TMI Blog2012 (6) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... x Appellate Tribunal upheld the judgment dated March 26, 2007 of the Commissioner of Income-tax (Appeals) Alwar (for short, "the CIT"), who in its turn, confirmed the assessment order passed by the Assessing Officer. 2. The factual matrix of the case is that on May 6, 2002, a survey under sec- tion 133A of the Income-tax Act, 1961 (for short, "the Act") was conducted at the business premises of the appellant-assessee in which it was found that the books of account had been written only up to April 26, 2002, and no entries were thereafter made till the date of survey. The appellant- assessee, however, on December 2, 2003, filed its return of income declaring income of Rs. 6,69,050 along with audited balance-sheet, profit and loss account, tax audit report dated November 22, 2003. Since the survey was carried out under section 133A of the Act, the case of the appellant- assessee was selected for compulsory scrutiny by issuing notice to it under section 143(2) on May 6, 2004, however, the jurisdiction of the case was transferred to the Assistant Commissioner of Income-tax, Circle-2, Alwar, as the income of the appellant-assessee exceeded Rs. 5 lakhs and, there- fore, notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rified by the Assessing Officer. It was contended that the onus of verifying the entries made in the cash book after date of survey was on the Assessing Officer, who has utterly failed to discharge the same. Despite of this contentions raised, the Income-tax Appellate Tribunal has failed to examine them in their true perspective and erred in law in holding that the appellant-asses- see failed to submit cogent explanation. The learned Income-tax Appellate Tribunal was wholly unjustified in rejecting the books of account of the appellant-assessee invoking the provisions of section 145(3) of the Act. Merely because the books of account could not be written for a period of 10 days due to absence of accountant, such books could not be rejected for the entire period. Alternatively, though contrarily, it was argued that once the books of account were rejected and income of the appellant-assessee was calculated on estimated basis, non-recording of some entries in the books lost its relevance for the purpose of estimation of income. 5. Shri Anant Kasliwal, learned counsel for the appellant-assessee further contended that the Revenue authorities have seriously erred in disallowing a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en when he unsuccessfully filed two appeals-one before the Commissioner of Income-tax (Appeals) and another before the Income-tax Appel- late Tribunal. Learned counsel submitted that books of account were not properly maintained by the appellant-assessee which were rightly rejected by the learned Assessing Officer by invoking the provisions of section 145(3) of the Act. The Assessing Officer estimated the sale of the relevant period at rupees two crores and gross profit at 4.25 per cent. He accordingly worked out the gross profit at Rs. 8,50,000 as against Rs. 8,09,939 declared by the assessee and made a trading addition of Rs. 40,061 in the income of the assessee. The Commissioner of Income-tax (Appeals) affirmed the action of the Assessing Officer. 10. The learned counsel submitted that during the course of survey, certain loose slips of sale transactions were found and yet the same were not recorded in the books of account. The appellant-assessee failed to submit any cogent explanation therefor. The Assessing Officer also noted that the appellant had given advance of Rs. 2,50,000 to its sister concern working under the name and stile of M/s. Subham Hotel on May 8, 2002, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the sum of Rs. 2,18,424 and unexplained stock register of Rs. 77,200. Although, during the assessment proceedings the Assessing Officer retained the addition with regard to discrepancy in cash amounting to Rs.2,95,600 detected at the time of survey ; however, he noted that the assessee had included only Rs. 2,18,424 on account of discrepancy in stock of sugar and other goods in his return of income as against a discrepancy of Rs. 2,28,086 found at the time of survey. During the course of survey, inventories were prepared in this regard and the stock as per physical verification was found of Rs. 14,23,250 excluding the stock of sugar at Rs.3,22,336. The stock as per the books of account, excluding sugar, was to the tune of Rs. 13,26,323 and as such the discrepancy that was found, was to the tune of Rs. 96,921. The assessee, while filing the return of income, included a sum of Rs. 87,259 but failed to give any justification for non- inclusion of the differential amount of Rs. 9,662. 14. Similarly the Assessing Officer noted that the assessee had disclosed receipt of interest to the tune of Rs. 900 only, whereas he had given advance of Rs. 2,50,000 to its sister concern working ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retracting from disclosure of undisclosed income made by the latter during the survey proceedings and deleted the additions made on account of excess cash and stock by accepting the updated books of account prepared by the assessee, which were supported by primary evidence on record. It was held that the concurrent findings of fact recorded by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal could not be said to be perverse. 17. In the present case, however, the situation is entirely converse wherein the appellant-assessee failed to give any satisfactory explanation on all the issues referred to above, and could not produce any cogent evidence in support of any such explanation. Not only the Assessing Officer but also the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal in this case have concurrently recorded their findings against the appellant-assessee on all the issues. Those findings in the facts of the present case, in our considered view, cannot be said to be either perverse or erroneous so as to warrant interference by this court. 18. Section 69 of the Act, inter alia, provides that where in the financial year i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly followed by the assessee. It is in that back- ground that the Assessing Officer is entitled to make computation of income or loss for the purpose of assessment in the manner on best judgment assessment basis as per section 144 of the Act. It cannot, there- fore, be accepted that the ingredients of sections 69, 69A, 69B and 69C were not satisfied in the present case because in all these provisions what is provided is that if an assessee is found to be the owner of any money, jewellery or any other valuable articles not recorded in the books of account and fails to offer any explanation about the nature and source thereof or in case any such explanation, if offered, is not satisfactory in the opinion of the Assessing Officer, then this may be deemed to be the income of the assessee for such financial year. Ultimately, therefore, it would be dependent on the nature of explanation submitted by the asses- see and the satisfaction of the Assessing Officer about the acceptability of the same, which is the sine qua non for invoking the provisions contained in sections 69, 69A, 69B and 69C of the Act. It is in this context that the satisfaction of the Assessing Officer about the correctn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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