M/s Maya Trading Co, Agra V. A.C.I.T., Central Circle, Agra

CO 20/AGR/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7924 (ITAT-AGRA)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KM ANURADHA
• Assessee Lawyers: RAKESH GUPTA F
• Keywords: Unexplained investment; Business income; Income from undisclosed sources; Search and seizure; Loose papers; Corroborative evidences
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 31/AGRA/2012 ASSTT. YEAR : 2008-09 A.C.I.T., CENTRAL CIRCLE, VS. M/S. MAYA TRADING CO., AGRA. 31/58, TIWARI GALI, RAWATPARA, AGRA. (AGFM 8509 A) C.O. NO. 20/AGRA/2012 (IN ITA NO. 31/AGRA/2012) ASSTT. YEAR : 2008-09 M/S. MAYA TRADING CO., VS. A.C.I.T., CENTRAL CI RCLE, 31/58, TIWARI GALI, AGRA. RAWATPARA, AGRA. (APPELLANT) (RESPONDENT) REVENUE BY : KM. ANURADHA, JR. D.R. ASSESSEE BY : SHRI RAKESH GUPTA, F.C.A. DATE OF HEARING : 26.09.2012 DATE OF PRONOUNCEMENT OF ORDER : 05.10.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE AND THE CROSS-OBJECTION BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-I, AGRA DATED 29.06.2011 FO R THE ASSESSMENT YEAR 2008- 09. IN THE DEPARTMENTAL APPEAL, THE REVENUE HAS CHA LLENGED THE ORDER OF THE LD. CIT(A) IN RESTRICTING THE ADDITION MADE ON ACCOUNT OF EXCESS STOCK TO ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 2 RS.1,68,795/- AS AGAINST THE ADDITION OF RS.37,11,7 82/- MADE BY THE AO. THE PART OF THE ADDITIONS MAINTAINED BY THE LD. CIT(A) THOUG H CHALLENGED IN THE CROSS- OBJECTION BUT LD. AR SEEKS PERMISSION TO WITHDRAW T HE CROSS OBJECTION. THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS WITHDRAWN . 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERED TH E MATERIAL ON RECORD. IN THIS CASE, A SURVEY WAS CONDUCTED ON 30/31.01.2008 DURIN G THE COURSE OF SEARCH AND SEIZURE OPERATION IN THE CASE OF SHANKAR GUTKHA GRO UP. AT THE TIME OF SURVEY, AN EXCESS STOCK OF RS,37,11,782/- WAS WORKED OUT BY TH E SURVEY PARTY ON THE BASIS OF A PROVISIONAL TRADING ACCOUNT PREPARED, SINCE PA RTNER OF THE APPELLANT FIRM COULD NOT EXPLAIN EXCESS STOCK OF RS.37,11,782/-, T HE SAME WAS SURRENDERED AND THEY AGREED TO PAY TAXES ON THE VALUE OF EXCESS STO CK. AT THE TIME OF SURVEY, AN EXCESS CASH OF RS.2,14,000/- WAS ALSO FOUND AND THE SAME WAS ALSO DECLARED BY THE PARTNERS OF THE FIRM AS THE INCOME OF FIRM OTHE R THAN ITS REGULAR INCOME. AFTER THE SURVEY OPERATION, THE APPELLANT FIRM FILED A RE TURN OF INCOME DECLARING AN INCOME OF RS.2,60,620/-, IN THIS RETURN OF INCOME, THE AMOUNT OF EXCESS STOCK DISCLOSED DURING THE SURVEY AMOUNTING TO RS,37,11,7 82/- WAS NOT FOUND TO BE INCLUDED BY THE AO, SIMILARLY, THE AO HAS ALSO NOTE D THAT AN EXCESS CASH OF RS.2,14,000/- FOUND DURING THE SURVEY AND DECLARED BY THE PARTNER OF THE FIRM AS ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 3 THE INCOME OF THE FIRM OTHER THAN ITS REGULAR INCOM E, WAS NOT INCLUDED. IN VIEW OF THESE FINDINGS, THE AO RELYING ON THE REPORT OF SUR VEY FOUND THAT BOOKS OF ACCOUNT OF THE APPELLANT WAS NOT MAINTAINED CORRECT LY AND HENCE, HE REJECTED BOOKS OF ACCOUNT INVOKING THE PROVISIONS OF SECTION U/S 145(3) AND THEREAFTER, HE MADE ADDITION OF RS,37,11,782/- U/S 69 ON ACCOUNT O F UNEXPLAINED INVESTMENT MADE BY THE APPELLANT FIRM IN THE EXCESS STOCK FOUN D DURING THE COURSE OF SURVEY AND RS.2,14,000/- WAS ADDED U/S 69A ON ACCOUNT OF E XCESS CASH FOUND DURING THE COURSE OF SURVEY AND THUS, THE ASSESSED INCOME OF T HE APPELLANT FIRM WAS DETERMINED AT RS.41 ,86,402/- AS COMPUTED BELOW:- INCOME SHOWN BY THE ASSESSEE RS.2,60,620/- ADD : 1. ADDITION U/S. 69 AS DISCUSSED ABOVE RS.37,11,7 82/- 2. ADDITION U/S. 69A AS DISCUSSED ABOVE RS. 2,14 ,000/- RS.41,86,402/- THE WORKING OF EXCESS STOCK OF RS.37,11,782/- MADE DURING THE COURSE OF SURVEY OPERATION HAS BEEN DISCUSSED IN THE ASSESSMENT ORDE R AS UNDER:- 'DURING THE COURSE OF SURVEY OPERATION U/S. 133(A) ON 30.01.2008, INVENTORY OF STOCK WERE PREPARED IN THE BUSINESS PR EMISES OF MAYA TRADING CO. SR. MARKET, RAWAT PARA, AGRA AND ITS GO DOWN. THE STOCK WORH RS. 37,25,1001- WAS FOUND WHICH IS AS UN DER:- S.NO. NAME OF ITEM QUANTITY IN BA GS RATE VALUE(RS) 1 SUPARI 292 70X85 17,37,400 2 PLASTIC BARDANA 3 40X20 800 3 KATTHA 26 315X20 1,63,800 ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 4 4 POWDER 7 15X20 2,100 5 SUPARI (CHURA) 30 60X20 36,000 6 SUPARI 300 70X85 17,85,000 I 37,25,100/- AFTER CONSIDERING THE ABOVE STOCK AND FIGURES OF PU RCHASES AND SALES AS PER ASSESSEE'S BOOKS OF ACCOUNT, A PROVISIONAL T RADING ACCOUNT OF M/S MAYA TRADING CO. WAS PREPARED ON 30.01.2008 BY THE SURVEY TEAM WHICH IS AS UNDER:- OPENING STOCK 15,80,000 SALES 74,20,097 PURCHASES 49,00,465 CLOSING STOCK 13,318 FREIGHT 2,52,654 GP. (9.43%) 6,99,715 --------------- --------------- 74,33,415 74,33,415 --------------- --------------- ON THE BASIS OF ABOVE FIGURES, EXCESS STOCK WORTH R S.37,11,7821- (37,25,100-13,318) WAS FOUND. DURING SURVEY, THE MA IN PARTNER SHRI NEERAJ MAHESHWARI WAS SPECIFICALLY REQUIRED TO EXPL AIN EXCESS STOCK BUT HE COULD NOT EXPLAINED THE SAME AND HE HAD SURR ENDERED THE AMOUNT OF RS.37,11,7821- ON ACCOUNT OF EXCESS STOCK AT THE TIME OF SURVEY AND HE HAD AGREED TO PAY THE DUE TAXES. ' 2.1 THE ASSESSEE CHALLENGED THE ADDITION OF RS.37,1 1,782/- BEFORE THE LD. CIT(A) AND FILED THE WRITTEN SUBMISSIONS ALSO. IN T HE WRITTEN SUBMISSIONS, IT HAS BEEN POINTED OUT THAT THAT THE 'PROVISIONAL TRADIN G ACCOUNT MADE BY THE SURVEY PARTY TO ARRIVE AT THE EXCESS VALUE OF THE STOCK WA S NOT CORRECT BECAUSE THE SALE AND PURCHASE FIGURES WERE NOT CORRECTLY WORKED OUT. IN THIS WRITTEN SUBMISSION, WORKING OUT OF SALE AND PURCHASE FIGURES WAS MADE O N THE BASIS OF THE IMPOUNDED BILLS AND THE VALUE OF THE SALES WAS ARRIVED AT RS. 67,58,352/- AND THE VALUE OF ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 5 PURCHASE WAS ARRIVED AT RS. 71,79,376/-. AFTER WORK ING OUT THE REVISED FIGURE OF SALE AND PURCHASE ON THE BASIS OF THE IMPOUNDED BIL LS, IT WAS SHOWN THAT THE EXCESS FIGURE OF STOCK WAS COMING TO ONLY RS.1, 11, 242/- TAKING, INTO ACCOUNT THE FIGURE OF EXCESS STOCK OF RS.6,60,000/INCLUDED IN T HE PROFIT & LOSS ACCOUNT FILED ALONGWITH THE RETURN OF INCOME. THE LD. AR POINTED OUT THAT THE ASSESSEE HAS ALREADY SURRENDERED THE VALUE OF 160 BAGS OF RS.6,0 0,000/- WHILE FINALIZING ITS FINAL ACCOUNT WHICH WAS WELL REFLECTED IN THE DETAI LS FILED ALONG WITH THE TRADING ACCOUNT. ON THE BASIS OF REVISED COMPUTATION OF SAL E AND PURCHASE FILED IN THE WRITTEN SUBMISSION, IT HAS BEEN PLEADED THAT NO FUR THER ADDITION IS REQUIRED TO BE MADE IN THE ASSESSMENT ORDER ON ACCOUNT OF EXCESS S TOCK IN THE INCOME DECLARED BY THE APPELLANT TAKING INTO ACCOUNT THE FACT THAT THE VALUATION OF STOCKTAKING WAS NOT DONE BY THE SURVEY TEAM PROPERLY RESULTING INTO OVER VALUATION BY RS.5,02,742/-. WITH REGARD TO EXCESS CASH OF RS.2,1 4,000/-, IT HAS BEEN SUBMITTED THAT THIS EXCESS CASH WAS NOT SURRENDERED IN THE HA ND OF THE FIRM BUT IT WAS THE INVESTMENT MADE BY THE PARTNER SHRI NEERAJ MAHESHWA RI IN THE APPELLANT FIRM AND THE SAME HAS BEEN REFLECTED IN THE RETURN OF INCOME FILED BY HIM. 2.2 IN VIEW OF THE SUBMISSION MADE BY THE LD. COU NSEL FOR THE ASSESSEE IN THE ABOVE MENTIONED WRITTEN SUBMISSION, A LETTER A.NO.3 82(10-11)/CIT(A)- I/AGRA/ACIT-CC/AGRA/2011-12 DATED 03.05.2011 WAS W RITTEN TO THE AO ASKING HIS REPORT ABOUT THE COMPUTATION OF SALE AND PURCHA SE FIGURES OF RS.74,20,097/- ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 6 AND RS.49,00,581/- RESPECTIVELY, SHOWN IN THE PROVI SIONAL TRADING ACCOUNT AS SHOWN IN PARA NO. 3.2 OF THIS ORDER, ON THE BASIS O F WHICH, EXCESS STOCK OF RS.37,11,782/- WAS WORKED OUT. SIMILARLY, FOR EXCES S CASH OF RS.2,14,000/-, THE AO WAS ASKED TO C1ARIFY AS THIS CASH WAS DECLARED U NDER WHOSE HAND DURING THE COURSE OF SURVEY OPERATION. THE QUERIES RAISED TO T HE AO IN THE LETTER DATED 03.05.2011 ARE REPRODUCED AS UNDER : (1). THE FIRST ADDITION IS MADE U/S. 69 OF RS.37 ,11,742/- ON THE BASIS OF EXCESS STOCK FOUND DURING SURVEY. THE VALUE OF EXCESS STOCK HAS BEEN COMPUTED AFTER PREPARATION OF PROVIS IONAL TRADING ACCOUNT OF THE APPELLANT ON THE BASIS OF ASSESSEE'S BOOKS OF ACCOUNT. IN THE WRITTEN SUBMISSION, THE LD. AR HAS DISPUTED THE COMPUTATION OF PURCHASE AND SALES SHOWN IN THE PROVISIONAL-TRAD ING ACCOUNT PREPARED IN THE ASSESSMENT ORDER. IN THIS PROVISION AL TRADING ACCOUNT, YOU HAVE COMPUTED PURCHASES AS RS.49, 00, 581/- AND SALES AS RS.74,20,097/- RESPECTIVELY. AS AGAINST THIS COM PUTATION, LD. AR IN HIS WRITTEN SUBMISSION HAS COMPUTED SALE AND PUR CHASE AS RS.71,79,376/- AND RS.67,58,352/- RESPECTIVELY. IT HAS BEEN ARGUED THAT IF THESE FIGURES OF PURCHASE AND SALES ARE TA KEN IN THE PROVISIONAL TRADING ACCOUNT IN PLACE OF SALES AND P URCHASES COMPUTED BY YOU, THERE WILL NOT BE ANY EXCESS STOCK . AFTER EXAMINATION OF THE FACTS GIVEN BY THE LD. AR IN HIS WRITTEN SUBMISSION, PLEASE CLARIFY FOLLOWING ISSUES- (I). THE BASIS FOR COMPUTATION OF PURCHASE OF RS. 4 9,00,581/- SHOULD BE EXPLAINED AS SHOWN IN THE PROVISIONAL TRADING AC COUNT PREPARED BY YOU AND SUPPORTING DOCUMENTS SHOULD ALSO BE PROD UCED DURING HEARING ON THE BASIS OF WHICH THIS FIGURE OF PURCHA SE HAS BEEN COMPUTED BY YOU. (II). THE BASIS FOR COMPUTATION OF SALES OF RS. 74, 20,097/- SHOULD BE EXPLAINED AND SUPPORTING DOCUMENT SHOULD ALSO BE PR ODUCED DURING THE HEARING ON THE BASIS OF WHICH THIS FIGURES OF S ALES HAS BEEN COMPUTED BY YOU. ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 7 (III).PROVIDE YOUR SPECIFIC COMMENTS ON THE COMPUTA TION OF SALE AND PURCHASE GIVEN BY THE LD. AR IN HIS WRITTEN SUBMISS ION. HIS COMPUTATION IS CORRECT OR NOT AND IF IT IS NOT CORR ECT WHAT ARE THE SPECIFIC DEFECTS IN THE COMPUTATION OF LD. AR SHOUL D BE SPECIFICALLY MENTIONED. (2). AS AGAINST THE ADDITION OF RS.2, 14,0001- U/S 69A FOR THE EXCESS CASH FOUND DURING SURVEY, IT HAS BEEN SUBMITTED BY THE LD. AR IN THE WRITTEN SUBMISSION THAT THIS CASH WAS SURRENDERED B Y THE PARTNER MR. NEERAJ MAHESHWARY IN HIS HAND. IN SUPPORT OF TH IS ARGUMENT, THE STATEMENT GIVEN BY HIM DURING THE COURSE OF SUR VEY OPERATION IS A/SO ENCLOSED IN THE WRITTEN SUBMISSION AT PAGE NO. 9 WHEREIN IT HAS BEEN SHOWN TO ME THAT HE STATED THAT THIS CASH SHOU LD BE CONSIDERED AS HIS UNDECLARED INCOME AND IT HAS BEEN ALSO STATE D THAT IT IS IN ADDITION TO THE REGULAR INCOME OF THE FIRM AND HE I S READY TO PAY TAX ON THIS INCOME. DESPITE THIS STATEMENT OF PARTNER T HE ADDITION FOR UNEXPLAINED CASH IS MADE IN THE ASSESSMENT ORDER OF THE FIRM ON THE GROUND THAT DURING SURVEY, IT WAS STATED BY THE PAR TNER THAT HE HAS NO EXPLANATION FOR THIS CASH AND THE EXCESS CASH SU RRENDERED IS UNDISCLOSED INCOME OF THE FIRM. I FIND CONTRADICTIO N IN THE STATEMENT SHOWN BY THE LD. AR AND WHAT IS DISCUSSED IN THE AS SESSMENT ORDER BY YOU. THEREFORE, YOU ARE REQUIRED TO PRODUCE BEFO RE ME THE STATEMENT OF THE PARTNER OF THE FIRM RELIED UPON BY YOU FOR WHICH IT WAS DISCUSSED IN THE ASSESSMENT ORDER BY YOU THAT T HIS CASH IS UNDISCLOSED INCOME OF THE FIRM. YOU SHOULD ALSO GIV E YOUR SPECIFIC COMMENTS WHETHER THE STATEMENT ENCLOSED WITH THE W RITTEN SUBMISSIONS PAGE NO.9 BY THE LD. AR IS CORRECT. THE LD. AR HAS ALSO INFORMED THAT THIS CASH AMOUNT HAS ALREADY BEEN DIS CLOSED BY THE PARTNER IN HIS RETURN INCOME AS HIS INCOME. THE SA ME MAY BE VERIFIED AND COMMENTED BY YOU. 2.3 IN RESPONSE TO THE ABOVE LETTER, A REPORT WAS SUBMITTED BY THE AO VIDE HIS LETTER F.NO.ACIT/CC/MAYA ,TDG/REMAND/11-12 DATED 16 .05.2011 AND THE SAME IS REPRODUCED AS UNDER:- ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 8 '1. DURING THE COURSE OF SURVEY CONDUCTED AT THE BU SINESS PREMISES OF THE ASSESSEE ON 30.01.2008 PROVISIONAL TRADING A CCOUNT WAS PREPARED BY THE SURVEY TEAM ON THE BASIS OF AVAILAB LE DOCUMENT AND INFORMATION GATHERED FROM DIFFERENT SOURCES, CALCUL ATING THE FIGURES OF PURCHASE AND SALE AT RS.49,00,581/- AND RS.74,20 ,097/- RESPECTIVELY WHICH WERE CONFRONTED TO THE ASSESSEE AT THE TIME OF SURVEY AND SAME WAS WELL ACCEPTED BY THE ASSESSEE A ND ACCORDINGLY A SURRENDER OF RS.37,11,782/-WAS MADE BY THE PARTNE R OF THE FIRM SHRI NEERAJ MAHESHWARI (COPY OF PROVISIONAL TRADING ACCOUNT AND CONFESSING STATEMENT OF THE PARTNER ENCLOSED). ACCE PTANCE OF THE ASSESSEE AT THE TIME OF SURVEY ON THE BASIS OF PHYS ICAL STOCK TAKEN AND PROVISIONAL TRADING ACCOUNT WERE ITSELF LEGAL E VIDENCES FOR ITS CORRECTNESS AND GENUINENESS. NO OBJECTION REGARDING PROVISIONAL TRADING ACCOUNT WAS RAISED BY THE ASSESSEE AT THE T IME OF SURVEY. ON THE BASIS OF SURVEY MATERIAL AND REPORT OF SURVEY T EAM AND ADI, THE SAID ADDITION WAS MADE IN THE INCOME OF THE ASSESSE E. RELIANCE IS MADE ON THE FOLLOWING CASE LAW IN WHICH IT IS HELD THAT CONFESSING STATEMENT IS THE BEST EVIDENCE. THE HON'BLE SUPREME COURT IN THE CASE OF NARAYAN BHAGWANTRAO GOSAVI BALAJIWALE VS. GOPAL VINAYAK GOS AVI AIR 1960(SC) 100 AND THIRU JOHN VS. RETURNING OFFICER, AIR 1977(SC) 1724, 1726 AN ADMISSION, MADE CLEARLY AND UNEQUIVOC ALLY, IS THE BEST EVIDENCE AGAINST THE PARTY MAKING IT AND THOUG H NOT CONCLUSIVE, SHIFTS THE ONUS ON TO THE MAKER ON THE PRINCIPLE TH AT WHAT A PARTY HIMSELF ADMITS TO BE TRUE MAY REASONABLY BE PRESUME D TO BE SO AND UNTIL THE PRESUMPTION WAS REBUTTED, THE FACT ADMITT ED MUST BE TAKEN TO BE ESTABLISHED. THE ABOVE CONCLUSION IS ALSO SUPPORTED BY FOLLOWING COURT DECISIONS - (JINDAL PHOTO FILMS LTD. VS. DCIT(1998) 234 ITR 170, 177, 178-179(DEL) . 2.DURING THE COURSE OF SURVEY A SUM OF RS.2,14,000/ - CASH WAS FOUND IN EXCESS WHICH WAS SURRENDERED BY THE PARTNE R SHRI NEERAJ MAHESHWARI. IN HIS STATEMENT AT PAGE NO.7(COPY ENCL OSED) THE PARTNER SHRI NEERAJ MAHESHWARI HAS SURRENDERED RS.3 9,25,782/-RS. 37,11,782 + RS.2,14,000) IN THE HANDS A FIRM M/S MA YA TRADING CO. ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 9 AFTER CONSIDERING THE SURVEY REPORT OF THE ADI IN W HICH IT WAS CLEARLY MENTIONED THAT THE SUM OF RS.2,14,000/- WAS SURRENDERED IN THE HANDS OF THE FIRM, HENCE, THE SAME WAS ADDED IN THE HANDS OF THE FIRM AS MR. NEERAJ KUMAR MAHESHWARI COULD NOT PROVE THE SOURCES OF EXCESS CASH FOUND IN THE PREMISES OF THE FIRM M/ S MAYA TRADING COMPANY. 3.DURING THE COURSE OF SURVEY PROCEEDINGS NUMBER OF BOOKS OF ACCOUNT AND LOOSE PAPERS AND INCRIMINATING PAPERS W ERE IMPOUNDED. AS MENTIONED ABOVE A PROVISIONAL TRADIN G WAS PREPARED BY THE SURVEY TEAM ON THE BASIS OF MATERIA L AND DOCUMENTS AVAILABLE AT THE TIME OF SURVEY. SINCE THERE WAS DI FFERENCE IN THE STOCK PHYSICALLY FOUND DURING THE COURSE OF SURVEY AND AVAILABILITY AS PER RECORD /ACCOUNTS. ON THE BASIS OF PROVISIONA L TRADING ACCOUNT PREPARED BY THE SURVEY TEAM THE EXCESS STOCK OF RS. 37, 1,182/- WAS FOUND. CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE REJECTED U/S1 45 (3) OF THE I. T. ACT, 1961. 2.4 IN THE ABOVE REPORT, THE AO AFTER RELYING ON TWO CASE LAWS IN THE CASE OF NARAYAN BHAGWANTRAO GOSAVI BALAJIWALE VS. GOPAL VIN AYAK GOSAVI AIR 1960(SC) 100 AND THIRU JOHN VS. RETURNING OFFICER, AIR 1977(SC) 1724, 1726 & JINDAL PHOTO FILMS LTD. VS. DCIT(1998) 234 ITR 17 0, 177, 178-179(DEL) ARGUED THAT THE ADMISSION DURING THE COURSE OF A SU RVEY IS THE BEST EVIDENCE AND THEREFORE, THE EXCESS DECLARED BY THE ASSESSEE DURI NG THE SURVEY SHOULD BE ACCEPTED. HOWEVER, HE DID NOT GIVE ANY COMMENT ON T HE BASIS OF COMPUTATION OF PURCHASE FIGURES OF RS.49,00,581/- AND SALE FIGURE OF RS.74,20,097/- AS SHOWN IN THE PROVISIONAL TRADING ACCOUNT. NO SUPPORTING DOCU MENTS HAVE BEEN PRODUCED TO JUSTIFY WORKING OF THESE TWO FIGURES. THEREFORE, IN THE HEARING HELD ON ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 10 15.06.2011, THE AO WAS ASKED TO SUBMIT HIS REPORT W ITH REGARD TO THREE SPECIFIC QUERIES (I), (II) & (III) RAISED IN MY LETTER DATED 03.05.2011 (REPRODUCED IN PARA NO. 5.2) BECAUSE THE LD. AR IN HIS REJOINDER FILED ON 15.06.2011 HAS AGAIN SPECIFICALLY QUESTIONED THE CORRECTNESS OF COMPUTAT ION OF SALE FIGURE OF RS.71,79,376/AND PURCHASE FIGURE OF RS.49,00,581/- SHOWN IN THE PROVISIONAL TRADING ACCOUNT. THE LD. AR ARGUED INSISTING THAT H IS WORKING OF SALE FIGURE OF RS.67,58,352/- AND PURCHASE FIGURE OF RS.71,79,376/ - IS BASED ON THE IMPOUNDED SALE BILLS AND PURCHASE BILLS WHICH WERE IN THE POS SESSION OF THE DEPARTMENT AND THE SAME WERE FOUND DURING THE COURSE OF SURVEY. TH EREFORE, IN VIEW OF THE LD. AR, SINCE FOR WORKING OUT FIGURES OF PURCHASE AND S ALE AS SHOWN BY HIM IN HIS WRITTEN SUBMISSION, NO ADDITIONAL DOCUMENTARY EVIDE NCE HAVE BEEN DEDUCED BY HIM AND THEREFORE, EITHER THE AO SHOULD JUSTIFY HIS OWN FIGURE OF PURCHASE OF RS.49,00,581/- AND SALE FIGURE OF RS.71,39,376/- BA SED ON SUPPORTING DOCUMENTARY EVIDENCE OR HE SHOULD COMMENT ON THE CO RRECTNESS OF THE SALE AND PURCHASE FIGURES WORKED OUT BY HIM ON THE BASIS OF IMPOUNDED SALE BILLS. IN VIEW OF THE OBJECTION RAISED BY THE LD. AR IN HIS REJOIN DER FILED ON 15.06.2011, THE AO WAS FURTHER ASKED TO SUBMIT HIS REPORT ON THE COMPU TATION OF SALE AND PURCHASE FIGURE SHOWN IN PROVISIONAL TRADING ACCOUNT. IN RES PONSE TO MY DIRECTION, THE AO HAS FURTHER SUBMITTED HIS REPORT VIDE HIS LETTER F. NO.ACIT/CC/MAYA TDG/REMAND/11-12 DATED 22.06.2011 AND THE SAME IS R EPRODUCED AS UNDER:- ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 11 'IN CONTINUATION OF REMAND REPORT FILED AND EXPLANA TION ASKED ON 15.6.2011 IN CONNECTION WITH THE FIGURES O F PROVISIONAL TRADING ACCOUNT WORKED OUT DURING THE COURSE OF SUR VEY IT IS SUBMITTED AS UNDER: (1)THAT THE FIGURES OF PURCHASES RS.49,00,581 /- AND SALES OF RS.74,20,097/- WORKED OUT BY SURVEY TEAM WERE RE-EX AMINED WITH THE IMPOUNDED MATERIAL. IT WAS NOTICED THAT CONSIGN MENT SALES OF RS. 6, 86, 753. 85 AGAINST FORM F SEEMS TO BE WRONGLY ADDED IN THE FIGURES OF SALES REFLECTED IN PROVISIONAL TRADING A CCOUNT. AFTER DEDUCTING THE CONSIGNMENT SALES THE FIGURE OF SALES COMES TO RS. 67,33,344/- WHILE THE APPELLANT SUBMITTED THE TOTAL SALES AT RS . 67, 58, 352/-. THE DIFFERENCE COMES TO RS.25, 008/-. SO FAR AS THE FIGURE OF PURCHASES ARE CONCERNED IT WAS FURTHER RE-EXAMIN ED AND THE FIGURES SUBMITTED BY THE APPELLANT WERE ALSO RE-EXA MINED WITH THE IMPOUNDED MATERIAL AND NO DISCREPANCY WAS NOTICED. AS THE FIGURES OF PURCHASES SHOWN IN THE PROVISIONAL TRADING ACCOU NT WORKED OUT BY THE SURVEY TEAM WAS CONFRONTED TO THE APPELLANT AND HE ADMITTED THE SAME AS CORRECT. BASED ON THE FIGURES WORKED OU T BY THE SURVEY TEAM WHICH WERE WELL ACCEPTED BY THE APPELLANT THER EBY THE SAID ADDITION OF RS.37,11,782/- WAS MADE IN THE ASSESSME NT ORDER. ' 2.5 THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATIO N OF THE ASSESSEE IN THE LIGHT OF THE SEIZED MATERIAL, RESTRICTED THE ADDITION ON ACCOUNT OF EXCESS STOCK TO RS.1,68,795/- AS AGAINST ADDITION MADE BY THE AO AT RS.37,11,782/-. THE FINDINGS OF THE LD. CIT(A) IN PARAS 5.5 TO 6.5 OF THE APPELL ATE ORDER ARE REPRODUCED AS UNDER : 5.5 AFTER RECEIVING THE SECOND REMAND REPORT OF TH E AO VIDE HIS LETTER DATED 22.06.2011, A HEARING WAS HELD ON 28.06.2011 ALONG WITH THE LD. AR AND THE AO. IN ORDER TO VERIFY THE CORRECTNESS OF PURCHASE BILLS, IMPOUNDED DOCUMENT A-11 CONTAINING VARIOUS PURCHASE BILLS WERE ALSO EXAMINED BY ME PERSONALLY ALONG WITH THE AO WHO WAS PRESENT DURING THE HEARING. AFTER VERIFY ING EACH AND EVERY BILL IN ANNEXURE A-11, IT HAS BEEN FOUND THAT TOTAL PURCHASES IS COMING TO RS.71,79,376/- AS COMPUTED BY THE LD. AR. IN THE ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 12 PROVISIONAL TRADING ACCOUNT, TOTAL PURCHASES WERE S HOWN AS RS.49,00,581/-. HOWEVER, NO WORKING WAS GIVEN IN TH E SURVEY FILE AND HENCE CORRECTNESS OF WORKING OF PURCHASE OF RS. 49,00,581/- COULD NOT BE VERIFIED. THE AO DURING THE HEARING AL SO COULD NOT JUSTIFY THE PURCHASE AMOUNT OF RS.49,00,581/- TAKEN IN THE PROVISIONAL TRADING ACCOUNT. THEREFORE, IN VIEW OF THE IMPOUNDED PURCHASE BILLS AS PRODUCED BEFORE ME BY THE AO IN F ORM OF ANNEXURE A11, IT HAS BEEN DECIDED TO TAKE PURCHASE AMOUNT AS RS.71,79,376/-. IN THE SECOND REMAND REPORT DATED 22.06.2011, THE A O HIMSELF HAS ADMITTED THAT THE CONSIGNMENT SALES OF RS.6,86,753. 85/- AGAINST FORM F SEEMS TO BE WRONGLY ADDED IN THE FIGURES OF PROV ISIONAL TRADING ACCOUNT AND, THEREFORE, AFTER DEDUCTING THE CONSIGN MENT SALES, THE FIGURES OF SALES COMES TO RS.67,33,344/- THROUGH TH E FIGURES OF SALES REPORTED BY THE APPELLANT WAS AT RS.67,58,352/-. DU RING THE COURSE OF HEARING ON 28.06.2011, THE AO HAS AGREED TO TAKE SALE FIGURE AT RS.67,58,352 SHOWN BY THE LD. AR IN THE PROVISIONAL TRDING ACCOUNT MADE BY HIM. THEREFORE, AFTER DISCUSSION WITH LD. A R AND AO, IT HAS BEEN DECIDED THAT THE AMOUNT OF EXCESS STOCK FOUND DURING THE COURSE OF SURVEY OPERATION SHOULD BE REWORKED AFTER MAKING ANOTHER TRADING ACCOUNT BY TAKING SALE FIGURE AT RS.67,58,3 52/- AND PURCHASE FIGURE AT RS.71,79,376/-.. 5.6 REGARDING EXCESS CASH OF RS.2,14,000/-, AFTER E XAMINING THE STATEMENT OF SHRI NEERAJ KUMAR MAHESHWARI, PARTNER OF THE APPELLANT FIRM, IT HAS BEEN FOUND THAT THIS AMOUNT WAS FINALLY SURRENDERED IN THE HAND OF THE FIRM STATING IN THE STATEMENT THAT THIS AMOUNT IS HIS UNACCOUNTED INCOME WHICH IS IN ADDITI ON TO REGULAR INCOME OF THE FIRM. THE RELEVANT PORTION OF THE STA TEMENT OF SHRI NEERAJ KUMAR MAHESHWARY IS GIVEN AS UNDER:- EKK;K VSFMAX DAIUH ESA 214000 :I;S VF/KD IK;S TKUS DS CKJS ESA ESA DQN UGHA DG LDRK VR% ;G ESJH V?KKSFIR VK; EKUH TK;SA TKS FD QEZ DH FU;E VK; DS VTKOK GSA VKSJ BL IJ ES DJ NSUS DKS RS;KJ GWWA FURTHER, FROM THE ANSWER TO QUESTION NO.23 IN THE S TATEMENT OF SHRI NEERAJ KUMAR MAHESHWARI, IT BECOMES MORE CLEAR THAT EXCESS CASH OF RS.2,14,000/- WAS DECLARED IN THE HAND OF T HE FIRM AND NOT IN ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 13 THE HAND OF SHRI NEERAJ KUMAR MAHESHWARI. THE RELEV ANT PORTION OF THIS ANSWER IS REPRODUCED AS UNDER: - 23 IWOZ ESA IWNS X, IZU LA[;K 21O 22 DS TCKC ESA V KIUS VIUH O;FDRXR VKSJ QEZ DH FU;FER VK; DS VYKOK FU;EKUQLKJ VFRFJDR VK; TKS SURRENDER DH GSA 1 QEZ ESALLZ EK;K VS~ZFMAX DAIUH :I;S 39257 82 2 O;FDRXR VK; FORR OIZ 2006& 07 1050000 -- DO -- 2007&08 4975782 5.7 IN THE ABOVE ANSWER, THE TOTAL AMOUNT OF RS.39, 25,782/- DECLARED IN THE NAME OF THE APPELLANT FIRM INCLUDES RS.37,11 ,782/- ON ACCOUNT OF EXCESS STOCK AND RS.2,14,000/- ON ACCOUNT OF EXC ESS CASH. RS.10,50,000/- DECLARED BY SRI NEERAJ KUMAR MAHESHW ARI IN HIS INDIVIDUAL NAME INCLUDES RS.6,50,000/- FOR AY 08-09 AND RS.4,00,000/- FOR AY 07-08. ON VERIFYING THE ASSESS MENT ORDER OF SHRI NEERAJ KUMAR MAHESHWARI ALSO, FOR AY 08-09 PAS SED U/S 143(3) VIDE ORDER DATED 10.12.2010, IT HAS BEEN FOU ND THAT THOUGH RS.6,50,000/- DECLARED BY HIM IN HIS PERSONAL CAPAC ITY WAS CONSIDERED BY THE AO FOR MAKING NECESSARY ADDITION IN HIS HAND BUT THE AMOUNT OF RS.2,14,000/- WAS NOT INCLUDED IN HIS INCOME. THEREFORE, IT HAS BECOME VERY CLEAR RS.2,14,000/- OF EXCESS CASH DECLARED IN THE HAND OF FIRM WAS NEITHER CONSIDERED IN THE HAND OF SHRI NEERAJ KUMAR MAHESHWARI PARTNER OF THE FIRM, N OR IT WAS DECLARED IN THE HAND OF THE APPELLANT FIRM. THEREFO RE, THE EXCESS CASH OF RS.2,14,000/- FOUND DURING THE COURSE OF S URVEY OPERATION AND DECLARED AS BEING IN ADDITION TO REGULAR INCOME OF THE APPELLANT IS REQUIRED TO BE CONSIDERED IN THE HAND OF THE APP ELLANT FIRM ONLY. 6.1 IN VIEW OF THE ABOVE FINDINGS WITH REGARD TO WO RKING OF EXCESS STOCK AND EXCESS CASH FOUND DURING THE COURSE OF SU RVEY AS IT HAS EMERGED DURING THE COURSE OF HEARING OF APPEAL, GRO UNDS NO.3 & 4 HAVE BEEN DECIDED IN WHICH BOTH THE ADDITIONS ON AC COUNT OF EXCESS STOCK AND ON ACCOUNT OF EXCESS CASH WERE CHALLENGED . IN GROUND NO.3, THE APPELLANT CHALLENGED THE ADDITION OF RS.3 7, 11,782/- ON ACCOUNT OF EXCESS STOCK. WITH REGARD TO THIS ADDITI ON, I HAVE ALREADY DISCUSSED IN DETAIL IN PREVIOUS PARA THAT ON MAKING VERIFICATION FROM ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 14 THE IMPOUNDED PURCHASE BILLS AND SALES DOCUMENT THE CORRECT FIGURE OF THE PURCHASE HAVE BEEN FOUND TO BE RS.71,79,376/ - AND SALE FIGURE HAS BEEN FOUND TO BE RS.67,58,352/-. WHILE M AKING THE PROVISIONAL TRADING ACCOUNT, THE GP OF 9.43% WAS TA KEN BY THE SURVEY PARTY AND THE FREIGHT FIGURE WAS TAKEN TO BE RS.2,52,654/-. AFTER DEDUCTING THESE FIGURES AND TAKING THE FIGURE S OF PURCHASE AND SALE AS PER THE IMPOUNDED DOCUMENTS, THE PROVISIONA L TRADING ACCOUNT OF THE APPELLANT IS MADE AS UNDER:- TRADING ACCOUNT OPENING STOCK 15,80,465/- SALES 67,58,352/- PURCHASE 71,79,376/- CLOSING STOCK 28,91,455/- FREIGHT 2,52,654/- G.P. (9.43% OF SALE) 6,37,312/- ------------- 96,49,807/- 96,49,807/- ----------------- --------------- 6.2 AS PER THE ABOVE TRADING ACCOUNT, THE STOCK OF THE APPELLANT IS COMING TO RS.28,91,455/- AS AGAINST THE STOCK OF RS .37,25,100/- FOUND DURING THE COURSE OF SURVEY OPERATION. THEREF ORE, THE EXCESS STOCK WOULD COME TO RS.8,33,645/- 37,25,100 28,91 ,455). AS AGAINST THIS EXCESS STOCK, THE APPELLANT HAS SHOWN THAT HE HAS ALREADY DECLARED THE EXCESS STOCK OF RS.6,64,850/- AS HIS ADDITIONAL INCOME IN THE PROFIT & LOSS ACCOUNT AND HENCE THE F IGURE OF EXCESS' STOCK DECLARED BY THE APPELLANT WAS FOUND SHORT BY RS1,68,795/- {RS.8,33,645 RS.6,64,850/-) AND THEREFORE, THE AO IS DIRECTED TO ADD RS.1,68,795/- IN THE INCOME OF THE APPELLANT U/ S. 69 ON ACCOUNT OF THE FIGURE OF EXCESS STOCK AS COMPUTED ABOVE AND NOT DISCLOSED BY THE APPELLANT IN THE RETURN OF INCOME. THEREFORE, T HE ADDITION OF RS.37,11,742/- MADE BY THE AO IN THE ASSESSMENT ORD ER ON ACCOUNT OF UNDISCLOSED STOCK IS SUSTAINED TO THE EXTENT OF RS.1,68,795/- AND THE APPELLANT GETS RELIEF OF RS.35,42,987/-. IN THE RESULT GROUND NO.3 IS PARTLY ALLOWED. ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 15 6.3 AS REGARDS TO THE ARGUMENT OF THE AO IN THE RE MAND REPORT DATED 16.05.2011, THAT THE CONFESSION STATEMENT DUR ING THE COURSE OF SURVEY SHOULD BE CONSIDERED AS BEST EVIDENCE, I FIN D THAT IN THE DECISIONS CITED BY THE AO, IT HAS ALSO BEEN HELD TH AT THOUGH SUCH EVIDENCE ARE BEST EVIDENCE BUT THEY ARE NOT CONCLUS IVE AND THESE EVIDENCES CAN BE CONSIDERED DURING THE COURSE OF AS SESSMENT PROCEEDING ONLY TILL THEY ARE NOT REBUTTED BY THE A SSESSEE WITH SUPPORTING EVIDENCE. RECENTLY, IT HAS BEEN HELD BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DHINGRA METAL WOR KS (2010) ITA NO. 111/2010 DATED 4.10.2010 (COPY OF THE ORDER IS PLACED AT ANNEXURE A-1) THAT THE WORD 'MAY' USED IN SECTION 1 33A(3)(III) OF THE ACT CLARIFIES BEYOND DOUBT THAT THE MATERIAL COLLEC TED AND STATEMENT RECORDED DURING THE SURVEY IS NOT A CONCLUSIVE PIEC E OF EVIDENCE BY ITSELF. THE COURT HAS ALSO AGREED AS IT WAS HELD BY THE HON'BLE ALLAHABAD HIGH COURT IN CASE OF DR. S.C. GUPTA VS. CIT 248 ITR 782 (ALL) AS CITED BY AO THAT IT IS SETTLED LAW THA T THOUGH AN ADMISSION IS EXTREMELY IMPORTANT PIECE OF EVIDENCE, IT CANNOT BE SAID TO BE CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO H AS MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. BY CITING T HIS GENERAL PRINCIPLE, THEIR LORDSHIPS WERE OF THE OPINION THAT SINCE THE RESPONDED ASSESSEE HAS BEEN ABLE TO EXPLAIN THE DIS CREPANCY IN THE STOCK FOUND DURING THE COURSE OF SURVEY BY PRODUCTI ON OF RELEVANT RECORDS INCLUDING THE EXCISE REGISTER OF AN ASSOCIA TE COMPANY NAMELY M/S D.M.W.P. LTD., THE AO COULD NOT HAVE MAD E THE AFORESAID ADDITION SOLELY ON THE BASIS OF THE STATE MENT MADE ON BEHALF OF THE RESPONDENT ASSESSEE DURING THE COURSE OF SURVEY. 6.4 IN THE PRESENT CASE UNDER APPEAL ALSO, THOUGH THE APPELLANT DECLARED THE EXCESS STOCK OF RS.37,11,782/- DURING THE COURSE OF SURVEY ON THE BASIS OF PROVISIONAL TRADING ACCOUNT PREPARED BY THE SURVEY PARTY BUT ON MAKING VERIFICATION FROM THE IM POUNDED SALES AND PURCHASE BILLS LATER ON, IT WAS FOUND THAT THE WORKING OF SALES AND PURCHASES WERE NOT DONE BY THE SURVEY PARTY COR RECTLY AND THEREFORE, THE WORKING OF EXCESS STOCK MADE BY THE SURVEY PARTY WAS NOT FOUND TO BE CORRECT. I HAVE ALREADY DISCUSSED I N PARA NO. 5.5 THAT THE SALE AND PURCHASE FIGURES WERE WORKED OUT ON THE BASIS OF THE IMPOUNDED DOCUMENT IN THE PRESENCE OF THE AO ON 28.06.2011 AND IT HAS BEEN FOUND THAT SALE AND PURCHASE FIGURE S SHOWN IN THE PROVISIONAL TRADING ACCOUNT MADE BY THE SURVEY PART Y WAS NOT CORRECTLY WORKED OUT AND THE AO ALSO COULD NOT JUST IFY THE FIGURES OF ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 16 SALE AND PURCHASE SHOWN IN THE PROVISIONAL TRADING ACCOUNT. THEREFORE, IN MY OPINION, THE LD. AR WAS ABLE TO RE BUT THE CONFESSION MADE BY THE APPELLANT DURING THE COURSE OF SURVEY OPERATION ON THE BASIS OF IMPOUNDED DOCUMENT AND SU CH REBUTTAL CANNOT BE BRUSHED ASIDE ONLY ON THE BASIS OF A STAT EMENT RECORDED DURING THE SURVEY OPERATION WHICH WAS BASED ON A PR OVISIONAL TRADING ACCOUNT, THE CORRECTNESS OF WHICH COULD NOT BE ESTABLISHED BY THE AO WITH ANY SUPPORTING EVIDENCE. THEREFORE, IN MY CONSIDERED OPINION, NO ADDITION ON THE BASIS OF CON FESSIONAL STATEMENT CAN BE SUSTAINED UNLESS SUCH CONFESSION I S SUPPORTED BY SOME DOCUMENTARY EVIDENCE AND THIS VIEW HAS BEEN CL EARLY EMPHASIZED BY THE CBDT IN ITS INSTRUCTION NO.286/2/ 2003-IT(LNV.) IN WHICH IT HAS BEEN STATED AS UNDER:- 'INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHE RE ASSESSEE HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE U NDISCLOSED INCOME DURING THE COURSE OF SEARCH AND SEIZURES AND SURVEY OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CRE DITABLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEE WHILE FILLING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, CONFESSIONS DURING THE SEARCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEF UL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND C ONCENTRATION ON COLLECTION OF EVIDENCES OF INCOME WHICH LEADS TO IN FORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENT. SIMILARLY, WHILE RECORDI NG STATEMENT DURING THE COURSE OF SEARCH, SEIZURE AND SURVEY OPE RATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSIONS AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. ' THE ABOVE INSTRUCTION IS PLACED AT ANNEXURE A-2 6.5 IN VIEW OF THE ABOVE INSTRUCTION OF THE CBDT AS WELL AS THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. DHINGRA METAL WORKS (SUPRA), I FIND THAT THE AO WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.37,11,782/- JUST ON THE BASIS OF A C ONFESSIONAL STATEMENT WITHOUT EXAMINING THE IMPOUNDED DOCUMENT. ON EXAMINATION OF THE IMPOUNDED DOCUMENT AND RETURN OF INCOME FILED BY THE APPELLANT, IT HAS BEEN FOUND THAT THE ADDITION TO THE EXTENT OF ONLY RS.1,68,795/- IS SUSTAINABLE AND THE SAME HAS BEEN CONFIRMED BY ME IN THIS ORDER. ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 17 3. THE LD. DR RELIED UPON THE ORDER OF THE AO AND S UBMITTED THAT THE AO, CORRECTLY, ON THE BASIS OF PROVISIONAL TRADING ACCO UNT PREPARED AT THE TIME OF SURVEY MADE THE ADDITION ON ACCOUNT OF EXCESS STOCK IN A SUM OF RS.37,11,782/-. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THA T THE SURVEY PARTY DID NOT TAKE CORRECT FIGURES OF SALES AND PURCHASES. THEREF ORE, THE PROVISIONAL TRADING ACCOUNT PREPARED AT THE TIME OF SURVEY WAS NOT CORR ECT AND WHEN ALL THE SALES AND PURCHASE VOUCHERS WERE IMPOUNDED DURING THE COURSE OF SURVEY AND CORRECT FIGURES HAVE BEEN TAKEN AS PER IMPOUNDED DOCUMENTS AND REVISED FIGURES HAVE BEEN TAKEN BY THE LD. CIT(A) OF PURCHASE AND SALES, THERE WERE NO DIFFERENCES WITH REGARD TO THE STOCK AND ONLY SMALL DIFFERENCE IN STOCK WAS FOUND IN A SUM OF RS.1,68,795/-. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE MATTER AND FOR PART ADDITION MAINTAINED BY THE LD. CIT(A), THE ASSESSEE DID NOT CHALLENGE THE CROSS- OBJECTION. HE HAS SUBMITTED THAT THE STATEMENT GIVE N AT THE TIME OF SURVEY IS NOT CONCLUSIVE AND IT IS OPEN TO THE ASSESSEE TO ESTABL ISH THAT THE SAME WAS NOT TRUE AND CORRECT BY FILING THE COGENT EVIDENCE. IN SUPPO RT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF MADRAS HIGH COURT IN TH E CASE OF CIT VS. S. KHADER KHAN SON, 300 ITR 157 AND ALSO SUBMITTED THAT THE S AID DECISION HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT RECENTLY. HE HAS ALSO RELIED UPON SEVERAL DECISIONS IN SUPPORT OF THE SAME CONTENTION . THE COPIES OF THE SAME ARE ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 18 FILED IN THE PAPER BOOK AND ALSO RELIED UPON THE DE CISION OF HONBLE HIGH COURT OF CHHATTISGARH IN THE CASE OF ITO VS. VIJAY KUMAR KESAR, 327 ITR 497. HE HAS ALSO CITED SOME OTHER DECISIONS OF THE TRIBUNAL, CO PIES OF WHICH ARE FILED IN THE PAPER BOOK ON THE PROPOSITION THAT ADDITION WAS MER ELY MADE ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SURVEY WITH OUT BRINGING ANY CORROBORATIVE EVIDENCE AND THE ADDITION CANNOT BE S USTAINED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). IT I S WELL SETTLED LAW THAT ADMISSION ARE NOT CONCLUSIVE PROOF OF THE MATTER. THEY MAY BE SHOWN TO BE UNTRUE OR HAVE BEEN MADE UNDER MISTAKE OF FACT OR LAW. CIRCUMSTANC ES HAVE TO BE SEEN UNDER WHICH SAME ARE MADE. IT CAN BE WITHDRAWN UNLESS IT IS ESTOPPEL AND CONCLUSIVE. HONBLE SUPREME COURT IN THE CASE OF PULLANGODE RUB BER PRODUCTS CO. LTD. 91 ITR 18 HELD THAT THE ASSESSEE SHOULD BE GIVEN OPPOR TUNITY TO SHOW THAT ADMISSION IS INCORRECT OR DO NOT SHOW CORRECT STATE OF FACTS. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KISHAN LAL SHIV CHAND RAI VS. CIT, 88 ITR 293 HELD THAT IT IS AN ESTABLISHED PRINCIPLE OF LAW THAT A PARTY IS ENTITLED TO SHOW AND PROVE THAT ADMISSION MADE BY HIM WAS IN FACT NOT CORRECT AND T RUE. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE LEGAL PROPOSITION ABOV E, WE DO NOT FIND IF THE LD. CIT(A) HAS COMMITTED ANY ERROR IN REDUCING SUBSTANT IAL ADDITION. THE CASE OF THE ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 19 ASSESSEE IS ENTIRELY BASED UPON PROVISIONAL TRADING ACCOUNT PREPARED AT THE TIME OF SURVEY SHOWING THE FIGURE OF PURCHASE AND SALES DIFFERENTLY AS AGAINST THE FIGURES POINTED OUT BY THE ASSESSEE. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE PREPARED THE WORKING OF THE PURCHASE AND SALES FIGU RES ON THE BASIS OF THE IMPOUNDED BILLS AND VALUE OF THE SALE WAS ARRIVED A T RS.67,58,352/- AND THE PURCHASES HAVE BEEN FOUND AT RS.71,79,376/- AS AGAI NST THE SALES AND PURCHASES OF RS.74,20,097/- AND RS.49,00,581/- AS PER THE PROVIS IONAL TRADING ACCOUNT. THE CORRECT FIGURES POINTED OUT BY THE ASSESSEE OF SALE S AND PURCHASES WERE BASED UPON THE IMPOUNDED DOCUMENTS. THE LD. CIT(A) VERIFI ED ALL THE FIGURES AT THE APPELLATE STAGE IN THE PRESENCE OF THE AO AND AFTER VERIFICATION OF PURCHASE AND SALES FOUND THAT CORRECT FIGURES HAVE BEEN POINTED OUT BY THE ASSESSEE. THUS, THE SOLE BASIS OF MAKING ADDITION, I.E., PROVISIONAL TR ADING ACCOUNT WAS NOT FUND HAVING CORRECT FIGURES OF PURCHASE AND SALES. WHATE VER ITEMS HAVE BEEN DECLARED BY THE ASSESSEE ON ACCOUNT OF EXCESS STOCK HAVE BEE N GIVEN BENEFIT CORRECTLY BY THE LD. CIT(A). SINCE THE FIGURES OF THE SALES AND PURCHASES WERE BASED ON FACTUAL FIGURES, THEREFORE, IT IS A CASE OF FACTUAL MISTAKE COMMITTED BY THE SURVEY PARTY AS WELL AS BY THE ASSESSING OFFICER, WHICH HAS BEEN RI GHTLY CORRECTED BY THE LD. CIT(A). THUS, THE ASSESSEE ON THE BASIS OF SEIZED M ATERIAL ITSELF HAS BEEN ABLE TO SHOW THAT THE ADMISSION MADE AT THE TIME OF SURVEY SURRENDERING THE ADDITIONAL INCOME ON ACCOUNT OF EXCESS STOCK WAS NOT CORRECT A ND DID NOT SHOW CORRECT STATE ITA NO. 31/AGRA/2012 & C.O. NO. 20/AGRA/2012 20 OF FACTS. THEREFORE, NO ADDITION COULD BE MADE AGAI NST THE ASSESSEE ON THE BASIS OF MERE ADMISSION ACCORDING TO THE FACTS AND CIRCUMSTA NCES OF THIS CASE. THE LD. CIT(A) CORRECTLY ON THE BASIS OF THE MATERIAL ON RE CORD, DELETED THE SUBSTANTIAL ADDITION. THE CASE LAW RELIED UPON BY THE LD. CIT(A ) SUPPORT THE FINDINGS OF LD. CIT(A). IT IS A DEPARTMENTAL APPEAL AND NO MATERIAL HAS BEEN PRODUCED BEFORE US TO CONTRADICT THE FINDINGS OF THE LD. CIT(A) IN DEL ETING THE ADDITION. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE LD. CIT(A) IN DELETING THE ADDITION. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY