2016 (1) TMI 529
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....n income admitted during the course of survey U/s 133A and return income." 2. The assessee is an authorized distributorship of Spice Mobile Handset. The assessee filed e-return on 11/10/2010 declaring total income of Rs. 4,81,00,570/-. The case was scrutinized U/s 143(3) of the Income Tax Act, 1961 (in short the Act). The assessee produced books of account as cash book, ledger etc., which was text check by the Assessing Officer. The ld Assessing Officer observed that there was a survey U/s 133A of the Act was conducted at the business premises of the assessee at 244, Frontier Colony, Adarsh Nagar, Jaipur on 11/3/2010. During the course of survey, statement of Shri Dilip Kalra, one of the Director of assessee company was recorded. In reply....
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....ost of the sales and purchases of any company must have been booked by month of March. Books of account of any company are written day to day basis and being the Director of the company he must have knowledge about financial status of the company. There were only 20 days left in the year ending 2009-10. Thus the assessee's argument that regular income was disclosed on the basis of estimation, did not find convincing to the Assessing Officer. The assessee's plea was found to the Assessing Officer an afterthought to release the tax liability only. The ld Assessing Officer relied on the decision of the Hon'ble Allahabad High Court in the case of Dr. S.C. Gupta Vs. CIT (2001) 248 ITR 782 (All), AIR 1963 S.C. 1094, Pullan Code Rubber product Com....
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....essing Officer, the assessee the matter before the ld CIT(A), who had deleted the addition by observing as under:- "2.3 I have considered the facts of the case; assessment order and appellant's written submissions. During the course of survey, director of the appellant company admitted additional income of Rs. 1,62,81,065 for of the current assessment year. Apart from this direction also stated that the regular income for the year is likely to be Rs. 4 crores. Appellant disclosed the additional income of Rs. 1,62,81,065/- separately and therefore there is no dispute about this. However, regular income was disclosed at Rs. 3,18,19,505/- as against likely income of Rs. 4 crores as per statement given during survey. Assessing Officer made th....
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....the assessment order and appellant's submission, it is found that Assessing Officer made addition only on the basis of statement recorded during survey. Even the statement did not give categorical disclosure of income for the year. It was only talking about likely regular income for the year. When estimation of income was made 20 days before the end of accounting year, it is bound to be different. Appellant explained the difference on account of higher depreciation under Income Tax Act, interest paid to directors and other year end provisions etc. which totals up to the addition made by the A.O.. Assessing Officer did not find fault with any of the expense claimed by the appellant. When there was no defect found in the regular books of acco....
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....t, assessee only stated that in current year regular income is expected to be Rs. 4 crores. As on the date of survey a period of 20 days were still left for close of the accounts and at the year-end various incomes/expenditures are to be provided. Therefore on a broad basis assessee stated the probable regular income for the current year at Rs. 4 crores. However on finalization of the accounts, the regular income as per books is arrived at Rs. 3,53 ,41,847/- (in computation such income is worked out at Rs. 3,18,19,505/- because of depreciation factor). The variation between the probable regular income stated in course of survey and that actually worked out on finalization of the account is mainly on account of the following factors:- (i) ....
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.... is estimated, addition can't be made by considering the difference between the probable income and actual income as undisclosed income. He further relied on the decision in the case of CIT Vs. S. Kadarkhan Son 352 ITR 480 wherein the Hon'ble Supreme Court has held that statement U/s 133A does not empower any IT authority to examine any person on oath and therefore statement recorded in survey has no evidentiary value. He further relied on the following case laws: (i) Pullangone Rubber Produce Company Limited Vs. State of Kerala and Another 91 ITR 18 (SC) (ii) ITO Vs. Vijay Kumar Kesar (2010) 36 DTR 13 (Chattisgarh). (ii) Surendra Pal Verma Vs. ACIT 89 ITD 129 (Chd)(TM). He has further drawn our attention on CBDT Instruction....