DCIT 27 1 MUMBAI, NAVI MUMBAI V. HINDUSTAN RUBBER WORKS, MUMBAI

ITA 4221/MUM/2025

AI Insights

The case involves the Income Tax Department's appeal against the decision of the Ld. CIT(A) which had deleted the addition of Rs. 10,00,00,000 made by the Assessing Officer. The addition was based on the alleged undisclosed income of the assessee, Hindustan Rubber Works, which was purportedly revealed during a survey operation. The Revenue contended that the addition was justified based on incriminating documents and statements made during the survey. However, the Ld. CIT(A) found that the documents did not specifically link to the addition and that the income had been declared under the Income Declaration Scheme (IDS), 2016. The Tribunal agreed with the Ld. CIT(A), emphasizing that the addition would lead to double taxation and that the documents did not substantiate the Revenue's claims.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848103 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Mumbai
• Assessment Year: 2017-2018
• Appeal Filed On: 25-06-2025
• Other Referred Cases: Dr. Dinesh Jain vs. Income Tax Officer, M/S. T. Lakhamshi Ladha & Co. vs. The Commissioner of Income Tax, Mumbai, KTMS Mohammed and Another vs. Union of India
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RITESH MISRA
• Assessee Lawyers: RAJKUMAR SINGH AW
• Keywords: Business income; Corroborative evidences; Income from undisclosed sources; Onus to prove; Retraction; Capital Gains; TDS; Loose papers
• Section: 142(1); 131; 133A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 4221/MUM/2025 Assessment Year: 2017-18 DCIT 27 1, Room No. 408, 4th floor, tower No. 6 Vashi Railway Station Complex Building Navi Mumbai-400703. Vs. Hindustan Rubber Works, Neelkamal Bldg. Near Satyam Ind. Estate Off BKSD Marg Behind USV Ltd Govandi, Mumbai-400088. PAN NO. AACFH 0608 K Appellant Respondent Assessee by : Mr. Rajkumar Singh a/w Mr. Kamal Mangal Revenue by : Mr. Ritesh Misra, CIT-DR Date of Hearing : 18/03/2026 Date of pronouncement : 27/03/2026 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against order dated 09.04.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – 51, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising the following grounds: Printed from counselvise.com “1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 10,00,00,000/ made by the Assessing Officer without appreciating the facts that above addition was made on the basis of incriminating documents found during the course of survey proceedings and the s during the course of survey proceedings in case of the assessee. 2. Whether on the facts and in the circumstances of the case and in law, the Id. CIT(A) was justified in holding that there was no incriminating evidences in the case of the assessee without appreciating the fact that during the course of the Survey proceedings, incriminating documents in the Form of Annexure A- 2 was found and impounded by the department which pertained to the assessee and statements recorded facts in the form of incriminating evidences as these evidences were crucial for determining the correct income of the assessee. 3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 10,00,00,000/ the Act without appreciating the fact that, the statement of Shri Ramlal Agarwal, who is also a partner of the assessee was recorded during the course of survey proceedings and he confirmed a statement of Shri Deven Juthani which proves the correctness of facts stated as he failed to explain the incriminating documents in the Form of Annexure A-2 and offered an additional income of Rs. 10,00,00,000/ its regular business income. This affirmation of all the partners clearly reveals that the truths as stated in the statement u/s 131 were correct and answered affirmatively. Moreover, the addition is primarily based on evidence impounded as per Annexure A recorded during the course of survey proceedings. 4. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 10,00,00,000/ the Act without appreciating that Statements recorded under various provisions of the Income Tax Act, are vital tool in the hands of the Income certain factual and legal positions. When a par may reasonably be presumed to be so, unless it is satisfactorily explained or successfully withdrawn. So long as they do not operate as estoppel, persons making admissions are at liberty to contradict them or to show that they untrue or mistaken or made under a misapprehension. Thus, the effect of an admission is to shift the burden of proof to the party making the admission. 5. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in holding Rs.10 crore without corroborative evidence and based solely on statement recorded during the course of survey, without appreciating the fact that statement recorded during the course of survey is itsel “1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) rred in deleting the addition of Rs. 10,00,00,000/- u/s 69A of the Act made by the Assessing Officer without appreciating the facts that above addition was made on the basis of incriminating documents found during the course of survey proceedings and the same was admitted by the partners during the course of survey proceedings in case of the assessee. 2. Whether on the facts and in the circumstances of the case and in law, the Id. CIT(A) was justified in holding that there was no incriminating evidences the case of the assessee without appreciating the fact that during the course of the Survey proceedings, incriminating documents in the Form of 2 was found and impounded by the department which pertained to the assessee and statements recorded u/s 131 of the partners are material facts in the form of incriminating evidences as these evidences were crucial for determining the correct income of the assessee. 3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) deleting the addition of Rs. 10,00,00,000/- under section 69A of the Act without appreciating the fact that, the statement of Shri Ramlal Agarwal, who is also a partner of the assessee was recorded during the course of survey proceedings and he confirmed and concurred with the statement of Shri Deven Juthani which proves the correctness of facts stated as he failed to explain the incriminating documents in the Form of Annexure 2 and offered an additional income of Rs. 10,00,00,000/- ular business income. This affirmation of all the partners clearly reveals that the truths as stated in the statement u/s 131 were correct and answered affirmatively. Moreover, the addition is primarily based on evidence impounded as per Annexure A-2 and not merely on statement recorded during the course of survey proceedings. 4. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 10,00,00,000/- under section 69A of the Act without appreciating the fact that it has been well settled principle that Statements recorded under various provisions of the Income Tax Act, are vital tool in the hands of the Income-tax authorities in their quest to establish certain factual and legal positions. When a party himself admits to be true, may reasonably be presumed to be so, unless it is satisfactorily explained or successfully withdrawn. So long as they do not operate as estoppel, persons making admissions are at liberty to contradict them or to show that they untrue or mistaken or made under a misapprehension. Thus, the effect of an admission is to shift the burden of proof to the party making the admission. 5. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in holding that the AO is not justified in making the addition of Rs.10 crore without corroborative evidence and based solely on statement recorded during the course of survey, without appreciating the fact that statement recorded during the course of survey is itsel Hindustan Rubber Works 2 ITA No. 4221/MUM/2025 “1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) u/s 69A of the Act made by the Assessing Officer without appreciating the facts that above addition was made on the basis of incriminating documents found during the ame was admitted by the partners during the course of survey proceedings in case of the assessee. 2. Whether on the facts and in the circumstances of the case and in law, the Id. CIT(A) was justified in holding that there was no incriminating evidences the case of the assessee without appreciating the fact that during the course of the Survey proceedings, incriminating documents in the Form of 2 was found and impounded by the department which pertained u/s 131 of the partners are material facts in the form of incriminating evidences as these evidences were crucial 3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) under section 69A of the Act without appreciating the fact that, the statement of Shri Ramlal Agarwal, who is also a partner of the assessee was recorded during the nd concurred with the statement of Shri Deven Juthani which proves the correctness of facts stated as he failed to explain the incriminating documents in the Form of Annexure - over and above ular business income. This affirmation of all the partners clearly reveals that the truths as stated in the statement u/s 131 were correct and answered affirmatively. Moreover, the addition is primarily based on ot merely on statement 4. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) under section 69A of the fact that it has been well settled principle that Statements recorded under various provisions of the Income Tax Act, are tax authorities in their quest to establish ty himself admits to be true, may reasonably be presumed to be so, unless it is satisfactorily explained or successfully withdrawn. So long as they do not operate as estoppel, persons making admissions are at liberty to contradict them or to show that they are untrue or mistaken or made under a misapprehension. Thus, the effect of an admission is to shift the burden of proof to the party making the admission. 5. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) that the AO is not justified in making the addition of Rs.10 crore without corroborative evidence and based solely on statement recorded during the course of survey, without appreciating the fact that statement recorded during the course of survey is itself based on Printed from counselvise.com corroborative evidence impounded as Annexure A Survey, and also based on the reconciliation of the corroborative evidence with the facts submitted by partners Shri Ramlal Agarwal and Shri Deven Juthani in their respective st 6. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in holding that addition of Rs. 10 crore in this case would lead to double taxation of the said amount as the same has been conside finalizing the books of accounts, without appreciating the fact that the said income of Rs. 10 crore is the unaccounted income over and above the accounted business income of the assessee for the year under consideration and the same does not for per audited accounts. 7. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in deleting the addition of Rs. 10,00,00,000/ the Act without appreciatin the case of Dr. Dinesh Jain vs. Income Tax Officer (2014) 363 ITR 210 ( Bom): (2014)226 Taxman 27 wherein it was held that: \"A statement under section 133A does not lose its evidentiary value merely because it is made on oath more so where such statement is not the sole evidence but was one of the pieces of evidence and the Tribunal had also recorded a finding that the addition of income was based on loose paper found during survey and also the assessee was statement made by him was not correct or unbelievable\". Therefore incriminating material is found against the assessee and there is live link between the material found and accordingly, the addition made by the A.O.\" 8. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 10,00,00,000/ the Act without appreciating the fact that Burden to prove the 'Admission' as incorrect is on the maker and in case that earlier stated facts were wrong, his earlier statements are sufficient to conclude a matter. 9. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of R the Act without appreciating the fact that assessee has made advance tax payment of Rs.5,00,00,000/ assessee while computing advance tax liability has considered the addit income of Rs. 10,00,00,000/ finally claimed refund of Rs.4,47,53,797/ 10. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addit the Act without appreciating the fact that by not including the income of Rs. corroborative evidence impounded as Annexure A-1 and A Survey, and also based on the reconciliation of the corroborative evidence with the facts submitted by partners Shri Ramlal Agarwal and Shri Deven Juthani in their respective statements recorded during the survey. 6. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in holding that addition of Rs. 10 crore in this case would lead to double taxation of the said amount as the same has been conside finalizing the books of accounts, without appreciating the fact that the said income of Rs. 10 crore is the unaccounted income over and above the accounted business income of the assessee for the year under consideration and the same does not form a part of the returned income of the assessee as per audited accounts. 7. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in deleting the addition of Rs. 10,00,00,000/- under section 69A of the Act without appreciating the decision of the Hon'ble Bombay High Court in the case of Dr. Dinesh Jain vs. Income Tax Officer (2014) 363 ITR 210 ( Bom): (2014)226 Taxman 27 wherein it was held that: \"A statement under section 133A does not lose its evidentiary value merely e it is made on oath more so where such statement is not the sole evidence but was one of the pieces of evidence and the Tribunal had also recorded a finding that the addition of income was based on loose paper found during survey and also the assessee was unable to show that the statement made by him was not correct or unbelievable\". Therefore incriminating material is found against the assessee and there is live link between the material found and accordingly, the addition made by the A.O.\" the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 10,00,00,000/- under section 69A of the Act without appreciating the fact that Burden to prove the 'Admission' as incorrect is on the maker and in case there is a failure of the maker to prove that earlier stated facts were wrong, his earlier statements are sufficient to 9. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 10,00,00,000/- under section 69A of the Act without appreciating the fact that assessee has made advance tax payment of Rs.5,00,00,000/- on 15.03.2017 from which it is apparent that assessee while computing advance tax liability has considered the addit income of Rs. 10,00,00,000/- over and above its regular business income but finally claimed refund of Rs.4,47,53,797/- while filing the ITR. 10. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 10,00,00,000/- under section 69A of the Act without appreciating the fact that by not including the income of Rs. Hindustan Rubber Works 3 ITA No. 4221/MUM/2025 1 and A-2 during the Survey, and also based on the reconciliation of the corroborative evidence with the facts submitted by partners Shri Ramlal Agarwal and Shri Deven atements recorded during the survey. 6. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in holding that addition of Rs. 10 crore in this case would lead to double taxation of the said amount as the same has been considered while finalizing the books of accounts, without appreciating the fact that the said income of Rs. 10 crore is the unaccounted income over and above the accounted business income of the assessee for the year under consideration m a part of the returned income of the assessee as 7. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) under section 69A of g the decision of the Hon'ble Bombay High Court in the case of Dr. Dinesh Jain vs. Income Tax Officer (2014) 363 ITR 210 ( Bom): \"A statement under section 133A does not lose its evidentiary value merely e it is made on oath more so where such statement is not the sole evidence but was one of the pieces of evidence and the Tribunal had also recorded a finding that the addition of income was based on loose paper unable to show that the statement made by him was not correct or unbelievable\". Therefore incriminating material is found against the assessee and there is live link between the material found and accordingly, the addition made by the A.O.\" the facts and circumstances of the case and in law, Ld. CIT(A) under section 69A of the Act without appreciating the fact that Burden to prove the 'Admission' as there is a failure of the maker to prove that earlier stated facts were wrong, his earlier statements are sufficient to 9. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) under section 69A of the Act without appreciating the fact that assessee has made advance tax on 15.03.2017 from which it is apparent that assessee while computing advance tax liability has considered the additional over and above its regular business income but while filing the ITR. 10. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) under section 69A of the Act without appreciating the fact that by not including the income of Rs. Printed from counselvise.com 10 crore in its Return of Income, the assessee has effectively retracted from its statement recorded during the course of survey pr statement cannot be retracted by another partner of that firm in absence of any allegation of pressure and coercion by the department and there being no evidence to prove that original statement was incorrect, as held by the Hon'ble High Court in the case of M/S. T. LAKHAMSHI LADHA & CO. VERSUS THE COMMISSIONER OF INCOME TAX, MUMBAI 2016. 11. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 10,00,00,000/ the Act without appreciating the fact that the assessee has nowhere established the reasons for retraction of the statement recorded in survey action u/s 133A of the Act whereas appeal of the assessee was dismissed by the Hon'ble Apex Court in the case of K VERSUS UNION OF INDIA 1992 by holding that reasons for retraction are very important and of paramount importance and the same should be clear, unambiguous, and explicitly supported by strong evidence. It has been further held that it is only for the maker of the statement who alleges inducement, coercion, threat, etc., to establish that force was adopted which burden has not been discharged by the appellant for want of evidence. 12. Whether on the facts and circumstances of the case (A) has erred in deleting the addition of Rs. 10,00,00,000/ of the Act without appreciating the fact that the onus was not shifted on the Assessing Officer to establish the facts stated in the statement while making addition u/s 69A because the assessee failed to file retraction of statement before the authorities and the assessee also failed to establish with cogent reason as to why the said income of Rs. 10 crore was not included in its Return of Income?” 2. The Revenue has raised multiple grounds; however, the controversy essentially narrows down to a single issue, namely, whether the addition of the Income-tax Act, 1961( in short ‘the Act’) undisclosed income declared during survey proceedings, was rightly deleted by the Ld. CIT(A) 3. Briefly stated, facts of the case are that the assessee engaged in the construction of real estate building and flats. The 10 crore in its Return of Income, the assessee has effectively retracted from its statement recorded during the course of survey pr statement cannot be retracted by another partner of that firm in absence of any allegation of pressure and coercion by the department and there being no evidence to prove that original statement was incorrect, as held by the t in the case of M/S. T. LAKHAMSHI LADHA & CO. VERSUS THE COMMISSIONER OF INCOME TAX, MUMBAI 2016. 11. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of Rs. 10,00,00,000/- under section 69A of he Act without appreciating the fact that the assessee has nowhere established the reasons for retraction of the statement recorded in survey action u/s 133A of the Act whereas appeal of the assessee was dismissed by the Hon'ble Apex Court in the case of KTMS MOHAMMED AND ANOTHER VERSUS UNION OF INDIA 1992 by holding that reasons for retraction are very important and of paramount importance and the same should be clear, unambiguous, and explicitly supported by strong evidence. It has been it is only for the maker of the statement who alleges inducement, coercion, threat, etc., to establish that force was adopted which burden has not been discharged by the appellant for want of evidence. 12. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in deleting the addition of Rs. 10,00,00,000/- under section 69A of the Act without appreciating the fact that the onus was not shifted on the Assessing Officer to establish the facts stated in the statement while making addition u/s 69A because the assessee failed to file retraction of statement before the authorities and the assessee also failed to establish with cogent reason as to why the said income of Rs. 10 crore was not included in its The Revenue has raised multiple grounds; however, the controversy essentially narrows down to a single issue, namely, whether the addition of ₹10,00,00,000/- made under section 69A of 1961( in short ‘the Act’) on account of alleged isclosed income declared during survey proceedings, was rightly deleted by the Ld. CIT(A) Briefly stated, facts of the case are that the assessee engaged in the construction of real estate building and flats. The Hindustan Rubber Works 4 ITA No. 4221/MUM/2025 10 crore in its Return of Income, the assessee has effectively retracted from its statement recorded during the course of survey proceedings and statement cannot be retracted by another partner of that firm in absence of any allegation of pressure and coercion by the department and there being no evidence to prove that original statement was incorrect, as held by the t in the case of M/S. T. LAKHAMSHI LADHA & CO. VERSUS THE COMMISSIONER OF INCOME TAX, MUMBAI 2016. 11. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) under section 69A of he Act without appreciating the fact that the assessee has nowhere established the reasons for retraction of the statement recorded in survey action u/s 133A of the Act whereas appeal of the assessee was dismissed by TMS MOHAMMED AND ANOTHER VERSUS UNION OF INDIA 1992 by holding that reasons for retraction are very important and of paramount importance and the same should be clear, unambiguous, and explicitly supported by strong evidence. It has been it is only for the maker of the statement who alleges inducement, coercion, threat, etc., to establish that force was adopted which burden has not been discharged by the appellant for want of evidence. and in law, Ld. CIT under section 69A of the Act without appreciating the fact that the onus was not shifted on the Assessing Officer to establish the facts stated in the statement while making addition u/s 69A because the assessee failed to file retraction of statement before the authorities and the assessee also failed to establish with cogent reason as to why the said income of Rs. 10 crore was not included in its The Revenue has raised multiple grounds; however, the controversy essentially narrows down to a single issue, namely, made under section 69A of on account of alleged isclosed income declared during survey proceedings, was rightly Briefly stated, facts of the case are that the assessee is engaged in the construction of real estate building and flats. The Printed from counselvise.com return of income was filed by the total income of Rs.4,68,75,620/ 22.08.2018 revising the return was taken up for scrutiny and notice u were issued and duly serve observed that a survey premises of the assessee assessee, Shri Ramlal Agarwal, offered an amount of Rs. 10,00,00,000/- as additio income. During survey t Annexure A-1: Relating to \"on assessee disclosed ₹20 Crores under the Income Disclosure Scheme (IDS), 2016; and (ii) Annexure A ld AO mentioned that project accounts were in progress and profits undetermined, the partners \"offered\" an additional income of FY 2016-17 over and above regular income. disclosure was based on entries recorded in Annexure A 3.1 However, the ld AO made during the survey was not separately \"honoured.\" Rejecting the assessee's plea that this disclosure was integrated into the business profits via the sale of 20 flats to partners, the AO treated the sum as unexplained money under In addition, certain other disallowances were also made, return of income was filed by the assessee on 30.10.2017 income of Rs.4,68,75,620/-. This return was subsequently 22.08.2018 revising the total income to Rs.5,39,35,650/ ken up for scrutiny and notice u/s 143(2) and duly served. During scrutiny proceeding, the ld AO that a survey u/s 133A of the Act was carried out at the assessee on 21.09.2016, in which the Partner of the , Shri Ramlal Agarwal, offered an amount of Rs. as additional income over and above the regular During survey two sets of documents were impounded: (i) Relating to \"on-money\" receipts, for which the 20 Crores under the Income Disclosure Scheme Annexure A-2: Containing various jottings. ld AO mentioned that Shri Deven Juthani stated (Q. 93) that as the project accounts were in progress and profits undetermined, the partners \"offered\" an additional income of ₹10 Crores 17 over and above regular income. According to the said disclosure was based on entries recorded in Annexure A However, the ld AO observed that the ₹10 Crore disclosure made during the survey was not separately \"honoured.\" Rejecting plea that this disclosure was integrated into the business profits via the sale of 20 flats to partners, the AO treated the sum as unexplained money under Section 69A r.w.s. 115BBE In addition, certain other disallowances were also made, Hindustan Rubber Works 5 ITA No. 4221/MUM/2025 on 30.10.2017 declaring . This return was subsequently on income to Rs.5,39,35,650/-. The said /s 143(2) of the Act, During scrutiny proceeding, the ld AO was carried out at the in which the Partner of the , Shri Ramlal Agarwal, offered an amount of Rs. nal income over and above the regular wo sets of documents were impounded: (i) money\" receipts, for which the 20 Crores under the Income Disclosure Scheme Containing various jottings. The Shri Deven Juthani stated (Q. 93) that as the project accounts were in progress and profits undetermined, the 10 Crores for the current According to the said disclosure was based on entries recorded in Annexure A-2. 10 Crore disclosure made during the survey was not separately \"honoured.\" Rejecting plea that this disclosure was integrated into the business profits via the sale of 20 flats to partners, the AO treated Section 69A r.w.s. 115BBE. In addition, certain other disallowances were also made, Printed from counselvise.com culminating in assessment of total income at finding of the ld AO is reproduced as under: “A survey u/s 133A was conducted at the business premises of assessee and statement of Shri Ramlal Agrawal partner of the firm was recorded u/s 131 on 21.09.2016 at Neelkamal Building Sanghvi Estate off Govandi station road, Govandi, Mumbai. During the course of survey, incriminating documents found were impounded as per annexure A 19. Shri Ramlal Agarwal was confronted on the incriminating his statement recorded u/s 131. The specific content of the statement relating to undisclosed income on account of On Money accepted is reproduced as under: “...Q. 15 Please explain these loose papers page no 1 to 19 of Annexure A Ans. Page number 1 to 3 & 5 to 19 pertains to some cash receipts entries which I have to recall for explanation. Please allow me some time for remembrance. Page No 4 pertains to details of flats retained with partners family. Q. 16 Now the time is 10:30PM, do you wants to rest. Ans. I want to continue the statement and survey proceedings and complete it. Q. 17 You have allowed half an hour to remember the entries recorded on loose paper bearing no 1 to 3 & 5 to 19, you are request same. Ans. Sir, I was not remembering the same. Therefore, I consulted with our partners Mr. Deven L. Juthani and Mr. Sameer Savla. It is on money received on sale of flats. We have decided to offer the same under IDS Scheme 2016. Q. 18 What is the percentage of On Money receipts on sale of flats in Satyam Spring project. Ans. Sir, it is approximately 14%. We get 14% in cash and rest in cheque. The cash receipts which are made till march 2015 and it was not recorded in books of accounts of Q. 19 Please state sale value of the total flats which were entered in books of accounts. Ans. As per records, the total value of flats sold is approximately 122 crores. ssessment of total income at ₹17.78 crores finding of the ld AO is reproduced as under: A survey u/s 133A was conducted at the business premises of assessee and statement of Shri Ramlal Agrawal partner of the firm was recorded u/s at Neelkamal Building Sanghvi Estate off Govandi station road, Govandi, Mumbai. During the course of survey, incriminating documents found were impounded as per annexure A-1 containing pages 1 to 19. Shri Ramlal Agarwal was confronted on the incriminating his statement recorded u/s 131. The specific content of the statement relating to undisclosed income on account of On Money accepted is reproduced as “...Q. 15 Please explain these loose papers page no 1 to 19 of Annexure A e number 1 to 3 & 5 to 19 pertains to some cash receipts entries which I have to recall for explanation. Please allow me some time for remembrance. Page No 4 pertains to details of flats retained with partners Q. 16 Now the time is 10:30PM, do you wants to continue the statement or Ans. I want to continue the statement and survey proceedings and complete Q. 17 You have allowed half an hour to remember the entries recorded on loose paper bearing no 1 to 3 & 5 to 19, you are requested to explain the Ans. Sir, I was not remembering the same. Therefore, I consulted with our partners Mr. Deven L. Juthani and Mr. Sameer Savla. It is on money received We have decided to offer the same under IDS Scheme 2016. hat is the percentage of On Money receipts on sale of flats in Satyam Ans. Sir, it is approximately 14%. We get 14% in cash and rest in cheque. The cash receipts which are made till march 2015 and it was not recorded in books of accounts of the firm. Q. 19 Please state sale value of the total flats which were entered in books of Ans. As per records, the total value of flats sold is approximately 122 crores. Hindustan Rubber Works 6 ITA No. 4221/MUM/2025 17.78 crores. The A survey u/s 133A was conducted at the business premises of assessee and statement of Shri Ramlal Agrawal partner of the firm was recorded u/s at Neelkamal Building Sanghvi Estate off Govandi station road, Govandi, Mumbai. During the course of survey, incriminating 1 containing pages 1 to 19. Shri Ramlal Agarwal was confronted on the incriminating documents in his statement recorded u/s 131. The specific content of the statement relating to undisclosed income on account of On Money accepted is reproduced as “...Q. 15 Please explain these loose papers page no 1 to 19 of Annexure A-1. e number 1 to 3 & 5 to 19 pertains to some cash receipts entries which I have to recall for explanation. Please allow me some time for remembrance. Page No 4 pertains to details of flats retained with partners wants to continue the statement or Ans. I want to continue the statement and survey proceedings and complete Q. 17 You have allowed half an hour to remember the entries recorded on ed to explain the Ans. Sir, I was not remembering the same. Therefore, I consulted with our partners Mr. Deven L. Juthani and Mr. Sameer Savla. It is on money received We have decided to offer the same under IDS Scheme 2016. hat is the percentage of On Money receipts on sale of flats in Satyam Ans. Sir, it is approximately 14%. We get 14% in cash and rest in cheque. The cash receipts which are made till march 2015 and it was not recorded in Q. 19 Please state sale value of the total flats which were entered in books of Ans. As per records, the total value of flats sold is approximately 122 crores. Printed from counselvise.com Q. 20 Please produce the working of On Money receipts on these sales. Ans. It is nearly 19,86,00,000/ receipts are approximately same....\" The photocopies of incriminating documents impounded have been dully provided to the assessee vide letter dated 20.11.2019. The copy of statement r Shri Ramlal Agarwal was also provided to assessee. During the course of survey, statement of Shri Deven Juthani, partner was also recorded u/ s 131 of the IT Act on 22.09.2016. During the course of survey, incriminating documents were also impou containing pages 1 to 31. Shri Deven Juthani was confronted on the impounded documents as per annexure A 131. He was also shown the statement recorded of Shri Ramlal Agrawal . For the purpose of clarity the specific questions put forth to him and his replies are reproduced as under “ Q. 85 You have been provided enough time to answer the question no 61- “What do you find in these papers marked as 10 to 15 ofannexure now? Ans. Please give half an hour time to discuss with my partners. Q. 86 You have been provided enough time to answer the question no 68 What do you find in this paper marked as 18 of annexure answer now? Ans. Please give half an hour time to discus Q. 87 You have been provided enough time to answer the question no 73 “Have these corrections been effected in the books of accounts\". Please answer now? Ans. Please give half an hour time to discuss with my partners. Q-881 m showing yo in M/s. Hindustan Rubber Works, M/s. Satyam Developers and various other firms. This statement has been recorded under oath u/s 131 of the Income Tax Act. Do you have anything to say? Q. 20 Please produce the working of On Money receipts on these sales. It is nearly 19,86,00,000/-. Sir, if you see the loose papers, the cash receipts are approximately same....\" The photocopies of incriminating documents impounded have been dully the assessee vide letter dated 20.11.2019. The copy of statement r Shri Ramlal Agarwal was also provided to assessee. During the course of survey, statement of Shri Deven Juthani, partner was also recorded u/ s 131 of the IT Act on 22.09.2016. During the course of survey, incriminating documents were also impounded as per annexure A containing pages 1 to 31. Shri Deven Juthani was confronted on the impounded documents as per annexure A-2 in his statement recorded u/s 131. He was also shown the statement recorded of Shri Ramlal Agrawal . For ity the specific questions put forth to him and his replies are reproduced as under Q. 85 You have been provided enough time to answer the question no you find in these papers marked as 10 to 15 ofannexure- A-2\". Please answer Please give half an hour time to discuss with my partners. Q. 86 You have been provided enough time to answer the question no 68 What do you find in this paper marked as 18 of annexure Ans. Please give half an hour time to discuss with my partners. Q. 87 You have been provided enough time to answer the question no 73 “Have these corrections been effected in the books of accounts\". Please Ans. Please give half an hour time to discuss with my partners. 881 m showing you the statement ofShri Ramlal Agarwal, partner with you in M/s. Hindustan Rubber Works, M/s. Satyam Developers and various other This statement has been recorded under oath u/s 131 of the Income Tax Act. Do you have anything to say? Hindustan Rubber Works 7 ITA No. 4221/MUM/2025 Q. 20 Please produce the working of On Money receipts on these sales. . Sir, if you see the loose papers, the cash The photocopies of incriminating documents impounded have been dully the assessee vide letter dated 20.11.2019. The copy of statement recorded of During the course of survey, statement of Shri Deven Juthani, partner was also recorded u/ s 131 of the IT Act on 22.09.2016. During the course of nded as per annexure A-2 containing pages 1 to 31. Shri Deven Juthani was confronted on the 2 in his statement recorded u/s 131. He was also shown the statement recorded of Shri Ramlal Agrawal . For ity the specific questions put forth to him and his replies Q. 85 You have been provided enough time to answer the question no 2\". Please answer Please give half an hour time to discuss with my partners. Q. 86 You have been provided enough time to answer the question no 68-“ What do you find in this paper marked as 18 of annexure-A-2\". Please s with my partners. Q. 87 You have been provided enough time to answer the question no 73- “Have these corrections been effected in the books of accounts\". Please Ans. Please give half an hour time to discuss with my partners. u the statement ofShri Ramlal Agarwal, partner with you in M/s. Hindustan Rubber Works, M/s. Satyam Developers and various other This statement has been recorded under oath u/s 131 of the Income Tax Act. Printed from counselvise.com Ans. Please give half an hour time to discuss with my partners. Q. 89 You have been provided half an hour time to discuss with your partners. Do you have anything to say? Ans. Sir, I have discussed with my partners and we have considered several papers put before us. I co and as has been affirmed by him in his statement. We would like to declare our income under IDS of various reasons. My partner Shri Ramlal Agarwal had ad receipts amounting to Rs. 19.86 Cr. I have discussed with my other partners and offered to declare Rs. 20 Cr under IDS Q. 90 On going through P&L Account of M/s. Hindustan Rubber works for the year ending 31.03.2013, 31.03.2014, 31.03.201 that the net profit/loss shown as under: F.Y. 2012-13 F.Y. 2013-14 F.Y. 2014-15 F.Y. 2015-16 Please explain how the firm got loss hem there is no sales shown for the relevant period. Ans. I have to go with the accounts for answer this question. We will explain/rectify the accounts if needed and produce before you within 3 days. Q.91 It is noticed from P&L account that the following land cost and compensation of tenancies were F.Y. 2012-13 Rs. 81,69,98,000/ F.Y. 2013-14 Rs. 19,69,05,780/ F.Y. 2014-15 Rs. 4,98,91,140/ produce documentary evidence for the same and als BMC charges and other charges debited against the cost of land along with supporting evidences. Ans. We will produce these details in 3 days along with supporting evidences. Q. 92 You have not shown any profit on the project till d current F.Y. the half an hour time to discuss with my partners. Q. 89 You have been provided half an hour time to discuss with your Do you have anything to say? Ans. Sir, I have discussed with my partners and we have considered several papers put before us. I completely agree with partner Shri Ramlal Agarwal and as has been affirmed by him in his statement. We would like to declare our income under IDS- 2016, which could not be offered for taxation because of various reasons. My partner Shri Ramlal Agarwal had ad receipts amounting to Rs. 19.86 Cr. I have discussed with my other partners and offered to declare Rs. 20 Cr under IDS-2016. Q. 90 On going through P&L Account of M/s. Hindustan Rubber works for the year ending 31.03.2013, 31.03.2014, 31.03.2015,& 31.03.2016 it is noticed that the net profit/loss shown as under:- Rs. (-)2,33,816/- Rs. (-) 20,12,65,746/- 0/- 0/ Please explain how the firm got loss hem there is no sales shown for the Ans. I have to go with the accounts for answer this question. We will explain/rectify the accounts if needed and produce before you within 3 days. Q.91 It is noticed from P&L account that the following land cost and compensation of tenancies were debited for the year shown below: 13 Rs. 81,69,98,000/- & Rs. 20,09,63,120/- 14 Rs. 19,69,05,780/- & Rs. 3,15,52,400/- 15 Rs. 4,98,91,140/- F.Y. 2015-16 Rs. 7,70,70,240/Please produce documentary evidence for the same and also produce the details of BMC charges and other charges debited against the cost of land along with supporting evidences. Ans. We will produce these details in 3 days along with supporting Q. 92 You have not shown any profit on the project till date whereas during Hindustan Rubber Works 8 ITA No. 4221/MUM/2025 half an hour time to discuss with my partners. Q. 89 You have been provided half an hour time to discuss with your Ans. Sir, I have discussed with my partners and we have considered several mpletely agree with partner Shri Ramlal Agarwal and as has been affirmed by him in his statement. We would like to declare 2016, which could not be offered for taxation because of various reasons. My partner Shri Ramlal Agarwal had admitted cash receipts amounting to Rs. 19.86 Cr. I have discussed with my other partners Q. 90 On going through P&L Account of M/s. Hindustan Rubber works for the 5,& 31.03.2016 it is noticed Please explain how the firm got loss hem there is no sales shown for the Ans. I have to go with the accounts for answer this question. We will explain/rectify the accounts if needed and produce before you within 3 days. Q.91 It is noticed from P&L account that the following land cost and debited for the year shown below: 16 Rs. 7,70,70,240/Please o produce the details of BMC charges and other charges debited against the cost of land along with Ans. We will produce these details in 3 days along with supporting ate whereas during Printed from counselvise.com O. C. Of the project is also received. It is also noticed that the 58.3% of the area has been sold to the respective buyers. Also the LTCG on A/c of conversion of land to stock in trade is worked out at Rs. 25,81,55,520/ 58.38% of enhanced cost Rs. 44,28,05,380/ Ans. We have earlier shown some capital gain income on conversion of land into stock in trade. However, we will verify the records and offer LTCG during the current financial year if the pr Further, we want to mention here that after completion of books of accounts for FY 2015-16 it will be in profit after set off earlier year losses. We mean to say here that we are in overall in profit in FY 2015 loss will remains as on 31.03.2016. the books of accounts are under finalisation and audit will be completed in the specified period. The returns for AY 2016-17 will be filed in time after paying taxes as per computation of total income. Q. 93 Please state the estimated profit for current FY 2016 Ans. The accounts are in progress and at this stage the amount of profit is not determined. However, we all the partners have decided to offer an additional income of Rs. 10,00,00,000/ 2016-17 over and above our regular income on which the advance tax will be paid during the year. Q. 94 Do you have anything to say? Ans. Yes sir, I would like to declare income under IDS on behalf of our firms M/s Hindustan Rubber Works for Rs. 15,00,00,000/ Dvelopers for Rs. 5.00.00.000/ additional income of Rs. above regular income....\" The copies of impounde Shri Deven Juthani have been dully provided vide letter dated 20.11.2019. As regards admission of \"ON MONEY” on sale of flats by the partners and offering of Rs. 20 crores income under the IDS Scheme, it submission made in response to notice u/s 142(1) dated 04.11.2019 explaining the cash deposited in the bank account during the demonetisation period that the assessee has deposited an amount aggregating to Rs. 3,00,00,000/ crore rupees) in its bank accounts out of income declared of Rs. 15,00,00,000/- (Fifteen Crore rupees) under IDS, 2016. As discussed herein above, survey was conducted u/s 133A on 21.09.2016 to 23.09.2016 and declaration made by Shri Deven Juthani in his statement recorded u/s 131 of the IT Act 1961 of additional income of Rs. 10 Crore over C. Of the project is also received. It is also noticed that the 58.3% of the area has been sold to the respective buyers. Also the LTCG on A/c of conversion of land to stock in trade is worked out at Rs. 25,81,55,520/ 58.38% of enhanced cost Rs. 44,28,05,380/-) please explain. Ans. We have earlier shown some capital gain income on conversion of land into stock in trade. However, we will verify the records and offer LTCG during the current financial year if the proportionate has been not offered yet. Further, we want to mention here that after completion of books of accounts 16 it will be in profit after set off earlier year losses. We mean to say here that we are in overall in profit in FY 2015-16 and no carry forward loss will remains as on 31.03.2016. the books of accounts are under finalisation and audit will be completed in the specified period. The returns 17 will be filed in time after paying taxes as per computation of . 93 Please state the estimated profit for current FY 2016-17. Ans. The accounts are in progress and at this stage the amount of profit is not determined. However, we all the partners have decided to offer an additional income of Rs. 10,00,00,000/- on the project for the current financial year i.e. 17 over and above our regular income on which the advance tax will be paid during the year. Q. 94 Do you have anything to say? Ans. Yes sir, I would like to declare income under IDS on behalf of our firms M/s Hindustan Rubber Works for Rs. 15,00,00,000/- & M/s Satayam 5.00.00.000/-. Further, we are hereby offering an additional income of Rs. 10.00.00.000/- for current financial year over and above regular income....\" The copies of impounded documents and the statements recorded u/s 131 of Shri Deven Juthani have been dully provided vide letter dated 20.11.2019. As regards admission of \"ON MONEY” on sale of flats by the partners and offering of Rs. 20 crores income under the IDS Scheme, it is found from the response to notice u/s 142(1) dated 04.11.2019 explaining the cash deposited in the bank account during the demonetisation period that the assessee has deposited an amount aggregating to Rs. 3,00,00,000/ pees) in its bank accounts out of income declared of Rs. (Fifteen Crore rupees) under IDS, 2016. As discussed herein above, survey was conducted u/s 133A on 21.09.2016 to 23.09.2016 and declaration made by Shri Deven Juthani in his statement recorded u/s 131 of the IT Act 1961 of additional income of Rs. 10 Crore over Hindustan Rubber Works 9 ITA No. 4221/MUM/2025 C. Of the project is also received. It is also noticed that the 58.3% of the area has been sold to the respective buyers. Also the LTCG on A/c of conversion of land to stock in trade is worked out at Rs. 25,81,55,520/-(i.e. Ans. We have earlier shown some capital gain income on conversion of land into stock in trade. However, we will verify the records and offer LTCG during oportionate has been not offered yet. Further, we want to mention here that after completion of books of accounts 16 it will be in profit after set off earlier year losses. We mean to no carry forward loss will remains as on 31.03.2016. the books of accounts are under finalisation and audit will be completed in the specified period. The returns 17 will be filed in time after paying taxes as per computation of 17. Ans. The accounts are in progress and at this stage the amount of profit is not determined. However, we all the partners have decided to offer an additional project for the current financial year i.e. 17 over and above our regular income on which the advance tax will be Ans. Yes sir, I would like to declare income under IDS on behalf of our firms & M/s Satayam Further, we are hereby offering an for current financial year over and d documents and the statements recorded u/s 131 of Shri Deven Juthani have been dully provided vide letter dated 20.11.2019. As regards admission of \"ON MONEY” on sale of flats by the partners and is found from the response to notice u/s 142(1) dated 04.11.2019 explaining the cash deposited in the bank account during the demonetisation period that the assessee has deposited an amount aggregating to Rs. 3,00,00,000/-(Three pees) in its bank accounts out of income declared of Rs. As discussed herein above, survey was conducted u/s 133A on 21.09.2016 to 23.09.2016 and declaration made by Shri Deven Juthani in his statement recorded u/s 131 of the IT Act 1961 of additional income of Rs. 10 Crore over Printed from counselvise.com and above regular income for FY 2016 proceeding, notice u/s 142(1) dated 13.10.2019 was issued requiring the assessee to explain as to how th been offered for taxation in return of income for AY 2017 assessee vide letter dated 27.11.2019 made submission on ITBA stating that 20 flats are purchased by the partners of the assessee an members which generated additional revenue of Rs. 49.65 crores and capital gain of Rs. 11.80 crores. The explanation furnished by the assessee on the issue is reproduced as under: 1. \"....1. In point no :8 of the notice dated 13.10.2019 issu assessee u/s 142(1) of the Act, your honour has referred to the statement of one of the partners (Mr. Deven Juthani) of the assessee recorded u/s 131A of the Act and asked us to explain as to how the additional income of Rs. 10 crore as mentioned said statement was offered to tax by the assessee in the year under consideration. Before answering the said question, we would like to reproduce the part of the said stamen as referred by your honour in the above mentioned show cuase notice as und “Q. 93 Please state the estimated profit for current FY 2016 Ans. The accounts are in progress and at this stage the amount of profit is not determined. However, we all the partners have decided to offer an additional income of Rs. 10,00,00,000/ 201617 over and above our regular income on which the advance tax will be paid during the year.” 1. We submit that to comply with the abovementioned answer given by Mr. Deven Juthani during the suvey procee assessee and their family members had decided to purchase properties from the assessee and accordingly, entered into the agreements for sale in the last month of the present financial year. (i.e. March, 2017) that in turn generat the additional revenue of Rs. 49.65 crores to the assessee. The details of same are as under: 2. The assessee submits that it generated Rs. 49.95 Crores as additional revenue over and above its normal revenue generated from dealing with outsiders. It is further submitted that all the above mentioned purchase were made through the registered agreements and the sale value of each agreement/transaction exceeds the value as determined by the stamp duty authority. It is submitted that the relevant copies of I agreements have already been placed on record vide submission dated 06.09.2019. We categorically submit that since the construction of the project was complete in the year under consideration, the entire amount of Rs. and above regular income for FY 2016-17. During the course of assessment proceeding, notice u/s 142(1) dated 13.10.2019 was issued requiring the assessee to explain as to how the additional income of Rs. 10,0, been offered for taxation in return of income for AY 2017-18. In assessee vide letter dated 27.11.2019 made submission on ITBA stating that 20 flats are purchased by the partners of the assessee an members which generated additional revenue of Rs. 49.65 crores and capital gain of Rs. 11.80 crores. The explanation furnished by the assessee on the issue is reproduced as under: In point no :8 of the notice dated 13.10.2019 issu assessee u/s 142(1) of the Act, your honour has referred to the statement of one of the partners (Mr. Deven Juthani) of the assessee recorded u/s 131A of the Act and asked us to explain as to how the additional income of Rs. 10 crore as mentioned said statement was offered to tax by the assessee in the year under consideration. Before answering the said question, we would like to reproduce the part of the said stamen as referred by your honour in the above mentioned show cuase notice as under: “Q. 93 Please state the estimated profit for current FY 2016-17. Ans. The accounts are in progress and at this stage the amount of profit is not determined. However, we all the partners have decided to offer an additional income of Rs. 10,00,00,000/- on the project for the current financial year i.e. 201617 over and above our regular income on which the advance tax will be paid during the year.” We submit that to comply with the abovementioned answer given by Mr. Deven Juthani during the suvey proceedings, the partners of the assessee and their family members had decided to purchase properties from the assessee and accordingly, entered into the agreements for sale in the last month of the present financial year. (i.e. March, 2017) that in turn generat the additional revenue of Rs. 49.65 crores to the assessee. The details of The assessee submits that it generated Rs. 49.95 Crores as additional revenue over and above its normal revenue generated from dealing with further submitted that all the above mentioned purchase were made through the registered agreements and the sale value of each agreement/transaction exceeds the value as determined by the stamp duty authority. It is submitted that the relevant copies of Index agreements have already been placed on record vide submission dated 06.09.2019. We categorically submit that since the construction of the project was complete in the year under consideration, the entire amount of Rs. Hindustan Rubber Works 10 ITA No. 4221/MUM/2025 17. During the course of assessment proceeding, notice u/s 142(1) dated 13.10.2019 was issued requiring the 10,0,00,000/- has 18. In response, the assessee vide letter dated 27.11.2019 made submission on ITBA stating that 20 flats are purchased by the partners of the assessee and their family members which generated additional revenue of Rs. 49.65 crores and capital gain of Rs. 11.80 crores. The explanation furnished by the assessee on the In point no :8 of the notice dated 13.10.2019 issued to the Act, your honour has referred to the statement of one of the partners (Mr. Deven Juthani) of the assessee recorded u/s 131A of the Act and asked us to explain as to how the additional income of Rs. 10 crore as mentioned in the said statement was offered to tax by the assessee in the year under consideration. Before answering the said question, we would like to reproduce the part of the said stamen as referred by your honour in the above 17. Ans. The accounts are in progress and at this stage the amount of profit is not determined. However, we all the partners have decided to offer an additional n the project for the current financial year i.e. 201617 over and above our regular income on which the advance tax will be We submit that to comply with the abovementioned answer given by dings, the partners of the assessee and their family members had decided to purchase properties from the assessee and accordingly, entered into the agreements for sale in the last month of the present financial year. (i.e. March, 2017) that in turn generated the additional revenue of Rs. 49.65 crores to the assessee. The details of The assessee submits that it generated Rs. 49.95 Crores as additional revenue over and above its normal revenue generated from dealing with further submitted that all the above mentioned purchase were made through the registered agreements and the sale value of each agreement/transaction exceeds the value as determined by the stamp duty ndex-II of the said agreements have already been placed on record vide submission dated 06.09.2019. We categorically submit that since the construction of the project was complete in the year under consideration, the entire amount of Rs. Printed from counselvise.com 49,65,00,000 was a consideration. Sr. No Name of the person 1 V.A. Manania 2 Shyamlal Agarwal 3 Rekha Shyamlal Agarwal 4 V.A. Manania 5 V.A. Manania 6 Ankit Agarwal 7 Ramlal V Agarwal 8 Sangeeta R Agarwal 9 V.A. Manania 10 V.A. Manania 11 V.A. Manania 12 Sapna Agarwal 13 Omnaryan B Agarwal 14 Leela Omnaryan Agarwal 15 V.A. Manania 16 V.A. Manania 17 V.A. Manania 18 V.A. Manania 19 Lalit Chandra J. Juthani 20 Sanket S Agarwal The assessee’s above submissions explaining the additional income declared during the course of survey is offered in the return of income is not acceptable. The assessee in regular course of business had sold 20 flats to the partners and his family member gain. The assessee has to declare the income in the return of income on the profits earned in the regular course of business. Accordingly, the assessee has accounted the sales of 20 flats and proportionate capital gain i in the return of income. The additional income of Rs. 10 crores over and above regular income declared by the partner of the assessee firm during the course of survey was on account of incriminating documents found , admission of \"ON MONEY” on sale of flats in statement recorded u/s 131 by Shri Ramlal 49,65,00,000 was accounted as sales and offered to tax in the year under Name of the Unit No Corresponding date of the agreements for sale V.A. Manania 1601 07.03.2017 Shyamlal Agarwal 1702 03.03.2017 Rekha Shyamlal Agarwal 1703 01.03.2017 V.A. Manania 1705 07.03.2017 V.A. Manania 1706 07.03.2017 Ankit Agarwal 1801 27.02.2017 Ramlal V Agarwal 1802 02.03.2017 Sangeeta R Agarwal 1803 27.03.2017 V.A. Manania 1807 07.03.2017 V.A. Manania 1805 07.03.2017 V.A. Manania 1806 07.03.2017 Sapna Agarwal 1901 27.03.2017 Omnaryan B Agarwal 1902 27.03.2017 Omnaryan Agarwal 1903 27.03.2017 V.A. Manania 1904 07.03.2017 V.A. Manania 1905 07.03.2017 V.A. Manania 1906 07.03.2017 V.A. Manania 2001 07.03.2017 Lalit Chandra J. Juthani 2006 22.03.2017 Sanket S Agarwal 1701 27.03.2017 The assessee’s above submissions explaining the additional income declared during the course of survey is offered in the return of income is not acceptable. The assessee in regular course of business had sold 20 flats to the partners and his family member which generated revenue and capital gain. The assessee has to declare the income in the return of income on the profits earned in the regular course of business. Accordingly, the assessee has accounted the sales of 20 flats and proportionate capital gain i in the return of income. The additional income of Rs. 10 crores over and above regular income declared by the partner of the assessee firm during the course of survey was on account of incriminating documents found , admission of le of flats in statement recorded u/s 131 by Shri Ramlal Hindustan Rubber Works 11 ITA No. 4221/MUM/2025 ccounted as sales and offered to tax in the year under Agreement value/sale consideration 2,85,00,000 2,15,00,000 2,85,00,000 2,00,00,000 2,60,00,000 2,85,00,000 2,15,00,000 2,85,00,000 1,75,00,000 1,75,00,000 2,60,00,000 2,85,00,000 2,15,00,000 2,85,00,000 1,75,00,000 1,75,00,000 2,60,00,000 2,85,00,000 2,60,00,000 2,85,00,000 The assessee’s above submissions explaining the additional income declared during the course of survey is offered in the return of income is not acceptable. The assessee in regular course of business had sold 20 flats to which generated revenue and capital gain. The assessee has to declare the income in the return of income on the profits earned in the regular course of business. Accordingly, the assessee has accounted the sales of 20 flats and proportionate capital gain is offered in the return of income. The additional income of Rs. 10 crores over and above regular income declared by the partner of the assessee firm during the course of survey was on account of incriminating documents found , admission of le of flats in statement recorded u/s 131 by Shri Ramlal Printed from counselvise.com Agarwal and inability to explain incriminating documents impounded as per annexure A-2 by Shri Deven Juthani. Moreover, Shri Deven Juthani partner of the firm has confirmed declaration of additional and above the regular income after consultation with other partners. Further, submission is also made vide letter dated 18.12.2019 wherein statement giving page no & explanation on the impounded documents has been furnished. On assessee merely stated that income declared under IDS impounded documents as per annexure A and correlated the amounts with the IDS declaration. Further, no on the noting has been offered on the documents impounded as per annexure A-2. Thus, the declaration of additional income of Rs. 10,00,00,000/ and above regular income made in the statement recorded u/s 131 on the basis of incriminating d not been offered in return of income. The assessee filed its return of income declaring total income of Rs. 5,39,56,120/-. The total tax and interest payable on the return income is shown at Rs. 1,26,33,92 1,24,48,756/- and Rs. 1,85,166/ tax and TDS of Rs. 5,04,00,000/ claimed refund of Rs. 4,47,53,797/ assessee are as under: Sr. No BSR Code Challan No 1 250271 90223 2 250275 1 On going through the details of advance tax it is apparent that the assessee while computing advance tax liability on 15.03.2017 has considered the income of Rs. 10,00,00,000/ regular income and has paid the advance tax. In view of the above facts, the a issue of letter dated 26.12.2019 requiring the assessee to show cause as to why an amount of Rs. income as undisclosed income. The assessee dated 27.12.2019. The specific content of the submissions explaining the issue is reproduced as under: Agarwal and inability to explain incriminating documents impounded as per 2 by Shri Deven Juthani. Moreover, Shri Deven Juthani partner of the firm has confirmed declaration of additional income of Rs. 10 crores over and above the regular income after consultation with other partners. Further, submission is also made vide letter dated 18.12.2019 wherein statement giving page no & explanation on the impounded documents has been furnished. On perusal of explanation column of the statement the assessee merely stated that income declared under IDS impounded documents as per annexure A-1 but has not provided any amount and correlated the amounts with the IDS declaration. Further, no on the noting has been offered on the documents impounded as per annexure 2. Thus, the declaration of additional income of Rs. 10,00,00,000/ and above regular income made in the statement recorded u/s 131 on the basis of incriminating documents impounded during the course of survey has not been offered in return of income. The assessee filed its return of income declaring total income of Rs. . The total tax and interest payable on the return income is shown at Rs. 1,26,33,922/- which includes tax and interest of Rs. and Rs. 1,85,166/- respectively. The assessee paid advance tax and TDS of Rs. 5,04,00,000/- and Rs. 69,87,719/- repectively and has claimed refund of Rs. 4,47,53,797/-. The details of advance tax pai assessee are as under: Challan Date of Deposit A.Y. Major Head Minor Head Amount 90223 13-06-2016 2017-18 21 100 400000 15-03-2017 2017-18 21 100 50000000 On going through the details of advance tax payment made by the assessee, it is apparent that the assessee while computing advance tax liability on 15.03.2017 has considered the income of Rs. 10,00,00,000/ regular income and has paid the advance tax. In view of the above facts, the assessee was again given an opportunity by issue of letter dated 26.12.2019 requiring the assessee to show cause as to why an amount of Rs. 10,0, 00,000/- should not be added to the income as undisclosed income. The assessee made submission vide letter dated 27.12.2019. The specific content of the submissions explaining the issue is reproduced as under: Hindustan Rubber Works 12 ITA No. 4221/MUM/2025 Agarwal and inability to explain incriminating documents impounded as per 2 by Shri Deven Juthani. Moreover, Shri Deven Juthani partner of income of Rs. 10 crores over and above the regular income after consultation with other partners. Further, submission is also made vide letter dated 18.12.2019 wherein statement giving page no & explanation on the impounded documents has perusal of explanation column of the statement the assessee merely stated that income declared under IDS-2016 for the 1 but has not provided any amount and correlated the amounts with the IDS declaration. Further, no explanation on the noting has been offered on the documents impounded as per annexure 2. Thus, the declaration of additional income of Rs. 10,00,00,000/- over and above regular income made in the statement recorded u/s 131 on the ocuments impounded during the course of survey has The assessee filed its return of income declaring total income of Rs. . The total tax and interest payable on the return income is which includes tax and interest of Rs. respectively. The assessee paid advance repectively and has . The details of advance tax paid by the Amount 400000 50000000 payment made by the assessee, it is apparent that the assessee while computing advance tax liability on 15.03.2017 has considered the income of Rs. 10,00,00,000/- along with its ssessee was again given an opportunity by issue of letter dated 26.12.2019 requiring the assessee to show cause as to should not be added to the made submission vide letter dated 27.12.2019. The specific content of the submissions explaining the Printed from counselvise.com \"..... Forgiving the answer to question no 8 & 9 of your notice dated 13.10.2019, the assessee statements made by Shri Deven Juthani during the survey conducted u/s 133A on 21.09.2016 to 23.09.2016. The same were provided by you on 20.11.2019, the reply to the above said question no 8 & 9 was submitted by the assessee on 27.11.2019 is self explanatory and exp Assessees has offered the additional income of Rs. 10 crores over and above regular income. In question no.8, you have only asked explanation for the statement made by Shri Deven Juthani and not by Shri Ramlal Agarwal. Explanation was asked only in respect of DECLARATION regarding additional income of Rs. 10 crores. The assessee was asked to explain how the additional income of Rs. 10 crores over and above regular income has been offered in the return of A.Y. 2017-18, for which detailed reply long back on 27-11 DECLARED that additional income of Rs. 10 crores over and above regular income of F.Y. 2016 DECLARE income under IDS on behalf of our firms M/s Hindustan Rubber Works for Rs. 15,00,00,000/ 5,00,00,000/-. Further, we are hereby OFFERING (NOT DECLARING) an additional income of Rs. 10,00,00,000/ above regular income on which the advance tax will be paid during the year.” It means the Assessee will pay advance tax after considering Rs. 10 crores over and above regular income and as such to meet their obligation to OFFER additional income of Rs. 10 crores the partners and their family members purchased 20 flts in the month of March 2017 as explained in reply submitted on 27-11-2019. In response to para 1.4 of your notice dated 26.11.2019, we have already given explanation that in resp A1, the declaration of Rs. 15 crores of M/s Hindustan Rubber Works & Rs. 5 crores of M/s Satyam Developers is made under IDS 2016. Regarding Annexure A2, we would like to state that loose papers 1 to 31 were not f from the possession of Shri Deven Juthani, but found from the premises of Neelkamal Building. knowledge. The Assessee has already furnished explained on 18 The annexure A-2 is not relating mainly it is either some rough working of unit area calculation and/or details relating to flats sold and unsold, details of instalments of advances received in instalments from the buyers of the flats, details of possession to be handed over to the on 01.10.2016, all these things are reflected in the books of accounts and question of offering any not arise. In response to para 1.6, as stated above in reply to para 1.4, we have already stated that additional income was not offered on the basis of \"..... Forgiving the answer to question no 8 & 9 of your notice dated 13.10.2019, the assessee had on 04.11.2019 requested you to provide them made by Shri Deven Juthani during the survey conducted u/s 133A on 21.09.2016 to 23.09.2016. The same were provided by you on 20.11.2019, the reply to the above said question no 8 & 9 was submitted by the assessee on 27.11.2019 is self explanatory and exp Assessees has offered the additional income of Rs. 10 crores over and above In question no.8, you have only asked explanation for the statement made by Shri Deven Juthani and not by Shri Ramlal Agarwal. Explanation was asked only in respect of DECLARATION regarding additional income of Rs. 10 crores. The assessee was asked to explain how the additional income of Rs. 10 crores over and above regular income has been offered in the return of 18, for which detailed reply is already submitted by the assessee 11-2019. In the statement Shri Deven Juthani has not DECLARED that additional income of Rs. 10 crores over and above regular income of F.Y. 2016-17. Shri Deven Juthani has stated that “I would like to ECLARE income under IDS on behalf of our firms M/s Hindustan Rubber Works for Rs. 15,00,00,000/- & M/s Satayam Developers for Rs. . Further, we are hereby OFFERING (NOT DECLARING) an additional income of Rs. 10,00,00,000/- for current financia above regular income on which the advance tax will be paid during the year.” It means the Assessee will pay advance tax after considering Rs. 10 crores over and above regular income and as such to meet their obligation to OFFER ncome of Rs. 10 crores the partners and their family members purchased 20 flts in the month of March 2017 as explained in reply 2019. In response to para 1.4 of your notice dated 26.11.2019, we have already given explanation that in respect of impounded documents as per Annexure A1, the declaration of Rs. 15 crores of M/s Hindustan Rubber Works & Rs. 5 crores of M/s Satyam Developers is made under IDS 2016. Regarding Annexure A2, we would like to state that loose papers 1 to 31 were not f from the possession of Shri Deven Juthani, but found from the premises of Neelkamal Building. He is B.Engg, M.B.A. and does not possess accounting knowledge. The Assessee has already furnished explained on 18 2 is not relating to any income and as stated in the reply, mainly it is either some rough working of unit area calculation and/or details relating to flats sold and unsold, details of instalments of advances received in instalments from the buyers of the flats, details of the flats of which possession to be handed over to the on 01.10.2016, all these things are reflected in the books of accounts and question of offering any In response to para 1.6, as stated above in reply to para 1.4, we have stated that additional income was not offered on the basis of Hindustan Rubber Works 13 ITA No. 4221/MUM/2025 \"..... Forgiving the answer to question no 8 & 9 of your notice dated had on 04.11.2019 requested you to provide them made by Shri Deven Juthani during the survey conducted u/s 133A on 21.09.2016 to 23.09.2016. The same were provided by you on 20.11.2019, the reply to the above said question no 8 & 9 was submitted by the assessee on 27.11.2019 is self explanatory and explain how the Assessees has offered the additional income of Rs. 10 crores over and above In question no.8, you have only asked explanation for the statement made by Shri Deven Juthani and not by Shri Ramlal Agarwal. Explanation was asked only in respect of DECLARATION regarding additional income of Rs. 10 crores. The assessee was asked to explain how the additional income of Rs. 10 crores over and above regular income has been offered in the return of is already submitted by the assessee 2019. In the statement Shri Deven Juthani has not DECLARED that additional income of Rs. 10 crores over and above regular 17. Shri Deven Juthani has stated that “I would like to ECLARE income under IDS on behalf of our firms M/s Hindustan Rubber & M/s Satayam Developers for Rs. . Further, we are hereby OFFERING (NOT DECLARING) an for current financial year over and above regular income on which the advance tax will be paid during the year.” It means the Assessee will pay advance tax after considering Rs. 10 crores over and above regular income and as such to meet their obligation to OFFER ncome of Rs. 10 crores the partners and their family members purchased 20 flts in the month of March 2017 as explained in reply In response to para 1.4 of your notice dated 26.11.2019, we have already ect of impounded documents as per Annexure A1, the declaration of Rs. 15 crores of M/s Hindustan Rubber Works & Rs. 5 crores of M/s Satyam Developers is made under IDS 2016. Regarding Annexure A2, we would like to state that loose papers 1 to 31 were not found from the possession of Shri Deven Juthani, but found from the premises of He is B.Engg, M.B.A. and does not possess accounting knowledge. The Assessee has already furnished explained on 18-12-2019. to any income and as stated in the reply, mainly it is either some rough working of unit area calculation and/or details relating to flats sold and unsold, details of instalments of advances received the flats of which possession to be handed over to the on 01.10.2016, all these things are reflected in the books of accounts and question of offering any income does In response to para 1.6, as stated above in reply to para 1.4, we have stated that additional income was not offered on the basis of Printed from counselvise.com impounded documents during the course of Survey u/s 133A and as such Rs. 10 crores cannot be added as undisclosed income without any material and /or proof....\" The submission made by the asses additional income is considered but cannot be accepted. Shri Ramlal Agarwal in his statement u/s 131 has admitted the notings on the incriminating documents impounded as per Annexure A on sale of flats. Shri Ramlal Agarwal has quantified the amount of \"ON MONEY” at Rs. 19,86,00,000/ Deven Juthani, partner in his statement has confirmed the receipt of “ON MONEY” of Rs. 19,86,00,000/ documents impounded as per Annexure has finally admitted to declare Rs. 15,00,00,000/ Rs. 10,00,00,000/- for A.Y. 2017-18. The assessee has declared income of Rs. 15,00,00,000/ under IDS, 2016. However, has omitted to offer Rs. 10,00,00,000/ return of income for A.Y. 2017 failed to make satisfactory explanat income of Rs. 10.00.00.000/declared regular income has been accounted and offered for taxation. The assessee failed to discharge the onus cast upon it to explain the amounts noted o impounded documents are account in the regular books of accounts. The assessee has accepted and admitted the notings of amounts aggregating to Rs.19,86,00,000/- on the impounded documents to be the “ON MONEY” received on sale of flats and consequentl 15,00,00,000/- under IDS, 2016. Out of the income declared under IDS, 2016 the assessee has deposited Rs. 3,00,00,000/ demonetization period. In absence of satisfactory submission supported w proof relating to Rs. 10,00,00,000/declared as additional income over and above the regular income on the basis of notings made on documents impounded during the course of survey, it is presumed that the assessee has no further explanation to offer and (Ten crore rupees) is added as income u/s 69A r.w.s. 115BBE of the IT Act, 1961 as unexplained money. 3.2 In appellate proceedings, the Ld. CIT(A), after examining the material on record, deleted the addition of holding that:(i)The alleged disclosure was not shown to be linked with any specific incriminating material, particularly documents impounded as Annexure A establish any nexus between such document impounded documents during the course of Survey u/s 133A and as such Rs. 10 crores cannot be added as undisclosed income without any material and The submission made by the assessee explaining the issue of declaration of additional income is considered but cannot be accepted. Shri Ramlal Agarwal in his statement u/s 131 has admitted the notings on the incriminating documents impounded as per Annexure A-1 relating to ON MONEY accep on sale of flats. Shri Ramlal Agarwal has quantified the amount of \"ON MONEY” at Rs. 19,86,00,000/- noted on the impounded documents. Shri Deven Juthani, partner in his statement has confirmed the receipt of “ON MONEY” of Rs. 19,86,00,000/- but could not explain the notings made on documents impounded as per Annexure- A2. Therefore, Shri Deven Juthani has finally admitted to declare Rs. 15,00,00,000/- under the IDS, 2016 and as additional income over and above the regular income 18. The assessee has declared income of Rs. 15,00,00,000/ under IDS, 2016. However, has omitted to offer Rs. 10,00,00,000/ return of income for A.Y. 2017-18. In reply to show cause notice, the assessee failed to make satisfactory explanation supported with proof as to how the 10.00.00.000/declared as additional income over and above regular income has been accounted and offered for taxation. The assessee failed to discharge the onus cast upon it to explain the amounts noted o impounded documents are account in the regular books of accounts. The assessee has accepted and admitted the notings of amounts aggregating to on the impounded documents to be the “ON MONEY” received on sale of flats and consequently has declared an amount of Rs. under IDS, 2016. Out of the income declared under IDS, 2016 the assessee has deposited Rs. 3,00,00,000/- in its bank accounts during the demonetization period. In absence of satisfactory submission supported w proof relating to Rs. 10,00,00,000/declared as additional income over and above the regular income on the basis of notings made on documents impounded during the course of survey, it is presumed that the assessee has no further explanation to offer and the amounts noted of Rs. (Ten crore rupees) is added as income u/s 69A r.w.s. 115BBE of the IT Act, 1961 as unexplained money.” In appellate proceedings, the Ld. CIT(A), after examining the material on record, deleted the addition of ₹10 crores, inter alia, holding that:(i)The alleged disclosure was not shown to be linked with any specific incriminating material, particularly documents impounded as Annexure A-2; (ii) The Assessing Officer failed to establish any nexus between such documents and the impugned Hindustan Rubber Works 14 ITA No. 4221/MUM/2025 impounded documents during the course of Survey u/s 133A and as such Rs. 10 crores cannot be added as undisclosed income without any material and see explaining the issue of declaration of additional income is considered but cannot be accepted. Shri Ramlal Agarwal in his statement u/s 131 has admitted the notings on the incriminating 1 relating to ON MONEY accepted on sale of flats. Shri Ramlal Agarwal has quantified the amount of \"ON noted on the impounded documents. Shri Deven Juthani, partner in his statement has confirmed the receipt of “ON ot explain the notings made on A2. Therefore, Shri Deven Juthani under the IDS, 2016 and as additional income over and above the regular income 18. The assessee has declared income of Rs. 15,00,00,000/- under IDS, 2016. However, has omitted to offer Rs. 10,00,00,000/- in the 18. In reply to show cause notice, the assessee ion supported with proof as to how the as additional income over and above regular income has been accounted and offered for taxation. The assessee failed to discharge the onus cast upon it to explain the amounts noted on the impounded documents are account in the regular books of accounts. The assessee has accepted and admitted the notings of amounts aggregating to on the impounded documents to be the “ON MONEY” y has declared an amount of Rs. under IDS, 2016. Out of the income declared under IDS, 2016 in its bank accounts during the demonetization period. In absence of satisfactory submission supported with proof relating to Rs. 10,00,00,000/declared as additional income over and above the regular income on the basis of notings made on documents impounded during the course of survey, it is presumed that the assessee has the amounts noted of Rs.10.00.00.000/- (Ten crore rupees) is added as income u/s 69A r.w.s. 115BBE of the IT Act, In appellate proceedings, the Ld. CIT(A), after examining the crores, inter alia, holding that:(i)The alleged disclosure was not shown to be linked with any specific incriminating material, particularly documents 2; (ii) The Assessing Officer failed to s and the impugned Printed from counselvise.com addition; (iii) The disclosure was made in a general context, as the accounts were under finalisation and profits were yet to be determined; (iv)The assessee had, in substance, honoured the declaration by recognising income through actua transactions, namely sale of flats, which stood duly accounted for and taxed; and (v) Any further addition would amount to impermissible double taxation. CIT(A) is reproduced as under: “7.3.1 The core ground Rs.10 crores made by the AO, alleging that the same represents undisclosed income arising out of documents marked as Annexure survey proceedings, and not disclosed in the return of inco the case are that a survey under section 133A of the Act was conducted at the business premises of the appellant on the Partners namely Shri Deven Juthani and Shri Ramlal Agrawal were recorded. Upon confron identification \"A1”, Shri Ramlal Agarwal admitted that the same pertains to \"On money” received for the sale of flats. Shri Agarwal quantified this amount to Rs.19.86 Crores and promised to declare the sam partner of the Firm, Shri Deven Juthani accepted the quantification of \"On money” done by Shri Ramlal Agarwal and disclosed an amount of Rs.20 Crores under the IDS to cover this \"On money”. Some other documents bearing marks of ident and his statement recorded. In response to the various queries raised in the statement recorded during the course of survey, Shri Deven Juthani stated that since the accounts are in progress and the amoun determined, the partners have agreed to offer an additional income of Rs.10,00,00,000/- on the project for the instant AY over and above the regular income and pay advance taxes accordingly. It is this admission by Shri Deven Juthani tha While the appellant contends that the said income has been duly offered by way of selling 20 flats to the Partners and their family members and thereby recognising revenue in terms of business profit & AO is of the view that the flats sold are part of regular business activity and the amount of Rs.10,00,00,000/ survey was over and above the regular business income. The AO further contends that the disclosure of additional income was over and above the regular business income and since the contents of A2 could not be explained at the time of survey, the amount of Rs.10,00,00,000/ addition; (iii) The disclosure was made in a general context, as the accounts were under finalisation and profits were yet to be determined; (iv)The assessee had, in substance, honoured the declaration by recognising income through actua transactions, namely sale of flats, which stood duly accounted for and taxed; and (v) Any further addition would amount to impermissible double taxation. The relevant finding of the Ld. CIT(A) is reproduced as under: The core ground raised by the appellant is against the addition of Rs.10 crores made by the AO, alleging that the same represents undisclosed income arising out of documents marked as Annexure-A2 impounded during survey proceedings, and not disclosed in the return of inco the case are that a survey under section 133A of the Act was conducted at the business premises of the appellant on 21.09.2016 wherein statements of the Partners namely Shri Deven Juthani and Shri Ramlal Agrawal were recorded. Upon confronting with the impounded documents bearing marks of identification \"A1”, Shri Ramlal Agarwal admitted that the same pertains to \"On money” received for the sale of flats. Shri Agarwal quantified this amount to Rs.19.86 Crores and promised to declare the same under IDS. The other partner of the Firm, Shri Deven Juthani accepted the quantification of \"On money” done by Shri Ramlal Agarwal and disclosed an amount of Rs.20 Crores under the IDS to cover this \"On money”. Some other documents bearing marks of identification \"A2” was also shown to Shri Deven Juthani and his statement recorded. In response to the various queries raised in the statement recorded during the course of survey, Shri Deven Juthani stated that since the accounts are in progress and the amount of profit is not determined, the partners have agreed to offer an additional income of on the project for the instant AY over and above the regular income and pay advance taxes accordingly. It is this admission by Shri Deven Juthani that is the basis of contention and needs to be decided. While the appellant contends that the said income has been duly offered by way of selling 20 flats to the Partners and their family members and thereby recognising revenue in terms of business profit & long term capital gain, the AO is of the view that the flats sold are part of regular business activity and the amount of Rs.10,00,00,000/- offered as income during the course of survey was over and above the regular business income. The AO further s that the disclosure of additional income was over and above the regular business income and since the contents of A2 could not be explained at the time of survey, the amount of Rs.10,00,00,000/- is attributable to these Hindustan Rubber Works 15 ITA No. 4221/MUM/2025 addition; (iii) The disclosure was made in a general context, as the accounts were under finalisation and profits were yet to be determined; (iv)The assessee had, in substance, honoured the declaration by recognising income through actual business transactions, namely sale of flats, which stood duly accounted for and taxed; and (v) Any further addition would amount to The relevant finding of the Ld. raised by the appellant is against the addition of Rs.10 crores made by the AO, alleging that the same represents undisclosed A2 impounded during survey proceedings, and not disclosed in the return of income. The facts of the case are that a survey under section 133A of the Act was conducted at wherein statements of the Partners namely Shri Deven Juthani and Shri Ramlal Agrawal were ting with the impounded documents bearing marks of identification \"A1”, Shri Ramlal Agarwal admitted that the same pertains to \"On money” received for the sale of flats. Shri Agarwal quantified this amount e under IDS. The other partner of the Firm, Shri Deven Juthani accepted the quantification of \"On money” done by Shri Ramlal Agarwal and disclosed an amount of Rs.20 Crores under the IDS to cover this \"On money”. Some other documents ification \"A2” was also shown to Shri Deven Juthani and his statement recorded. In response to the various queries raised in the statement recorded during the course of survey, Shri Deven Juthani stated t of profit is not determined, the partners have agreed to offer an additional income of on the project for the instant AY over and above the regular income and pay advance taxes accordingly. It is this admission by t is the basis of contention and needs to be decided. While the appellant contends that the said income has been duly offered by way of selling 20 flats to the Partners and their family members and thereby long term capital gain, the AO is of the view that the flats sold are part of regular business activity and offered as income during the course of survey was over and above the regular business income. The AO further s that the disclosure of additional income was over and above the regular business income and since the contents of A2 could not be explained is attributable to these Printed from counselvise.com impounded documents. The AO theref Rs.10,00,00,000/-. It is however important to note that the AO has not stated or given any findings as to how the impounded documents identified as A2 give rise to an income of Rs.10,00,00,000/ has been discussed by the AO in his order. 7.3.2 As regards the issue of papers pertaining to \"On money” found during the course of survey and inventorised as \"A1”, the same has already been admitted by the appellant and corresponding disclosure of Rs.20 crore under the IDS. Thus, the issue of \"On money” and impounded documents A1 have already been taken care off and no longer relevant. The sole issue to be decided is as to whether the disclosure of Rs.10 Crores made by the Partner during the course of Su then whether the AO is correct in making an addition of Rs.10,00,00,000/ the basis of statement of the Partner recorded during the course of Survey. 7.3.3 The AO has not given any finding with respec documents A2 and has merely reproduced the statement of the Partner. The relevant extract of the statement has been reproduced above in the findings of the AO. It is seen that the AO has highlighted that portion of the statement wherein Shri Devesh Juthani has requested for some time to consult with the other Partners. No finding has been given by the AO with respect to these documents and also as to how these documents result into an income of Rs.10,00,00,000/-. The appellant contends th made by the AO is based on misplaced inferences from Shri Deven Juthani’s statement, where he agreed to offer the amount under stress without linking it to the notings in Annexure assessee's group. The appellant explains that this disclosure was made in response to questions about past losses and future profits, not connected to Annexure-A2. To honor this disclosure, the firm sold 20 flats to its partners, generating Rs. 49.65 Crore income, which was duly taxed. The appellant asserts that the Ld. AO failed to establish any correlation between the Rs. 10 Crores income and Annexure A2, and taxing the same amount again would result in d the income has already been offered to tax. 7.3.4 After carefully considering the submissions of the appellant, statement of Shri Deven Juthani and examining the evidence on record, it is evident that the disclosure of Rs. 10 Crores made response to the question regarding the non years and was not related to any specific entry in Annexure in Annexure-A2, as pointed out by the appellant, are rough jotting not contain any actionable intelligence. There is no substantial evidence or direct correlation between the notings and the additional income of Rs. 10 Crores. Thus, the finding of the AO that the disclosure of Rs.10,00,00,000/ was made to cover the discrepancy in A2 is not supported by the impounded documents. The AO therefore made an addition of . It is however important to note that the AO has not stated any findings as to how the impounded documents identified as A2 give rise to an income of Rs.10,00,00,000/- and not even a single page of A2 been discussed by the AO in his order. As regards the issue of papers pertaining to \"On money” found during the course of survey and inventorised as \"A1”, the same has already been admitted by the appellant and corresponding disclosure of Rs.20 crore under the IDS. Thus, the issue of \"On money” and impounded documents A1 have already been taken care off and no longer relevant. The sole issue to be decided is as to whether the disclosure of Rs.10 Crores made by the Partner during the course of Survey is related to impounded documents A2 and if not then whether the AO is correct in making an addition of Rs.10,00,00,000/ the basis of statement of the Partner recorded during the course of Survey. The AO has not given any finding with respect to the impounded documents A2 and has merely reproduced the statement of the Partner. The relevant extract of the statement has been reproduced above in the findings of the AO. It is seen that the AO has highlighted that portion of the statement Shri Devesh Juthani has requested for some time to consult with the other Partners. No finding has been given by the AO with respect to these documents and also as to how these documents result into an income of . The appellant contends that the Rs. 10 Crores addition made by the AO is based on misplaced inferences from Shri Deven Juthani’s statement, where he agreed to offer the amount under stress without linking it to the notings in Annexure-A2, which are rough jottings unrelated to the assessee's group. The appellant explains that this disclosure was made in response to questions about past losses and future profits, not connected to A2. To honor this disclosure, the firm sold 20 flats to its partners, generating Rs. 49.65 Crores in revenue, including Rs. 10 Crores in additional income, which was duly taxed. The appellant asserts that the Ld. AO failed to establish any correlation between the Rs. 10 Crores income and Annexure A2, and taxing the same amount again would result in double taxation, as the income has already been offered to tax. After carefully considering the submissions of the appellant, statement of Shri Deven Juthani and examining the evidence on record, it is evident that the disclosure of Rs. 10 Crores made by Shri Juthani was a result of his response to the question regarding the non-declaration of profits in earlier years and was not related to any specific entry in Annexure A2, as pointed out by the appellant, are rough jotting not contain any actionable intelligence. There is no substantial evidence or direct correlation between the notings and the additional income of Rs. 10 Crores. Thus, the finding of the AO that the disclosure of Rs.10,00,00,000/ the discrepancy in A2 is not supported by the Hindustan Rubber Works 16 ITA No. 4221/MUM/2025 ore made an addition of . It is however important to note that the AO has not stated any findings as to how the impounded documents identified as A2 and not even a single page of A2 As regards the issue of papers pertaining to \"On money” found during the course of survey and inventorised as \"A1”, the same has already been admitted by the appellant and corresponding disclosure of Rs.20 crores made under the IDS. Thus, the issue of \"On money” and impounded documents A1 have already been taken care off and no longer relevant. The sole issue to be decided is as to whether the disclosure of Rs.10 Crores made by the Partner rvey is related to impounded documents A2 and if not then whether the AO is correct in making an addition of Rs.10,00,00,000/- on the basis of statement of the Partner recorded during the course of Survey. t to the impounded documents A2 and has merely reproduced the statement of the Partner. The relevant extract of the statement has been reproduced above in the findings of the AO. It is seen that the AO has highlighted that portion of the statement Shri Devesh Juthani has requested for some time to consult with the other Partners. No finding has been given by the AO with respect to these documents and also as to how these documents result into an income of at the Rs. 10 Crores addition made by the AO is based on misplaced inferences from Shri Deven Juthani’s statement, where he agreed to offer the amount under stress without linking A2, which are rough jottings unrelated to the assessee's group. The appellant explains that this disclosure was made in response to questions about past losses and future profits, not connected to A2. To honor this disclosure, the firm sold 20 flats to its partners, s in revenue, including Rs. 10 Crores in additional income, which was duly taxed. The appellant asserts that the Ld. AO failed to establish any correlation between the Rs. 10 Crores income and Annexure- ouble taxation, as After carefully considering the submissions of the appellant, statement of Shri Deven Juthani and examining the evidence on record, it is evident that by Shri Juthani was a result of his declaration of profits in earlier years and was not related to any specific entry in Annexure-A2. The notings A2, as pointed out by the appellant, are rough jottings and do not contain any actionable intelligence. There is no substantial evidence or direct correlation between the notings and the additional income of Rs. 10 Crores. Thus, the finding of the AO that the disclosure of Rs.10,00,00,000/- the discrepancy in A2 is not supported by the statement of Printed from counselvise.com the Partner or the impounded documents. The relevant extract of the statement is reproduced as under: Q No 92 You have not shown any profit on the project till date whereas during current F.Y. the that the 58.3% of the area has been sold to the respective buyers. Also the LTCG on A/c of conversion of land to stock in trade is worked out at Rs.25,81,55,520/- (i.e. 58.3% of enhanced cost Fts.44,2 explain. Ans We have earlier shown some capital gain income on conversion into stock in trade. However, we will verify the records and offer LTCG during the current financial year if the proportionate has been not offered yet. Further, we want to mention here that after completion of books of accounts for F.Y. 2015-16 it will be in profit after set off earlier years losses. We mean to say here that we are in overall in profit in F.Y. 2015 forward loss will remains finalisation and audit will be completed in the specified period. The return for A.Y. 2016-17 will be filed in time after paying taxes as per computation of total income, Q No 93 Please state the estimated Ans The accounts are in progress and at this stage the amount of not determined. However, we all the partners have decided to offer an additional income of Rs.10,00,00,000/ year i.e., F.Y. 2016 advance tax will be paid during the year. Q No 94 Do you have anything to say? Ans: Yes sir, I would like to declare income under IDS on behalf of our firms M/s Hindustan Rubber Work Developers for Rs. 5,00,00,000/ additional income of Rs.10,00,00,000/ above our regular income. It is therefore apparent from the plain reading of disclosure of Rs.10,00,00,000/ 7.3.5 Coming to the other finding of the AO that the disclosure amount of Rs.10,00,00,000/- was over and above the regular business income and hence income on account of sale of flats cannot be attributed to it, in my considered view even this finding is flawed. The appellant is a developer and generates income out of sale of flats. No evidence of any other business activity or source of income was discovered d hence the question of having any income over and above the regular business the Partner or the impounded documents. The relevant extract of the statement is reproduced as under: Q No 92 You have not shown any profit on the project till date whereas during current F.Y. the O.C of the project is also received. It is also noticed that the 58.3% of the area has been sold to the respective buyers. Also the LTCG on A/c of conversion of land to stock in trade is worked out at (i.e. 58.3% of enhanced cost Fts.44,28,05,380/ We have earlier shown some capital gain income on conversion into stock in trade. However, we will verify the records and offer LTCG during the current financial year if the proportionate has been not offered yet. rther, we want to mention here that after completion of books of accounts 16 it will be in profit after set off earlier years losses. We mean to say here that we are in overall in profit in F.Y. 2015- 16 and no carry forward loss will remains as on 31.03.2016, The books of accounts are under finalisation and audit will be completed in the specified period. The return for 17 will be filed in time after paying taxes as per computation of Q No 93 Please state the estimated profit for current F.Y. 2016 The accounts are in progress and at this stage the amount of not determined. However, we all the partners have decided to offer an additional income of Rs.10,00,00,000/- on the project for the current financi year i.e., F.Y. 2016-17 over and above our regular income on which the advance tax will be paid during the year. Q No 94 Do you have anything to say? Yes sir, I would like to declare income under IDS on behalf of our firms M/s Hindustan Rubber Works for Rs.15,00,00,000/- & M/s Satyam Developers for Rs. 5,00,00,000/-. Further we are hereby offering an additional income of Rs.10,00,00,000/- for current financial year over and above our regular income. It is therefore apparent from the plain reading of the statement that the disclosure of Rs.10,00,00,000/- was not related to any specific document. Coming to the other finding of the AO that the disclosure amount of was over and above the regular business income and account of sale of flats cannot be attributed to it, in my considered view even this finding is flawed. The appellant is a developer and generates income out of sale of flats. No evidence of any other business activity or source of income was discovered during the course of Survey and hence the question of having any income over and above the regular business Hindustan Rubber Works 17 ITA No. 4221/MUM/2025 the Partner or the impounded documents. The relevant extract of the Q No 92 You have not shown any profit on the project till date whereas O.C of the project is also received. It is also noticed that the 58.3% of the area has been sold to the respective buyers. Also the LTCG on A/c of conversion of land to stock in trade is worked out at 8,05,380/-) Please We have earlier shown some capital gain income on conversion of land into stock in trade. However, we will verify the records and offer LTCG during the current financial year if the proportionate has been not offered yet. rther, we want to mention here that after completion of books of accounts 16 it will be in profit after set off earlier years losses. We mean 16 and no carry as on 31.03.2016, The books of accounts are under finalisation and audit will be completed in the specified period. The return for 17 will be filed in time after paying taxes as per computation of profit for current F.Y. 2016-17. The accounts are in progress and at this stage the amount of profit is not determined. However, we all the partners have decided to offer an on the project for the current financial 17 over and above our regular income on which the Yes sir, I would like to declare income under IDS on behalf of our firms & M/s Satyam . Further we are hereby offering an for current financial year over and the statement that the was not related to any specific document. Coming to the other finding of the AO that the disclosure amount of was over and above the regular business income and account of sale of flats cannot be attributed to it, in my considered view even this finding is flawed. The appellant is a developer and generates income out of sale of flats. No evidence of any other business uring the course of Survey and hence the question of having any income over and above the regular business Printed from counselvise.com income does not arise at all. The appellant in the instant year has sold the flats and has recognised the revenue and booked profit as per actuals resulting into business income and long term capital gain. The survey was conducted before the accounts could be finalised and the income has been returned as per the audited books of accounts. Once income is disclosed and taxed through actual transactions a under a different pretext (i.e., as undisclosed) would lead to double taxation, which is impermissible in law. The instant case is not that of an entry operator wherein the circumstantial evidence and the statements a subject matter of fact finding but is rather the case of a valid business entity wherein the financial results are duly vouched by way of an audit. Thus, in my considered view the AO is not justified in making the addition of Rs.10,00,00,000/- on ac survey that do not arise out of any corroborative evidence and is based solely on the statement recorded during the course of survey. Moreover, the amount declared by the appellant in the course of survey stan actual transactions members, generating revenue of Rs.49.65 crores and capital gains of Rs.11.80 crores. In view of the same, the addition of Rs.10,00,00,000/ by the AO is deleted and this ground of appeal is allowed. 4. Aggrieved, the Revenue is in appeal before the Tribunal by way of raising the grounds as reproduced above. 5. The solitary issue for adjudication is whether the sum of crores, stated to have been offered during the course of survey by a partner of the assessee firm, stood duly accounted for in the return of income, or whether the same remained undisclosed so as to warrant addition under section 69A of the Act. dispute is in relation to deletion of addition of Rs.10 crores by the Ld. CIT(A). 5.1 The Ld. Departmental Representative relied upon the assessment order and contended that the disclosure made during survey, supported by statements recorded un documents impounded, constituted valid incriminating material. It income does not arise at all. The appellant in the instant year has sold the flats and has recognised the revenue and booked profit as per actuals sulting into business income and long term capital gain. The survey was conducted before the accounts could be finalised and the income has been returned as per the audited books of accounts. Once income is disclosed and taxed through actual transactions as per books, re-adding the same amount under a different pretext (i.e., as undisclosed) would lead to double taxation, which is impermissible in law. The instant case is not that of an entry operator wherein the circumstantial evidence and the statements a subject matter of fact finding but is rather the case of a valid business entity wherein the financial results are duly vouched by way of an audit. Thus, in my considered view the AO is not justified in making the addition of on account of declaration made during the course of survey that do not arise out of any corroborative evidence and is based solely on the statement recorded during the course of survey. Moreover, the amount declared by the appellant in the course of survey stands offered by way of actual transactions — through sale of 20 flats to partners and their family members, generating revenue of Rs.49.65 crores and capital gains of Rs.11.80 crores. In view of the same, the addition of Rs.10,00,00,000/ eleted and this ground of appeal is allowed.” the Revenue is in appeal before the Tribunal by way of raising the grounds as reproduced above. The solitary issue for adjudication is whether the sum of crores, stated to have been offered during the course of survey by a partner of the assessee firm, stood duly accounted for in the return of income, or whether the same remained undisclosed so as to warrant addition under section 69A of the Act. The sol in relation to deletion of addition of Rs.10 crores by the The Ld. Departmental Representative relied upon the assessment order and contended that the disclosure made during survey, supported by statements recorded under section 131 and documents impounded, constituted valid incriminating material. It Hindustan Rubber Works 18 ITA No. 4221/MUM/2025 income does not arise at all. The appellant in the instant year has sold the flats and has recognised the revenue and booked profit as per actuals sulting into business income and long term capital gain. The survey was conducted before the accounts could be finalised and the income has been returned as per the audited books of accounts. Once income is disclosed and adding the same amount under a different pretext (i.e., as undisclosed) would lead to double taxation, which is impermissible in law. The instant case is not that of an entry operator wherein the circumstantial evidence and the statements are the subject matter of fact finding but is rather the case of a valid business entity wherein the financial results are duly vouched by way of an audit. Thus, in my considered view the AO is not justified in making the addition of count of declaration made during the course of survey that do not arise out of any corroborative evidence and is based solely on the statement recorded during the course of survey. Moreover, the amount ds offered by way of through sale of 20 flats to partners and their family members, generating revenue of Rs.49.65 crores and capital gains of Rs.11.80 crores. In view of the same, the addition of Rs.10,00,00,000/- done the Revenue is in appeal before the Tribunal by way The solitary issue for adjudication is whether the sum of ₹10 crores, stated to have been offered during the course of survey by a partner of the assessee firm, stood duly accounted for in the return of income, or whether the same remained undisclosed so as to he sole issue in in relation to deletion of addition of Rs.10 crores by the The Ld. Departmental Representative relied upon the assessment order and contended that the disclosure made during der section 131 and documents impounded, constituted valid incriminating material. It Printed from counselvise.com was submitted that the assessee failed to retract such admission with cogent evidence, and therefore, the addition was justified. Ld. Departmental Representative (DR) was based on incriminating material in Annexure A argued that an admission made under oath shifts the burden of proof to the assessee, and in the absence of a formal retraction supported by evidence of coercion, the 5.2 Per contra, the Ld. counsel for the assessee submitted that addition of Rs.10 crores has been made in the assessment order merely on the basis of statement of Shri Deven Juthani who to offer sum of Rs.10 crores as additional income. for the assessee referred to answer to question No. 93 of the statement of Mr. Deven Juthani and submitted that Shri Deven Jhuthani stated that profit was not determined and all the partners decided to declared additional income of Rs.10 crores on the project for current financial year 2016-17 and over and above regular income on which the advance tax would be paid submitted that assessee honoured the said declaration and offered the said additional income of Rs.10 crores by way of selling 20 flats to its partners generating Rs.49.65 crores as revenue and offered income of Rs.11.92 crores in the return of income , which is exceeding the disclosure of Rs.10 crores. Officer, the said disclosure of Rs.10 crores was on the basis of the was submitted that the assessee failed to retract such admission with cogent evidence, and therefore, the addition was justified. Ld. Departmental Representative (DR) contended that the disclosure was based on incriminating material in Annexure A argued that an admission made under oath shifts the burden of proof to the assessee, and in the absence of a formal retraction supported by evidence of coercion, the statement remains binding. the Ld. counsel for the assessee submitted that addition of Rs.10 crores has been made in the assessment order merely on the basis of statement of Shri Deven Juthani who of Rs.10 crores as additional income. The Ld. counsel for the assessee referred to answer to question No. 93 of the statement of Mr. Deven Juthani and submitted that Shri Deven Jhuthani stated that accounts were in progress at this stage and t determined and all the partners decided to declared additional income of Rs.10 crores on the project for current financial 17 and over and above regular income on which the advance tax would be paid. The Ld. counsel for the assessee hat assessee honoured the said declaration and offered the said additional income of Rs.10 crores by way of selling 20 flats to its partners generating Rs.49.65 crores as revenue and offered income of Rs.11.92 crores in the return of income , which is eeding the disclosure of Rs.10 crores. According to the Assessing Officer, the said disclosure of Rs.10 crores was on the basis of the Hindustan Rubber Works 19 ITA No. 4221/MUM/2025 was submitted that the assessee failed to retract such admission with cogent evidence, and therefore, the addition was justified. The contended that the disclosure was based on incriminating material in Annexure A-2. It was argued that an admission made under oath shifts the burden of proof to the assessee, and in the absence of a formal retraction statement remains binding. the Ld. counsel for the assessee submitted that addition of Rs.10 crores has been made in the assessment order merely on the basis of statement of Shri Deven Juthani who agreed The Ld. counsel for the assessee referred to answer to question No. 93 of the statement of Mr. Deven Juthani and submitted that Shri Deven accounts were in progress at this stage and t determined and all the partners decided to declared additional income of Rs.10 crores on the project for current financial 17 and over and above regular income on which the . The Ld. counsel for the assessee hat assessee honoured the said declaration and offered the said additional income of Rs.10 crores by way of selling 20 flats to its partners generating Rs.49.65 crores as revenue and offered income of Rs.11.92 crores in the return of income , which is According to the Assessing Officer, the said disclosure of Rs.10 crores was on the basis of the Printed from counselvise.com documents impounded under Annexure A course of survey proceedings. based on any specific incriminating document but was an estimated declaration made during survey when accounts were incomplete. The Ld. Counsel submitted that the estimation of project profits, not tied to any specifi entry in Annexure A- flats to partners and relatives at a total consideration of Crores, resulting in a recognized profit/capital gain exceeding the ₹10 Crore threshold. It was argued would constitute impermissible double taxation. 6. We have heard rival submissions of the parties and perused the relevant materials on record dispute are that the during the survey proceedings conducted at the business premises of the assessee firm, of Shri Ramlal Agrawal and Shri Deven Juthani, partners of the assessee firm, offering additional income of Rs. 10,00,00,000/-, issued notice u/s 142( the assessee to explain as to how the additional income of Rs. 10,00,00,000/- has been offered for taxation in return of income for AY 2017-18. In response, the assessee primarily submitted that 20 flats are purchased by the partne members which generated additional revenue of Rs. 49.65 crores and capital gain of Rs. 11. ents impounded under Annexure A-2 impounded during the course of survey proceedings. The disclosure of ₹10 crores wa based on any specific incriminating document but was an estimated declaration made during survey when accounts were incomplete. The Ld. Counsel submitted that the ₹10 Crore offer was a proactive estimation of project profits, not tied to any specific \"incriminating\" -2. To fulfill this commitment, the firm sold 20 flats to partners and relatives at a total consideration of Crores, resulting in a recognized profit/capital gain exceeding the 10 Crore threshold. It was argued that taxing this amount again would constitute impermissible double taxation. We have heard rival submissions of the parties and perused the relevant materials on record. The facts in brief qua the issue in he ld AO, on the basis of statement recorded during the survey proceedings conducted at the business premises of the assessee firm, of Shri Ramlal Agrawal and Shri Deven Juthani, partners of the assessee firm, offering additional income of , issued notice u/s 142(1) of the Act, requiring the assessee to explain as to how the additional income of Rs. has been offered for taxation in return of income for 18. In response, the assessee primarily submitted that 20 flats are purchased by the partners of the assessee and their family members which generated additional revenue of Rs. 49.65 crores and capital gain of Rs. 11.92 crores. The submission of the assessee Hindustan Rubber Works 20 ITA No. 4221/MUM/2025 2 impounded during the 10 crores was not based on any specific incriminating document but was an estimated declaration made during survey when accounts were incomplete. 10 Crore offer was a proactive c \"incriminating\" 2. To fulfill this commitment, the firm sold 20 flats to partners and relatives at a total consideration of ₹49.65 Crores, resulting in a recognized profit/capital gain exceeding the that taxing this amount again We have heard rival submissions of the parties and perused . The facts in brief qua the issue in statement recorded during the survey proceedings conducted at the business premises of the assessee firm, of Shri Ramlal Agrawal and Shri Deven Juthani, partners of the assessee firm, offering additional income of 1) of the Act, requiring the assessee to explain as to how the additional income of Rs. has been offered for taxation in return of income for 18. In response, the assessee primarily submitted that 20 rs of the assessee and their family members which generated additional revenue of Rs. 49.65 crores crores. The submission of the assessee Printed from counselvise.com along with relevant documents was considered by the AO, but not acceptable to him. 6.1 Having considered the material on record and the finding of the Ld. CIT(A), we find that primarily on the statement of a partner recorded during survey proceedings, wherein an amount of offered as additional income. question No. 93 of the statement of partners Shri Deven Juthani which the Ld. CIT(A) has also reproduced in his finding. From the said statement, it is clear that this additional income of Rs.1 crores was offered by the partner on the project for the current financial year for the reason that accounts were in the progress and profit from the said project was not determined at that stage. perusal of Question 93 and its answer reveals that the statement was qualifying in nature. He explicitly stated that \"accounts are in progress\" and \"profit is not determined.\" This indicates that the ₹ project profit meant to ensure the payment of adequate tax, rather than a confession of a hidden asset or \"on (which was already separately covered under Annexure A IDS disclosure). 6.2 The Revenue’s argument regarding \"retraction\" is misplaced. The assessee did not retract the manner in which that amount was offered to tax. Since the AO along with relevant documents was considered by the AO, but not Having considered the material on record and the finding of the Ld. CIT(A), we find that the foundation of the addition rests primarily on the statement of a partner recorded during survey proceedings, wherein an amount of ₹10 crores was stated to be ed as additional income. The Assessing Officer has referred to question No. 93 of the statement of partners Shri Deven Juthani which the Ld. CIT(A) has also reproduced in his finding. From the said statement, it is clear that this additional income of Rs.1 crores was offered by the partner on the project for the current financial year for the reason that accounts were in the progress and profit from the said project was not determined at that stage. perusal of Question 93 and its answer reveals that the statement was qualifying in nature. He explicitly stated that \"accounts are in progress\" and \"profit is not determined.\" This ₹10 Crores was a benchmark of anticipated project profit meant to ensure the payment of adequate tax, rather than a confession of a hidden asset or \"on (which was already separately covered under Annexure A The Revenue’s argument regarding \"retraction\" is misplaced. The assessee did not retract the amount; it merely explained the in which that amount was offered to tax. Since the AO Hindustan Rubber Works 21 ITA No. 4221/MUM/2025 along with relevant documents was considered by the AO, but not Having considered the material on record and the finding of the foundation of the addition rests primarily on the statement of a partner recorded during survey 10 crores was stated to be The Assessing Officer has referred to question No. 93 of the statement of partners Shri Deven Juthani which the Ld. CIT(A) has also reproduced in his finding. From the said statement, it is clear that this additional income of Rs.10 crores was offered by the partner on the project for the current financial year for the reason that accounts were in the progress and profit from the said project was not determined at that stage. A perusal of Question 93 and its answer reveals that the partner’s statement was qualifying in nature. He explicitly stated that \"accounts are in progress\" and \"profit is not determined.\" This 10 Crores was a benchmark of anticipated project profit meant to ensure the payment of adequate advance tax, rather than a confession of a hidden asset or \"on-money\" (which was already separately covered under Annexure A-1 and the The Revenue’s argument regarding \"retraction\" is misplaced. it merely explained the in which that amount was offered to tax. Since the AO Printed from counselvise.com failed to establish a \"live link\" between the impounded documents and the addition, the primary onus remained undischarged by the Revenue. 6.3 Crucially, the Assessing Of cogent material to establish that the said disclosure was relatable to the documents impounded as Annexure A conspicuous absence of any analysis of these documents or demonstration of how they give rise to crores. Mere reference to the existence of such documents, without establishing their evidentiary nexus, cannot sustain the addition. 6.4 The AO's primary error lies in the assumption that the disclosure was linked to Annexure A entry in the said Annexure that quantifies or leads to a suppressed income of ₹10 Crores. It is a settled principle of law that while an admission is an extremely relevant piece of evidence, it cannot be the sole basis for add the underlying material does not support such a quantification. 6.5 In the present case, the assessee has placed on record a plausible and substantiated explanation demonstrating that the disclosure was d transactions. The sale of 20 flats to partners and their family members resulted in substantial revenue, and the income arising therefrom has been duly offered to tax in the return of income. failed to establish a \"live link\" between the impounded documents and the addition, the primary onus remained undischarged by the Crucially, the Assessing Officer has not brought on record any cogent material to establish that the said disclosure was relatable to the documents impounded as Annexure A-2. There is a conspicuous absence of any analysis of these documents or demonstration of how they give rise to undisclosed income of crores. Mere reference to the existence of such documents, without establishing their evidentiary nexus, cannot sustain the addition. The AO's primary error lies in the assumption that the disclosure was linked to Annexure A-2 without identifying a single entry in the said Annexure that quantifies or leads to a suppressed 10 Crores. It is a settled principle of law that while an admission is an extremely relevant piece of evidence, it cannot be basis for addition if it is divorced from the actual facts or if the underlying material does not support such a quantification. In the present case, the assessee has placed on record a plausible and substantiated explanation demonstrating that the disclosure was duly honoured through actual business transactions. The sale of 20 flats to partners and their family members resulted in substantial revenue, and the income arising therefrom has been duly offered to tax in the return of income. Hindustan Rubber Works 22 ITA No. 4221/MUM/2025 failed to establish a \"live link\" between the impounded documents and the addition, the primary onus remained undischarged by the ficer has not brought on record any cogent material to establish that the said disclosure was relatable to 2. There is a conspicuous absence of any analysis of these documents or undisclosed income of ₹10 crores. Mere reference to the existence of such documents, without establishing their evidentiary nexus, cannot sustain the addition. The AO's primary error lies in the assumption that the without identifying a single entry in the said Annexure that quantifies or leads to a suppressed 10 Crores. It is a settled principle of law that while an admission is an extremely relevant piece of evidence, it cannot be ition if it is divorced from the actual facts or if the underlying material does not support such a quantification. In the present case, the assessee has placed on record a plausible and substantiated explanation demonstrating that the uly honoured through actual business transactions. The sale of 20 flats to partners and their family members resulted in substantial revenue, and the income arising therefrom has been duly offered to tax in the return of income. The Printed from counselvise.com Assessing Officer has n any material been brought to show that such income does not encompass the amount declared during survey. 6.6 The assessee has demonstrated that it generated revenue of ₹49.65 Crores through the sale of 20 units transaction was recorded in the books of accounts and formed part of the returned income. The Ld. CIT(A) correctly observed that the assessee has no other known source of income. Once the \"offered\" income is channeled through regi tax as business profit/capital gains, the same cannot be added again under Section 69A. Once such business income stands duly recorded and taxed, any further addition on the same count would result in double taxation, whi 6.7 The AO’s reliance on the statement in isolation, without correlating it to the impounded Annexure A income already offered via flat sales, cannot be sustained in the eyes of the law. In view of above, we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and we accordingly uphold the same. The sole issue in dispute raised in the ground of the Revenue is accordingly dismissed. 6.8 The grounds of appeal of dismissed. Assessing Officer has not controverted this factual position nor has any material been brought to show that such income does not encompass the amount declared during survey. The assessee has demonstrated that it generated revenue of 49.65 Crores through the sale of 20 units to related parties. This transaction was recorded in the books of accounts and formed part of the returned income. The Ld. CIT(A) correctly observed that the assessee has no other known source of income. Once the \"offered\" income is channeled through registered sale deeds and subjected to tax as business profit/capital gains, the same cannot be added again under Section 69A. Once such business income stands duly recorded and taxed, any further addition on the same count would result in double taxation, which is impermissible in law. The AO’s reliance on the statement in isolation, without correlating it to the impounded Annexure A-2 or accounting for the income already offered via flat sales, cannot be sustained in the In view of above, we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and we accordingly uphold the same. The sole issue in dispute raised in the ground of the Revenue is accordingly dismissed. The grounds of appeal of the Revenue are accordingly Hindustan Rubber Works 23 ITA No. 4221/MUM/2025 ot controverted this factual position nor has any material been brought to show that such income does not The assessee has demonstrated that it generated revenue of to related parties. This transaction was recorded in the books of accounts and formed part of the returned income. The Ld. CIT(A) correctly observed that the assessee has no other known source of income. Once the \"offered\" stered sale deeds and subjected to tax as business profit/capital gains, the same cannot be added again under Section 69A. Once such business income stands duly recorded and taxed, any further addition on the same count would ch is impermissible in law. The AO’s reliance on the statement in isolation, without 2 or accounting for the income already offered via flat sales, cannot be sustained in the In view of above, we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and we accordingly uphold the same. The sole issue in dispute raised in the ground of the Revenue are accordingly Printed from counselvise.com 7. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 27/03/2026 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// In the result, the appeal of the Revenue is dismissed. ounced in the open Court on 27/03/2026. Sd/ (SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Hindustan Rubber Works 24 ITA No. 4221/MUM/2025 In the result, the appeal of the Revenue is dismissed. /03/2026. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "