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2018 (3) TMI 1958 - ITAT JAIPURRevision u/s 263 - survey U/s 133A - excess stock worked out by the survey team and the stock adopted by the survey team as per books of account - Confession of additional Income during the course of search &seizure and survey operation - Excess stock worked out by the survey team and the stock adopted by the survey team as per books of account are disputed by assessee - HELD THAT:- ITO had referred to the fact that consequent upon the survey, the assessee had filed a revised return offering 8 per cent of the contract receipts as net profit before allowing deduction of salary payment made to partners - 8 per cent profit disclosed was deemed to have been arrived at after allowing depreciation and interest on capital paid to the partner - assessee had not paid the amount of ESI on due date and, accordingly, that amount and amount of P.F. were disallowed and added to the total income of the assessee. It could, thus, be seen that the ITO had not accepted the income declared by the assessee in a mechanical way but applied his mind to the various aspects of the matter before completing the assessment. In the statement in the course of survey, the managing partner only stated that an amount of ₹ 19 lakhs was introduced towards advance for sale of land but confirmed only six lakhs. It was on that basis that the balance of ₹ 13 lakhs was offered for the assessment year 1998-99. That was confirmed by the creditors. The Income-tax Officer also verified the above aspects. Therefore, the assumption that what was offered in the statement as ₹ 43 lakhs was in addition to what had been assessed and on that basis, that statement had got evidentiary value, was erroneous and materials collected during the course of survey had been borne in mind by the Assessing Officer who was well aware of the evidentiary value of the statement. At the same time, such survey conducted unearthed certain income and the ITO on the basis of accounts and offer made and admission made before him, came to the conclusion that what was offered in the written offer made by the assessee was reasonable. Admission contained in the statement of the managing partner of the assessee obtained under section 133A was only a qualified one and the assessee had clearly explained the same before the Assessing Officer by cogent materials and the same was accepted by the said officer. [Para 18] The view taken by the ITO could not be said to be unsustainable in law, so as to call it an order passed erroneously. ITO had seized books of account and elicited certain answers which had no evidentiary value. ITO was satisfied about the actual amount received towards advances and only an amount of ₹ 6 lakhs out of the balance was to be further explained and they were telescoped. The entire sum of ₹ 19 lakhs was considered for the block assessment completed in the case of the creditor much before the survey. In those circumstances, the statement of the assessee that the amount of ₹ 13 lakhs offered by him in the statement during the course of survey was only a mistake of fact, could not be brushed aside. Further, in the light of the voluntary disclosure in the letter given in writing by the assessee, the facts given by him had been verified with the books of account and it was only after consideration of the various aspects of the matter and related facts, that the Assessing Officer accepted the offer made by the assessee. In such circumstances, the view taken by the ITO could not be said to be prejudicial to the revenue nor could it be said to be erroneous. Nothing was found in the order of the ITO to warrant a finding that it was unsustainable in law. The Commissioner was not justified in law in invoking the power under section 263 as the twin conditions precedent to exercise the power had not been satisfied in the instant case. Hence, the orders of the Tribunal and the Commissioner were set aside and the order of the ITO was confirmed - we allow the appeal of the assessee.
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