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2016 (9) TMI 755 - ITAT MUMBAI

2016 (9) TMI 755 - ITAT MUMBAI - TMI - Addition made on the basis of the statement of the assessee recorded during the course of survey u/s.133A. - Held that:- On appraisal of the finding of the CIT(A), it is quite clear that the assessee declared his approximate income for the A.Y.2007-08 to the tune of ₹ 50,00,000/-. The P & L Account of the assessee speaks about the profit to the tune of ₹ 54,83,851/- which is quite near to the assessment assessed by the assessee while making his .....

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ore in view of the said circumstances we of the view that the CIT(A) has passed the order in question correctly and judiciously which does not require to be interfere with at this appellate stage. - Decided against revenue. - I.T.A. No.7782/Mum/12 - Dated:- 10-8-2016 - SHRI D. KARUNAKARA RAO, AM AND SHRI AMARJIT SINGH, JM For The Assessee : Shri Yogesh Thar & Fenil Bhatt For The Department : Shri Kamal Mangal ORDER PER AMARJIT SINGH, JM: The revenue has filed the present appeal against the o .....

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d during the course of survey u/s.133A. 2. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the Assessing Officer restored. 3. The brief facts of the case are that the assessee filed the return of income on 22.05.2007 declaring total income to the tune of ₹ 27,63,342/-. The return of income was processed u/s.143(1) of the Income Tax Act, 1961 ( in short the Act ). The case was selected for scrutiny. Therefore, notice u/s.143(2) of the Act was issue .....

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77,63,940/-. Feeling aggrieved the assessee filed an appeal before the CIT(A) who deleted the said addition, therefore the revenue has filed the present appeal before us. ISSUE NO.1 &2:- 4. Issue no.1 and 2 are interconnected, therefore are being taken up together for adjudication. Under these issues the revenue has challenged the deletion of ₹ 50,00,000/- by the CIT(A) which was added by the Assessing Officer in view of the statement of one of the partner. The learned representative o .....

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hence the CIT(A) has rightly deleted the addition in accordance with law. 5. Keeping in view of the argument advanced by the learned representative of the parties and perused the record carefully, it is observed that the Assessing Officer added the additional income of ₹ 50,00,000/- on the basis of the statement recorded on 13.12.2006. However to make more crystal clear the question and answer of the assessee as well as the authority is hereby produced below:- Q.No.12. As per the register .....

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e additional income of the assessee to the tune of ₹ 50,00,000/- as additional income. Anyhow, how the CIT(A) has dealt this matter is also require to be seen. The finding of the CIT(A) in this regard is hereby reproduced below:- 2.9 I have gone through the facts of the issue. In this case, survey u/s.133A was conducted on 13.12.2006. In the answer to question no.10, the partner has stated that the collections from OPD for the entire amounting year will be around ₹ 30 to 35 lacs. In .....

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profit is ₹ 54,83,851/- (i.e. the income before debiting partner s salary and interest to partners). From this even the estimate made by the appellant during the survey is almost reflected in the actual business results. Further, from the statement recorded and from the assessment order, it is seen that there was no discrepancy found in the accounts maintained by the appellant either during the survey u/s.133A of the I.T.Act or during the assessment proceedings. 2.9Further, it is seen that .....

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pay advance tax bases on the said estimated income, the following two cheques for the advance tax payable have been submitted: 1. Cheque no.05723 dated 15.12.2006 for ₹ 10 lacs drawn on New India Co-operative Bank Ltd. 2. Cheque no.052724 dated 15.03.2007 for ₹ 5 lacs drawn on New India Co-operative Bank Ltd. May we submit that, while estimating the tax on the said income and accordingly, the advance tax, the deduction for the remuneration which the partners would be entitled to on t .....

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377; 20 lacs would be paid to the partners as remuneration, resulting in reduction in the taxable income to that extent. Hence, it is our contention that, 40% of the tax paid ₹ 10 lacs, about ₹ 4 lacs would be the tax on account of the remuneration. The partners who are entitled to such remuneration (equally, as per Clause 7(A) of the Partnership Deed), namely, Dr.Venkateshwar M. Moorthy and Dr.(Mrs.) Smitha V. Moorthy, have considered the same for their estimated income for the year .....

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lacs, respectively, for which the cheques have been submitted. Therefore, out of ₹ 10 lacs of the second installment, we request you to consider the balance of ₹ 4 lacs (the amount in excess of the advance tax liability of ₹ 6 lacs) as towards the third installment would not be required to be paid by the firm. We bring to your attention that this change would be translate into any loss to the Department as mentioned earlier the said amount of ₹ 4 lacs has already been co .....

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the same is not encashed. We request you to consider and record the above proposal and give effect to the Statement made on oath accordingly, for which act of kindness, we shall forever remain grateful. 2.10 This letter also makes it clear that the admitted estimated income during the survey is the net income before considering the salary and interest payable to partners. It is also pertinent to note that the A.O. has not encahsed the cheque for ₹ 5 lacs. All these facts shows that the act .....

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