Income Tax Appellate Tribunal - Ahmedabad
Ito vs Becharbhai Karshanbhai Patel on 28 March, 2003
Equivalent citations: (2004)91TTJ(AHD)352
ORDER
S.C. Tiwari, A.M. This appeal has been filed by the department on 16-3-2000, against the order of the learned Commissioner (Appeals)-III, Surat, dated 4-1-2000, in the case of the assessee in relation to assessment order under section 143(3) read with section 147 for assessment year 1994-95. In response, the assessee has filed the cross-objection on 4-2-2003.
2. The only point taken in the revenue's appeal is that the learned Commissioner (Appeals) erred in deleting the addition of Rs. 1,27,461. Facts of the case leading to this appeal, briefly, are that there was a survey under section 133A on 1-5-1993. During the course of survey, the statement of the assessee was recorded and in that statement the assessee agreed to declare an income of Rs. 2 lakhs for the accounting year 1993-94 so as to cover investments out of books of accounts in cash, diamonds and immovable properties. Thereafter, the assessee addressed a letter on 10-7-1993, and another letter on 16-7-1993, to the assessing officer in which the assessee furnished explanations in respect of sources of investment in diamonds and immovable property and the cash found with the assessee during the course of survey under section 133A. In short, the assessee stated that additional income to be declared worked out to Rs. 72,539 only. Thereafter, the assessee filed the return of income for assessment year 1994-95 on 26-8-1994, wherein the assessee included income to the extent of Rs. 72,539 only. No further action except processing under section 143(l) was taken on this return of income. However, the department issued notice under section 148 on 23-8-1996, and, thereafter, the learned assessing officer completed the assessment order under section 143(3) read with section 147 of the Act. In this assessment order, the assessing officer heavily relied on the statement of the assessee at the time of survey. The learned assessing officer held the view that, after having made disclosure during the course of survey action, the assessee could not come forward for retracting the same after a long gap of time. The learned assessing officer, therefore, added a sum of Rs. 1,27,461 to the income declared by the assessee.
3. During the course of hearing before the learned Commissioner (Appeals), the assessee pointed out that the statement during the course of survey was not properly recorded. Soon after the survey, the assessee furnished satisfactory explanations to the assessing officer as to why the additional income should be restricted to Rs. 72,539. The learned Commissioner (Appeals) held the view that disclosure was made by the assessee without indicating any basis. The assessing officer also did not gather any corroborating evidence and bring any material on record to suggest that additional income was indeed Rs. 2 lakhs. He, therefore deleted the addition of Rs. 1,27,461 as not based on adequate material. Aggrieved by this order, the revenue is in appeal before me.
4. During the course of hearing before me, the learned departmental Representative argued that the learned Commissioner (Appeals) seriously erred in holding that the assessing officer had not furnished any corroborating evidence. The assessing officer had relied upon the assessee's own statement and there could not be any better evidence to support the assessment of the entire sum of Rs. 2 lakhs. The learned departmental Representative further argued that the assessee cannot, after having deflected the departmental enquiry by making additional disclosure, go back on his words and offer much smaller amount for assessment. For this purpose, the learned departmental Representative relied upon the order of Tribunal, Mumbai, in the case of Param Anand Builders (P) Ltd. v. Income Tax Officer (1996) 59 TTD 29 (Mum). The learned departmental Representative also placed reliance on the order of the Tribunal Ahmedabad "C" Bench in the case of Manoharlal Kasturchand v. Asstt. CIT (1997) 61 ITD 55 (Ahd),
5. The learned Authorised Representative for the assessee argued that in this case, an ad hoc statement was recorded for disclosure of an additional income of Rs. 2 lakhs. This additional income was computed without any particular basis. The assessee did not identify anything specifically out of books of accounts. After survey, the assessee examined various documents and material available with him and came to the conclusion that the quantum of undisclosed income was much less. He, therefore, immediately wrote to the assessing officer on 10-7-1993 and 16-7-1993, in which the entire situation was explained. Thereafter, the assessee furnished its return of income. No further action was taken by the assessing officer on assessee's return of income. Long after the department issued notice under section 148. The action under section 147 against the assessee was not called for becau se there was no omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment at the stage of the original return of income. The learned Authorised Representative argued that there was no rule that the statement once made was binding upon the assessee for all times to come. It was open to the assessee to furnish further material which the assessee had done long back. In support of his contention, the learnd departmental Representative also placed reliance on the judgment reported in V. Kunhambu & Sons v. CIT (1996) 219 ITR 235 (Kar).
6. On consideration of the matter, I see considerable force in the arguments of the assessee. In this case, statement was recorded during the course of survey on 1-5-1993. Soon thereafter, the assessee explained the factual position as per its letter dated 10-7-1993 and 16-7-1993, and pointed out that the additional income to be disclosed was only Rs. 72,539. No defect was noticed in these letters of the assessee so much so that the assessee's return of income filed on 24-8-1994 was accepted. Thereafter on 23-8-1996, after a gap of about 2 years and 3 months, the department issued a notice under section 148. There was no new material in the possession of the department. From the sequence of events it appears that earlier the assessing officer was satisfied with the original return of income. In this view of the matter, I do not see any infirmity in the impugned order of the learned Commissioner (Appeals). The same is upheld and the appeal is dismissed.
7. In the assessee's cross -objection, the assessee has merely supported the order of the learned Commissioner (Appeals). As a matter of fact, no objection has been made to any part of the impugned order of the learned Commissioner (Appeals). Thus, the CO filed by the assessee is not legally tenable. The same is dismissed as infructuous.
8. In the result, both the department's appeal and the cross-objection are dismissed.