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2015 (8) TMI 837 - AT - Income TaxAddition on account of excess cash found during survey - CIT(A) deleted the addition - contention of the assessee is that one of the partners entered into the sale agreement and received advance from six parties as cash in part which was utilized for introducing capital into the firm and balance was utilized for improvement of house property of the partners - Held that:- There is no dispute with regard to the fact that one of the partners of the assessee-firm has owned up the excess cash found during the course of survey subsequent to survey action. It is also not in dispute another partner surrendered the same as undisclosed income during the course of survey. Subsequently, the other partner retracted from his statement and claimed that the excess cash found was in fact capital introduced by other partner. The source of excess cash and unexplained expenses, being the advance received, the partner of firm upon entering into agreement to sale of immovable property. We agree with the view of ld.CIT(A) that so far as issue of taxability of amount introduced by the partners of firm is concerned, the AO has not made any inquiry to verify the veracity of explanation. The partner of firm claims to be his capital introduced into firm’s account. So far as assessee-firm is concerned, it has an explanation although same is subject to further verification on the part of AO. The Revenue has not placed any material suggesting the explanation of assessee being false. Under these facts, we do not see any reason to interfere with the order of ld.CIT(A), same is hereby upheld - Decided against revenue. Addition on account of unaccounted excess stock - CIT(A) deleted the addition - Held that:- Undisputedly, the assessee retracted from the statement recorded during the survey proceedings and offered explanation towards disclosure of ₹ 43,35,039/- out of total disclosure of ₹ 70,02,520/-. The explanation so offered was not accepted by the AO on the ground that purchase bill of ₹ 28,09,862/- and accounts were produced on 24/12/2009 when further verification was impossible due to time constraint. The ld.CIT(A) deleted the addition on the ground that the AO has not found any defects in the books of accounts maintained by the assessee. We do not agree with the reasoning of ld.CIT(A), as the AO has recorded that the purchase bill and related accounts were furnished only on 24/12/2009. Therefore, the AO had not examined the accounts and verified the genuineness of purchase bill. Under these facts, the ld.CIT(A) ought to have verified the veracity of purchase bill and examined the related accounts. The ld.CIT(A) could have sought remand report from the AO. Thus we set aside the order fo the ld.CIT(A) on this ground and restore this issue to the file of AO for decision afresh. The AO would verify the claim of the assessee that one of the purchase bill was not entered into the accounts on the date of survey and the same was recorded subsequently. The AO would also verify the genuineness of purchase bill by making necessary inquiry. Needless to say that the AO would grant sufficient opportunity to the assessee. - Decided in favour of revenue for statistical purpose
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