TRIDEVH CONSTRUCTION COMPANY, MUMBAI V. ACIT - 29 (3), MUMBAI

ITA 3064/MUM/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7246 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 09-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gross profit estimation; Loose papers; Retraction
• Section: 143(3); 142(1); 133A; 131

Judgement Text

1 IN THE INCOME-TAX APPELLATE TRIBUNAL E BENCH MUMB AI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO. 3064/MUM/2019 (ASSESSMENT YEAR 2014-15 ) TRIDEVH CONSTRUCTION COMPANY, OFFICE NO.32, NIRMAL GALAXY, LBS ROAD, MULUND WEST, MUMBAI-400080 . PAN: AADFT2138H VS. ACIT- 29(3) 2 ND FLOOR, C-10, PRATYASHAKAR BHAVAN, BKC, MUMBAI. APPELLANT RESPONDE NT APPELLANT BY : SHRI NIMESH CHOTHANI WITH SHRI LAJARI OSWAL (AR) RESPONDENT BY : SHRI MANOJ KUMAR SINGH (CIT-DR) DATE OF HEARING : 10.07.2019 DATE OF PRONOUNCEMEN T : 24.07.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-40 [THE LD. CI T(A)], MUMBAI DATED 11.03.2019 FOR ASSESSMENT YEAR 2014-15. THE A SSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A)-40, MUMBAI ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN ESTIMATING THE GROSS PROFIT AT 15% OF THE WORK IN PROGRESS AS AGAINST 10 % WHICH THE APPELLANT HAS DECLARED IN THE RETURN OF INCOME. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A)-40, MUMBAI ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN RELYING ON THE STATEMENT OF THE PARTNER OF THE APPELLANT RECORDED AT THE TIME OF SURVEY U/S ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 2 133A WHICH WAS CARRIED OUT IN THE MID OF THE YEAR F OR THE PURPOSE OF PAYMENT OF ADVANCE TAX. 3. THE LD. CIT(A)-40 ALSO IGNORED THAT THE OVERALL PROFIT DECLARED ON THE SAID PROJECT DURING THE CONSTRUCTION PERIOD IS MORE THAN THE ACTUAL PROFIT REALIZED AND THEREFORE, MAKING FURTHER ADDITION ON ESTIMATION BASIS IS GROSSLY UNJUSTIFIED AND MAY BE DELETED, ESPECIALLY WHEN BOO KS OF THE APPELLANT IS NOT REJECTED 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPA NY IS A FIRM ENGAGED THE BUSINESS OF BUILDING AND CONSTRUCTION. A SURVEY ACTION UNDER SECTION 133A WAS CARRIED OUT AT THE PREMISES OF ASS ESSEE ON 20.03.2013. DURING THE SURVEY ACTION, THE STATEMENT OF PARTNER OF ASSESSEE NAMELY SHRI MULCHAND GOSAR WAS RECORDED. S HRI MULCHAND GOSAR IN REPLY TO THE QUESTION NO. 10 OFFERED ESTIM ATED PROFIT OF 15% FOR THE WORK-IN-PROGRESS FOR THE YEAR ENDING ON 31. 03.2014. 3. THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSM ENT YEAR 2014-15 ON 23.09.2014 DECLARING INCOME OF RS. 3,06,71,128/- . THE RETURN OF INCOME WAS SELECTED FOR SCRUTINY AND AFTER SERVING STATUTORY NOTICE UNDER SECTION 142(1) AND 143(2). THE ASSESSING OFFI CER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) ON 29.12.2016. THE ASSESSING OFFICER WHILE MAKING ASSESSMENT NOTED THAT ASSESSEE HAS OFF ERED GROSS PROFIT OF 10% ON THE WORK-IN-PROGRESS IN RESPECT OF PROJEC T SAPPHIRE. THE ASSESSING OFFICER ISSUED SHOW-CAUSE NOTICE DATED 19 .12.2016 AS TO WHY THE DIFFERENCE OF GROSS PROFIT AS DISCLOSED/ OF FERED DURING THE ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 3 SURVEY SHOULD NOT BE ADDED BACK TO THE INCOME OF AS SESSEE. THE ASSESSEE FILED ITS REPLY DATED 23.12.2016. IN THE R EPLY, IT WAS STATED ON BEHALF OF ASSESSEE THAT AT THE TIME OF SURVEY ON 22 .1.2013, THE STATEMENT WAS GIVEN ABOUT THE PROFITABILITY OF THE PROJECT AROUND 15% ON ROUGH ESTIMATE. HOWEVER, AFTER THE FINALIZING TH E ACCOUNTS DURING THE COURSE OF AUDIT, IT WAS NOTED OVERALL PROFITABI LITY OF THE PROJECT WAS NOT 15% AS INTEREST EXPENDITURE ON ACCOUNT OF SECUR ED LOAN FROM LIC HOUSING FINANCE WAS HIGH AND THE PROJECT WAS DELAYE D RESULTING IN PROJECT EXPENSES. THE ASSESSEE ALSO FURNISHED THE D ETAILED OF PROFITABILITY OF THE PROJECT. THE CONTENTION OF ASS ESSEE WAS NOT ACCEPTED. THE ASSESSING OFFICER NOTED THAT IN THE D ETAILED FURNISHED IN THE CHART, THE PROFITABILITY STATEMENT OF PROJECT, THE ASSESSEE IN SUCCEEDING YEAR HAS DECLARED 20% AS GROSS PROFIT. T HE ASSESSEE IN THE SURVEY DECLARED 15% AS ESTIMATED PROFIT THAN IN SUC CEEDING YEAR ALSO GROSS PROFIT WOULD HAVE WORKED OUT TO 20%. THUS, TH E ESTIMATION OF ASSESSEE AT THE TIME OF SURVEY WAS CORRECT. THE ASS ESSING OFFICER WORKED OUT THE PROFITABILITY FOR THE ASSESSMENT YEA R UNDER CONSIDERATION AT RS. 82,11,408/- AND MADE ADDITION ACCORDINGLY. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF THE ASS ESSING OFFICER WAS UPHELD. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED T HE PRESENT APPEAL BEFORE US. ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 4 4. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. THE LD. AR OF THE ASSESSEE SUBMITS THAT DURING THE SURVEY ACTION, THE ASSESSEE OFFERED 15% GROSS PROFIT ON THE BASIS OF MERE ESTIMATION. H OWEVER, WHILE PREPARING AUDITED ACCOUNT, IT WAS NOTED THAT THE ES TIMATION DISCLOSED AT THE TIME OF SURVEY WAS NOT CORRECT. THE ASSESSEE WH ILE FILING RETURN OF INCOME DECLARED ACTUAL PROFIT EARNED DURING THE YEA R. THE ASSESSING OFFICER MADE ADDITION OF DIFFERENCE OF INCOME OFFER ED DURING THE SURVEY AND THE INCOME SHOWN IN THE RETURN OF INCOME . THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT THE BOOKS OF ACCO UNT WERE NOT REJECTED BY ASSESSING OFFICER. IN ASSESSMENT YEAR 2014-15, T HE ASSESSEE HAS OFFERED 20% OF THE GROSS PROFIT. THE ASSESSING OFFI CER COMBINED IT WITH ASSESSMENT YEAR 2013-14 AND TAKEN IT TO 10%. I T WAS FURTHER SUBMITTED THAT THE STATEMENT GIVEN UNDER SECTION 13 3A HAS NO EVIDENTIARY VALUE. IN SUPPORT OF HIS SUBMISSION, TH E LD. AR OF THE ASSESSEE RELIED UPON THE DECISION OF HONBLE APEX C OURT IN CIT VS. KADER KHAN [2012] 25 TAXMANN 413 (SC), DELHI HIGH C OURT IN CIT VS. DHINGRA METAL WORKS [2011] 196 TAXMANN 488(DEL.), K ERALA HIGH COURT IN PAUL MATHEWS & SONS VS. CIT [2003] 129 TAX MANN 416 (KER.), DECISION OF TRIBUNAL IN D.S. AGENCIES & ASS OCIATES VS. ACIT ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 5 (MUM ITAT) ITA NO. 33 & 34 OF 2011, DCIT VS. PREMSO NS (MUM. ITAT) (ITA NO. 4698/MUM/2006, UNITEX PRODUCTS LTD. VS. ITO (MUM. ITAT) (ITA NO. 153 & 154/MUM/2003, M/S SWADES HI COMMERCIAL CO. LTD. VS. CIT (ITA NO. 219 OF 2001) & ARUP KUMAR HAZARA VS. ITO (ITA NO. 2385/KOL/2017). 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. THE LD. DR FURTHER SUBMITS THAT THE STATEMENT OF PARTNER SHRI MULCHAND GOSAR (SUPRA) WAS RECORDED ON OATH. THE GIST OF STATEMENT RECORDED DURING THE SURVEY IS REFERRED BY ASSESSING OFFICER IN PARA-4 OF THE ASSESSMENT ORDER. IN THE STATEMENT THE PARTNER OF ASSESSEE OFFERED 15% OF PROFIT FOR THE YEAR UNDER C ONSIDERATION. THE STATEMENT WAS NOT RETRACTED BY THE PARTNER OF THE A SSESSEE. THE STATEMENT RECORDED UNDER SECTION 131, WAS RECORDED ON OATH AND IS ADMISSIBLE AGAINST THE ASSESSEE. IN SUPPORT OF HIS SUBMISSION, THE LD. DR FOR THE REVENUE RELIED UPON THE DECISIONS IN DIN ESH JAIN VS. ITO [145 TAXMANN.COM 442(BOMBAY), RAJ HANS TOWERS VS. C IT [56 TAXMANN.COM 67 (DEL.)], PR. CIT VS. AVINASH KUAMR S ETIA [81 TAXMANN.COM 476(DELHI)], IN PEBBLE INVESTMENT VS. I TO [ITA 988/2014, BOMBAY HC], PEBBLE INVESTMENT VS. ITO [SL P NO. 11784/2017], NAVDEEP DHINGRA VS. CIT [56 TAXMANN.CO M 75 (P&H)] AND SANJEEV AGRAWAL VS. I.T.SC [2015] (56 TAXMANN 214 (ALLD.)]. ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 6 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THERE IS N O DISPUTE THAT DURING THE SURVEY, THE STATEMENT OF PARTNER OF ASSESSEE OF FERED 15% OF PROFIT FOR THE YEAR ENDING ON 31.03.2014. HOWEVER, WHILE F ILING RETURN OF INCOME, THE ASSESSEE OFFERED GROSS PROFIT OF 10% OF THE WORK-IN- PROGRESS. THE ASSESSING OFFICER MADE ADDITION OF DI FFERENCE OF INCOME OFFERED DURING THE SURVEY AND SHOWN IN THE RETURN O F INCOME. THE LD. CIT(A) WHILE CONFIRMING THE ACTION OF ASSESSING OFF ICER CONCLUDED THAT THE ASSESSEE HAS NOT SPECIFIED ANY UNFORESEEN CIRCUMSTANCES WHICH REDUCE THE PROFIT AT THE END OF YEAR. AS THERE IS N O CLARITY ON THE SHORT REALIZATION OF PROFIT DUE TO UNFORESEEN CIRCUMSTANC ES, THEREFORE, THE EXPLANATION OFFERED BY ASSESSEE WAS REJECTED AND TH E ACTION OF ASSESSING OFFICER WAS CONFIRMED. WE HAVE NOTED THAT DURING THE SURVEY ACTION, THE STATEMENT OF PARTNER OF ASSESSME NT RECORDED. FOR APPRECIATION OF STATEMENT OF PARTNER, THE RELEVANT PART OF QUESTION NO. 10 AND ANSWERER THEREOF IS EXTRACTED BELOW: Q.10. SINCE YOU ARE FOLLOWING PERCENTAGE OF COMPLETION M ETHOD AND THE CONSTRUCTION HAS BEEN COMPLETED MORE THAN 40% PLEAS E EXPLAIN WHY NO ADVANCE TAX HAS BEEN PAID AND ALSO LET ME KNOW WHAT WILL BE YOUR ESTIMATED PROFIT FROM THIS PROJECT FOR THE YEAR? ANS: AS PER OUR ROUGH ESTIMATE WE ARE EXPECTED TO EARN A NET PROFIT OF 15% FROM THIS PROJECT. SINCE WE HAVE FAILED TO PAY ADVANCE TAX AS PER THIS ESTIMATION, THEREBY WE OFFER A PROFIT OF 15% FOR TH E YEAR AND ACCORDING TO WHICH AS PER THE WIP AS ON 30/09/2013 WHICH COMES T O RS. 1,12,,75,267/- ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 7 AND PROMISE TO PAY THE NEXT INSTALLMENT OF ADVANCE TAX DUE BEFORE 15 TH DECEMBER, 2013 INCLUDING THE 1 ST INSTALLMENT OF ADVANCE TAX PAYABLE ON 15 TH SEPTEMBER, 2013. WE ALSO PROMISE THAT THIS ESTIMAT ED PROFIT OF 15% WILL ALSO BE CONSIDERED FOR THE WIP FOR THE YEAR EN DING 31/03/2014. 7. DURING THE ASSESSMENT, THE ASSESSING OFFICER ON PER USAL OF TRADING ACCOUNT NOTED THAT THE ASSESSEE HAS OFFERED GROSS P ROFIT OF 10% I.E. RS. 1.26 CRORE ON WORK-IN-PROGRESS OF RS. 12.63 CRORES AS ON 31/03/2014 AGAINST 15% OF WORK-IN-PROGRESS (RS. 13.89 CRORE) O FFERED DURING THE SURVEY. THE ASSESSING OFFICER ISSUED SHOW-CAUSE NOT ICE DATED 19/12/2016 AS TO WHY DIFFERENCE BE NOT ADDED TO THE INCOME OF ASSESSEE. THE ASSESSEE FILED ITS REPLY DATED 23/12 /2016 AND STATED THAT DURING THE SURVEY THE STATEMENT WAS MADE ON ROUGH E STIMATE WHICH WAS MADE ON THE WORKING OF CLOSING WIP AS ON 30/09/ 2013. HOWEVER, AFTER FINALIZATION OF THE ACCOUNTS AND DURING THE C OURSE OF AUDIT, IT WAS OBSERVED THAT OVERALL PROFITABILITY OF THE PROJECT WAS NOT 15% AS INTEREST EXPENDITURE INCURRED ON LOAN AVAILED FROM LIC HOUSING FINANCE WAS HIGH AND PROJECT WAS DELAYED RESULTING INTO MORE EXPENSES. THE ESTIMATED PROFIT WAS NOT REALIZED AND THEIR ESTIMATE PROFIT OF 15% WAS FAILED. THE ASSESSEE ALSO FURNISH ED THE DETAILS OF PROFITABILITY FOR THE YEAR ENDING ON 31.03.2014, WH ICH HAS BEEN EXTRACTED BY ASSESSING OFFICER IN PARA 7 OF THE ASS ESSMENT ORDER. THE EXPLANATION FURNISHED BY ASSESSEE ABOUT OFFERING 10 % OF GROSS PROFIT ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 8 IN RETURN OF INCOME WAS NOT ACCEPTED BY ASSESSING O FFICER HOLDING THAT THE ASSESSEE IN THE IMMEDIATELY PRECEDING YEAR DECL ARED 20% OF THE GROSS PROFIT. THE ASSESSEE DURING THE COURSE OF SUR VEY DECLARED 15% ESTIMATED GROSS PROFIT. IN SUCCEEDING YEAR, THE GRO SS PROFIT WORKED OUT 20%. THEREFORE, THE ESTIMATION MADE BY ASSESSEE DUR ING THE SURVEY WAS CORRECT. THE ASSESSING OFFICER ALSO CONCLUDED T HAT ASSESSEE HAS NOT AFFECTED SALES AND IN ABSENCE OF ANY SALE AT TH E END OF THE YEAR, THE DEVIATION FROM THE ESTIMATION WAS WITHOUT ANY BASIS . THE ASSESSING OFFICER FINALLY CONCLUDED THAT THE STATEMENT OF PAR TNER WAS RECORDED UNDER SECTION 131 WHICH CLEARLY SPELLED OUT THE PRO FIT OF PROJECT TO BE AT 15% AND ACCORDINGLY, THE ASSESSING OFFICER WORKED O UT THE DIFFERENCE OF RS. 82,11,408/- AND ADDED TO THE INCOME OF ASSES SEE. THE LD. CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER ON SIMILA R LINE. 8. BEFORE US, THE LD. AR OF THE ASSESSEE VEHEMENTLY SU BMITTED THAT DURING THE SURVEY, THE ASSESSEE OFFERED 15% OF GROSS PROFI T ON MERE ESTIMATION BASIS.THE ESTIMATION OF ASSESSEE WAS PRO VED TO BE WRONG. WE HAVE NOTED THAT THE ASSESSEE IN ITS REPLY TO THE SHOW-CAUSE NOTICE BEFORE ASSESSING OFFICER CLEARLY BROUGHT ON RECORD ABOUT THE EXTRA EXPENDITURE INCURRED DURING THE YEAR REDUCE THE PRO FITABILITY OF THE PROJECT. THE ASSESSEE HAS SPECIFICALLY CONTENDED TH AT THE ASSESSEE INCURRED INTEREST EXPENDITURE ON SECURED LOAN FROM LIC HOUSING ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 9 FINANCE LTD. THE ASSESSEE ALSO STATED THAT DUE TO C OMPETITIVE MARKET THE SALE PROCEEDS WHICH WERE ESTIMATED WERE NOT REA LIZED AND THE ESTIMATION OF ASSESSEE WAS FAILED. THE ASSESSEE ALS O FURNISHED THE DETAILS OF PROFITABILITY FOR ASSESSMENT YEAR UNDER CONSIDERATION AND SUBSEQUENT ASSESSMENT YEAR. WE HAVE NOTED THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY FINDING ON THE EXPLANATIO N ABOUT LOW GROSS PROFIT OFFERED BY ASSESSEE. THE ASSESSING OFFICER M ERELY RELIED UPON THE STATEMENT OF PARTNER OF THE ASSESSEE RECORDED D URING THE SURVEY. THE LD. AR OF THE ASSESSEE ALSO VEHEMENTLY SUBMITTE D THAT THE STATEMENT RECORDED DURING THE SURVEY HAS NO EVIDENT IARY VALUE AND ON ADMISSION MADE DURING AND NO ADDITION CAN BE MADE. TO SUPPORT HIS CONTENTION, THE LD. AR OF THE ASSESSEE HAS RELIED U PON THE DECISION OF HONBLE SUPREME COURT IN CIT VS. KHADER KHAN SON (S UPRA). 9. THE LD. AR ALSO RELIED UPON THE DECISION OF DELHI H IGH COURT IN CIT VS. DHINGRA METAL WORKS (SUPRA) WHEREIN IT WAS HELD THAT IT IS SETTLED LAW THAT THOUGH AN ADMISSION IS EXTREMELY IMPORTANT PIECE OF EVIDENCE, IT CANNOT BE SAID TO BE CONCLUSIVE AND IT IS OPEN T O THE PERSON WHO MADE THIS ADMISSION, TO SHOW THAT IT IS INCORRECT. THE ASSESSEE IN SAID CASE WAS ABLE TO EXPLAIN THE DISCREPANCY IN THE STO CK FOUND DURING THE COURSE OF SURVEY BY PRODUCTION OF RELEVANT RECORD I NCLUDING EXCISE REGISTER OF ITS ASSOCIATE COMPANY, IT WAS HELD THAT THE ASSESSING ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 10 OFFICER COULD NOT HAVE MADE THE ADDITION SOLELY ON THE BASIS OF STATEMENT MADE ON BEHALF OF ASSESSEE DURING THE COU RSE OF SURVEY. 10. FURTHER, THE HONBLE KERALA HIGH COURT IN PAUL MAT HEWS & SONS VS. CIT(SUPRA), HELD THAT THE POWER TO EXAMINE THE PERS ON ON OATH IS SPECIFICALLY CONFERRED ON THE AUTHORISED OFFICER ON LY UNDER SECTION 132(4) IN THE COURSE OF SEARCH OR SEIZURE. SECTION 133A ENABLES THE INCOME-TAX AUTHORITY TO RECORD ANY STATEMENT OF ANY PERSON WHICH MAY BE USED TO BUT DOES NOT AUTHORIZE FOR TAKING AN Y STATEMENT ON OATH. IT WAS ALSO HELD THAT SECTION 133A DOES NOT EMPOWER ANY ITO TO EXAMINE ANY PERSON ON OATH. 11. CONSIDERING THE FACTS, WHICH HAVE NOTED ABOVE THAT THE ASSESSEE HAS SUFFICIENTLY EXPLAINED IN THE REPLY TO THE SHOW-CAU SE NOTICE THAT THE STATEMENT MADE DURING THE SURVEY WAS MERE ON ESTIMA TION BASIS, WHICH WAS PROVED TO BE INCORRECT AT THE TIME OF FINALIZAT ION OF ACCOUNTS ON THE YEAR ENDED ON 31/03/2014. IN OUR VIEW, THE ASSESSEE HAS SUFFICIENTLY EXPLAINED ABOUT THE INCORRECTNESS OF THE STATEMENT RECORDED DURING THE SURVEY. THEREFORE, THE ASSESSING OFFICER WAS NOT EN TITLED TO ADD THE DIFFERENCE OF ESTIMATED INCOME PROJECTED DURING THE SURVEY. 12. THE CASE LAWS RELIED BY LD. DR FOR THE REVENUE ARE FACTUALLY AT VARIANCE. IN DINESH JAIN VS. ITO (SUPRA), THE ASSES SEE IN THAT CASE RAISED THE GRIEVANCE THAT NO RELIANCE CAN BE PLACED UPON THE STATEMENT ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 11 MADE BY THE ASSESSEE DURING THE SURVEY PROCEEDINGS UNDER SECTION 133A FOR THE REASON THAT IT WAS RECORDED ON OATH. T HE ASSESSEE IN THE SAID CASE COULD NOT FURNISH ANY EVIDENCE TO JUSTIFY HIS STAND. MOREOVER, THE STATEMENT OF ASSESSEE WAS CORROBORATED WITH THE LOOSE PAPERS TITLED AS PAGE NO. 17 . THE ASSESSEE IN THAT CASE TOOK THE STAND THAT ENTRY ON THE DIARY WAS INFLATED FOR SEEKING A LOAN; THE ASSE SSEE NOT NAMED THE BANKER NOR PRODUCES ANY EVIDENCE TO SUPPORT HIS STA ND. THEREFORE, THE STATEMENT OF THE ASSESSEE WHICH WAS SUPPORTED WITH THE ENTRY ON THE DIARY WAS TREATED AS ADMISSION AGAINST THE ASSESSEE . HOWEVER, THE FACTS OF THE PRESENT CASE ARE ENTIRELY ON DIFFERENT FOOTI NGS. THE ASSESSING OFFICER HIMSELF HAS NOTED THAT ASSESSEE OFFERED INC OME ON ESTIMATE BASIS. 13. IN NAVDEEP DHINGRA VS. CIT (SUPRA), THE STATEMENT WAS RETRACTED BELATEDLY I.E. AFTER YEARS OF THE SURVEY. MOREOVER, NO REASON WAS GIVEN TO SUBSTANTIATE THE RETRACTION. HOWEVER, IN THE PRE SENT CASE THE ASSESSEE SUFFICIENTLY EXPLAINED DURING THE ASSESSMENT THAT T HEIR ESTIMATION WAS WRONG AND FURNISHED THE WORKING OF THE ACTUAL PROFI T, WHICH WAS OFFERED FOR TAXATION. 14. IN RAJ HANS TOWERS P. LTD. VS. CIT (SUPRA), THE ASS ESSEE HAS NOT OFFERED ANY SATISFACTORY EXPLANATION REGARDING SURR ENDER OF AMOUNT BEING NOT BONAFIDE AND IT WAS NOT BORNE OUT FROM TH E CONTENTIONS RAISED ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 12 BEFORE LOWER AUTHORITIES. IN PCIT VS. AVINASH KUMA R SETIA (SUPRA), THE STATEMENT WAS RETRACTED AFTER TWO YEAR WITHOUT ANY SATISFACTORY EXPLANATION, WHICH WAS NOT TREATED AS BONAFIDE. 15. PEEBLE INVESTMENT & FINANCE LTD. VS. ITO, THE FACT S ARE ENTIRELY DIFFERENT, THE HONBLE COURT HAS CLEARLY DISTINGUIS HED THE FACT OF KHADER KHAN SON CASE (SUPRA). THE HONBLE COURT CLE ARLY HELD THAT IN ABSENCE OF OFFERING ANY EXPLANATION WHY THE STATEME NT CANNOT BE RELIED, NO FAULT CAN BE FOUND ON THE RELIANCE OF ST ATEMENT OF DIRECTOR. 16. NOW AGAINST TURNING TO THE FACT OF THE PRESENT CASE , THE ASSESSEE HAS CLEARLY EXPLAINED BEFORE THE ASSESSING OFFICER BY F URNISHING THE DETAILS OF PROFITABILITY OF THE PROJECT, WHICH IN OUR VIEW WAS A SUFFICIENT EXPLANATION. THE ASSESSING OFFICER HAS NOT BROUGHT ANY FACT ON RECORD TO DISBELIEVE THE EXPLANATION FURNISHED BY ASSESSEE DURING THE ASSESSMENT ABOUT LOW PROFIT EARNED BY THE ASSESSEE. THE ASSESSING OFFICER MADE ADDITION SOLELY ON THE BASIS OF STATEM ENT RECORDING DURING THE SURVEY. AT THE COST OF REPETITION, WE MAY RE-TR EAT THAT DURING THE STATEMENT, THE INCOME WAS SOLELY OFFERED ON ESTIMAT ION, WHICH WAS PROVED TO BE INCORRECT AS SUBSTANTIATE BY ASSESSEE. THE ASSESSING OFFICER NOT REJECTED THE STATEMENT OF ACCOUNT OF TH E ASSESSEE BEFORE BRINGING THE ALLEGED DIFFERENCE FOR TAXATION. THERE FORE, IN OUR VIEW, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN BRINGING THE DIFFERENCE OF ITA NO . 3064 MUM 2019-TRIDEVH CONSTRUCTION COMPANY 13 ESTIMATED INCOME OFFERED DURING THE SURVEY AND THE ACTUAL INCOME OFFERED FOR TAXATION IN THE RETURN OF INCOME. IN TH E RESULT, THE GROUND OF APPEAL RAISED BY ASSESSEE IS ALLOWED. 17. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/07/2019. SD/- SD/- G. MANJUNATHA PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 24.07.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR E BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI