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2009 (8) TMI 675

..... il 1, 1997 and other primary records solely on the ground that the assessee had made a confessional statement during the survey proceedings and voluntary payment of tax against the income from undisclosed sources surrendered during the survey proceedings. The primary evidence in the for of purchase bill was rejected on the ground that it was produced at the time of assessment after a considerable period and the retraction was after more than 3.5 months. The parties from whom goods were shown to be purchased and the donor in whose name entries were made in books of account confirmed the entries and verified the transaction, but the Assessing Officer disbelieved them on the ground that the donors were close relative of the assessee and the donation was made in cash. The Commissioner (Appeals) accepted the explanation offered by the assesee and the books of account filed with the return by the assessee as the entries in the books of accounts were supported by the primary evidence. The Commissioner (Appeals) also accepted the explanation that the statement were made by the assessee without understanding the import of the same as he was under stress due to suicidal death of his daughter .....

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..... n 133A of the Act was conducted in the premises of the assessee as well as in the business premises of Kesar Bartanwala , a retail shop of utensils under the ownership of the assessee s mother Smt. Savitri Bai Kesar. During the survey, books of account were found to be maintained only up to March 31, 1997. Physical verification of the stock and cash was made and inventories were prepared with the help and assistance of the assessee. On verification, cash amount of Rs. 4,18,028 was found in the assessee s business premises. An amount of Rs. 3,00,000 was also found in the business belonging to Smt. Savitri Devi Kesar. Thus, total cash of Rs. 7,18,028 was found during the survey. In the statement the assessee admitted that he has not maintained account after March 31, 1997 and he requested for treating cash amount of Rs. 7,18,028 as his undisclosed income for the relevant accounting year and he may be given an opportunity to pay income-tax. Similarly, stock worth Rs. 37,06,697 was found in the premises during the survey and the assessee offered the value of excess stock of Rs. 24,49,707 for taxation after subtracting the value of closing stock as on March 31, 1997. However, the assess .....

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..... n regarding the amount of Rs. 3,00,000 found in the coffer (tijori) was also disbelieved on the ground that the same was not disclosed in his initial statement or final statement of survey. Gifts of Rs. 9,75,000 received by the assessee for the accounting year 1998-99 was also disbelieved on the ground that the donors are close relatives of the assessee, the donors could not explain the sources and availability of the above amount on the date of gift and the gift was given in cash though the donors were holding bank accounts and thus, it was held that the claim of gift is impertinent. With these observations it was held that entire exercise was an after-thought and it was aimed at mitigating the effect of surrender made during survey. Relying upon the judgment of the hon ble Supreme Court rendered in the Customs Act matter it was held that admissions made by the assessee before the Income-tax Officer would bind the assessee. 6. With the aforesaid discussions, an addition of Rs. 6,33,753 towards cash found during survey ; Rs. 24,49,707 towards value of excess stock ; Rs.38,390 towards taxable new goods account ; and Rs. 45,510 towards tax paid new goods account were made and total i .....

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..... ere made on credit which also creates suspicion about the genuineness of the primary records produced by the assessee. The stock covered under these purchases was not found on physical verification. The claim of stock transferred to karigars is not supported by any documentary evidence, such as issue register, covering invoices, vouchers for forwarding expenses, etc. In order to explain the sources of investment for the purchases, the assessee had claimed that he has received gifts from the family members, use of sale proceeds of assets declared under the VDIS and sundry creditors. However, the donors were close relatives and the gifts were made in cash that too without any occasion and there is no independent evidence to support the self-serving statement of the family members. All of them admitted the assessee as the controlling person for financial affairs. In the statement recorded during the survey, the assessee confirmed that VDIS, sale proceeds were used for construction of house property. Initially, the assessee confirmed the cash found at the premises of his mother as his personal cash, however, subsequently, he claimed that the same belongs to his Hindu undivided family. .....

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..... March 31, 1997 without considering the purchases and sales during the intervening period. Whole amount was taken as undisclosed income by taking cash balance as nil. All the primary records on the basis of which books of account were prepared were verified by the Income-tax Officer from the selling parties and the same tallied with the accounts. Entries in the books of account prepared on the basis of vouchers and invoices were produced before the Income-tax Officer, how-ever, the same were rejected. 11. The Commissioner of Income-tax (Appeals) and the Tribunal considering the primary records produced by the assessee have held that the asses-see was having necessary material on the basis of which books of account for the period after April 1, 1997 could be prepared. No serious defects were found in the books of account which entitles addition under section 68 of the Act or for that matter under section 69 or 69A of the Act. It was argued that the findings of fact recorded by the Commissioner of Income-tax (Appeals), which has been subsequently confirmed by the Tribunal, is based on detailed verified primary records and no question of law arises for adjudication of this appeal. It w .....

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..... ision to this effect in section 132(4) itself. The general rule of evidence is that no person can be forced to be a witness against himself. 15. Copies of trading account, profit and loss account and balance-sheet and stock forms filed before the S. T. A. were not filed during the assessment proceeding as the same were never demanded by the Assessing Officer and the assessee had no reason to apprehend that the books of account will be treated as cooked-up by the Assessing Officer since the primary documents produced by the assessee were duly verified by the Income-tax Officer from various parties regarding purchase transactions and since the Assessing Officer also examined the donors to verify the fact of gifts, which was confirmed by all of them with documentary evidence. The assessee did not file various records, which he filed before the STO, which were subsequently filed at the appellate stage. Sections 68, 69 and 69A of the Act are not applicable in the facts of the present case and the same have been duly explained in the written submissions before the Commissioner of Income-tax (Appeals). 16. We have heard learned counsel for the parties. 17. We have already reproduced the f .....

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..... ad discussed the fact regarding survey under section 133A on October 21, 1999 and had verified the books produced which was in the computerized form. Merely negating that they were not the books of account prepared regularly in the course of business it could not be considered as an adverse finding against the assessee. No serious defects were found in the books of account by way of bogus entries which entitled the Assessing Officer to frame addition under section 68 or for that matter under section 69 too. The assessee had submitted separate trading account for taxable goods and tax paid goods and had also given details of opening stock, closing stock, purchases, sales, etc. The Assessing Officer did not disturb the same thereby indirectly accepting the flow of stock from March 31, 1997 to the date of survey. Similarly, with the cash balance the expenses and other claim on account of payments to creditors were not disturbed which were inscribed in the books of account on the basis of primary vouchers and, therefore, were accepted by the Assessing Officer. It was simply rejection by the Assessing Officer without any basis. On the issue of obtaining the gifts and other creditors it .....

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..... red during the survey proceedings in the form of cash and surplus stock. The primary evidence in the form of purchase bills, vouchers, gifts, etc., were rejected as the same were produced at the time of assessment after considerable period and retraction statement was made after more than 3\xba months and the same was an afterthought. From the record it also appears that the Assessing Officer before rejecting the primary evidence had verified the vouchers, purchase bills, gifts, etc., from the parties from whom it was shown to be purchased and the donors on whose names entries were made in the books of account were also interrogated. It also appears that all of them confirmed the entries and verified the transactions, however, the same was disbelieved by the Assessing Officer on the ground that the donors were close relatives of the assessee, the donation was made in cash just to enable the assessee for the purpose of his accounting to show that he made purchases from the money received by him by way of donation. 20. The Commissioner of Income-tax (Appeals) on appreciation of material available on record accepted the explanation offered by the assessee and also accepted the books o .....

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..... nsidering the materials that were filed by the assessee along with his sales tax return before the survey proceedings. The findings are based on the primary evidence produced by the assessee and duly verified by the Assessing Officer during the assessment proceedings under section 143(3) and the same cannot be considered to be a perverse finding without any evidence contrary to record. The finding of the Commissioner of Income-tax (Appeals) has been confirmed by the Tribunal and the Tribunal being the final forum of facts, the Revenue cannot be permitted to challenge the concurrent findings of fact recorded by two appellate forums below. 23. After close examination of the order passed by the Commissioner of Income-tax (Appeals), which has been subsequently confirmed by the Tribunal, we are of the opinion that the findings recorded by both the forums below cannot be termed perverse and beyond record. The Commissioner of Income-tax (Appeals), after considering the material produced by the assessee during the assessment proceedings and on due appreciation thereof, has accepted the explanation of the assessee for retracting his admission as bona fide and further accepted the books of a .....

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