TMI Blog2019 (10) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... that the A.O. is not justified in making the addition. Therefore, the A.O. is directed to delete this addition. Unaccounted cash - HELD THAT:- We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The fact that the assessee has reflected cash balance as on 15.1.2005 at ₹ 11,965/- is not controverted by the revenue by placing any contrary material, therefore, the addition made is not justified. We therefore, direct the A.O. to delete this addition. Addition of HUF income - Addition on the hands of assessee - HELD THAT:- As perused the materials available on record and gone through the orders of the authorities below. The contention of the assessee is that the document relates to a separate entity who has filed its return of income since 2004-05. The fact that HUF namely M/s. Ramlal Birdichand Vani HUF was assessed to tax is to be verified at the end of the Assessing officer. Therefore, this issue is set aside to the file of the A.O. to decide it afresh. The ground of the assessee s appeal is allowed for statistical purposes. Addition in respect of the advances made to Shri Kamlesh V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against two different orders of the CIT(A), Ujjain dated 1.2.2018 for the assessment year 2005-06. Since the issues are same and grounds are identical, the appeals were taken up together and are being disposed of by way of this consolidated order. First we take up ITA No.491/Ind/2018. In this appeal, the assessee has raised following grounds of appeal: 2. The facts giving rise to the present appeal are that the assessee is an individual engaged in the business of grain, cotton, pulse seed marketing and also money lending. A survey u/s 133A of the Income Tax Act, 1961 (hereinafter called as the Act ) was carried out at the business premises and assessee on 3.5.2005 by the Income Tax Officer Ward- 2, Ratlam. During the course of survey, certain books of accounts and loose papers were found and same were impounded by the survey party. It was observed that entries in the books of accounts on the date of survey was recorded till 15.1.2005. During the course of survey statement of the assessee was recorded. In the statement, the assessee offered additional income of ₹ 32,28,920/- for the year under appeal. However, while filing the return o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- as is unexpalined investment in stock for the relevant previous year. He contended that while drawing the trading account of Udad although based upon the sales bills, sales made after 15.1.2005 were considered but purchases made after 15.1.2005 were not so taken into account. He contended that against the additional income of ₹ 6,83,310/-surrendered by the assessee in his return had declared additional income to the extent of ₹ 4,14,312/- only as per working given in a separate statement of various of closing stock duly prepared and submitted along with the return of income. He submitted that a difference of ₹ 2,68,998/- in respect of variation in closing stock. It may be appreciated that out of 6 items of goods, which were physically found in the business premises of the assessee during the course of survey except one item i.e. udad the assessee has taken the surplus quantity of the stock at the same figure, which were determined by the survey party. The only point of difference in the surplus stock as determined at the time of survey and determined by the appellant while furnishing the return of income is as regard to quantity of valuation of udad and that to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larly, decision of the Hon'ble High Court of Madras rendered in the case of CIT Vs. M/s. S. Khader Khan Son (2008) 300 ITR 157 (Mad) and also the decision of the Hon'ble Supreme Court rendered in the case of Pillangode Rubber Produce Co. Vs. State of Kerala and another (1973) 91 ITR 18 (SC). Therefore, he submitted that the addition sustained by the Ld. CIT(A) of ₹ 26,80,998/- may please be deleted. 4. On the contrary, Ld. D.R. opposed these submissions and supported the orders of the authorities below. Ld. D.R. vehemently argued that the assessee cannot go back from his statement. The assessee had sufficient opportunity during the course of survey to reconcile his stock. But he chose not to do so and remained silent for 7 months. It was only while filing the return of income, the assessee retracted from the statement. The case laws as relied by the Ld. Counsel for the assessee are not applicable under the facts of the present case. 5. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. Undisputedly, the books of accounts of the assessee at the time of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 7. On the contrary, Ld. D.R. opposed these submissions and supported the orders of the authorities below. He contended that the averments so made are afterthought. At the time of survey he did not clarify this position. 8. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The fact that the assessee has reflected cash balance as on 15.1.2005 at ₹ 11,965/- is not controverted by the revenue by placing any contrary material, therefore, the addition made is not justified. We therefore, direct the A.O. to delete this addition. 9. Ground No.3 is against addition of ₹ 12,35,990/-. Ld. Counsel for the assessee reiterated the submissions as made in the written synopsis. It is contended that during the survey two ugai books were found and impounded. In the said book, the ledger account of various farmers and villagers to whom loan on interest basis were given by the separate entity name and style of M/s. Ramlal Birdichand Vani HUF. It is contended that HUF did not furnish return of income prior to assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of survey based upon the material on record, the assessee realized that certain transactions of the loans, as contained in the above stated loose papers, had taken place during the previous year relevant to the preceding assessment year i.e. A.Y. 2004- 05. After realizing such factual situation, the appellant filed his revised return of income for A.Y. 2004-05. In the revised return of income the appellant had shown taxable income at an increased amount of ₹ 4,84,419/- as against the income declared in original return at ₹ 45,040/-. Hence, the assessee had shown additional income of ₹ 4,39,379/-. In the return, the assessee shown interest income of ₹ 33,576/-. He further contended that the assessee realized that peak investment made by him in giving loan to the said persons worked out to be at ₹ 8,45,000/- only. Considering such factual error and further considering the fact that peak amount of investment made by the assessee during the previous year relevant to the assessment year 2004-05 was to the extent of ₹ 4,15,000/- for which he has already revised his return by declaring additional income of ₹ 4,39,379/-. He fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orking of surplus stock of ₹ 8,88,836/- as submitted by the assessee with the return of income, it can be observed that assessee had claimed that on the basis of trading account prepared till 7.12.2004 i.e. till which the books of account of the appellant were written, the appellant was having stock of 150 qtls. of Urad of value of ₹ 1,44,802/-. Further, the appellant had made total purchases of Urad, Arandi, Ground nut, Chana, Makka, Tuar, Soyabean and Cotton during the period from 8.12.2004 to 3.3.2005, i.e. the date of survey, of a sum of ₹ 68,272/-. However, during the above stated period of 8.12.2004 to 3.3.2005, the appellant had also made sales of various kind of goods to the extent of ₹ 2,69,960/-. Accordingly, the value of stock as per books as on the date of survey was worked out at ₹ 47,524/-. Besides holding the stock of his commercial concern i.e. M/s. Gordhanlal Ramlal Vani, the appellant was also having stock of goods of business carried on in his individual name of a sum of ₹ 6,34,720/- on the date of survey. Accordingly, as per the appellant, he was having explained stock of goods of a sum of ₹ 6,82,244/- o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be conducted. It is true that revenue cannot direct the assessee how he should carry out his business but where the assessee tries to create a colourable device such act is not permissible under the law. In the present case, the assessee has claimed that he was running business in proprietary and individual capacity. Therefore, the stock related to proprietary and individual capacity was available at the premises. We are unable to accept this contention of the assessee as the assessee has not disclosed in his accounts related to earlier years that he was carrying out business under the proprietary and individual capacity. The ignorance of law cannot be an excuse to avoid tax liability. Therefore, we do not see any reason to interfere in the finding of the Ld. CIT(A). This ground of the assessee s appeal is dismissed. 20. Ground No.2 of the assessee s appeal is against confirming the addition of ₹ 1,26,001/-. Ld. Counsel for the assessee reiterated the submissions as made in the written synopsis. He contended that as per the cash book, the assessee was having balance of ₹ 1,26,001/- as on the date of survey and 2 days before the survey i.e. on 1.3.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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