9911796707
TMI Blog2021 (2) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... radha have invested a sum of Rs. 2,78,75,000/- in purchase of lands at Nellore. Consequent thereto, the AO conducted survey operations in the hands of the assessee u/s 133A of the Act on 30.7.2013. In view of the survey operations, the assessee furnished a letter dated 27.9.2013 voluntarily declaring an amount of Rs. 4,14,42,864/- as his income for the assessment years 2008-09 to 2013-14. Accordingly, the assessee filed his return of income on 02.10.2013 for AY 2013-14 declaring total income of Rs. 2,60,41,500/-. 4. The Ld A.R submitted that the assessee had received advances from his customers for sale of land and they were shown as Sundry creditors in the books. Consequent to the survey operations, the assessee surrendered part of sundry creditors amounting to Rs. 4,14,42,864/- as his income in order to purchase peace from the department. Accordingly, the assessee has offered income for the year under consideration by passing a journal entry in his books of accounts, i.e, by crediting the Profit and Loss account with Rs. 2,60,38,898/- and debiting "Advance Income tax Adjustment a/c". The Ld A.R submitted that the break-up details of Sundry creditors, which was offered as income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The Ld A.R submitted that the above said amount also included major portion of the amount of Rs. 2,60,38,898/- erroneously offered in assessment year 2013-14 by the assessee. The Ld A.R submitted that the assessee challenged the addition of Rs. 4,00,47,110/- made in AY 2008-09 by filing appeal before Ld CIT(A). The first appellate authority has deleted the addition to the extent of Rs. 3,80,93,238/- and confirmed the addition of Rs. 19,53,932/- only. The Ld A.R submitted that the revenue has not challenged the above said order of Ld CIT(A) passed for AY 2008-09 and hence his order has attained finality, meaning thereby, the assessee has proved the cash credits to the extent of Rs. 3,80,93,238/- as per the order of Ld CIT(A). Accordingly, he contended that the very same cash credits cannot be assessed as income in any other year. 9. The Ld A.R submitted that the assessee has prepared a statement furnishing details of creditors assessed in AY 2008-09 and the details of creditors erroneously offered by the assessee in AY 2013-14. This statement would reveal that most of the amounts were received from the creditors in AY 2008-09 itself and the same was also assessed in that year. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings relating to AY 2012-13. Accordingly, it was stated that the reversal of liability was a mistake. The AO, in paragraph 4 of page 2 of the assessment order, captures the same. These facts would make it clear that the assessee has surrendered part of sundry creditors only as his income. 13. There should not be any dispute that the addition u/s 68 of the Act can be made only in the year in which cash credit was received. In this regard, a gainful reference may be made to the decision rendered by Hon'ble Delhi High Court in the case of CIT vs. Usha Stud Agricultural Farms Ltd (2008)(301 ITR 384)(Delhi). 14. In the instant case, we notice that the assessee has received the advances from his customers during the year relevant to AY 2008-09. We also notice that the assessing officer has assessed sundry creditors as unexplained credit u/s 68 of the Act to the tune of Rs. 4,00,47,170/-. The statement of sundry creditors furnished by the assessee at pages 21 to 23 of the paper book, the assessment orders passed for AY 2008-09 and 2012-13 & the appellate order passed for AY 2008-09 reveal the following facts:- (a) The sundry creditors balance outstanding as on 31.3.2012 was Rs. 9, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2007-08. Since it was voluntarily offered by the assessee himself, his plea was rejected. The matter was carried to the Tribunal. Since there was difference of opinion between the members of the Tribunal, the matter was referred to a Third Member. The Hon'ble Third Member held that the above said amount is not taxable in AY 2007-08, even though it was voluntarily offered by the assessee. The decision rendered by Hon'ble Third member is extracted below:- "13. The issue is as to whether the assessee should be subjected to tax on a sum of Rs. 4,28,750/- for two assessment years 2007-08 and 2008-09, even though the assessee himself has offered the said amount as his income for both the above assessment years. 14. The case of the assessee is that the above stated amount of Rs. 4,28,750/- was offered by him as income for the impugned assessment year 2007-08 by mistake, whereas the said amount was rightly offered as income for the subsequent assessment year 2008-09 and the same was assessed after getting the TDS credit and assessment has become final. In order to rectify his mistake of offering the income of Rs. 4,28,750/- for taxation for the assessment year 2007-08, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes and granting refunds and giving reliefs. 3. Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the department for it would inspire confidence in him that he may be sure of getting a square deal from the department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessee on whom it is imposed by law, officers should-- (a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; (b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs. 4. ....... ....... ....... 5. While officers should, when requested, freely advise assessees the way in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2008-09, for which assessment year the assessment has been completed and it has become final. Inspite of this factual knowledge, the assessing authority thought to assess the amount of Rs. 4,28,750/- as the income of the assessee for the impugned assessment year 2007-08 only on the technical ground that the said amount was offered for assessment by the assessee himself voluntarily. 18. The Commissioner of Income-tax(Appeals) after understanding the facts of the case without any confusion, dismissed the plea of the assessee on the ground that when there is no liability as a result of the assessment, there is no scope for appeal. It is the case of the Commissioner of Income- tax(Appeals) that an appeal lies only when the assessee denies his liability to be assessed and in the present case as the assessing authority has accepted the returned income, there is no denial of liability from the side of the assessee. These are all reasonings for self consumption. The Income-tax Act does not authorize levy of tax on the same amount of income more than once. A particular amount of income can be assessed only for once for a particular assessment year. This is very certain. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax for the assessment year 2007-08 is against law. Therefore, I agree with the order of the learned Accountant Member in giving direction to the assessing authority to delete the said amount of Rs. 4,28,750/- from the assessment relating to the assessment year 2007-08. I agree with the learned Accountant Member that the appeal of the assessee is to be allowed." 17. In the instant case also, we have noticed that the assessee has offered the amount of Rs. 2,60,38,898/-, which formed part of sundry creditors balance. Major portion of very same amount was assessed in AY 2008-09 by the AO and deleted by the Ld CIT(A). The assessing officer has accepted the above said creditors in AY 2012-13. We have also noticed that the above said credits were not received during the financial year relevant to AY 2013-14. Hence, even the assessee has surrendered above said amount voluntarily, yet the same is not legally assessable as income of AY 2013-14 as per the provisions of Income tax Act. As observed by Honourable Third member in the case of R Natarajan (supra), the Income tax Act does not authorize levy of tax on the same amount of income more than once. It is also well settled proposition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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