TMI Blog2015 (1) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... ct in the computation made by the appellant regarding cash sales and receipts not posted up to 20/10/2009, payment remained/posted up to 20/10/2009. Mainly cash sales at Lalkothi branch, cash sales as per machine at Lalkohti shop, mainly cash sales at Ajmer Road branch, cash sales as machine at Ajmer Road shop, sales worked out from seized material, cash sales as per bill book No. 3101 to 3200, recovery from debtors, payment for expenses and payment for purchases, therefore, we do not find Assessing Officer’s order erroneous and prejudicial to the interest of the revenue. Accordingly, the order of the learned CIT passed U/s 263 of the Act is set aside. - Decided in favour of assessee. - ITA No. 186/JP/2014 - - - Dated:- 16-1-2015 - Shri R. P. Tolani, JM And Shri T. R. Meena, AM,JJ. For the Petitioner : Shri P.C. Parwal (C.A.) For the Respondent : Smt. Rolee Agarwal (CIT). ORDER Per: T. R. Meena, A. M. This is an appeal filed by the assessee against the order dated 21/2/2014 passed by the learned CIT (Central), Jaipur for A.Y. 2010-11. The effective grounds of appeal are as under:- 1 Under the facts and circumstances of the case, the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Assessing Officer gave reasonable opportunity of being heard on this issue, which was responded by the assessee vide letter dated 27/12/2011, which is reproduced as under:- .It is with reference to your order sheet query whereby it is required to explain why the assessee has not offered the amount of ₹ 34,60,400/- in the return, which was surrendered by him in his statement recorded U/s 132(4) as a part of the total surrender of ₹ 2 crores. In this connection we are to submit as under:- 1. In letter dated 24/11/2011 we have furnished a chart explaining the income offered by the assessee/company in which he is director vis a vis the amount surrendered at ₹ 2 crore in statement u/s 132(4). 2. From that statement it can be noted that amount offered in the return is ₹ 1,10,40,000/- as against ₹ 2 crores stated in statement u/s 132(4). The difference is of ₹ 89,60,000/-. This difference is on two counts. One is on account of cash where instead of ₹ 98,39,600/- surrendered u/s 132(4), the amount offered in the return is ₹ 21,63,520/-. The difference is ₹ 76,76,080/-. This difference is mainly on account of the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat during search, ₹ 2 crores was surrendered by Shri Johari Lal Sodhani, however, only ₹ 1,02,00,000/- was declared by him in his return of A.Y. 2010-11 as per letter dated 24/11/2011 of the AR filed during assessment proceedings. The details given below clarify: Surrender Declared in return * Cash found ₹ 98,39,600 ₹ 21,63,520 * Advances against Purchase of plots ₹ 30,00,000 ₹ 30,00,000 * Construction of workshop At Kartarpura Ind. Area ₹ 22,00,000 ₹ 29,62,461 * Construction of shop of Sodhani Sweets Ajmer Road ₹ 10,00,000 ₹ 10,37,956 * Investment in Jewellery ₹ 5,00,000 ₹ 5,00,000 * Advances to close relatives ₹ 34,60,400 ₹ 5,36,063 ₹ 2,00,00,000 ₹ 1,02,00,000 As against surrender of ₹ 2,00,00,000/- only ₹ 1,02,00,000 were declared in the return by the assessee. The computation filed with return is given below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the Assessing Officer s order dated 29/12/2011 is erroneous and prejudicial to the interest of the revenue because, surrender on account of the undisclosed cash to the extent of ₹ 76,76,080/- was not disclosed in the return and was not added to the income in the assessment order dated 29/12/2011 passed U/s 143(3) for A.Y. 2010-11 without specifying the reasons, without giving any finding. The learned CIT gave a show cause notice on the above fact, which was replied by the learned AR on 08/1/2014, which has been reproduced by the CIT on page Nos. 6-7 of her order, it has been found that surrender was revised by the assessee through letter addressed to the ADIT, cash sales, which were not posted on the date of search in the cash books have since been posted in the cash book of the company and have been accepted in the scrutiny assessment of the company (Sodhani Sweets Pvt. Ltd) for A.Y. 2010-11. After considering the assessee s reply, it has been held that the learned Assessing Officer has not verified the cash sales made as per annexure-1 annexed with the order U/s 263 of the Act. The cash book balance at ₹ 83,86,096/- showing balance of company as on date of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee confirmed in reply to question 17 that the amount of ₹ 98,39,600 is related to him and is not entered in regular books of accounts of the company and surrendered this amount willingly for taxation. The contention that cash balance as on 20/10/2009 in the cash book of the company is ₹ 83,86,096/- is only an afterthought and also an eyewash, which is in total negation of the acceptance in statement U/s 132(4) by the assessee that even if all entries were incorporated till 20/10/2010 (date of search) in the books of Sodhani Sweets P Ltd., then too cash balance in the company s books would be at ₹ 6,44,200 only. Moreover, cash balance in company s books irrespective of the amount, does not obliterate the presence of huge cash at residence which was accepted by the assessee as his own income u/s 132(4). It is seen that the A.O. has not verified the contention of the assessee with respect to cash found at residence (as cash sales of seven days prior to the date of search) vis a vis cash deposits made in the bank accounts of the company and of Shri Johari Lal Sodhani. The bank account of the company (M/s Sodhani Sweets P Ltd.) maintained at the Urban Co-operative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 01/12/2009 to DDIT (Inv.3) intimated the position of cash as per books as on the date of search. Thereafter, in course of assessment proceedings, assessee explained the position of cash availability as per the books of accounts vide letter dated 24/11/2011 and 27/11/2011 according to which the cash availability as per the books of accounts on the date of search worked out at ₹ 83,86,096/- after incorporating the cash sales and the cash payment not recorded in the books. The cash receipt and the cash payment was further supported by the detailed working of date wise cash sales and cash payment. The Assessing Officer after examining the same has accepted the cash positions as on the date of search at ₹ 83,86,097/-. Therefore, the order passed by the Assessing Officer accepting the above cash as per the books of accounts cannot be held to be erroneous. Only because the Assessing Officer has not discussed this issue in the assessment order, his order, which is made after detailed inquiry cannot be held to be erroneous. To what extent, the Assessing Officer should made investigation or discuss the issue in the assessment order is a matter left to be wisdom of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pportunity of being heard on short disclosure of income in the return on account of cash, which has been replied by the assessee and considered by the Assessing Officer with detailed evidences. It is true that he has not given detail findings in his order but does not mean, has not considered the assessee s reply on this count. The appellant also explained this difference before the DDIT at the time of search, which has been again reiterated before the Assessing Officer at the time of assessment and also during the course of 263 proceedings. The statement recorded U/s 132(4) of the Act is an evidence under the Income tax proceedings but is rebuttable. The appellant had calculated the difference of cash on the basis of cash sales bill book which had not been considered during the search proceedings. The learned CIT DR had not found any defect in the computation made by the appellant regarding cash sales and receipts not posted up to 20/10/2009, payment remained/posted up to 20/10/2009. Mainly cash sales at Lalkothi branch, cash sales as per machine at Lalkohti shop, mainly cash sales at Ajmer Road branch, cash sales as machine at Ajmer Road shop, sales worked out from seized materia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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