TMI Blog2012 (10) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... sales. Whatever items have been declared by the assessee on account of excess stock have been given benefit correctly by the CIT(A). Since the figures of the sales and purchases were based on factual figures, therefore, it is a case of factual mistake committed by the Survey Party as well as by the AO, which has been rightly corrected by CIT(A). Thus, the assessee on the basis of seized material itself has been able to show that the admission made at the time of survey surrendering the additional income on account of excess stock was not correct and did not show correct state of facts. Therefore, no addition could be made against the assessee on the basis of mere admission according to the facts and circumstances of this case - in favour of assessee. - ITA No. 31/Agra/2012 & C.O. No. 20/Agra/2012 - - - Dated:- 5-10-2012 - Bhavnesh Saini And A. L. Gehlot, JJ. Revenue by : Anuradha, Jr. D.R. Assessee by : Rakesh Gupta, F.C.A. ORDER Per Bhavnesh Saini, J.M.: This appeal by the Revenue and the cross-objection by the assessee against the order of ld. CIT(A)-I, Agra dated 29.06.2011 for the assessment year 2008- 09. In the departmental appeal, the Revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Add : 1. Addition u/s. 69 as discussed above Rs.37,11,782/- 2. Addition u/s. 69A as discussed above ₹ 2,14,000/- Rs.41,86,402/- The working of excess stock of ₹ 37,11,782/- made during the course of survey operation has been discussed in the assessment order as under:- During the course of survey operation u/s. 133(A) on 30.01.2008, inventory of stock were prepared in the business premises of Maya Trading Co. SR. Market, Rawat Para, Agra and its godown. The stock worh ₹ 37,25,1001- was found which is as under:- S.No. Name of Item Quantity in Bags Rate Value (Rs) 1. Supari 292 70x85 17,37,400 2 Plastic Bardana 3 40x20 800 3 Kattha 26 315x20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the excess figure of stock was coming to only ₹ 1, 11,242/- taking, into account the figure of excess stock of ₹ 6,60,000/included in the profit loss account filed alongwith the return of income. The Ld. AR pointed out that the assessee has already surrendered the value of 160 bags of ₹ 6,00,000/- while finalizing its final account which was well reflected in the details filed along with the trading account. On the basis of revised computation of sale and purchase filed in the written submission, it has been pleaded that no further addition is required to be made in the assessment order on account of excess stock in the income declared by the appellant taking into account the fact that the valuation of stocktaking was not done by the survey team properly resulting into over valuation by ₹ 5,02,742/-. With regard to excess cash of ₹ 2,14,000/-, it has been submitted that this excess cash was not surrendered in the hand of the firm but it was the investment made by the partner Shri Neeraj Maheshwari in the appellant firm and the same has been reflected in the return of income filed by him. 2.2 In view of the submission made by the Ld. Counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if it is not correct what are the specific defects in the computation of Ld. AR should be specifically mentioned. (2). As against the addition of ₹ 2, 14,0001- u/s 69A for the excess cash found during survey, it has been submitted by the Ld. AR in the written submission that this cash was surrendered by the partner Mr. Neeraj Maheshwary in his hand. In support of this argument, the statement given by him during the course of survey operation is a/so enclosed in the written submission at page no.9 wherein it has been shown to me that he stated that this cash should be considered as his undeclared income and it has been also stated that it is in addition to the regular income of the firm and he is ready to pay tax on this income. Despite this statement of partner the addition for unexplained cash is made in the assessment order of the firm on the ground that during survey, it was stated by the partner that he has no explanation for this cash and the excess cash surrendered is undisclosed income of the firm. I find contradiction in the statement shown by the Ld. AR and what is discussed in the assessment order by you. Therefore, you are required to produce before me the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by following court decisions - (Jindal Photo Films Ltd. Vs. DCIT(1998) 234 ITR 170, 177, 178-179(Del). 2. During the course of survey a sum of ₹ 2,14,000/- cash was found in excess which was surrendered by the partner Shri Neeraj Maheshwari. In his statement at page no.7(copy enclosed) the partner Shri Neeraj Maheshwari has surrendered ₹ 39,25,782/-Rs. 37,11,782 + ₹ 2,14,000) in the hands a firm M/s Maya Trading Co. After considering the survey report of the ADI in which it was clearly mentioned that the sum of ₹ 2,14,000/- was surrendered in the hands of the firm, hence, the same was added in the hands of the firm as Mr. Neeraj Kumar Maheshwari could not prove the sources of excess cash found in the premises of the firm M/s Maya Trading company. 3.During the course of survey proceedings number of books of account and loose papers and incriminating papers were impounded. As mentioned above a provisional trading was prepared by the survey team on the basis of material and documents available at the time of survey. Since there was difference in the stock physically found during the course of survey and availability as per record /accounts. On the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n provisional trading account. In response to my direction, the AO has further submitted his report vide his letter F. No. ACIT/CC/Maya Tdg/Remand/11-12 dated 22.06.2011 and the same is reproduced as under:- In continuation of remand report filed and explanation asked on 15.6.2011 in connection with the figures of provisional trading account worked out during the course of survey it is submitted as under: (1) That the figures of purchases ₹ 49,00,581/- and sales of ₹ 74,20,097/- worked out by survey team were re-examined with the impounded material. It was noticed that consignment sales of ₹ 6, 86, 753. 85 against Form F seems to be wrongly added in the figures of sales reflected in provisional trading account. After deducting the consignment sales the figure of sales comes to ₹ 67,33,344/- while the appellant submitted the total sales at ₹ 67, 58, 352/-. The difference comes to ₹ 25, 008/-. So far as the figure of purchases are concerned it was further re-examined and the figures submitted by the appellant were also re-examined with the impounded material and no discrepancy was noticed. As the figures of purchases shown in the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operation should be reworked after making another trading account by taking sale figure at ₹ 67,58,352/- and purchase figure at ₹ 71,79,376/-.. 5.6 Regarding excess cash of ₹ 2,14,000/-, after examining the statement of Shri Neeraj Kumar Maheshwari, partner of the appellant firm, it has been found that this amount was finally surrendered in the hand of the firm stating in the statement that this amount is his unaccounted income which is in addition to regular income of the firm. The relevant portion of the statement of Shri Neeraj Kumar Maheshwary is given as under:- Further, from the answer to question no.23 in the statement of Shri Neeraj Kumar Maheshwari, it becomes more clear that excess cash of ₹ 2,14,000/- was declared in the hand of the firm and not in the hand of Shri Neeraj Kumar Maheshwari. The relevant portion of this answer is reproduced as under: - 5.7 In the above answer, the total amount of ₹ 39,25,782/- declared in the name of the appellant firm includes ₹ 37,11,782/- on account of excess stock and ₹ 2,14,000/- on account of excess cash. ₹ 10,50,000/- declared by Sri Neeraj Kumar Maheshwari in his individual n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96,49,807/- 96,49,807/- 6.2 As per the above trading account, the stock of the appellant is coming to ₹ 28,91,455/- as against the stock of ₹ 37,25,100/- found during the course of survey operation. Therefore, the excess stock would come to ₹ 8,33,645/- 37,25,100 28,91,455). As against this excess stock, the appellant has shown that he has already declared the excess stock of ₹ 6,64,850/- as his additional income in the Profit Loss account and hence the figure of excess' stock declared by the appellant was found short by Rs 1,68,795/- {Rs.8,33,645 ₹ 6,64,850/-) and therefore, the AO is directed to add ₹ 1,68,795/- in the income of the appellant u/s. 69 on account of the figure of excess stock as computed above and not disclosed by the appellant in the return of income. Therefore, the addition of ₹ 37,11,742/- made by the AO in the assessment order on account of undisclosed stock is sustained to the extent of ₹ 1,68,795/- and the appellant gets relief of ₹ 35,42,987/-. In the result Ground no.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that sale and purchase figures shown in the provisional trading account made by the survey party was not correctly worked out and the AO also could not justify the figures of sale and purchase shown in the provisional trading account. Therefore, in my opinion, the Ld. AR was able to rebut the confession made by the appellant during the course of survey operation on the basis of impounded document and such rebuttal cannot be brushed aside only on the basis of a statement recorded during the survey operation which was based on a provisional trading account, the correctness of which could not be established by the AO with any supporting evidence. Therefore, in my considered opinion, no addition on the basis of confessional statement can be sustained unless such confession is supported by some documentary evidence and this view has been clearly emphasized by the CBDT in its Instruction No.286/2/2003-IT(lnv.) in which it has been stated as under:- Instances have come to the notice of the Board where assessee have claimed that they have been forced to confess the undisclosed income during the course of search and seizures and survey operations. Such confessions, if not based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of survey is not conclusive and it is open to the assessee to establish that the same was not true and correct by filing the cogent evidence. In support of his contention, he has relied upon the decision of Madras High court in the case of CIT vs. S. Khader Khan Son, 300 ITR 157 and also submitted that the said decision has been confirmed by the Hon ble Supreme Court recently. He has also relied upon several decisions in support of the same contention. The copies of the same are filed in the paper book and also relied upon the decision of Hon ble High Court of Chhattisgarh in the case of ITO vs. Vijay Kumar Kesar, 327 ITR 497. He has also cited some other decisions of the Tribunal, copies of which are filed in the paper book on the proposition that addition was merely made on the basis of statement recorded during the course of survey without bringing any corroborative evidence and the addition cannot be sustained. 4. We have considered the rival submissions and do not find any justification to interfere with the order of the ld. CIT(A). It is well settled law that admission are not conclusive proof of the matter. They may be shown to be untrue or have been made under mistake of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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