TaxTMI 
TaxTMI 
2025 (2) TMI 1446
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....rtnership firm, filed its return of income for the assessment year under consideration declaring total taxable income at Rs. 1,76,63,300/- which was processed u/s 143(1) of the Act on 13.05.2019. Prior to that a survey operation u/s 133A of the Act was carried out in the case of the assessee on 18.01.2018, a notice whereof u/s 143(2) of the Act was issued on 27.09.2019 by the DCIT, Circle 47(1), New Delhi and upon centralization of the matter of the case u/s 127 of the Act vide order dated 19.02.2020 issued by the PCIT the proceedings continued. Notice u/s 142(1) dated 26.02.2021 along with questionnaire was issued. In response thereto submission was filed by the assessee on-line. It is relevant to mention that the assessee before us is engaged in the business of purchase and sale of dry fruits and running its business at Katra Ishwar Bhawan. During survey proceedings various discrepancies were claimed to have been noted on account of excess stock of Rs. 88,04,481/- and shortage of stock Rs. 67,80,481/-. Further, unaccounted cash sales was also found to have been made by the assessee and during the course of survey proceedings the assessee surrendered an amount of Rs. 4,13,85,200/-....
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.... found during the course of survey was claimed to be the dumb document by the assessee and no addition, therefore, can be made on the basis of such figure mentioned in the said impounded document as admitted in the statement recorded during survey as the assessee has already retracted the said statement which was the sole basis of the proposed addition. 4. In support of the case made out by the assessee several judgments were relied upon as is evident from the order passed by the learned Assessing Officer. However, the learned Assessing Officer has observed that the surrender of Rs. 5 crores made by the assessee before the survey team was not out of threat, fear and/or coercion. With the following finding the addition to the tune of Rs. 3,75,00,000/- was made by the learned Assessing Officer on account of discrepancy found in stock and cash receivable: "5.1.3.3 These discrepancies clearly depict that books of accounts of the assessee are not reliable. During the course of survey proceedings, the assessee was specifically asked about the discrepancies pointed out in the closing stock and loose papers. On confrontation, the assessee did not give the name and complete addr....
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.... on account of excess stock and cash receivable was actually undisclosed income of the assessee and liable to be taxed. As mentioned earlier para that the books of account of the are not reliable and deserved to be rejected and same is hereby rejected, considering the discrepancies pointed out above. In view of discussed facts the surrendered income of Rs. 5,00,00,000/- representing the undisclosed income of the assessee from which assessee has already declared an amount of Rs. 1,25,00,000/- under the head other source of income and the remaining of Rs. 3,75,00,000/- is hereby added back to the total income of the assessee as business income. (Addition: Rs. 3,75,00,000/-)" 5. In appeal before the learned CIT(Appeals) the assessee reiterated the stand taken earlier and filed written submissions against such addition of Rs. 3,75,00,000/- made by the Assessing Officer on the basis of statements of partners of the appellant firm recorded during the course of survey. Learned CIT(Appeal) taking into consideration this particular aspect of the matter that the learned AO reached to a conclusion that excess stock and cash receivable as undisclosed income to the tune of Rs. 5 cro....
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....d only partially offered the undisclosed income and the major portion amounting to Rs. 3.75 crore was not offered by him. Therefore, necessary evidences was supposed to be gathered which has not been done. 24. A statement once made cannot be said to be conclusive proof regarding undisclosed income of the assessee. Courts have consistently opined that ultimately it is the nature of the evidences available with the department which will decide the matter whether on the basis of same, any undisclosed income can be assessed in the hands of the assessee or not. 25. It is a trite law and settled legal position that no adverse cognizance should be taken against the assessee on the basis of statement only which is not corroborated by any document/evidence. 26. This fact has been noted by CBDT and also Hon'ble Courts (Harjeev Agarwal 290 CTR 263) Delhi. 27. In the case of M.S Agarwal v. Dy. CIT [2004] 90 ITD 80 (Del.-Trib.), assessee admitted gift to be non-genuine in his statement recorded during search but during the course of assessment proceedings, it was found that there was ample evidence to show that these transactions was disclosed in the book....
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....on the alleged cash sale of Rs. 4,13,85,200/- is taken at 2% (higher than the one recorded in the books and adopted by the Assessing Officer), then also no further addition can be made because the additional income offered by the appellant is enough to take care of additional profits. This is evident from the following calculation. Addition income disclosed Rs. 1,25,00,000/- Less: Excess stock Rs. 8805481/- Less: G.P on negative stock Rs. 67804/- Rs. 36,26,715/- Less: G.P @2% on cash sale Rs. 8,27,704/- 34. Thus, no further addition was required to be made by the Assessing Officer on the basis of statement alone. Even if, the contents of the loose slips is treated as fully true, then also not more than Rs. 8,27,704/- was the income of the appellant on account of loose slips. In that case also, no further addition could have been made. 35. In view of the above discussion, it is held that the Assessing Officer was unjustified in making the addition amounting to Rs. 3,75,00,000/- to the returned income of the appellant firm. Accordingly, the addition is hereby deleted. 36. In view of the decision in respect of Ground No. ....