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2018 (7) TMI 66 - AT - Income TaxAddition made on statement made during survey proceedings - Held that:- Revenue has made additions by heavily relying upon the statement made by the partners during survey proceedings without making much effort to corroborate the same with some further evidences, which could be found during survey proceedings. At the same time, the assessee has also failed to demonstrate any bonafide of the retraction made subsequently and the reasons given, in this regard, are not much plausible in nature. More of factual in nature and the decision has to be arrived at on the basis of factual matrix and observations made by lower authorities during assessment & appellate proceedings. Addition towards excess investment in furniture & fixture - addition has purely been made on an estimated basis only without appreciating the books of accounts. No working has been given anywhere to arrive at the impugned amount. The same appears to have been made merely on a guess work in a very mechanical manner and therefore, the same could not be sustained. Hence, the stand of Ld. first appellate authority, in this regard, stand confirmed - addition of ₹ 3.12 Lacs u/s 41(1) on account of remission of trading liability could not be sustained since Ld. First appellate authority, after appreciating the ledger of the concerned entity namely Sterling Lab has noted that the said party had, in fact, debit balance on the date of survey and the amount was never written off by the assessee in his books of accounts. No infirmity in the stand of first appellate authority in this regard. Addition excess stock found during survey proceedings could also not be sustained since we find that no working, whatsoever, has been given by the survey team so as to arrive at the impugned additions. The assessee has alleged that the stock was lying at three places, which were never visited by the survey team. Out of these three godowns / warehouses, it is undisputed fact that the survey team never visited two places and only dispute is with regard to godown situated at Bhiwandi. This very fact supports the stand of the assessee that no effort, whatsoever, has been made to arrive at actual discrepancy, if any, between physical stock vis-à-vis stocks as per books of accounts. This is further corroborated by the fact that working of discrepancies in the physical stock, valuation thereof, position as per books of accounts and the method of arriving at the impugned addition could not be adduced / demonstrated by the revenue. Therefore, we find no reason to interfere with the stand of Ld. CIT(A) in this regard. Addition of excess cash found during survey proceedings we find that stand of revenue plausible one. It is noted that the addition represent excess cash found at the time of survey proceedings, which the partners of the assessee firm also admitted by way of statement during survey. Now, merely by way of retraction, the aforesaid fact could not be negated. No effort has been made by the assessee to reconcile the actual cash found vis-à-vis cash as per books of accounts on the date of survey rather the AR is merely harping on the point that the statement was made by the partners under pressure. Since the complete onus to reconcile the cash balance on the date of survey rest upon assessee, which has remained un-discharged. Therefore, this addition to the extent of ₹ 8,99,749/- stand confirmed. FAA stand reversed to that extent. - Decided partly in favour of revenue.
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