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Assistant Commissioner of Income Tax, Circle-5, Jaipur Versus M/s Delta Prime Marketing Pvt. Ltd.

2016 (1) TMI 529 - ITAT JAIPUR

Addition on account of difference between income admitted during the course of survey U/s 133A and return income - CIT(A) deleted the addition - Held that:- The statement recorded U/s 133A as held by the various courts including Hon'ble Supreme Court that statement recorded has no evidentiary value and also rebuttable. The assessee admitted ₹ 4 crores during the survey estimated regular income but books had not been completed as date of survey was 11/3/2010. The statutory deduction such as .....

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R. MEENA, A.M. This is an appeal filed by the revenue against the order dated 13/12/2013 of the learned C.I.T.(A)-IIl, Jaipur for A.Y. 2010-11. The sole ground of appeal is reproduced as under:- On the facts and in the circumstances of the case, the ld CIT(A) has erred in deleting the addition of ₹ 80,99,430/- made by the A.O. on account of difference between income admitted during the course of survey U/s 133A and return income. 2. The assessee is an authorized distributorship of Spice Mo .....

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g the course of survey, statement of Shri Dilip Kalra, one of the Director of assessee company was recorded. In reply to question No. 12, Sh. Dilip Kalra, Director of the assessee company admitted total additional income of ₹ 1,62,81,065 being cash receipts from various parties. Sh. Dilip Kalra also admitted regular income of ₹ 4 crores. Thus total disclosure was ₹ 5.62 crores as on 12/3/2010 but in the return of income filed on 11/10/2010, the assessee had declared total incom .....

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the company in the current year was liable to be about 5.62 crores including surrendered amount of ₹ 1,62,81,065/-. For further clarification, statement of Shri Dilip Kalra is reproduced as under:- Image No. 1 It is clear that the assessee admitted that additional income of ₹ 5.62 crores during the survey proceedings whereas the assessee filed declared income of ₹ 1,81,00,570/-. The assessee s contention that the regular income estimated by the assessee was not based on the boo .....

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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 Company Ltd. Vs State of Kerala 91 ITR 18, Hiralal Maganalal & Com Vs. DCIT, Special Range-52 ITAT Mum .....

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t or coercion, who has also certified that he read over statement and same was found to be correct recorded. The statement was given by the Director is also clear and without any confusion. The statement recorded U/s 133A has evidentiary value. He further relied on the decision in the case of Surjeet Singh Chharba Vs. Union of India 1997 (89) E.L.T. 646 wherein confessional statement given by the assessee before the custom officials though retracted within 60 days, the admission is binding on th .....

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n 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 ₹ 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 ₹ 4 crores. Appellant disclosed the additional income of ₹ 1,62,81,065/- separately and therefore there is no dispute about .....

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lso relied upon certain judicial decisions in which statement recorded during survey was considered important evidence and A.O. can rely on the said statement unless proved otherwise by the appellant. Appellant on the other hand submitted that what was mentioned in the statement during survey was the likely regular income. It was not confirmed regular income since there were 20 days left before the end of accounting year. Appellant submitted that while giving statement in respect of the estimati .....

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upreme Court decision, statement recorded during survey has no evidentiary value and therefore the same alone cannot be relied upon for making addition. On careful analysis of 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 .....

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e basis of a statement given during survey that estimated income for the year would be ₹ 4 crores. If appellant deviates from such estimation, Assessing Officer has to find out whether it is on account of suppression of receipt or claim of bogus expenses. If receipts and expenses are found to be correct then addition cannot be made simply on the basis of statement which is also of likely estimated income. Considering the facts, I do not find any basis in A.O s claim that appellant retracte .....

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ny basis for making addition to the regular income without finding any mistake just of the basis of statement of likely income. Accordingly, addition made by the A.O. is deleted. 4. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the Assessing Officer. At the outset, the ld AR of the assessee has reiterated the arguments made before the ld CIT(A). He further submitted that in statement, assessee only stated that in current year regular income is expected t .....

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. 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) In the books of accounts depreciation has been provided at ₹ 3,70 ,449/- whereas in the return of income depreciation as per Income Tax Act is claimed at ₹ 38,93,445/-. The depreciation was not provided in the books as on the date of survey, it was provided only at the end of the year while final .....

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robable regular income as stated in course of survey and that actually worked out remains at ₹ 12,56,362/- (8099430 - 6843068). This difference is for the reason that at the year-end various expenditures like audit fees, director's remuneration, provisions for outstanding liabilities, claims etc. are provided. (iv) In the statement assessee has only stated the probable regular income as per books at ₹ 4 crores. This can't be considered as sacrosanct. After finalization of the .....

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