TaxTMI 
TaxTMI 
2023 (1) TMI 1492
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....refore, condone the delay and admit the appeal for adjudication. 3. The Revenue is in appeal before this Tribunal raising following revised grounds of appeal: "That, on the facts and circumstances of the case, the Ld. CIT(A) was not justified in her decision to ignore the fact that the discrepancy to a tune of Rs. 2,09,25,288/- as determined on the basis of the findings during the course of survey operation u/s 133 A of the I.T. Act, as well as after providing ample opportunities to assessee during the course of scrutiny proceedings. Thus, it is crystal clear here that the addition made in the assessment order was not made solely upon the findings during the course of survey u/s 133A of the I.T. Act, 1961 but also on the basis examinations of the documentary evidences as produced by the assessee during the scrutiny u/s 143(3). The case laws cited by the Ld. CIT(A) are found to be distinguishable on facts and but not applicable in the instant case. Thus, the Ld. CIT(A) erred in her verdict to delete the addition of Rs. 2,09,25,288/-. The grounds of appeal for each issue are enumerated as under: 1. That, on the facts and circumstances of the case, the Ld....
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....ry debtors of Rs. 4,00,14,645/-. Thereafter, the assessee filed return of income on 05.10.2016 declaring total income of Rs. 2,14,22,050/-. This was followed by selection of the case for complete scrutiny through CASS and serving of valid notices u/s 143(2) & 142(1) of the Act upon the assessee. During the assessment proceedings, ld. AO called for various details. After considering the same, the assessment was concluded. Addition was made towards undisclosed cash at Rs. 8,24,000/-. As regards bogus sundry debtors of Rs. 4,00,14,645/-, ld. AO based on the submissions filed by the assessee accepted the assessee disclosure of Rs. 2,00,99,770/- and did not made the addition for the remaining amount as the assessee explained the difference being the debtor belonging to another concern M/s. Laxmi Cotton Industry. As regards undisclosed stock, the assessee filed complete details as well as the reconciliation statement and considering the same, ld. AO observed that the assessee has shown closing stock as on the date of survey i.e. 18.07.2015 at Rs. 3,01,59,910/- in its books of accounts but the actual closing stock found during the course of survey was Rs. 1,00,53,929/- and, therefore, the....
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....surrendering the undisclosed stock at Rs. 3,91,81,368/-. Ld. AO, on perusal of the income tax return observed that the assessee has failed to reflect the said undisclosed stock/income of Rs. 3,91,81,368/-. The assessee gave the following reply along with filing profit and loss account for the period from 01.04.2015 to 18.07.2015: "Sir, during survey operation the Survey Team had found a total stock of Rs. 4,22,11,880/- lying in the godown as on 17.07.15. The Survey Team had excluded a stock of Rs. 30,30,432/- being disclosed stock as per books of account of Laxmi Cotton Industry. Your Assessee would like to submit that as per impounded books of account of Laxmi cotton Industry bearing identification mark no. BNA/2, Page 1 to 12, the entries was completed only up to 30.06.2015, laxmi Cotton Industry is a partnership firm in which your assessee is a one of the partners. Your assessee would like to state that the godown in which the stocks of his proprietorship concern, M/s. Agarwal Trading Co. and stocks of his partnership firm, Laxmi Cotton Industry are kept and stored in the same godown having 3(three) different and distinct parts by way of brick wall partitions. In one pa....
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..../- may please be considered for the sake of justice. There is approxly same(higher) in quantity of stocks found by the survey team and considered in the stock summary generated from tally software by your assessee. Regarding stock of Rs. 3,06,61,938.19/- as on 17.07.2015, your assessee likes to produce his audited books of account for F.Y:15-16 and purchase & sale bills. There was a deficit investment of Rs. 74,14,878.80 in the books of the assessee in comparison to the quantity and value of stocks held by him. Sir, your assessee was reassessed on 19.02.2016 for ASST. Year 2011-12 by the Department and a total addition of Rs. 92,03,181/- had been made by the Department on account of unexplained investment and unexplained income, against which your assessee did not prefer any appeal. Your assessee had capitalized the said sum of Rs. 92,03,181/- in his book of account as per recognized accounting standard and as per various verdict of Courts. Your assessee had also made a disclosure of Rs. 1,09,02,880/- under IDS on account of his undisclosed business income. The income of Rs. 1,09,02,880/- so disclosed under IDS had also been capitalized by the assessee in....
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....d that the reopening assessment for assessment year 2011-12 had been drawn on 19.2.2016, after the date of survey on 18.7.2015. So, the claim for set-off on account of additions vide assessment order dated 19.2.2016 against undisclosed stocks found much before that date on 18.7.2015 was not allowable. The AO had also stated in his order that the case law cited by the appellant was different than the fact of the case of the appellant. The appellant before the AO and also at appellate stage has relied on the decision of Calcutta High Court in Balaram Saha us. CIT, I.T. Appeal No. 319 of 2003, dated 19.04.2011. In his case a survey was conducted at appellant's business premises on 09.01.1997 and following impoundments of books and other documents, the assessments for previous assessment years 1995-96 and 1996-97 were reopened. In asst, year 1995-96 an intangible addition of Rs. 1,43,688/- and in assessment year 1996-97 an estimated addition of Rs. 8,19,704/- (reduced to Rs. 2,84,699/ in appeal) had been made. Both the additions had been made after the date of survey and the Calcutta High Court has allowed the claim of set off of the assessee to explain the discrepancy found i....
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.... assessment proceedings for subsequent years(s)? Answer: As per section 189 of the Finance Act, 2016, any declaration made under the Scheme shall not affect finality of completed assessments. However, in an assessment proceeding before the Assessing Officer for an assessment year subsequent to the year for which the income declared under the Scheme, the income declared for an earlier assessment year can be taken into account to explain the transactions provided there is a nexus between the income declared and the transactions of the subsequent year. Question No. 12: In answer (b) to question No. 6 of Circular No 17 of 2016 dated 20.5.2016, it has been stated that "person is barred from making a declaration under the Scheme in respect of an undisclosed income in which the survey was conducted". Please clarify? Answer: The clause (b) of answer 6 may be read as "In case of survey operation, the person is barred for making a declaration under the Scheme in respect of the previous year in which the survey was conducted. The person is, however, eligible to make declaration in respect of an undisclosed income of any other previous year". The Circular is....
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....the undisclosed stock surrendered during the course of survey and ld. CIT(A) has rightly appreciated the same in the light of the Sections 188 & 192 of the Finance Act, 2016 as well as Circular No. 29 of 2016 dated 18.12.2016 and thus, we confirm the finding of ld. CIT(A). 15. As regards difference of stock of Rs. 5,02,028/-, we find that the books of accounts are not rejected by ld. AO and due to some calculation error, the said difference has arisen and as the assessee has shown closing balance as on 18.07.2015 at Rs. 3,01,55,910/- arrived at after considering various details of purchase, sales and expenses prepared after the completion of survey but before finalizing of books of accounts, which are duly audited and also considering the fact that statements given during the course of survey does not carry any evidentiary value as held by Hon'ble Apex Court in the case of CIT vs. S. Khader Khan & Sons. (2013) 352 ITR 480 (SC) and therefore, ld. AO before declining the claim of the assessee ought to have referred to any discrepancy or defect in the books of account. 16. Since the Revenue has failed to bring out any such fact on record, we hold that no addition was called ....
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....that the said claim had been made for the first time before AO after a long period of time and the appellant had not lodged his claim at any time before assessment stage. The decisions of Courts cited by the AO are not relevant in the present case as no search and seizure operation had been conducted in this case. The Apex Court in CIT vs. S. Khader Khan & Sons. (2013) 352 ITR 480 (SC) has ruled that survey does not empower any I.T.O. to examine any person on oath and as such statement recorded u/s 133A has no evidentiary value and addition cannot be made merely on the basis of such statement. CBDT Instruction No. 286/2/2003 (Inv), dated 10.03.2003 also directs the lower authority that no addition should be made merely on the basis of statement of the assessee during survey. Further, the ITAT Kolkata in Rohitaswa Das vs. Asst. CIT, ITA No. 1949/Koi/2017, dated 28.08.2019 where claim had been made first time during assessment proceeding that the stock taken during survey operation was not correct as the premise, in which the stocks were found, had been let out by the assessee to other person and the stock in the said premises was not belonged to the assessee. But, the asses....