M/s Kotibhaskar Construction, Sangli V. ITO, Ward 1(2),Sangli, Sangli

ITA 2320/PUN/2012

• Counselvise Citation: 232024514 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-11-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 23-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PRAVEENA
• Keywords: Unexplained investment; Business income
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.2318/PN/2012 (A.Y. 2009-10) M/S. KOTIBHASKAR BUILDERS, 43, SHRIRAM PLAZA, RAM MANDIR CHOWK, SANGLI 416416 PAN: AAAFK9962H APPELLANT VS. ITO, WARD 1(2), SANGLI RESPONDENT ITA NO.2320/PN/2012 (A.Y. 2009-10) M/S. KOTIBHASKAR CONSTRUCTIONS, 43, SHRIRAM PLAZA, RAM MANDIR CHOWK, SANGLI 416416 PAN: AADFK1414D APPELLANT VS. DY.CIT, CIRCLE-1, SANGLI RESPONDENT ITA NO.2321/PN/2012 (A.Y. 2009-10) M/S. KOTIBHASKAR & ASSOCIATES 43, SHRIRAM PLAZA, RAM MANDIR CHOWK, SANGLI 416416 PAN: AACFK0327L APPELLANT VS. DY.CIT, CIRCLE-1, SANGLI RESPONDENT 2 ASSESSEE BY : SHRI C.H. NA NIWADEKAR DEPARTMENT BY : MS. S. PRA VEENA DATE OF HEARING : 20.01.2014 DATE OF ORDER : 27.01.2014 ORDER PER BENCH ALL THESE APPEALS PERTAIN TO THE SAME GROUP ON ALM OST SIMILAR ISSUES. SO THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE . 2. IN ITA NO.2318/PN/2012, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1.1 THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), KOLHAPUR ['THE ID. CIT (A)] ERRED IN CONFIRMING THE ACTION OF THE INCOME TAX OFFICER, WARD-1(2), SANGLI ('THE A.O .') WHEREBY THE A.O. HAD MADE AN ADDITION OF RS.7,00,00 0/- ON ACCOUNT OF THE EXCESS CASH FOUND DURING THE COUR SE OF THE SURVEY ACTION. 1.2 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCUMSTA NCES OF THE CASE, AND IN LAW, NO SUCH ADDITION WAS CALLED F OR. 1.3 THE ID. CIT (A) ERRED IN CONFIRMING THE ACTION OF T HE A.O. WHEREBY THE A.O. HAD MADE AN ADDITION OF RS. 52,00,000/- U/S. 69B OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF THE UNEXPLAINED INVESTMENT IN EXCESS WOR K IN PROGRESS FOUND DURING THE SURVEY ACTION 2.2 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRC UMSTANCES OF THE CASE, AND IN LAW, NO SUCH ADDITION WAS CALLED F OR. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELE TE OR MODIFY ALL OR ANY THE ABOVE GROUND AT THE TIME OF HEARING. 3. THE ASSESSEE IS A PARTNERSHIP FIRM, ENGAGED IN T HE BUSINESS OF PROMOTERS AND BUILDERS. A SURVEY ACTION U/S.133A O F THE I.T. ACT WAS CONDUCTED IN THIS CASE ON 19 TH & 20 TH SEPTEMBER 2008. AFTER VERIFICATION OF BOOKS OF ACCOUNTS, STOCK AND CASH, THE SURVEY PARTY HAS NOTICED EXCESS WORK-IN-PROGRESS OF 52,00,000/- AND EXCESS 3 CASH FOUND AT 7,03,089/-. ON BEING ASKED TO EXPLAIN THE SAME, I N THE STATEMENT RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS, THE ASSESSEE VOLUNTARILY DECLARED AN AMOUNT OF 59,03,089/- AS ADDITIONAL INCOME ON ACCOUNT OF EXCESS WIP AND EXCE SS CASH, OVER AND ABOVE ITS REGULAR BUSINESS INCOME. 3.1 HOWEVER, ON PERUSAL OF RETURN OF INCOME FILED, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAD FILED RET URN OF INCOME DECLARING TOTAL INCOME OF 7,18,720/- IN WHICH THE DECLARATION OF ADDITIONAL INCOME OF 59,03,089/- WAS NOT APPARENTLY REFLECTED. THE ASSESSING OFFICER HAS ASKED THE ASSESSEE THE RE ASONS FOR NOT OFFERING THE ADDITIONAL INCOME FOR TAXATION, THOUGH VOLUNTARILY DECLARED BY IT DURING THE COURSE OF SURVEY. THE ASS ESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAS ALREADY ACCOUNTED FOR EXCESS WIP OF 52,00,000/-, WHICH IS EVIDENT FROM THE P & L ACCOUNT. AS REGARDS EXCESS CASH OF 7,03,089/-, THE ASSESSEE EXPLAINED THAT IT HAD INCLUDED AN AMOUNT OF 3,089/- AS OTHER INCOME DECLARED WHICH IS CREDITED TO P & L ACCOUNT AND THE BALANCE AMOUNT OF 7,00,000/- WAS ALREADY OFFERED FOR TAXATION IN A.Y . 2007-08 AND 2008-09, I.E. IN THE RELEVANT ASSESSMEN T YEARS IN WHICH SAID EXCESS AMOUNT WAS COLLECTED FOR THE FLAT HOLDE RS, AS PER NOTINGS IN THE IMPOUNDED NOTE-BOOK. THE ASSESSING OFFICER D ID NOT ACCEPT THE SUBMISSION OF THE ASSESSEE AND OBSERVED THAT AS SESSEE SHOULD HAVE DECLARED THE EXCESS WIP AND EXCESS CASH FOUND, OVER AND ABOVE ITS REGULAR INCOME, WHICH THE ASSESSEE HAS NOT DONE . THE ASSESSEE HAS PREPARED TENTATIVE CONSTRUCTION ACCOUNT AS ON 1 9.09.2008 ON THE BASIS OF BOOKS OF ACCOUNTS MAINTAINED AND HAS A RRIVED AT EXCESS WIP OF 52,00,000/- WHICH WAS VOLUNTARILY DECLARED BY THE ASSESSEE AS ADDITIONAL INCOME, BUT IN THE RETURN OF INCOME F ILED, THOUGH THE EXCESS WIP OF 52,00,000/- WAS NOT OFFERED FOR TAXATION, THE ASSESSEE HAS NULLIFIED THE EFFECT OF THE SAME BY DE BITING THE SAME AMOUNT OF 52,00,000/- IN FINAL CONSOLIDATED CONSTRUCTION ACC OUNT. THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE ASSESSEE HAS NOT OFFERED THE SAME FOR TAXATION AND HE TREATED TH E SAME AS 4 UNEXPLAINED INVESTMENT, ACCORDINGLY, ADDED AN AMOUN T OF 52,00,OOO/- U/S 69 B OF THE ACT, BEING EXCESS WIP F OUND DURING SURVEY WHICH WAS SUBSEQUENTLY RETRACTED BY THE ASSE SSEE BY WAY OF DEBITING THE SAME IN CONSOLIDATED CONSTRUCTION ACCO UNT. IN RESPECT OF EXCESS CASH FOUND AMOUNTING TO 7,03,089/-, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS OFFERED F OR TAXATION ONLY AN AMOUNT OF 3,089/- AS AGAINST DECLARATION OF 7,03,089/-. THE ASSESSING OFFICER THEREFORE, MADE ADDITION OF 7,00,000/- TO TOTAL INCOME. 3.2 THE MATTER WAS CARRIED BEFORE THE APPELLATE AUT HORITY WHEREIN, THE SAME WAS DISMISSED ON BOTH ACCOUNTS WHICH HAS B EEN OPPOSED ON BEHALF OF ASSESSEE BY RAISING VARIOUS CONTENTION S. REGARDING THE ADDITION OF RS.7,00,000/- ON ACCOUNT OF EXCESS CASH , THE STAND OF THE ASSESSEE WAS THAT WHILE EXPLAINING THE DIFFERENCE O F CASH, THE ASSESSEE CONTENTED THAT DURING THE COURSE OF SURVEY ACTION, THE ASSESSEE HAS DECLARED ADDITIONAL INCOME ON ACCOUNT OF EXCESS CASH OF 7,03,089/-, OUT OF WHICH AN AMOUNT OF 3,089/- WAS OFFERED FOR TAXATION FOR A.Y.2009-10. IN RESPECT OF THE BALANCE AMOUNT OF 7,00,000/-, THE ASSESSEE CONTENDED THAT SINCE THE S AID AMOUNT WAS PERTAINING TO EARLIER YEARS AS PER THE NOTINGS OF T HE IMPOUNDED NOTE- BOOK, WAS ACCORDINGLY OFFERED FOR TAXATION IN THE R ESPECTIVE YEARS OF ITS RECEIPTS, I.E. IN THE A.Y. 2007-08 OF 3,00,000/- AND IN THE A.Y. 2008-09 OF 4,00,000/-. IN THIS BACKGROUND, THE ASSESSEE HAS CLAIMED THAT SINCE THE INCOME OF 7,00,000/- WAS ALREADY TAXED IN THE A.Y. 2007-08 AND 2008-09, TAXING THE SAME AMOUN T DURING A.Y. 2009-10 AGAIN WILL AMOUNT TO DOUBLE TAXATION WHICH IS NOT JUSTIFIED. 3.3 WE FIND THAT A SIMILAR ADDITION WAS MADE IN THE SAME SURVEY OF EXCESS CASH IN THE CASE OF M/S. KOTIBHASKAR BALGURG I ASSOCIATES VIDE ITA NO.2319/PN/2012, WHICH WAS DECIDED BY THIS TRIB UNAL BY OBSERVING AS UNDER: 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE FACTUAL MATRIX IS TO THE EFFECT THAT AT THE TIME OF SURVEY ON 19 TH /20 TH SEPTEMBER, 2008 CASH OF RS.2,86,623/- WAS FOUND 5 WHEREAS IT WAS SEEN FROM THE CASH BOOK WRITTEN TILL 21.07.2008 THAT CLOSING CASH BALANCE AS ON 19 TH /20 TH SEPTEMBER, 2008 WAS RS.84,103/-, RESULTING IN A DISCREPANCY OF EXCESS C ASH OF RS.2,02,520/-. AS NOTED EARLIER, IN RESPONSE TO QUE STION NO. 9 WITH RESPECT TO THE SAID EXCESS CASH, ASSESSEE AGRE ED TO DISCLOSE ADDITIONAL INCOME TO THE EXTENT OF RS.2,02,520/- OV ER AND ABOVE THE REGULAR INCOME FOR THE ASSESSMENT YEAR 2009-10, I.E. THE YEAR UNDER CONSIDERATION. HOWEVER, SUCH ADDITIONAL INCOME WAS NOT DECLARED IN THE RETURN OF INCOME FILED ON THE G ROUND THAT IN THE IMMEDIATELY TWO PRECEDING ASSESSMENT YEARS OF 2 007-08 AND 2008-09, ASSESSEE HAD DECLARED ADDITIONAL INCOM E ON ACCOUNT OF UNACCOUNTED SALE PROCEEDS RECEIVED IN CA SH AMOUNTING TO RS.3,03,510/- WHICH COULD BE SAID TO B E AVAILABLE WITH THE ASSESSEE SO AS TO EXPLAIN THE EXCESS CASH FOUND AT THE TIME OF SURVEY ON 19 TH /20 TH SEPTEMBER, 2008. THE CASE OF THE ASSESSEE HAS BEEN SHUT-OUT BY THE LOWER AUTHORITIES PRIMARILY ON THE GROUND THAT ASSESSEE VOLUNTARILY ADMITTED TO THE ADDITIONAL INCOME FOR THE ASSESSMENT YEAR 2009-10 D URING THE COURSE OF SURVEY ACTION. 10. IN OUR CONSIDERED OPINION, IT IS AN ADMITTED PO SITION OF LAW THAT AN ADMISSION MADE DURING SURVEY UNDER SECTION 133A OF THE ACT CANNOT BE TREATED AS A CONCLUSIVE EVIDENCE TO JUSTIFY AN ADDITION, ESPECIALLY IN A CASE WHERE THERE IS NO CO RROBORATIVE EVIDENCE TO SUPPORT THE ADMISSION. IN THE PRESENT C ASE, IT IS PERTINENT TO OBSERVE THAT SO FAR AS THE ADMISSION O F ADDITIONAL INCOME MADE BY THE ASSESSEE FOR ASSESSMENT YEARS 20 07-08 AND 2008-09 IS CONCERNED, SUCH ADMISSION WAS NOT ON LY MADE VOLUNTARILY BUT WAS BASED ON A DIARY FOUND AT THE T IME OF SURVEY WHICH RECORDED SUCH UNACCOUNTED RECEIPT OF S ALE PROCEEDS IN CASH. PERTINENTLY, THE ADMISSION FOR DE CLARATION OF ADDITIONAL INCOME ON ACCOUNT OF EXCESS CASH IN THE INSTANT ASSESSMENT YEAR IS NOT CORROBORATED BY THE KIND OF EVIDENCE THAT WAS AVAILABLE/FOUND AT THE TIME OF SURVEY IN R ELATION TO THE EARLIER TWO ASSESSMENT YEARS 2007-08 AND 2008-09. 11. APART THEREFROM, ANOTHER PLEA OF THE ASSESSEE I S THAT THE EXCESS CASH FOUND AT THE TIME OF SURVEY REPRESENTED THE ADDITIONAL INCOME BY WAY OF UNRECORDED CASH SALE PR OCEEDS DECLARED FOR THE IMMEDIATELY TWO PRECEDING ASSESSME NT YEARS OF 2007-08 AND 2008-09 AMOUNTING TO RS.3,03,510/-. NO DOUBT A PRESUMPTION THAT THE EXCESS CASH FOUND AT THE TIME OF SURVEY REPRESENTED THE ADDITIONAL INCOME OFFERED IN THE PR ECEDING YEARS CANNOT BE DRAWN IF A SUFFICIENT LONG PERIOD O F TIME HAS ELAPSED AFTER THE EARNING OF THE PAST UNDISCLOSED I NCOME SO, HOWEVER, IN THE PRESENT CASE THE ADDITIONAL AMOUNT TAXED IN PRIOR YEARS, IS IN CLOSE PROXIMITY TO THE INSTANT A SSESSMENT YEAR AND THEREFORE IN OUR VIEW, THE PLEA OF THE ASSESSEE IS PLAUSIBLE. MOREOVER, THERE IS NO EVIDENCE ON RECORD TO SHOW TH AT THE AMOUNT REFLECTED BY ADDITIONAL INCOME DECLARED FOR THE 6 ASSESSMENT YEARS 2007-08 AND 2008-09 HAS BEEN SPENT BY THE ASSESSEE PRIOR TO THE DISCOVERY OF EXCESS CASH ON T HE DATE OF SURVEY. 12. THEREFORE, CONSIDERING THE TOTALITY OF FACTS AN D CIRCUMSTANCES OF THE CASE, IN OUR VIEW, THE IMPUGNE D ADDITION OF RS.2,02,520/- SUSTAINED BY THE CIT(A) IS ON A WR ONG PREMISE FOR THE REASONS DISCUSSED IN THE AFORESAID PARAGRAP HS. ACCORDINGLY, THE ORDER OF THE CIT(A) IS SET-ASIDE A ND THE ASSESSING OFFICER IS DIRECTED TO DELETED THE ADDITI ON OF RS.2,02,520/-. 3.4 NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, WE ARE NO T INCLINED TO CONCUR THE FINDINGS OF CIT(A). WE FIND THAT THE AS SESSING OFFICER AT THE TIME OF SURVEY ON 19 TH & 20 TH SEPTEMBER, 2008 EXCESS CASH OF RS.7,03,089/- WAS FOUND. THE SAID EXCESS CASH WAS AGREED TO BE DISCLOSED AS AN ADDITIONAL INCOME OVER AND ABOVE FO R A.Y. 2009-10 I.E. THE YEAR UNDER CONSIDERATION. THE SAID INCOME WAS NOT DECLARED BY THE ASSESSEE ON THE GROUND THAT IMMEDIATE TO TWO PRECEDING YEARS A.Y. 2007-08 AND 2008-09, THE ASSESSEE HAS DECLARED ADDITIONAL INCOME ON ACCOUNT OF UNACCOUNTED SALE PROCEEDS RECE IVED IN CASH WHICH COULD BE SAID TO BE AVAILABLE WITH THE ASSESS EE SO AS TO EXPLAIN EXCESS CASH FOUND AT THE TIME OF SURVEY I.E. 19 TH & 20 TH SEPTEMBER, 2008. THE REVENUE AUTHORITIES HAS MADE A QUESTION ON ACCOUNT OF VOLUNTARY ADMISSION TO DECLARE ADDITIONAL INCOME ON THIS ACCOUNT FOR A.Y. 2008-09 CANNOT BE SOLE BASIS FOR JUSTIFYING TH E ADDITION ESPECIALLY IN THE ABSENCE OF CORROBORATIVE EVIDENCE TO SUPPORT THE SAME. IN THE CASE BEFORE US, THE ADDITIONAL INCOME HAS BEEN OFFERED IN A.Y. 2007-08 IN THE ABSENCE OF CORROBORATIVE EVI DENCE OF SAME BEING UNDER THE YEAR CONSIDERATION. THE REVENUE AU THORITIES HAVE NOT JUSTIFIED IN MAKING ADDITION IN THE YEAR UNDER CONSIDERATION ESPECIALLY WHEN SAME AMOUNT HAS BEEN DECLARED IN EA RLIER TWO YEARS AS DISCUSSED ABOVE. THEREFORE, CONSIDERING THE TOT AL FACTS AND CIRCUMSTANCES OF THE CASE, IMPUGNED ADDITION OF RS. 7,00,000/- SUSTAINED BY THE CIT(A) IS NOT JUSTIFIED IN VIEW OF ABOVE REASONS DISCUSSED ON THE ISSUE AND SET ASIDE THE ORDER OF C IT(A) AND THE 7 ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITIO N IN QUESTION. THIS VIEW IS FORTIFIED BY THE DECISION OF GROUP CASE AS DISCUSSED IN PARA 3.3 OF THIS ORDER. 4. NEXT ISSUE REMAINS WITH REGARD TO THE ADDITION O F 52,00,000/- ON ACCOUNT OF EXCESS WIP AS STATED ABOVE. THE ASSE SSING OFFICER HAS OBSERVED THAT AS THE ASSESSEE HAS ACCEPTED ADDITION AL INCOME OF 52,00,000/- ON ACCOUNT OF EXCESS WIP DURING THE COU RSE OF SURVEY ACTION, THE NET PROFIT ARRIVED AT RS.7,76,530/-. T HE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS ADOPTED WIP DECLA RED AT 52,00,000/- TO CONSOLIDATE CONSTRUCTION ACCOUNT AND CREDITED THE AMOUNT OF WIP DECLARED IN P & L ACCOUNT UNDER NARRA TION INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER HAS THE REFORE ASKED THE ASSESSEE TO CLARIFY THE SAME. IN RESPONSE TO WHICH , THE ASSESSEE CONTENDED BEFORE THE ASSESSING OFFICER THAT IT HAS ALREADY BEEN ACCOUNTED FOR WIP OF 52,00,000/- WHICH IS CLEARLY EVIDENT FROM P & L ACCOUNT. FURTHER, DECLARATION IN WIP WAS MADE ON THE BASIS OF DIFFERENT IN WIP AS ON 29.09.2008 AND THAT OF 31.03 .2008 EXPENSES AND THE EXPENSES OF RS.47,62,094/- INCURRED DURING THE PERIOD FROM 01.04.2008 TO 19.09.2008 ON CONSTRUCTION OF VARIOUS SITES WERE REMAINED TO BE TAKEN INTO ACCOUNT BY THE SURVEY PAR TY. IT WAS FURTHER CONTENDED ON BEHALF OF THE ASSESSEE THAT SI NCE THE ASSESSEE WAS FOLLOWING 'PARTIAL COMPLETION METHOD' SINCE BEG INNING FOR RECOGNIZING THE INCOME, THE MAJOR PROFIT WAS ALREAD Y DECLARED IN EARLIER YEARS DURING THE CONSTRUCTION STAGE ITSELF. THE ASSESSING OFFICER WAS NOT INCLINED TO CONCUR WITH THE SUBMISS ION OF THE ASSESSEE AND HE WAS OF THE VIEW THAT IN THE FINAL C ONSOLIDATED CONSTRUCTION ACCOUNT AS ON 31.03.2009, THE ASSESSEE HAS DEBITED WIP DECLARED AT 52,00,000/-. THE ASSESSING OFFICER WAS OF THE VIE W THAT THE ACTION OF THE ASSESSEE, BY DEBITING THE AD DITIONAL WIP OF 52,00,000/- ON THE DEBIT SIDE OF CONSOLIDATED CONST RUCTION ACCOUNT AND CREDITING THE SAME AMOUNT ON THE CREDIT SIDE OF P & L ACCOUNT, RESULTED IN TO ANNULMENT. THEREFORE, THE ASSESSING OFFICER HAS COME TO THE CONCLUSION THAT THE ASSESSEE HAS ACTUALLY NU LLIFIED THE EFFECT OF 8 52,00,000/- BY DEBITING THE SAME ON DEBIT SIDE OF CONSOLIDATED CONSTRUCTION ACCOUNT AND CREDITING THE SAME IN THE CREDIT SIDE OF P & L ACCOUNT AND ULTIMATELY HE MADE ADDITION OF 52,00,000/- U/S.69 (B) OF I.T ACT BEING AS UNEXPLAINED INCOME IN EXCES S WIP FOUND DURING SURVEY AND SAME WAS CONFIRMED BY THE CIT(A). 4.1 BEFORE US, THE STAND OF ASSESSEE IS THAT THE SU RVEY PARTY HAS NOT CONSIDERED THE EXPENSES TO THE TUNE OF 47,62,09 5/- WHILE PREPARING TENTATIVE TRADING ACCOUNT AND ALSO THERE WAS SOME MISTAKE / DISCREPANCY IN ADOPTING OPENING WIP AS ON 01.04.2 008 AT THE TIME OF PREPARATION OF TENTATIVE TRADING ACCOUNT. AS DI SCUSSED ABOVE, THE ASSESSING OFFICER HAS ADDED AN AMOUNT OF 52,00,000/- U/S.69(B) OF I.T. ACT TREATING THE SAME AS UNEXPLAINED INVESTMEN T WHICH AT THE TIME OF SURVEY, THE ASSESSEE WAS NOT ABLE TO EXPLAI N THE SOURCE OF INVESTMENT IN EXCESS WIP FOR WHICH, HE HAS VOLUNTAR ILY AGREED TO DISCLOSE THE AMOUNT ON THAT ACCOUNT. IT IS AN UNDI SPUTED FACT THAT THE ASSESSEE HAS DECLARED ADDITIONAL INCOME ON THE BASIS OF ALLEGED EXCESS WIP. THE STATEMENT RECORDED DURING THE COUR SE OF SURVEY IS SOLE BASIS FOR MAKING ADDITION IN QUESTION. THERE IS NO CORROBORATORY EVIDENCE OF RECORD FOR ALLEGED ADDITIONAL WIP FOR W HICH ADDITIONAL INCOME WAS OFFERED AT THE TIME OF SURVEY. THE ADMI SSION BY THE ASSESSEE CANNOT BE SAID TO BE SOLE BASIS FOR ADDITI ON DURING THE COURSE OF SURVEY IN THE ABSENCE OF CORROBORATIVE EV IDENCE FOR THE SAME. 4.2 WE FIND THAT ITAT, PUNE A BENCH IN ITA NO.692 /PN/2004 FOR A.Y. 1998-99 IN THE CASE OF SHRI SATYANARAYANA VITH AL KARNAKOT HAS HELD THAT THE STATEMENT TAKEN DURING SURVEY U/S.133 OF I.T. ACT CANNOT AS CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE. MORE PRECISELY, THE ASSESSEE WAS GRANTED THE RELIEF BY OBSERVING IN THE CASE OF SHRI SATYANARAYANA VITHAL KARNAKOT (SUPRA) AS UNDER: 4. ALL THE THREE ADDITIONS, DELETION OF WHICH IS C ALLED INTO QUESTION IN THIS APPEAL, WERE BASED ON THE STATEMEN TS MADE BY THE ASSESSEE DURING THE COURSE OF SURVEY PROCEEDING S. IT IS NOT 9 IN DISPUTE THAT WHEN THE ASSESSEE UPDATED HIS BOOKS OF ACCOUNTS, THE ASSESSEE COULD DEMONSTRATE THAT ON TH E BASIS OF THE BOOKS OF ACCOUNTS, NO FURTHER ADDITION IS WARRA NTED. THE ASSESSING OFFICER, HOWEVER, REJECTED THESE EXPLANAT IONS AS FABRICATED AND AFTERTHOUGHTS. THE CASH BALANCE AS P ER THE INITIAL STATEMENT RECORDED WAS MUCH LESS THAN WHAT THE ASSESSEE COULD EXPLAIN BY WAY OF UPDATED CASH BOOK. EVEN AS NO DEFECTS ARE POINTED OUT IN THE CASH BOOK, THE EX PLANATION WAS NOT ACCEPTED. SIMILARLY, AMOUNT SPENT ON CAR WA S SHOWN TO HAVE ALREADY BEEN ACCOUNTED FOR IN THE BOOKS OF ACC OUNTS. IN THESE CIRCUMSTANCES, AND BEARING IN MIND THE SETTLE D LEGAL POSITION - AS HAS BEEN REITERATED BY THIS TRIBUNAL TIME AND AGAIN THAT A STATEMENT UNDER SECTION 133 A CANNOT B E USED AS A CONCLUSIVE EVIDENCE AGAINST THE ASSESSEE, WE SEE NO INFIRMITY IN THE CIT (A) DELETING THE IMPUGNED ADDITIONS. WE APPROVED AND CONFIRM HIS ACTION AND DECLINE TO INTERFERE HI THE MATTER. 5. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNC ED IN THE OPEN COURT TODAY ON 30 TH DAY OF JUNE, 2008. 4.3 WE FIND THAT THE SIMILAR ISSUE HAS BEEN DECIDED BY ITAT PUNE A BENCH IN ITA NO.1597/PN/2004 IN THE CASE OF M/S . ANANT CONSTRUCTION VS. ACIT. IN VIEW OF ABOVE BACKGROUND WHICH IS UNDISPUTED FACT THAT THE IMPUGNED ADDITIONS ARE BAS ED ON STATEMENT GIVEN BY THE ASSESSEE, IT IS THE ASSESSEE WHO HIMSE LF HAS ACCEPTED THE FACT THAT WAS NOT SHOWN IN THE BOOKS OF ACCOUNT S. THE ASSESSEE SUBSEQUENTLY PREPARED / UPDATED THE BOOKS OF ACCOUN TS AND EXPLAINED ABOUT THE WIP WITH RESPECT TO THE ADDITIO N IN QUESTION. THE ALLEGATION OF EXCESS WIP IS NOT FOUNDED ON CONC RETE EVIDENCE AVAILABLE ON RECORD UNEARTHED DURING THE COURSE OF SURVEY. IT IS ONLY A STATEMENT OF ADDITION BY THE ASSESSEE WHICH WAS S OLE BASIS FOR ADDITION IN QUESTION. IT IS A SETTLED LEGAL POSITI ON THAT THE STATEMENT MADE DURING SURVEY U/S.133 OF I.T. ACT CANNOT BE SO LE BASIS FOR ADDITION SINCE THE ASSESSEE IS ABLE TO EXPLAIN THE DISCREPANCY NOTICED AT THE TIME OF SURVEY DURING ASSESSMENT PROCEEDINGS . THIS VIEW IS FORTIFIED BY THE DECISION OF PAUL MATHEWS & SONS VS . CIT (2003) 263 ITR 101 (KER). IN VIEW OF ABOVE DISCUSSION, WE ARE NOT INCLINED TO CONCUR ON THE FINDINGS OF CIT(A) WHO HAS SUSTAINED THE ADDITION WHICH IS SOLELY ON THE BASIS OF STATEMENT RECORDED AT THE TIME OF SURVEY. THE STATEMENT RECORDED DURING THE COURSE O F SURVEY CANNOT 10 BE SOLE BASIS FOR MAKING ADDITION IN QUESTION IN TH E ABSENCE OF CORROBORATIVE EVIDENCE IN THE SAME. AS A RESULT, T HE ORDER OF CIT(A) IS SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION IN QUESTION. 4.4 IN ITA NOS.2320/PN/2012 AND 2321/PN/2012 SIMILA R ADDITIONS WERE MADE ON ACCOUNT OF ALLEGED EXCESS WO RK IN PROGRESS OF 18,00,000/- FOR BOTH THE ASSESSEES. FACTS BEING S IMILAR TO THAT OF ISSUE 2 IN ITA NO.2318/PN/2012, SO FOLLOWING THE SA ME REASONING, WE ARE NOT INCLINED TO CONCUR THE FINDINGS OF CIT(A ) WHO HAS MADE ADDITION ON ACCOUNT OF EXCESS WORK IN PROGRESS OF R S.18,00,000/- IN BOTH THE YEARS ONLY ON THE BASIS OF STATEMENT BY TH E ASSESSEE AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADD ITION IN BOTH THE CASES. 5. IN THE RESULT, ALL THREE APPEALS FILED BY THE AS SESSEE ARE ALLOWED AS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 27 TH DAY OF JANUARY, 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 27 TH JANUARY, 2014 GCVSR COPY TO:- 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-KOLHAPUR 4. THE CIT-KOLHAPUR 5. THE DR, B BENCH, I.T.A.T., PUNE. 6. GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE