves to be dismissed and relief may be granted. DGOA-4: Rs. 35,00,000/-: on account of undisclosed income u/s 69 for construction expense w.r.t. house at E-15, Ballabhbari, Kota; Facts: The AO has dealt with this issue at Pg 9 Pr 8 and copied at page no.48 para 8.1 of CIT(A) order. The detailed written submissions dt.02.12.2022 filed before the CIT(A) are at page no.49 para 8.2, the remand report thereupon by the AO dt. 07.06.2023 is at page no.50 para 8.4, the rejoinder dt. 29.06.2023 at page no. 52 para 8.5 and finally the ld. CIT(A), after considering the detailed submi....
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....ses has been recorded in books, I have no knowledge at the hour. I shall provide the details later on." It is argued that the reply of appellant to the question is incomplete/ambiguous and cannot be relied upon. The appellant has replied that the amount relates to construction/repair/renovation of their house at E-15, Ballabhbari Kota. It is stated actually the said amount has been booked and accounted for by Smt Nisha Jain, wife of appellant who happens to be proprietor of Quick Advertising Company Kota. It is very argued that as per books of accounts, actual figures work out to Rs. 27,97,131/ and not Rs. 35,00,000/- The sum of Rs. 27,97,131/- has been well accounted for in the books of accounts by Smt. Nisha Jain. The appellant stated that the remaining Rs. 7,02,869/- be appropriated out of the amount Rs. 46,43,251/-, already declared by the appellant under the head "Other Receipts". The facts of the issue are considered. The AO made addition of Rs. 35,00,000/- on the basis of statement recorded during survey. However, in the statement itself, the appellant stated that the diary contains details about house construction aggregating to about Rs.....
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....ted detailed reply (also reproduced at pg.49 pr.8.2 of CIT(A) order) reproduced below: "In support of Ground No 8 & 9, the appellant humbly submits as under It is very humbly submitted that the submission made by the appellant with regard to retraction of recorded statement & appearing under Ground No 2, may very kindly be taken and treated applicable for Ground No 8 as well. It is very humbly submitted that the issue relates to some items and figures jotted on a page of table diary, impounded and inventorized by survey team as Annexure-A, Exhibit-13, page No 358, does not at all indicate any proper description/particulars/figures etc to arrive at some correct/logical point. However, the description indicates to some building material/masonary work like goods/services relating to house construction/repair. In reply to Q-23 of the Statement Recorded by the Survey team the appellants ineralia says "The diary contains details about house construction aggregating to about Rs. 35.00 lac on page No 358 of the relelvant Exhibit inventorized by the Survey Team. How much amount out of the expenses has been recorded in books, I have no knowledge at the hour. I shal....
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....0 + 60,000 total 36,43,000/-, page No 113 (ii) copy of ledger account page No 114 to 123 (iii) of construction activity relevant bills and vouchers relaing to construction expenses page No 124 to 218 (iv) Ledger Account showing payments routed through Bank Account & 219 to 237 (v) Assets Depreciation Chart showing Rs. 27,97,131, page No 238." 5.2 Further, assessee vide rejoinder dt. 29.06.2023 in response to Remand Report dt. 07.06.2023 submitted by Add. CIT, Central Range, Udaipur filed following reply (also reproduced at pg.52 pr.8.5 of CIT(A) order) reproduced as under: - "Addition of Rs. 35,00,000/- on account of un-accounted Expenditure on construction of house- E- 15, Ballabhbari, Kota (i) Referring to the documents impounded & inventorized as Exhibit-2, Annexure-A, page No 358, some rough jottings about masonary work estimates amounting to figures 35,00,000 + 83,000 + 60,000 Total 36,43,000, papers and documents submitted by the assessee/appellant, and placing reliance and much importance and emphasis to the recorded statement of Shri Naresh Jain, especially his answer to Q-No 23, saying that 'this document was related to expenses incurred for cons....
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....t has filed copy of ledger accounts, bills, vouchers and Bank Account statement, related to cost of construction before the Assessing Authority- Page 114 to 238 as enclosed with Index Sheet, with the reply letter dated 16/01/2023 and the same also had been filed before your honor for your ready reference. However, not considering all these papers and documents, the L'd Assessing Authority, has observed "The entire submission of assessee is only an after thought to save himself from Tax liability. Therefore his submission is not found maintainable and sustainable in the eyes of law and hence the amount of Rs. 35,00,000/- as paid in cash for house construction is added to the total income of assessee as un-disclosed income u/s 69 of the Income Tax Act In a routine and mechanical manner, the Assessing Authority has concluded "Hence the AO had rightly made addition of Rs. 35,00,000/- and the contention of assessee/appellant is not acceptable being not correct." Therefore the Assessing Authority observing as above, is not correct." 6. Voluminous evidences submitted before lower authorities but could not be rebutted by the AO: Assessee in support of its claim submitted documenta....
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....t at that moment he couldn't explain as to how much expenditure was already recorded in regular books of accounts, and should explain the same later on. The appellant argued that the said expenditure of Rs. 75,00,000/- was borne by his wife - Smt Nisha Jain, duly recorded in her books of accounts. It is stated that the para relates to Exhibit-1, Annexure-1, page No.56 (APB 238) of the impounded papers/documents that were inventorized by the Survey Team during course of Survey proceedings, and the paper indicates that some details and figures pertaining some rough estimates for some marriage function on various major/minor heads. It was argued that in reply to Q No 23 of his statement recorded during survey action u/s 133A on 03/02/2017, he explained that it contained information regarding various expenses on son's marriage to the tune of Rs. 75,00,000/-" and the details given by the appellant (i) Fooding Expenses Rs. 30 lac, (ii) Jewellery Rs. 21 lac, (iii) Event Rs. 11 lac, (iv) Venue rent/expenses - UmmedBhawan- Rs. 5 lac, (v) Other/MiscExp Rs. 8 lac- Total Rs. 75 lac. The appellant once again submitted that at that moment he could not explain ....
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.... entered in the books of accounts. The appellant has now furnished evidences to show that out of the expenses as on 31/03/2018 stand at Rs. 77,92,747/- which were spent by SmtNisha Jain- w/o appellant and the details are well entered in the ledger account of M/s Quick Advrtising Company, Kota a propriety concern of SmtNisha Jain. The AO was asked to verify the claim of the appellant in the remand proceedings. No adverse comments received from the AO with regard to claim of the appellant that the amount of Rs. 75,00,000/- has been accounted for in the books of accounts by Smt. Nisha Jain. In view of these facts, since this amount is already entered in regular books of accounts of Mrs. Nishajain, the addition in the hands of the appellant is not found to be justified and deleted. The Ground Nos. 10 & 11 of appeal are treated as allowed." 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) to the extent (Pg. 38, Para 6.6) his findings and observations are given in the favour of assessee. 3. We respectfull....
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.... at pg.84 Pr.12.4 considered the benefits of telescoping in following words: "12.4 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The appellant stated that benefit of telescoping and set off should be provided against the addition made by the AO and sustained in the appeal. It is further argued that there are various judgments of Hon'ble Supreme Court and Hon'ble High Courts who have applied the theory of telescoping in dealing with the Income Tax issues before them. The appellant relied upon the decision of Apex Court in case of Mahaveer Kumar Jain v. CIT (2018) 404 ITR 738 : 302 CTR 1 : 255 Taxman 161 : 165 DTR 113 (SC)], ITAT Jaipur in the case of Kushal Dasot v/s ACIT, Circle-7, Jaipur, in Appeal No ITA-675/JP/2012, Bombay High Court, in the case of Commissioner Of Income-Tax, ... vs Jawanmal Gemaji Gandhi on 5 October, 1983 discussing on the earlier decision of Kerala High Court in [1980] 121 ITR 433. The facts related to claim....
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..../[1984] 39 CTR 127 (Bombay)[05-10-1983] held as under - "The Supreme Court has held in the case of Anantharam Veerasinghaiah & Co. v. CIT [1980] 123 ITR 457 that the secret profits or undisclosed income of an assessee earned in an earlier assessment year can constitute a fund, though concealed, from which the assessee may draw subsequently. The assessee, in the instant case, acquired the gold in the latter half of the assessment year: it could then very well be that the undisclosed income earned in that very year, which had been added on account of the increased estimated turnover, constituted the fund from which this asset was acquired. The conclusion reached in this behalf by the Tribunal was reasonable and justifiable." The assessee, in the present case, acquired the cash from the employees of school which is offered for tax as per detail provided. It 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 sou....
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....nd to be acceptable in this regard. Accordingly, following additions confirmed in appeal are given benefit of telescoping. Rs. 20,50,000/- Rs. 5,00,000/- Rs. 7,02,869/- Rs. 7,00,000/- Rs. 9,50,000/- Total Rs. 49,02,869/- As discussed earlier, Rs. 46,43,251/- was already available with the assessee during the year as per additional income declared in the form of cash. Therefore, the net addition sustained is computed at Rs. 2,59,618 (49,02,869 - 46,43,251) as the appellant is in a position to establish cash availability out of additional income declared in the return of income filed. In the result the addition to the extent of Rs. 2,59,618 /- is upheld and the remaining additions of Rs. 46,43,251/- out of total additions confirmed of Rs. 49,02,869/- are not found to be sustainable as the 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." Submission: 1. In this ground, the Revenue has challenged the benefit of telescoping given by the CIT(A) of the availability of income of....
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....lescoping of the additional income against the undisclosed outgoings, to the extent sustained by him. There is no contrary evidence brought on record to dispute the factual assertions stated above. Therefore, this ground of the revenue may kindly be dismissed. 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. Thus, the appeal of the Revenue be dismissed as submitted hereinabove and relief may be granted u/r 27 may be prayed for. The above submissions have been made based on the instructions and the information provided of/by the client.'' 3.1 In ground No. 1 & 6 taken by the Revenue, the deletion of addition of Rs. 1,43,67,131,/- out of the total additions made by the AO of Rs. 1,83,20,000.-, is under challenge. It is noticed that the grievance raised in both the grounds is substantially the same hence being dealt with at one place. However, we find....
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....ut decided the legal aspect against the assessee. We therefore find such prayer justified and therefore acced the request made under Rule 27 and proceed to decide the contention raised by the assessee against the finding of the CIT(A) recorded at para 9 page 25-26. We derive support from the decisions in the cases of ITO Vs IME International ITA No. 1873/JP/2012 dated 08.01.2016 (Del Trib), BPL Systems & Projects Ltd., and Sun Pharmaceuticals Industries Ltd. Further in case of Sanjay Sawhney v. Principal Commissioner of Income-tax [2020] 116 taxmann.com 701 (Delhi), it is held that: "Section 253, read with section 153C, of the Income-tax Act, 1961 and rule 27 of the Income-tax (Appellate Tribunal) Rules, 1963 - Appellate Tribunal - Appealable orders (Aggrieved person) - Assessment year 2008-09 - Whether rule 27 embodies a fundamental principal that a respondent who may not have been aggrieved by final order of lower authority or court, and therefore, has not filed an appeal against same, is entitled to defend such an order before Appellate forum on all grounds, including ground which has been held against him by lower authority, though final order is in its favour - Held, yes - Whe....
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....n other words, though statement may be recorded on oath u/s 131, yet the statute not having provided such statement to be used as evidence against the assessee in any proceedings, the statement recorded under these two provisions loses their evidential value on the strict interpretation of the fiscal statute. Ignoring this significant difference will render the use of these words intendedly u/s 132(4), purposeless or nugatory. Therefore, to say that a statement recorded u/s 133A(3)(iii)/ or even u/s 133A(6) r/w s. 131, is equivalent to a statement recorded u/s 132(4) to be used as evidence against the assessee, is a gross misinterpretation of the provisions. We thus, agree with the contentions raised by the ld. A/R Shri Gargieya. We are supported by the decision, in 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....
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....led by the Revenue against the said decision after granting leave. To the same effect is the decision of this Court in Sunrise Tooling System (P.) Ltd. (supra) and of the Jharkhand High Court in Shree Ganesh Trading Co. (supra). The CBDT's instructions dated 10th March, 2003 and 18th December, 2014 have also emphasized that there should be no recording of statement during "search/seizure/other proceeding" under the Act under "undue pressure or coercion". 42. Therefore, in the present 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." Further the Hon'ble ITAT, Jaipur 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 discu....
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....n as much as there also, the lower authorities were not satisfied with the explanation furnished w.r.t the impounded document though the assessee had earlier admitted income based thereon, which are not the facts in the present case. Moreover, Meeta Gutgutia (Supra) is a much later decision, making a comparative study of the relevant provisions in detail. 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 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 appreciated by the various decisions cited by the ld. A/R. The ld. CIT(A) has completely misinterpreted and misapplied the ratio in the aforesaid case. 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. Furt....
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....irmed the deletions of additions by the ld.CIT(A) on merits independent of these legal aspects. Thus, following the findings recorded in the order A.Y. 16-17 as aforesaid, prayer of the assessee (U/R 27), is decided in its favour whereas part of the ground no. 1 & 6 taken by the Revenue are decided against the Revenue. Hence we hold accordingly. 4.1 In Ground No. 2, the Revenue is aggrieved by the deletion of the addition of Rs. 33,60,000/- made by the AO stated to be based on the impounded annexure and the statement of the Assessee record during the survey. 4.2 On a careful consideration of the rival contentions, the material available on record and in the light of the judicial pronouncements, we find no force in the ground of the Revenue. The AO has relied upon the impounded annexure A-1, Exhibit -1, Page No. 1-4, which is an agreement of purchase of house at 7, Wonder Road, Kota wherein the sale consideration is declared at Rs. 62.50 lakhs. Copy of the said agreement dt. 13.04.2016 is available at APB Pg. 62-65 and a perusal shows that it was an agreement between one Pradeep Sharma and the assessee. However, it was not signed by the assessee as a buyer. It is noticed that ....
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....-110, which related to purchase of the agricultural land at Manadana, Kota. Payment of consideration of Rs. 6.90 lakhs was paid through cheque however Rs. 7.10 lakhs paid in cash, which was the subject matter of the addition. We have found that the assessee did not dispute the transaction however the only contention was that the same related to A.Y 2009-10 but did not relate to the subject A.Y. 2017-18. Ld. CIT(A) recorded finding of fact that the document was bearing the dates of October, 2008 and therefore, the transaction pertained to A.Y 2009-10. 5.2 On a careful consideration of the rival contentions, the material available on record and in the light of the judicial pronouncements, we find no force in the ground of the Revenue. It is noticed that the impounded papers are bearing the dates of 2008 and other years, but do not show any date falling in the F.Y 16- 17(A.Y. 2017-18). Even the payment of Rs. 6,90,000/- was made by the assessee on different dates through cheques between the period from October, 2008 to March, 2009 as per the ledger account in the books of M/s Quick Advertising Company, copies placed at ABP Pg. 111. In the views of these facts which remained unrebut....
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....a Jain in the regularly maintained books of accounts of her proprietary M/s Quick Advertising Company, Kota. The said books of accounts containing the relevant ledger account, etc. were produced before the authorities below. However, the ld. AO could not find any fault therein, nor he rejected the books of accounts. We have also seen the impounded documents relied upon by the AO however, we find that they are mere rough-jottings, and in the shape of mere estimations, and does not inspire any confidence and has lost relevance in the light of the fact that the related marriage expenses had already been recorded in the accounts. No blind reliance could be placed on the statement of the assessee, alleging admission by the assessee because in the same very statement, he clearly stated that he was not in a position to tell the exact amount of expenditures recorded in the accounts. Further, we find that the ld. CIT(A), recorded categorical findings of fact after verification of the record, and obtained a remand report from the AO, wherein nothing substantial adverse was found and thus, he rightly deleted the addition. Therefore, this ground No. 5 of the Revenue is dismissed. 8.1 In gro....
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....vered balance of Rs. 2,59,618/- and therefore, the addition to that extent which could not be telescoped, was upheld by the ld. CIT(A). But we find that similar ground was taken by the Revenue being DGOA-5 (against the telescoping benefit) and an additional ground was raised by the assessee being AGOA-10 against allowing short claim of benefits of the telescoping, which was decided by us vide para 15 of order dated 05-08-24 in A.Y. 16-17 in ITA no. 349/JPR/2024(D) and ITA no. 358/JPR/2024(A). In A.Y. 16-17 against the availability of Rs. 1,00,90,778/-, the additions on account of outgoing/investments of Rs. 58,55,490/- were set off/telescoped leaving excess cash available of Rs. 46,64,712/- which was prayed to be carried forward to be next year A.Y 17-18 (under consideration) and to be telescoped similarly in this year. This year also the assessee has made the similar prayer but by way of invoking Rule 27 of ITAT Rules, 1962, in absence of any appeal or cross objection filled by it. It is also prayed that if any addition, sustained by the CIT(A), is deleted by the ITAT, that has also to be given effect while computing the benefits of telescoping. Since, such a prayer is consistent ....