Addition cannot be made only on the basis of a surrender simplictor

CA Prarthana Jalan 18 Jul 2014 1,379 Views 0 comment Print Income Tax | Judiciary

Case Law Details

Case Name : ITO Vs Ram Prakash (ITAT Agra)

Appeal Number : I.T.A. No.: 61/Agra/2013

Date of Judgement/Order : 18/07/2014

Related Assessment Year :

Courts : All ITAT ITAT Agra

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CA Prarthana Jalan

The Honble Agra ITAT has in the case of Ram Prakash has held that “Addition cannot be made only on the basis of a surrender simplictor “.

Brief Facts of the case are that the assessee is engaged in the business of foodgrains. During the course of the assessment proceedings, the Assessing Officer noticed that the assessee has shown unsecured creditors amounting to Rs 80,27,616 but, as certain payments made to these persons were in cash, the assessee was required to produce all the 12 creditors for verification. Even though the assessee produced all these persons, and apparently there were no infirmities in the documents produced too, the Assessing Officer made an addition by observing as follows:

3.2 On the date fixed that assessee filed a reply stated that “……..… I am here with producing the 12 sundry creditors along with photo identity & khasra Khatoni and filed all the affidavits & khasra of sundry creditors. I am here with surrendering Rs.10,00,000/- subject to no penal action …….……”.

The aforesaid addition was deleated by the CIT(A) and the same has been upheld by the Honble Agra ITAT Bench by observing as under

“We have noted that even though learned CIT(A) has given categorical findings on merits as also on the admissibility of surrender, the Assessing Officer has raised grievance only against the latter. The issue raised before us is thus infructuous inasmuch as even if the surrender is in order but the addition was not warranted on merits, it is only elementary that merely because the assessee has, under misconception of facts or law, surrendered an income, no addition can be made in respect of the same. We have also noted that as evident from the observations of even the Assessing Officer, there were no specific reasons for
making the addition of Rs 10,00,000 save and except for the alleged surrender made by the assessee. The issue in appeal is also covered, in favour of the assessee, by a coordinate bench of this Tribunal in the case of ACIT Vs Satya Narayan Agarwal (91 TTJ 481) wherein it is held that no addition can be made on the basis of a surrender simplictor even when surrender is made during the course of survey proceedings under section 133 A. In view of these discussions, as also bearing in mind entirety of the case, we approve the conclusions arrived at by the learned CIT(A) and decline to interfere in the matter.”

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