TMI Blog2024 (1) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... and sale of chicken, fish and goats being carried on by the assessee. In the instant there is no physical distinction between the accounted stock and unaccounted stock. No such physical distinction was found by the Revenue either. We therefore find that the difference in stock so found out by the authorities has no independent identity and is in terms of value terms only and thus part and parcel of entire stock, therefore, it cannot be said that there is an undisclosed asset which existed independently and thus, what is not declared to the department is receipt from business and not any investment as it cannot be co-related with any specific asset and the difference should thus be treated as business income. The income surrendered during the course of survey cannot be brought to tax under the deeming provisions of section 69A of the Act and the same has to be assessed to tax under the head business income as rightly offered by the assessee in the return of income. In absence of deeming provisions, the question of application of section 115BBE doesn t arise and normal tax rate shall apply. The AO is thus directed to assess the income under the head Income from Business/pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout any corroborative material has no evidentiary value. The assessee has proved from the contents of the diary that the surrender was made on basis of incorrect appreciation of facts and therefore, incorrect and unwarranted and cannot be justified by any stretch of imagination. The entries in the diary are clearly incomprehensible in terms of certain minimum particulars to establish any authenticity of the transactions so claimed to be undertaken by the assessee or corroborated with other material found during the course of survey and/or post survey proceedings which is clearly absent in the instant case and therefore, cannot be made basis of addition in the instant case. In view of the prayer so made and relief so sought, and given that the assessee has suo-moto offered a sum of Rs 35 lacs while filing his return of income and has paid taxes by way of advance tax and self assessment thereon, no interference is called for as far as amount of Rs 35 lacs disclosed in the return of income and taxes paid thereon is concerned. Appeal of the assessee is allowed. - SHRI. AAKASH DEEP JAIN, VP SHRI. VIKRAM SINGH YADAV, AM For the Appellant : Shri Sudhir Sehgal, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness premises of the assessee situated at Old Sabzi Mandi, Patiala on 20/10/2017. During the course of survey, the assessee surrendered a sum of Rs. 1,42,50,000/- as per the surrender letter dt. 20/11/2017 and the said surrender comprises of Rs. 9,96,000/- in terms of excess cash found, Rs. 27,54,000/- being the stock difference (Chicken Mutton) and Rs. 1,05,00,000/- in terms of unexplained advances. Subsequently, the assessee filed his return of income on 29/10/2018 wherein he offered the excess cash found and stock difference as business income and as against the unexplained advances of Rs. 1,05,00,000/- the assessee disclosed 1/3rd of the said amount i.e; Rs. 35,00,000/- as business income in the P L Account. 3. The case of the assessee was thereafter selected for compulsory scrutiny and notice under section 143(2) was issued to the assessee dt. 23/09/2019. Thereafter, in terms of notice under section 142(1) dt. 02/12/2020, the assessee was asked to give details of his source of income and details of all business concerns in which he has any business interest. The assessee was also asked to furnish the details of total disclosures made during the course of survey and to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O thereafter issued a specific show cause dt. 18/01/2021 wherein it was stated that during the course of survey, vide letter dt. 20/11/2017, the assessee had voluntarily disclosed an additional income of Rs. 9,96,000/- on account of discrepancy of unexplained excess cash in hand which is unexplained money within the meaning of Section 69A of the Act. Similarly it was stated that the assessee has disclosed an additional income of Rs. 27,54,000/- on account of discrepancy of unexplained excess stock in trade which is unexplained investment within the meaning of Section 69 of the Act and accordingly, assessee was asked to substantiate the manner in which the additional undisclosed income was earned by him, the treatment given in the books of account and the rate of tax at which the tax have been paid on such additional disclosed income. It was further stated by the AO that the assessee has booked the entire additional income as business income in the P L Account. However the additional income relates to unexplained money and unexplained investment within the meaning of Section 69A and 69 of the Act and in respect of which the provisions of Section 115BBE of the Act are applicable. Sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of a particular person more than once. According to the assessee, the advances have revolved more than 50 times over the entire year with respect to a particular person. On perusal of entries in the diary, there are total 77 entries of advances mentioned against various persons. Barring a few cases in which the names of persons, appear twice, most of the names are unique and do appear only once. Thus, the contention raised by assessee that the advances have revolved more than 50 times is not tenable. The assessee was thereafter asked to supply the copies of accounts of such purported customers in his books of accounts and specify the mode of payment of advance alongwith documentary evidence and also submit the name PAN and address of persons from whom advance amount of Rs. 1,00,000 and above has been received. 7. In response, the assessee vide his submission dt. 17/02/2021 submitted that he has already filed his submission explaining the nature and source of the amount surrendered during the course of survey and it was further submitted that Section 69A can be invoked only where the assessee is found to be the owner of and not merely in possession of the article specified in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of income to the extent of aggregate amount of advances. The fact remains that in the nature of the business of the assessee, giving and taking of advance is a necessary incidence and no customer being given an advance would like to keep it as advance only without making any purchase or sale. All these facts indicate that some element of estimation has to be there, since exactitude and precision are impossible to be achieved in the matter of estimates, the income has to be determined on the document itself, and the explanation of the assessee has also to be examined in the light of material itself. 9. The submissions so filed by the assessee were considered by the AO but the same were not found acceptable. As per the AO, the assessee could not furnish satisfactory explanation regarding the source of excess cash, excess stock and unaccounted advances found at the time of survey and keeping in view his inability to explain the said discrepancies, the assessee voluntarily disclosed an additional income of Rs. 1,42,50,000/- by way of voluntary disclosure letter dt. 20/11/2017. It was held by the AO that on perusal of the surrender letter, it is observed that the assessee was not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further the assessee could not furnish any evidence in support of his contention that the advances have revolved more than 50 times in the financial year and therefore the contention raised by the assessee was found not tenable and was rejected. It was held by the AO that the assessee has arbitrarily adopted a ratio of 1:3 to determine the actual sum of money advanced by him and the said methodology adopted by the assessee is without any basis and the same was rejected. Regarding contention of the assessee that the diary impounded during the course of survey is in the nature of dumb document as it does not specify nature of document and date of advances, it was held by the AO that the assessee did not raise any such contention during his statement recorded at the time of survey operation. Infact, the assessee has never disowned the said diary and has duly acknowledged the diary as containing the details of advances made to various persons, the source of which could not be explained by the assessee. It was further held by the AO that the assessee in the return of income has declared 1/3rd of total advances recorded in the diary amounting to Rs. 35,00,000/-. It was accordingly held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses, balance income was offered for taxation. As per the AR, the AO was of the view that the assessee is not eligible for any deduction from the 'income surrendered' during the course of survey and accordingly treated the 'excess cash', 'unexplained advances' and 'excess stock surrendered' of Rs 9,96,000/-,Rs 1,05,00,000/-and Rs 27,54,000/- respectively aggregating to Rs. 1,42,50,000/-, as income from undisclosed sources and charged to tax at higher rate as per provisions of section 115BBE instead of normal rate of tax. The AR argued that a perusal of 'surrender letter' reveals that the assessee had made the surrender as additional income over and above the normal profits of the concern, since the income has been declared as business income, the same should be assessed as 'business income' and not as 'deemed income' under section 69A. The AR argued that Section 69A can be invoked only where the assessee is found to be the owner of and not merely in possession of the article specified in the section and in this case, cash was found in the possession, which were on account of business proceeds and the same was justifiably tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions relating to his business and for that he offered an additional income of Rs.105,00,000/- over and above his normal business income for the A.Y 2018- 19 as 'Unexplained Advance', however, while filing the return of income for the A.Y.2018-19, the assessee declared income of Rs.35,00,000/-, without adding/showing the said additional income of Rs.1,05,00,000/-. As per the AR, the same was added to his taxable income at the time of framing assessment u/s 143(3) of the Act and the addition has been made on the basis of dairy. The AR further argued that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect. As per the AR, Section 133A does not empower any ITO to examine any person on oath, so statement recorded u/s 133A has no evidentiary value and any admission made during such statement cannot be made basis of the addition. The AR argued that since the figure of cash in hand and stock was apparent, the surrender made was declared as such but, however in respect of advances, if the facts are taken at face value the amount of advance goes on ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e books of account of assessee secondly the nature and source of acquisition of assets or expenditure are not explained or not explained satisfactorily. As per the AR, the excess stock found during survey operation is not separately and clearly identifiable but is part of mixed lots of stock found at the premises of the assessee which included declared stock as per books and also the excess stock as computed by the Authorized Officers during the survey operations at the premises and since excess stock is a result of suppression of profit from business over the years and has not been kept identifiable separately but is the part of overall physical stock found, the investment in the excess stock has to be treated as business income. The AR further argued that in case of survey u/s 133A it is to be noted that once a specific surrender made by the assessee has been accepted by the Income Tax Department as business income and tax on the same has been realized, the department cannot take a U- turn while framing the assessment of the assessee by taxing the same under the head Income from other sources under Section 69, 69A and 698 and it has to be assessed under the head Income from Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of the assessee because the addition has not been made solely on the basis of the statement but the addition of Rs. 1,05,00,000/- made by the AO on the basis of entries recorded in the diary impounded during the course of survey and the assessee was not able to explain the same and came forward with a surrender of Rs. 1,05,00,000/- on this account along with the other surrender made on account of excess stock and excess cash and the surrender was confirmed by the assessee through letter dated 20.11.2017 reproduced at page no. 5 of the assessment order. Thus, it is clear that the addition has not been made simply on the basis of statement given by the assessee, rather the assessee through the letter dated 20.11.2017 offered the additional income for taxation and that also at higher rate. From the above surrender letter, it is clear that the surrender of Rs. 1,42,50,000/- was made by the assessee when he was confronted with the discrepancies found during the course of survey. It is also clear that the disclosure of Rs. 1,42,50,000/- was made over and above the normal business income for Financial Year 2017-18 relevant to Assessment Year 2018-19. It was also stated that the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash can come from any source and not necessarily from the business and here also the onus is on the assessee to prove that source of cash is his business income. Mere saying so will not be sufficient and in fact the assessee is required to prove his claim with documentary evidence. Hence this contention of the AR is not found acceptable. In the present case, the assessee was found to be the owner of cash/stock over and above, the cash and stock recorded in the books of accounts, hence, these amounts are to be treated as deemed income u/s 69A or 69 of the Income Tax Act, 1961. Under the facts circumstances of the case, this is found to be a fit case for invocation of provision of Section 11588E since, asset or investment in the form of cash or stock was found in excess of what was appearing in the books of accounts of the assessee and the assessee has not explained the source of investment in excess stock and source of excess cash found during the survey. 15. It was further held by the ld CIT(A) that the AR has submitted that the provision of Section 115BBE are not attracted in this case as the appellant has surrendered the additional income over and above the normal profit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omes under any of specific heads, even if there is any activity which can be remotely/indirectly linked to such deemed income. The word 'source' in the same context would refer to nexus of such income generating activity/transaction with name and identity, creditworthiness of person with whom such activity/transaction was done along with proving the genuineness of transaction also. The requirement of proving these 3 essential ingredients to prove the source in order to escape the rigorous of the deeming fiction has been upheld universally. The conjoint burden of proving the 'nature and source' is therefore, not restricted to merely claiming the nexus of any activity/transaction to a particular credit/income/asset but also requires to establish with cogent evidence the nexus of such activity/transaction with source also by providing the name and identity, creditworthiness of person with whom the activity/ transaction was done along with proving the genuineness of transaction. Thus, the unrecorded excess stock and cash found during survey proceedings, there can be no presumption to treat the value representing such excess stock and cash as application of business inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess premises of the assessee was carried on 20/11/2017 and as borne out from the statement of the assessee recorded during the course of survey, the only source of income noticed during the course of survey was on account of trading of live stock and chicken, goat(meat) and fish and in the statement, he has categorically stated in answer to question no. 2 that he has no other source of income and nothing adverse was found by the Survey team and so stated during the course of survey. It was accordingly submitted that the nature and source of income so found during the course of survey has not been a subject matter of dispute and whatever amount had been surrendered was the business income only. 19. Regarding the findings of the AO that no satisfactory explanation regarding the source of excess stock has been found during the course of survey and as such the provisions of Section 69A are attracted, it was submitted that there is clear cut statement of the assessee that he has been engaged in this business of trading of live stock and other meat items and the departmental official also could not find any other source of income which is borne out from the statement so recorded durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, reference was drawn to the decision of Hon ble Punjab Haryana High Court in the case of CIT Vs. Ravi Kumar, 294 ITR 78 wherein under similar circumstances where certain slip was found and where no dates have been mentioned, it was held by the Hon ble High Court that no adverse inference could be drawn. 22. It was further submitted that thought the assessee during the course of survey proceedings had admitted that this could be nature of advances but it was submitted that the statement recorded during the survey has no evidentiary value as per the decision of Hon ble Supreme Court in case of CIT Vs. S. Khader Khan Son reported in 352 ITR 480 and reliance was also placed on the decision of Hon ble Supreme Court in case of Pullangode Rubber Produce Co. Vs. State of Kerala reported in 91 ITR 18 wherein it was held that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the person who made the admission to show that it is incorrect. Reliance was also placed on the decision of Madras High Court in case of CIT Vs. P. Balasuramanian T.C (A) No. 233 of 2010 dated 6/03/2013 wherein similar findings has been given stati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the same cannot be taken as an admission, as there is no estoppel against the statute and the tax has to be charged as per the normal rates. Thus, this finding of CIT(A) is not correct. 26. It was further submitted that the offer of stock and cash was made by comparing with the regular books of accounts of the assessee, which, he had been maintaining and, whatever, the excess cash or stock was found, the same was offered, meaning thereby that the cash and stock was part and parcel of the same business, which is proved from this fact. 27. It was further submitted that in the balance sheet, there are sundry creditors, debtors also, which proves that the purchases and sales were made on 'whole sale basis' and also the rates of these items are very much variable on day to day basis, because these are perishable goods and, as such, the advances against purchase and sale is normal phenomenon. Further, it may be stated here that there could be no purpose of such advances being outstanding due to nature of business and also, these advances are in round figures and the assessee being in wholesale business of purchases and sales also as stated above, the maximum rotation co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain mentioned in para 4 of the order that the assessee had declared additional income as income from business and the business means the business carried on by the assessee as no other business activity was noticed and, further, the stock as per books had been compared as per the books of accounts to the tune of Rs. 5,30,500/- and which was found as per physical verification at Rs. 32,84,500/- of the business carried on by the assessee and, thus, the excess stock of Rs. 27,54,000/- as offered was of the same business, and, thus, had to be treated as business income. No other activity has been noticed by the Department during survey and same kind of stock, which the assessee is carrying on, was found during the course of survey. Hence, it has to be taxed as business income. Reliance is being placed in the various judgments as cited in the 'judgment set' filed on 26.10.2022 read with judgment set-III in which the judgments in the case of 'Surinder Kumar' and 'Sham Jewellers' have been placed. d. As regards, the offer of surrender of Rs. 1,05,00,000/- on account of the advances, which offer was, later on, corrected to Rs. 35,00,000/-, a bare look at the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the business in Old Sabji Mandi, Patiala as a proprietor and he is engaged in the business of supply of Chicken, Fish and Goat Meat and keeps the stock ready on the basis of his day to day requirements. It has been stated during survey that all the raw material products i.e. Chicken, Fish, Mutton and Goat meat are sold to hotels, shopkeepers and retail customers. h. It was submitted to the Ld. Assessing Officer at page 12 of the order of the Ld. AO, that these advances at best could be attributable to purchases/sales and in view of the fact that the items of the assessee are perishable in nature, the advances as mentioned, cannot be said to be outstanding for a long period of time and at best, the amount could be said to be rotated in short interval of time and that amount has been calculated as, one third of the amount of Rs. 1,05,00,000/- to earn peace of mind and to settle the case, because no customers would like to give an advance for an indefinite period, without their being purchase of material and the same is the case, if the said amount is treated as advances received against the sales. Thus, the consideration of offer of Rs 35 lacs as made by the assessee at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including of the Chandigarh Bench of ITAT in which it has been held that assessee can retract the surrender if it is felt by him that the surrender during survey was on the basis of incorrect appreciation of the facts and, for that, the judgment of Ld. Chandigarh Bench being referred to in the case of Atop Fasteners Pvt. Ltd. and which copy has been placed in the judgment set-Ill at pages 307 to 390 in which it has been held that a higher surrender was made during the survey and which was retracted, while filing the return of income and various judgments starting from page 337 in the judgment set-Ill have been relied upon by the Hon'ble Benches and the findings in the above said case, have been given in para 54 onwards page 364 of the judgment set-III, it is stated that the surrender was made by the proprietor Sh. Jaswinder Singh who is not much educated and no conversant with the financial transactions and looking into the nature contents of the diary, and the business model of the assessee it lacks credibility as is evident from the face of the record itself and the assessee was entirely believing the version of the survey team. The Hon'ble ITAT in the case of Atop Fas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion which places the burden on the one who pleads that he has been coerced the onus to demonstrate it is on that person. The assessee possibly uses the terms coercion loosely alongwith pressure and not coercion perse. Thus, the source of money for such advances stands proved from the findings of the AO in the assessment order and nature of business items dealt in are of perishable in nature, the type of notings in record figure in the diary with no signatures and advances cannot be for indefinite period, it is prayed that addition of Rs. 70 lacs on account of alleged advances be deleted and provisions of Section 115BBE on the income offered during survey being not applicable be correct oblige. 29. The ld DR is heard who has relied on the order and findings of the AO as well as of the ld CIT(A) which we have already taken note of supra and not being repeated for the sake of brevity. 30. We have heard the rival contentions and purused the material available on record. In this case, survey operations u/s 133A was conducted at the business premises of the assessee on 20/10/2017 wherein the statement of the assessee was recorded u/s 131 of the Act. It is a settled pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value as contemplated under law, vide Paul Mathews and Sons v. CIT (2003) 263 ITR 101 (Ker); (iii) The expression such other materials or information as are available with the Assessing Officer contained in Section 158BB of the Income Tax Act, 1961, would include the materials gathered during the survey operation under Section 133A, vide CIT Vs. G.K.Senniappan, [2006] 284 ITR220(Mad)]; (iv) The material or information found in the course of survey proceeding could not be a basis for making any addition in the block assessment, vide decision of this Court in T.C. (A) No. 2620 of 2006 between Commissioner of Income Tax v. S. Ajit Kumar (2008) 300 ITR 152 (Mad); (v) Finally, the word may used in Section 133A(3)(iii) of the Act, viz., record the statement of any person which may be useful for, or relevant to, any proceeding under this Act, as already extracted above, makes it clear that the materials collected and the statement recorded during the survey under Section 133A are not conclusive piece of evidence by itself. 31. Similar view has been taken by the Hon ble Madras High Court in subsequent decision in case of CIT vs P. Balasubramium (supra) where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of the Assessing officer which could demonstrate that certain amount has been actually expended by the assessee by way of investment during the year and which is not recorded in the books of accounts. Similarly, for the deeming provisions of Section 69A to be applied, firstly, there has to be a finding by the Assessing officer that the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and the same is not recorded in the books of accounts maintained by the assessee. Thereafter, the assessee has to be given an opportunity and his explanation has to be sought and in a scenario, where the assessee offers no explanation or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount may be deemed to be the income of the assessee for such financial year. Therefore, to discharge the initial burden, the onus is clearly on the Assessing officer and record a specific finding in this regard based on tangible material and once the same is done, the onus can be shifted to the assessee to explain the nature and source of such investment. Therefore, in our considered view, in the instant case, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock by Rs. 27,54,000/- and the assessee was asked to explain the same. In response, the assessee submitted that he was unable to explain the difference of Rs 27,54,000/- in stock. However, in order to buy piece of mind, he voluntarily surrendered Rs 27,54,000/- over and above his normal business income for the financial year 2017-18 relevant to assessment year 2018-19. 36. We therefore find that the stock physically found has been valued and then, compared with the value of stock so recorded in the books of accounts and the difference in the value of the stock so found has been offered to tax in the statement so recorded of the assessee. The statement of the assessee thus stands corroborated by the stock physically found at the time of survey. There is also no dispute that there is a commonality in the stock so found and as recorded in the books and in absence of which, the comparison would not have been possible and difference would not have been worked out. The Revenue has not pointed out that the excess stock has any nexus with any other activities other than the business of purchase and sale of chicken, fish and goats being carried on by the assessee. There is thus a clear n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cated was not identifiable and hence adjustment was not permitted. 12. Thus the important aspect that emerges from the entire discussion is that for invoking deeming provisions under sections 69, 69A, 69B 69C there should be clearly identifiable asset or expenditure. In the present case we find that entire physical stock of Rs.25,14,306/- was part of the same business. Both kind of stock i.e. what is recorded in the books and what was found over and above the stock recorded in the books, were held and dealt uniformly by the assessee. There was no physical distinction between the accounted stock or unaccounted stock. No such physical distinction was found by the Revenue either. The assessee has repeatedly claimed that unaccounted business income is invested in stock and there is no amount separately taxable under section 69. The department has ignored this claim of the assessee and sought to tax the difference between book-stock and physical-stock as unaccounted investment under section 69 without considering the claim of the assessee that first the business receipt has to be considered and then investment should be treated as coming out of such unaccounted income. The diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch undeclared investment is sought to be taxed is not clearly identifiable or does not have independent identity but is integral and inseparable (mixed) part of declared asset, falling under a particular head, then the difference should be treated as undeclared business income explaining the investment. 14. To conclude sum of Rs.8,10,011/- being difference in stock is represented by undeclared business income. It does not have a separate physical identity. It is to be only taxed under the head business . Other assets have separate physical identity being furniture and fixtures, air conditioners etc. They cannot have a direct nexus with business and therefore investment therein has to be considered under section 69 only. 15. In view of the above, AO is directed to consider the sum of Rs.8,10,011/- as undisclosed business income assessable under the head business and other two sums under section 69. The business income including application of section 40(b) has to be considered accordingly. For calculation of income in view of our above observations, we restore the matter to the file of AO. 38. In the instant case as well, there is no physical distinction betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cussion and in the entirety of facts and circumstances of the case, the income of Rs 9,96,000/- surrendered during the course of survey cannot be brought to tax under the deeming provisions of section 69A of the Act and the same has to be assessed to tax under the head business income as rightly offered by the assessee in the return of income. In absence of deeming provisions, the question of application of section 115BBE doesn t arise and normal tax rate shall apply. The AO is thus directed to assess the income of Rs 9,96,000/- under the head Income from Business/profession and apply the normal rate of tax. 41. Now, coming to unexplained advances, in the statement so recorded of the assessee during the course of survey on 20/11/2017, in Question no. 10, it was stated that during the course of survey, a diary yellow and purple color having name written as pocket no. 106 marked as Annexure 6 has been found at the business premises and on going through the diary, name of certain persons with amount written against their names have been found. The assessee was asked to explain these financial transactions amounting to Rs 1,05,00,000/- and in response, the assessee has stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne basis and without any corroborative evidence, an incorrect inference has been done by the Assessing officer that there are unrecorded advances made by the assessee. As we have held above, the statement u/s 131 on standalone basis without any corroborative material has no evidentiary value. 43. Moving further, we find that during the course of assessment proceedings, the Assessing officer has rejected the contention so raised by the assessee that the diary is a dump document and doesn t specify the nature of advances and date of advances for the reason that the assessee didn t raise the similar contention at the time of recording of his statement during the course of survey and the assessee newer disowned the diary and infact, has admitted and surrendered the amount at the time of survey. Similar findings have been recorded by the ld CIT(A). In this regard, gainful reference can be drawn to the decision of the Hon ble Supreme Court in case of Pullangode Rubber Produce Co. Ltd (supra) wherein the Hon ble Supreme Court has held that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. In the present case, the assessee was found to be in possession of loose slips and not of any valuable articles or things. Neither the possession nor the ownership of any jewellery mentioned in the slips could prove. In view thereof, the provisions of Section 69A of the Act had rightly not been applied by the Tribunal to the facts of the case in hand. Accordingly, question No. 1 is answered against the Revenue and in favour of the assessee. 8. Now, adverting to question No. 2, the Tribunal while allowing the appeal filed by the assessee, in paragraphs 17 and 20 had recorded as under: 17- We have perused the order and material on record particularly the contents of the five documents which show that without any further material, it was not possible and justified to uphold the inference drawn by the Assessing Officer and by the Commissioner of Income-tax (Appeals). It has been correctly pointed out that except for slip No. 2, on which two dates are mentioned, no dates are mentioned on any other slip. It is not further clear whether these were sales or purchases or simply rough estimates of past or future planned and arranged purchases. In fact, from the nature of en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery, which was found from his possession on January 19,1988, and against which the surrender had been made. Thus, looking from any angle, we are unable to uphold the action of the Assessing Officer in making the additions of Rs. 1,642, Rs. 36,140, Rs. 99,000 and Rs. 6,23,000 on the basis of these loose slips. Same are, therefore, deleted. This disposed it of ground Nos. 1 to 5. 9. Learned Counsel for the Revenue, however, could not point out any illegality on the basis of which the findings recorded by the Tribunal could be said to be perverse. Accordingly, question No. 2 is also answered against the Revenue and in favour of the assessee. 45. At the same time, we find that the limited prayer before us relates to and limited to deletion of addition of Rs 70 lacs made by the AO on account of alleged advances out of total advances of Rs 1.05 crores. In view of the prayer so made and relief so sought, and given that the assessee has suo-moto offered a sum of Rs 35 lacs while filing his return of income and has paid taxes by way of advance tax and self assessment thereon, no interference is called for as far as amount of Rs 35 lacs disclosed in the return of income and taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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