TMI Blog2012 (11) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... return, still in the assessment proceedings the assessee offered to be subject to the addition as originally offered. AO is bound to examine all explanations and evidences in those proceedings, separately while considering the levy of penalty & cannot be bound by any condition of non-levy of penalty at the time of assessment. Thus in view of the facts as the document and cash and stock were found at the premises of the assessee, the additional income was accepted by the Director, assessee responsible person, the Director was confronted with the documents and evidences during survey although they may have been found from possession of employee and no claim of coercion or wrong doing was made even for months after the survey the addition a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h in Annexure-A/9, A/10 and A/11 which were not explained during the survey proceedings and stock difference between the physical stock and the books was also worked out. When these were confronted to the Director, Shri Vasudevbhai Patel, he admitted that the firm had Rs.50 lakhs as undisclosed income and agreed to pay the tax. However, the assessee did not disclose the income which has been agreed to earlier during the survey proceedings and filed its return of income on 10-10-2007 declaring nil income u/s. 115JB of the Act declaring tax on book profit at Rs.2,07,549/-. The assessee was confronted with various facts and circumstances and the assessee offered Rs.50 lakhs to be added to his total income subject to that no penalty be levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act at Rs.21,31,190/- after making an addition of Rs.50,00,000 towards undisclosed income of the appellant. The following disputes arise out of thee said assessment order. 3. During the course of survey action certain loose papers in the form of diary marked as Annexure 9, 1- and 11 was found from the possession of one MKr Rameshbhai Patel (who currently does not work with the appellant company). The appellant was served with a show cause notice and was asked to explain as too why the alleged figure of Rs.1,19,62,115 on the basis of Annexure A 9, 10 and 11 should not be added back to the total income of the appellant. Thereafter the appellant was being provided with the copies of the statements recorded during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer that: (a) Mr Rameshbhai Patel from whose possession the Annexures were found was carrying out the work of handling a pool of cash of the appellant company and the other entities i.e. Bhyangdev Cotton Industries and Shivshakti Ginning Pressing Factory. Accordingly the primary work of Mr Rameshbhai Patel, was to handle physical cash, and it is in these course certain notings appears to have been noted. These entities are group entities in which the Directors of the assessee company are partners in the said firm. (b) Some of the notings referred to in the said Annexures appears to be the personal transactions of Mr. Rameshbhai Patel. (ii) Because of the nature of work handled by Mr Rameshbhai Patel of handling pool of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Annexures were tentative notings and did not belong to the appellant company alone. Since he was handling the pool of cash, the nothings which were noted in the diaries were tentative nothings, the final transactions of which were recorded in the group entities. This fact was also explained to the Authorised Officer during the course of survey. Accordingly, the amount which was being referred by MR Rameshbhai and for which a show cause notice was issued to the appellant company was satisfactorily explained, by the appellant to the Assessing Officer during the course of assessment proceedings which is evident from the fact that no adverse action in this regard was taken. 8. Since the appellant had admitted an additional income of Rs.50,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Director Shri Vasudevbhai Patel, he admitted that the firm had Rs.50 lacs as undisclosed income and agreed to pay the tax. c) No letter or correspondence withdrawing the disclosure made or alleging coercion was made by the assessee till the scrutiny proceedings started about two years later. d) Although, no income was declared on this basis in the return, still in the assessment proceedings the assessee offered to be subject to the addition as originally offered. e) The AO did not examine the explanations of the assessee filed in support of its conduct of not including the disclosed income of Rs.50 lacs in the return clearly because the income was offered again for taxation during assessment proceedings. The assessee s main ..... X X X X Extracts X X X X X X X X Extracts X X X X
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