Case Law Details
Shri Babulal Vani Vs ACIT (ITAT Indore)
The issue under consideration is if the assessee is in a position to reconcile the discrepancy raised under survey with positive material,then, the A.O. should give relief to the assessee or not?
In the present case, the assessee is an individual engaged in the business of grain, cotton, pulse seed marketing. Survey under section 133A was carried out at business premises of assessee and certain books of account and loose papers were found and impounded by survey party. During the course of survey, statement of assessee was recorded and assessee admitted unexplained investment in stock but did not declare the same in return of income. Hence, AO made addition on that count.
ITAT states that, the books of accounts of the assessee at the time of survey on 3.3.2005 were found to be returned till 15.1.2005. It is the contention of the assessee that no opportunity to recast its trading account was given. It is further contended that the difference was due to non recording of the purchases. In fact sales of the ‘udad’ has been taken into account but purchases are not considered which was recorded subsequently.
Further it is states that during the course of survey statement recorded u/s 133A of the Act would not be a strong piece of evidence. In case the assessee is in a position to reconcile the discrepancy with positive material, in that event, the A.O. should give relief to the assessee. ITAT find that the A.O. has taken into account sales but the purchases of udad which was not recorded in the books and subsequently recorded after drawing a fresh trading account, no specific defect in such reconciliation is pointed out by the A.O. Under these facts, ITAT are of the view that the A.O. is not justified in making the addition. Therefore, the A.O. is directed to delete this addition.
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