TMI Blog2013 (5) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... iven the break-up of expenditure under various heads namely furniture, repairing and renovation of factory premises and external shed. The assessee vide his retraction has only retracted its answers to question No.23 and 26 & has not retracted the answers given to all the other questions and thus has made retraction on selective basis. Further nothing has been brought on record by the assessee to substantiate its stand as to how it was prevented in making retraction immediately after survey & the retraction was made after a gap of almost 5 months. The assessee vide its answer to question No.26 has stated the source of investments to be unaccounted income other than his business income. Further since the income is not derived from the business as submitted by assessee the assessee is not entitled to deduction u/s. 80IB on the same. Against assessee. - ITA No 3742/Ahd/2008, ITA 3130/Ahd/2010 - - - Dated:- 3-5-2013 - Shri D. K. Tyagi JM And Shri Anil Chaturvedi A.M.,JJ. For the Appellant : Shri Mehul K. Patel For the Respondent : Shri D. S. Kalyan, CIT (DR) ORDER Per: Shri Anil Chaturvedi, Accountant Member. These appeals are filed against the two separate orders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the A.O., assessee carried the matter before the CIT (A). 5. CIT (A) allowed the claim of the assessee for the reason that the Department's appeal for A.Y. 2006-07 was dismissed by the Hon'ble Tribunal. Aggrieved by the order of the CIT(A), the Revenue is now in appeal before us. 6. Before us at the outset the Ld. A.R. submitted that the facts of the year under appeal are identical to that of earlier years. He further, submitted that the department's appeal for earlier year has been dismissed by the Tribunal. He placed on record the copy of the order of the Tribunal for earlier year and submitted that following the order of earlier year the assessee be allowed the deduction u/s. 80-IB of the Act. 7. The Ld. D.R. on the other hand relied on the order of A.O. 8. We have heard the rival submissions and perused the material on record. We find that it is an undisputed fact that the facts in the year under appeal are identical to that of earlier year and Co-ordinate Bench of the Tribunal in the case of the assessee in ITA No.1637/Ahd/2009 order dated 30-7-2010 has allowed the appeal of the assessee by holding as under:- "15....On facts in addition to whatever stated hereinab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,05,900/- on account of income purported to have been disclosed during the course of survey proceedings u/s. 133A of the Act. 2. On appreciation of the facts and circumstances of the case and interpretation of the law, the Ld. A.O. may be directed to grant deduction u/s. 80IB of the I. T. Act, 1961 from the profits and gains of the industrial undertaking considering the same as the only source of the appellant." 10. Ground Nos.1 and 2 are not pressed. Hence dismissed as not pressed. 11. Ground No.3 and 4 and the additional grounds are interconnected and hence they are taken up together for the sake of convenience. 12. Assessee is a firm engaged in the business of manufacturing of telephone call monitors and coin pay phones. Assessee has filed its return of income for A.Y. 2005-06 on 23-12-2005 declaring total income of Rs.5,18,259/-. In the case of the assessee action u/s. 133A was carried out on 9-3-2005. During the course of survey it was noticed that the assessee has made repairing and renovation of the factory premises and has constructed an external factory shed. It was further noticed that the furniture and fixtures were new and further on verification of the books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt cannot be itself be made the basis of addition. The appellant relied upon the decision of Hon'ble Madras High Court in the case of CIT vs. Khader Khan Son reported in 300 ITR 0157 in support of its contention that the addition to income merely on the basis of statement recorded in the course of survey is not valid. The appellant also relied upon several other decisions as well which includes the Hon'ble Apex Court's decision in the case of Pullangode Rubber Produce Co. Ltd. vs. State of Kerala reported in 91 ITR 18. The appellant also relied upon a departmental communication dated 10-3-2003 issued by CBDT in support of its contention that disclosure without independent evidence is not a commendable practice on the part of the A.O. I have perused the factual matrix of the case. Admittedly the addition has been made by the A.O. based on the statement recorded on oath of one of the partner of the appellant firm u/s. 133A of the Act during the time of survey proceedings. It is also evident that the A.O. or the survey party has not found any independent evident as regards such investment as admitted by the A.O. in the remand report. Anyhow as mentioned by the A.O. it is seen that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that the source of making the investments was said to have been made out of the unaccounted income. He pointed out to questionNo.26 copy of which is placed at page 36 of the paper book. He thus submitted that the A. O., has rightly made the addition and the same should be upheld. He also placed reliance on the decision in the and in the case of Hira Singh Co. vs. CIT 230 ITR 791 (HP) and the decision of Tribunal in case of Carpenters Classics(Exim)(P) ltd. vs. DCIT (2007) 108 TTJ (Bang) 760. 17. We have heard the rival submissions and perused the material on record. It is an undisputed fact that the survey operation took place on 9- 3-2005 wherein the statement of Shri Rajul Vora, partner of the firm was recorded. 18. During the course of survey proceedings the questions and answers relevant with respect to the present issue are as under:- "Q.25 As per balance sheet you have made investment two years back. However, it is noticed most of the items are newly made or renovated or fabricated in the factory premises and surroundings. Please explain when these expenses were incurred and where it has been accounted for? Mr. Rajul Vora has replied the above ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not retracted the answers given to all the other questions and thus has made retraction on selective basis. Further nothing has been brought on record by the assessee to substantiate its stand as to how it was prevented in making retraction immediately after survey the retraction was made after a gap of almost 5 months. The assessee vide its answer to question No.26 has stated the source of investments to be unaccounted income other than his business income. He has clearly stated in reply to the question that the income is earned from the undisclosed source and not in the regular course of business income. Further since the income is not derived from the business as submitted by assessee the assessee is not entitled to deduction u/s. 80IB on the same. Assessee has placed reliance on the decision of the co-ordinate Bench in the case of Abbas Nabi Shaikh in ITA No.366/Ahd/2009 order dated 31-8- 2012. Facts in the case of Abbas Nabi Shaikh are distinguishable as in that case, assessee has retracted the entire disclosure made at the time of survey and was not a case of selective retraction and therefore the facts in that case are not comparable to that of the assessee. 21. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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