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2018 (4) TMI 607

e to make addition. In such a situation, no addition can be made or sustained only on the basis of the statement recorded during the survey U/s 133A of the Act. Once the assessee has retracted from the statement then it was on the A.O. to establish beyond any doubt the issues on which the addition has been made. - Once the assessee has submitted up to date cash book and stock register then it was duty of the Assessing Officer to pin point the defects in such books of account particularly with regard to the issues, on which the statement was recorded during the survey. Further in the case of Shri Pawan Kumar, even the Assessing Officer recorded his statement but he has not asked any question with regard to amount of advance of ₹ 10.00 lacs for which the addition has been made only on the basis of a piece of paper, which was not signed by Shri Pawan Kumar. Similarly in the case of debtors, once the assessee has retracted then it was the duty of the Assessing Officer to examine these debtors to establish the truthfulness of the debt. - Decided in favour of assessee - Invoking the provisions of Section 145(3) - estimating the turnover and G.P. - Held that:- The assessee .....

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unt in the return of income. The return was filed declaring total income of ₹ 4,23,780/-. In the assessment proceedings U/s 143(3) of the Act, the income was assessed at ₹ 68,92,550/-. The ld. CIT(A) has confirmed the addition of ₹ 60,09,418/- on the basis of statement recorded during the survey operation and granted part relief to the assessee from the trading addition made after rejecting books of account by invoking the provisions of Section 145(3) of the Act. 4. Now the assessee is in appeal before the ITAT by taking following grounds of appeal: 1. On the facts and in the circumstances of the case the Ld. CIT(A) has grossly erred in upholding the addition of ₹ 8,04,155/- made on account of excess cash found during the course of survey arbitrarily without appreciating the reconciliation submitted, thus the addition of ₹ 8,04,155/- confirmed by Ld. CIT(A) deserves to be deleted. 1.1 That the Ld. CIT(A) has further erred in ignoring the fact that the assessee had submitted vital evidences during the course of assessment proceedings wherein cash as per books of accounts and that found during the course of survey is in parity. Hence the addition of S .....

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be deleted in as much as these additions have been made by ignoring the well established law that no statements can be recorded on oath during the course of survey and if recorded, cannot be relied upon for the purpose of making additions. 6. On the facts and in the circumstances of the case the Ld. CIT(A) has grossly erred in confirming the action of Ld. AO of invoking the provisions of section 145(3) arbitrarily. 6.1 That the Ld. CIT(A) has further erred in confirming the action of Ld. Assessing Officer in varying the turnover declared by the assessee from ₹ 1,70,05,305/- to ₹ 1,80,00,000/- without bringing on record any adverse material to support his contention. Hence the turnover as declared by the assessee deserves to be accepted. 6.2 That the Ld. CIT(A) has further erred in confirming the addition of ₹ 1,42,778/- by applying the G.P. rate at 13.24% instead of 13.17% declared by the assessee. Hence addition of ₹ 1,42,778/- so made deserves to be deleted. 7. Without prejudice to grounds of appeal No. 1 to 6.2 above and in the alternative, the benefit of telescoping and set off of the addition made into each other ought to have been allowed on the additi .....

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,62,000/-. The assessee has not disclosed the amount in return of income and retracted from the statement recorded during survey, then the A.O. must have proceed further to establish his case. Once the assessee is retracted from the statement recorded by the survey team, then the A.O. was duty bound to investigate the issue further to make the addition. He also submitted that all the additions made by the A.O. were based on the statement recorded during the survey and such statement has no evidentiary value in view of the decision of Hon'ble Supreme Court in the case of CIT Vs S.Khader Khan Son 300 ITR 157 (SC). He has also relied on the decision of Hon ble Kerela High Court in the case of Paul Mathews and Sons Vs CIT 263 ITR 101 (Ker) and he pleaded to delete the addition in all these grounds. 6. On the other hand, the ld DR has vehemently supported the orders of the authorities below. The ld DR has relied on the decision of Hon ble Bombay High Court in the case of Dr. Dinesh Jain Vs ITO 45 taxmann.com 442 (Bom) and the decision of Hon ble Rajasthan High Court in the case of Rameshwar Lal Mali Vs CIT 132 Taxman 629 (Raj). 7. The Bench have heard both the sides on these issues. .....

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case of Shri Pawan Kumar, even the Assessing Officer recorded his statement but he has not asked any question with regard to amount of advance of ₹ 10.00 lacs for which the addition has been made only on the basis of a piece of paper, which was not signed by Shri Pawan Kumar. Similarly in the case of debtors, once the assessee has retracted then it was the duty of the Assessing Officer to examine these debtors to establish the truthfulness of the debt. The ld DR has relied on the decision of Hon ble Bombay High Court in the case of Dr. Dinesh Jain Vs. ITO (Supra) and decisions of Hon ble Rajasthan High Court in the case of Rameshwar Lal Mali Vs CIT (supra), we have considered the facts and law involved in these cases and we find that the facts are at variation from these cases, therefore, the ratio laid down in these cases are not applicable to the assessee s case. Considering all these aspects, we find no merit in sustaining the addition only based on the statement recorded during the course of survey. Hence grounds No. 1 to 5 of the appeal are allowed. 8. In the grounds No. 6, 6.1 and 6.2 the issue is regarding sustain the part addition by invoking the provisions of Sectio .....

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