ACIT Vs Naresh Jain (ITAT Jaipur)
In this ground, the Revenue contested the telescoping benefit of Rs. 1,00,30,778 that was granted by the CIT(A). Telescoping refers to the adjustment of income or unexplained investments of one year against the undisclosed income of another year. The CIT(A) had allowed the benefit of telescoping by utilizing the additional income disclosed by the assessee from earlier years to set off against the additions made in the current year.
The ITAT upheld the decision of the CIT(A), agreeing with the principle that the undisclosed income from one year could be legitimately used to explain investments, expenses, or other additions in subsequent years. The tribunal dismissed the Revenue’s argument, confirming that the CIT(A) had correctly applied the established principles of telescoping in this case, and there was no error in the approach adopted by the CIT(A).
FULL TEXT OF THE ORDER OF ITAT JAIPUR
This appeal filed by the Revenue is directed against order of the ld. CIT(A), Udaipur-2 dated 29-01-2024 for the assessment year 2017-18 raising therein following grounds of appeal.
‘’1 Whether on facts and in circumstances of the case, the Lad. CIT(A) is justified in ignoring the evidential basis of additions of Rs. 1,83,20,000/- available to the AO in the form of incriminating documents found and impounded during the survey containing all information of incriminating transactions recorded therein and further supported by the explanation and admission of Sh. Naresh Jain, in his statement recorded on oath us 131 during survey, who accepted these transactions to be unaccounted.
2. Whether on facts and in circumstances of case, the Ld. CTT(A) is justified in deleting addition of Rs 33,60,000/- made by AQ on the basis of incriminating documents containing registered document for purchase of property and supported by assessee’s statement-by simply relying on dicta from the decision of Hon’ble High Court of Kerala in the case of C.K. Abdul Azeez vs. CIT. Central Circle, Calicut [2019] 111 taxmann.com 74(Kerala) that “Statement on oath made by an assessée to income tax authority during survey proceedings under section 133A is not conclusive, assesse can explain or withdraw admission, if any, made by him in such statement and assessment of tax cannot be made solely on basis of such sworn statement made by assesssee under section 133A(3)(iii) and such statement can be used to corroborate other materials before assessing authority, including contents of any document which does not apply directly to present case as the addition was made on concrete evidence.
3. Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in deleting the addition of Rs. 7,10,000/- not considering the fact that it was made on the basis of incriminating documents impounded and the true explanation of Naresh Jan in statement was recorded on oath u/s 131 and not u/s 133A (3)(iii) and the assesse failed to prove with registered conveyance deed of transfer of above property, and also failed to make it verified with the explanation of the sellers
4. Whether on facts and in circumstances of the case, the Ld. CTT(A) is justified in deleting the addition of Rs. 27,97,131/- out of total addition of Rs 35,00,000/-by not considering the fact that the assessee admitted in his statement recorded on oath u/s 131 and not u/s 133A(3)(iii) and the assesssee failed to explain the available documents and evidences in this regard
5. Whether on facts and m circumstances of the case. the Lil CIT(A) is justified in deleting the addition of Rs. 75,00,000/- made on account of marriage of son Shri Ativeer Jain by appreciating the retraction from his statement claiming that these expenses do not belong to him and belonged to Nisha Jain despite that it was recorded on oath u/s 131 during the survey
6. Whether on facts and in circumstances of the case. the Ld. CIT(A) is justified in deleting the addition of Rs. 1,43,67,131/- out of total additions of Rs 1,83,20,000- which were duly made on the basis of incriminating documents found and impounded during the survey and truly explained by Naresh Jain in the statement recorded during the survey
7. Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in giving telescoping effect to the assesse to set off Rs 46,43,251-against the sustained addition Rs. 49,02,869- resulting in sustenance of remaining additions of Rs. 2,59,618/-only.’’
2.1 It may be noted that the present appeal is preferred by the Revenue against the order of CIT(A) dt. 29.01.2024. Since the ld. CIT(A) has already stated the relevant facts hence, the same are not being repeated here. During the course of hearing, the parties were directed to file detailed written submissions in support of their oral arguments, if so desired. However, the ld.DR supported the order of the AO. To this effect, the ld. AR of the assessee has filed the following written submissions countering the grounds of appeal raised by the Revenue.
