TMI Blog2022 (10) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... rration to various entries relied upon, in the absence of which, merely on the basis of piece of paper, without having any details thereof in regard to the transaction as we have already discussed, hereinabove, the addition is not found to be sustainable. The impugned addition on account of loans/advances is, hereby, deleted. Addition of excess stock - assessee surrendered on account of excess stock found during the course of survey - The assessee submitted that the audited books of accounts are correct and submitted that addition has been made only on the basis of the statement recorded during survey. No unaccounted cells/purchase invoices were found during the survey. No unaccounted lorry receipt, no unaccounted party Ledger found during the said survey. It was further contended by the Ld. AR that the survey team could not have counted and physically could have verified the stock within a limited time period of certain hours of survey. Even the colour pertaining to number of item(pieces/box/pockets/bori) and column of quantity per item(length/area/volume/weight is not mentioned. Such case made out by the assessee has not been able to be controverted by the Ld.DR. Hence, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d/2019 - - - Dated:- 29-9-2022 - Ms. Madhumita Roy, Judicial Member And Shri Bhagirath Mal Biyani, Accountant Member For the Appellant : Shri Rajesh Mehta And Apurva Mehta, A.Rs. For the Respondent : Shri P. K. Mitra, CIT.D.R. ORDER PER MS. MADHUMITA ROY - JM: The instant appeals filed by the assessee are directed against the orders dated 26.09.2019 09.09.2019 Passed by the Commissioner of Income Tax (Appeals)-II, Indore (in short CIT(A) ), arising out of the orders dated 25.12.2018 19.12.2018 passed by the DCIT/ACIT, Khandwa Income Tax Officer, Ward 1, Khandwa; respectively, under section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to the Act ) for Assessment Year 2016-17. 2. The assessee in ITA No. 910/Ind/2019 has raised following grounds: 1. Baseless addition of Rs.3,1l,56,849/- u/s 69.: - That the Ld. AO erred in treating Rs.3,11,56,849/- as undisclosed income u/s 68 and 69 against the facts of the case and against the law and CIT(A) erred in conforming the same U/s 69 of the act, ignoring the fact that the said amount was not an income of the assessee nor any provision of section 68 and 69 were applicable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ground No.1 Ground No. 4: are interlinked and thus taken together for disposal. 3. We have heard the rival submissions made by the respective parties and perused the materials available on record. 4. The brief facts leading to the case is this that a survey under section 133A(1) of the Act was carried out on the business premises of the appellant on 22.09.2015. 5. During the survey, statement of partners of the firm was recorded; as per the Ld.AO, the partner of the firm surrendered total Rs.4,11,56,849/- which includes Rs 48,75,500/- in respect of the difference of closing stock, and Rs 9,68,572/- on account of difference in cash and unsecured loan given to the tune of Rs3,53,12,777/-. However, while filing the return of income the appellant surrendered only a sum of Rs 1 crore as additional income. 6. During the course of assessment proceeding the Ld.AO made addition of Rs.3,11,56,849/- on account of income surrendered during the survey after reducing ₹1 crore being amount voluntarily offered by the appellant in its return of income in the following manner: Particulars Amount in Rs. Total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is neither clear from the said loose paper as to whether it is a list of advances given against any material or service supplied by the assessee. Such submission made by the assessee was not found convincing by the Assessing Officer as the partner of the firm has admitted in his statement that both the diaries contain the name of the persons to whom loans and advances have been given which are not recorded in the books of accounts of the assessee. 10. The relevant observation made by the Ld.AO is as follows: The reply submitted by the assessee in this regard has been carefully verified. However, the same is not found to be convincing. The assessee has made reference of affidavit dated 22.01.2016 which has been filed during the course of assessment proceedings. The claim of the assessee is that it was submitted before the authorities for retraction of income disclosed during the course of survey. However, despite specific request made to the assessee he has failed to produce evidence regarding filing this affidavit before the authorities. In absence of such evidence it can safely be presumed that the assessee is producing this affidavit for the first time during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded during survey has no evidentiary value and further contended that the diary found from the business premises is a dumb document. 12. So far as the reliance made by the Ld.AO on the statement recording during survey is concerned, the assessee has contended that the statement recorded under section 133A has no evidentiary value and any admission made during the statement cannot be allowed to be the basis of addition. He has relied upon several judgments passed by different High Courts including the Hon ble Supreme Court in the case of Commissioner of Income Tax, Salem vs. S. Kader Khan Son reported in (2012 ) 25 taxmann.com 413(SC), the judgement passed by the Hon ble MP High Court in the case of CIT vs. Digambar Kumar Jain, HUF, reported in (2013) 84 DTR 0365, the judgment passed by the Hon ble Kerala High Court in the case of Paul Matthews sons vs. CIT reported in (2003) 129 taxmann 416(KER). Copies of each of the judgment relied upon by the Ld.AR has been duly submitted before the authorities below and before us as well. He has further relied upon the circular issued by the CBDT being F. No. 286/98/2013-IT(INV-II) dated 18.12.2014 the copy whereof has been duly reprod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record any statement of any person which may be useful but does not authorise for taking any sworn in statement. On the other hand, such power to examine a person on oath is specifically conferred on the authorised officer only under section 132(4) in the course of any search or seizure. Thus, the Act whenever it thought fit and necessary to confer such power to examine a person on oath, the same has been expressly provided whereas section 133A does not empower any ITO to examine any person on oath. n contradistinction to the power under section 133A, section 132(4) enables the authorised officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Act. On the other hand, whatever statement recorded under section 133A is not given any evidentiary value obviously for the reason that the officer is authorised to administer oath and to take any sworn in statement which alone has the evidentiary value as contemplated in the law. [Para 11] . 15. In support of the contention made by the assessee that the diary found during survey is a dumb document, it is was specifically stated by the Ld. Counsel appearing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures noted therein. Otherwise the same should be considered as dumb document on which reliance could not placed upon. ii) ITAT Ahmedabad in the case of Nishant Construction Pvt. Ltd vs. ACIT(ITA. No: 1502/AHD/2015) on 14/02/2017 held that It was held that impounded loose sheet can at the most be termed as dumb document which did not contain full details about the dates, and its contents were not corroborated by any material and could not relied upon and made the basis of addition. iii) Honorable Delhi ITAT in the case of Ashwani Kumar vs. ITO, (1992) 42 TTJ (Del) 644 held that, When a dumb document, like the present slip, is recovered and the revenue wants to make use of it, it is the duty of the revenue to collect necessary evidence which may provide an acceptable narration to the various entries. The evidence collected should be such that any reasonable man would accept, the hypothesis advanced by the revenue that the figures written on the right side of the slip represent incomes earned by the assessee. It was conceded by the learned Departmental Representative that no such evidence has been brought on record . After careful reading of the judgment cited above, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at so far as the excess stock is concerned the assessee surrendered ₹4875500/- on account of excess stock found during the course of survey, the assessee submitted that the audited books of accounts are correct and submitted that addition has been made only on the basis of the statement recorded during survey. No unaccounted cells/purchase invoices were found during the survey. No unaccounted lorry receipt, no unaccounted party Ledger found during the said survey. It was further contended by the Ld. AR that the survey team could not have counted and physically could have verified the stock within a limited time period of certain hours of survey. Even the colour pertaining to number of item(pieces/box/pockets/bori) and column of quantity per item(length/area/volume/weight is not mentioned. Such case made out by the assessee has not been able to be controverted by the Ld.DR. Hence, in the absence of any valid documents, the addition made in regard to excess stock found to be not sustainable. Thus, the same is thus quashed. 20. However, the third component being excess cash of Rs.9,68,572/- found during survey could not be explained by the assessee. The same is, therefore, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the assessee about this point, the assessee made following submissions: We have already replied in our letters dated 08.10.2018 27.11.2018 that the firm had no liability of FBT during the AY 2016-17 and nothing of this kind is debited to our Profit Loss Account. Still the same query is being repeated in your notice dated 04.12.2018 also. This appears to be hypothetical figure. We once again request you to please inform us the location / source of this amount of Rs. 21,59,044/- projected as FBT to enable us to submit suitable reply. 27. Despite such categorical submission, the Ld. AO went on making disallowance without even communicating to the assessee, the source of alleged sum of Rs. 21,59,044/-. During appellate proceeding before Ld. CIT(A), the assessee made the same submissions, but the Ld. CIT(A) has also confirmed the disallowance without dealing with submission of assessee properly. 28. Before us, Ld. AR submitted that of late, without the assistance of revenue authorities, the assessee is able to find following figures in P L A/c which add up to Rs. 21,59,044/-: Seed Treatment Expenses Rs. 2,10,488/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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