TMI Blog1993 (7) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... me and style of Pushpa Vihar. The hotel was stated to be Udippi style which provides tea, coffee, cold drinks, light refreshment, lunch and dinner. On 11th Nov., 1987 survey action was conducted at the hotel premises of the assessee firm. In the course of survey, Shri B.N. Shetty, one of the partners of the firm stated on a stamp paper and made affirmation on the oath that during the last three years, the assessee-firm underestimated the sales figures in their IT returns. In order to cover up the errors and omissions in disclosing the true figures of sales he, on behalf of the assessee-firm, declared an amount of Rs. 9,25,000 as additional income and offered the same for taxation for the asst. yr. 1988-89. He also agreed to pay additional t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officers that our father is a heart patient and he is very weak and nervous. Whatever information they require, they may ask us. The officers started interrogating us. We were very much worried about our father's health, and we are confused and perplexed and we were not in our proper frame of mind. We could not produce our books of account as the same are written by part time accountant. The books of account were also incomplete. Officers present, asked us to make voluntary disclosure to cover up understatement of sales and errors of commissions and omissions. After some discussions and negotiations, we agreed that the sales understated be estimated at Rs. 9,25,000 and income in respect of these sales will be declared as additional income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emain, Yours faithfully, (1) Gangadhar N. Shetty (2) Balakrishna N. Shetty (Partners) C: 9th Income-tax Officer, C-III Ward, Bombay." Thereafter another survey operation was conducted at the assessee's premises on 2nd Dec., 1987. As per the Inspector's report, some discrepancies in regard to the cash was found. During the survey, the management had stopped the A.C. room and also stopped making special preparations despite customers' requests. Therefore, the correct sales figure could not be obtained. On this factual background, Revenue authorities concluded that there was concealment in the form of underestimation of sales and on the basis of declaration made by the assessee, the amount was added to the income. The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had obviously time and scope to manipulate the book figures. In the light of all these, the addition was confirmed. 7. Shri D.M. Harish, learned counsel for the assessee, appeared before us. Relevant documents and papers were filed in the form of a paper book. At the outset, Shri Harish tried to demonstrate with reference to the records that the books as maintained by the assessee are correct and complete. The G.P. 36.11 per cent is more than adequate. There is no error in the account. The amount of Rs. 3 lakhs was offered with an intention to buy peace. Further reliance was placed on the following: (i) Kishore A. Meswani (ITA No. 7161/B/87, dt. 7th Aug., 1990) (ii) Raghuvanshi Builders (ITA No. 1057/B/88, dt. 21st July, 1992) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by a person is relevant in deciding the matter. But it is not always conclusive. The person who admitted the fact is at liberty to explain or clarify the circumstances and the nature of statement and also the correct facts. It is well settled that the effect of an alleged admission depends upon the circumstances in which it was made. Therefore, it can be said that an admission is the best evidence that Revenue can rely upon and though not conclusive, is decisive of the matter unless successfully withdrawn and proved erroneous. 10. We now ponder over the possibility of existence of "misunderstanding" in stating the truth while narrating the facts before the Revenue authorities. Shri B.N. Shetty who is a partner of the firm (having 20% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accompanied it. The principle upon which the case falls to be decided (is) simply this: "whether the system of law permits the assessee to alter the admission made before the tax officials in the course of survey proceedings?" It is incumbent on the Revenue to follow the fine norms of jurisprudence. Else the whole process of law will be set at naught. The CIT(A) observed in his order that the assessee did not give any figures to support the declared income of Rs. 3 lacs as done in the second statement. Both the declarations are ad hoc declarations. There is no material to accept that the assessee's first statement was not correct in the sense that the amount of Rs. 9,25,000 represented sales figure and not concealed income that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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