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2015 (10) TMI 1512 - ITAT DELHI

2015 (10) TMI 1512 - ITAT DELHI - TMI - Determination of Income from profession - Held that:- It is an undisputed position that certain registers incorporating month-wise professional receipts and expenses in cash and cheques along with month-wise profit were impounded during the course of survey. Such registers pertained to various years. In so far as the assessment year under consideration is concerned, total income was computed by the AO from such registers to the tune of ₹ 54.00 lac. I .....

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pable that when the assessee pointed out mistakes to the AO in his calculation of professional receipts and expenses for the year in question but the AO chose not to adversely comment the same, the natural presumption is that the assessee’s calculation was correct. Under these circumstances, we are of the considered opinion that the ld. CIT(A) was justified in sustaining the addition at ₹ 40,17,517/-. We are unable to comprehend the rationale behind the assessee’s assailing the addition to .....

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ain deposits in saving bank account no. 702611 maintained with ABN Amro Bank, were transfer entries from one account to another. Even entry-wise details were also furnished which the AO refused to accept for want of any further corroboration. When the current account and savings bank account were available with him, the AO was obliged to cross check the entries. The ld. CIT(A) has examined this aspect and found the assessee’s contention correct. The ld. DR failed to controvert the position ascer .....

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st assessee.

Addition on bank interest - CIT(A) deleted the addition - Held that:- it is noticed that bank interest of ₹ 15,490/- emanating from the savings bank account which was not disclosed by the assessee and other credit entries in this bank account, except the transfer entries, have been separately added, for which we have sustained an addition of ₹ 2,82,838/-. Since the bank interest of ₹ 15,490/- is part of such addition sustained in the first appeal, any fu .....

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- one by the assessee and the other by the Revenue - arise out of the order passed by the CIT(A) on 26.12.2012 in relation to the assessment year 2005-06. This is a recalled matter. 2. First two grounds of the Revenue s appeal are against reducing the Income from profession from ₹ 54,00,899/- as determined by the Assessing Officer (AO) to ₹ 40,17,517/-. 3. Briefly stated, the facts of the case are that the assessee is an Advocate by profession, who filed his original return declarin .....

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d by cheques. During the course of survey operations, certain diaries, registers, loose papers, data from computer copied in hard disk etc. were impounded. These documents were marked as Annexure A-1 to A-27. Entries in these registers were confronted to the assessee during the course of recording of his statement at the time of survey on 1.2.2010. Vide question no. 10, the assessee was required to produce his books of account for the assessment year 2005-06 to 2009-10, in response to which it w .....

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e in this register. The assessee s office prepared details of cash receipts from these registers which were not declared in the income for the assessment years 2005-06 to 2010-11. Although the assessee admitted that these entries were reflected in the register, but, showed ignorance about their non-reflection in the returns of income. On a further query as to whether these entries represented any other receipts such as loan, gift, etc., the assessee replied in negative. After examining the entir .....

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s separate order dated 15.10.2010, which has been incorporated on pages 5 and 6 of the assessment order. On appreciation of the entire material before him, the AO noticed that only cheque receipts were offered for taxation by the assessee and the fee collected in cash was not shown as income. The assessee was given ample opportunity to produce his books of account, bills and vouchers for the expenses during the course of assessment proceedings. No such details were furnished. The AO noticed that .....

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h cheques from the total receipts received during the month in cash or through cheques. Month-wise working of profit from 1.4.2004 to 31.3.2005 as recorded in the register A-7 has been tabulated by the AO on page 9 of assessment order as under:- S. No. Month Name of annexure of impound ed material Receipts recorded from pages (in Rs.) Total amount of receipts during the month (in Rs.) Expenses of cheque Expenses of cash (by other name) Net profit for the month Page No. 1 April, 2004 A-7 77-74 4, .....

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4 -do- 35-30 7,14,291/- 1,02,836/- 75,649/- 5,35,806 30 10 Jan, 2005 -do- 29-23 7,87,609/- 2,03,546/- 1,13,949/- 4,70,114 23 11 Feb., 2005 -do- 22-17 6,16,706/- 1,56,924/- 88,700/- 3,71,082 17 12 March, 2005 -do- 16-10 10,05,307/- 1,89,077/- 1,21,143/- 6,95,087 10 Total 88,13,906/- 13,33,395/ 13,14,147/- 61,66,364 4. The AO noticed that the above calculation of net profit from the register maintained by the assessee for the period relevant to the assessment year under consideration divulged inco .....

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er dated 6.12.2010 contending that the registers impounded during the course of survey were not properly maintained. The assessee filed a chart to reflect the effect of discrepancies in the register as under:- Month As per AO Brought forward difference Cash difference Other differences Balance Amount June, 2004 416680 9425 55800 351455 July, 2004 605259 3045 114546 487668 Aug, 2004 1699797 341329 1358468 Sept., 2004 861399 158687 702712 Oct, 2004 491775 7000 169515 315260 Nov, 2004 593113 176860 .....

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the exclusion of income offered for two months, namely, April and May, 2004 because this was earned by the partnership firm in which the assessee was a partner at the material time. After deducting net profit of April and May, 2004 amounting to ₹ 3,67,286/- and ₹ 3,98,189/- respectively, from the total net profit as per Register A-7 amounting to ₹ 61.66 lac as reproduced above, the AO determined the amount of professional income at ₹ 54,00,889/-. Since this was the amoun .....

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e. During the course of the first appellate proceedings, the assessee filed, inter alia, a summary of recordings in the impounded register containing infirmities in the calculation of income as made by the AO. The same was sent by the ld. CIT(A) to the AO for comments. The AO vide his letter dated 15.10.2012 concurred with the view of his predecessor and did not mention anything further refuting the claims/objections made by the assessee. The assessee was also given an opportunity to file his co .....

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t by the AO. This resulted into a relief to the extent of ₹ 13,83,372/-. The Revenue is contesting such relief allowed by the ld. first appellate authority and the assessee is assailing the confirmation of addition made in the first appeal. 6. We have heard the rival submissions and perused the relevant material available on record. It is an undisputed position that certain registers incorporating month-wise professional receipts and expenses in cash and cheques along with month-wise profi .....

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discrepancy in such working of net profit submitted by the assessee with any cogent material. When the position is such, we fail to appreciate as to how a different view can be taken from the one canvassed by the ld. CIT(A). It is palpable that when the assessee pointed out mistakes to the AO in his calculation of professional receipts and expenses for the year in question but the AO chose not to adversely comment the same, the natural presumption is that the assessee s calculation was correct. .....

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enance of this addition in his ground of appeal. 7. Ground no. 3 is against restricting the addition of income from undisclosed sources from ₹ 4,99,266/- to ₹ 2,82,838/-. The assessee has also challenged the sustenance of addition. 8. Succinctly, the facts of this ground are that the assessee also maintained a savings bank account No.702611 with ABN Amro Bank (Now RBS) during the year under consideration, which was not disclosed for income-tax purpose. The AO extracted deposits in th .....

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contention to the extent of four entries representing deposits in this bank account to the tune of ₹ 36,295/-. He further observed that the assessee was a partner in Costa & Chopra, Advocates in April, 2004 and drew a salary of ₹ 7,500/- for each month, which was not separately shown as taxable. In the absence of submitting any proof about the claim of transfer entries from another bank account to this bank account, the AO held that the entire amount of ₹ 4,99,266/- (Rs.5,3 .....

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e withdrawals and re-deposits from one account to another. The ld. CIT(A) found correct the assessee s contention about the transfer of money from current account to savings bank account. The Revenue is not happy with the deletion of addition to this extent and the assessee is opposing the sustenance of pro tanto addition. 9. Having heard both the sides on the point and perused the relevant material on record, it is observed that the assessee categorically stated before the AO that certain depos .....

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