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May, 14th 2013
%                                      Judgment delivered on: 02.05.2013

+       ITA 596/2012

CIT                                                      ...   Appellant


AKME PROJECTS LTD                                        ...   Respondent
Advocates who appeared in this case:
For the Appellant     : Mr Karan Khanna, Adv. with Ms Ashmita Kumar, Adv.
For the Respondent    : Mr Piyush Kaushik, Adv.




1.      This is an appeal by the revenue against the order dated 28.12.2011
passed by the Income Tax Appellate Tribunal, New Delhi, in ITA No.
3276/Del/11 relating to the assessment year 2008-09. The appeal was
admitted for hearing on 15.10.2012. The order indicates that the
following question of law arises for consideration:-

        "Whether the Tribunal fell into error in directing that
        the sum of `. 39,52,293/-, added by the Assessing
        Officer, was covered by the disclosure made by the
        assessee after the survey conducted, which led to his
        filing a return?"

ITA 596/2012                                                         Page 1 of 5
2.      At the outset, the learned counsel for the respondent/assessee urged
that the above question was not a question of law at all and much less a
substantial question of law and that the same involved only issues of fact
which had been finally determined by the Tribunal. However, the learned
counsel for the appellant contended that a Bench of this court had already
framed the above question and therefore the same needs to be answered.

3.      The facts of the case are aptly set out in paragraph 2 of the
impugned order and the same are reproduced herein below:-

        "2. A search operation was carried out at the premises
        of the assessee including the group concerns. A
        survey was also conducted on 19.20th February, 2008
        on various premises and group concerns of the
        assessee. During the course of survey, on the basis of
        various documents/papers/soft copies of the data, the
        assessee declared a sum of `. 15 crore as additional
        business income in the hands of various business
        concerns of the assessee group vide letter dated 10th
        March, 2008 the copy of which has been placed at
        page 59 of the paper book.          On the basis of the
        declaration, it is the case of the assessee that the entire
        `. 15 crore was declared in its hands and accordingly
        the return of income was filed at `. 18,37,88,691/-.
        However, while assessing the income of the assessee,
        the Assessing Officer found that the assessee had
        claimed set off of loss from trading in commodities
        amounting to `. 39,52,293/- against business income.
        The Assessing Officer treated that such loss is of
        speculative nature, hence could not be set off against

ITA 596/2012                                                          Page 2 of 5
        business income. He, therefore, added the said sum to
        the income of the assessee and has assessed the
        income of the assessee at `. 18,77,40,980/-. The
        addition was challenged by the assessee before the
        CIT(A). It was contended that the assessee had
        transferred 58 flats having mutually agreed value at `.
        18,08,31,794/- in favour of M/s BLK Reality Pvt. Ltd.
        Against which claim of having incurred `. 17 crore on
        various projects of the assessee company. The
        assessee company recognized total value of sales of
        such flats in its profits and loss account at `.
        18,08,31,794/- as against the earlier sale value shown
        at `. 4,50,00,000/- thereby offering an additional
        income to the extent of `. 13,58,31,794/-. The said
        accretion formed part of the overall agreed income of
        `. 15 crore as offered voluntarily by the assessee after
        the survey. The balance amount of `. 1,41,68,206/-
        was offered directly in the computation of income to
        cover any deficiency or discrepancies or other
        investments/expenditure, etc. Thus, it was pleaded by
        the assessee that further disallowance of `. 39,52,293/-
        being less than the amount additionally offered for tax
        of `. 1,41,68,206/- on account of there being no other
        discrepancy, should have been considered to be
        covered by the said additional addition and therefore,
        the addition of `. 39,52,293/- was not called for. Such
        submissions of the assessee were forwarded by the
        CIT (A) to the Assessing Officer vide letter dated 20th
        January, 2011 for his comments within ten days, but,
        no comments were received from the Assessing
        Officer. It is observed by CIT (A) that the written
        submission of the assessee do not contain any
        additional evidence. Therefore, he proceeded to

ITA 596/2012                                                       Page 3 of 5
        decide the appeal filed by the assessee on the basis of
        the material available on record. Learned CIT (A)
        after reproducing the submissions of the assessee in
        letter dated 10th March, 2008 vide which the assessee
        had offered additional income of `. 15 crore has come
        to the conclusion that in view of the additional amount
        taken by the assessee of `. 1,41,68,206/- which did not
        exceed the disallowance made by the Assessing
        Officer of `. 39,52,293/-, the addition made by the
        Assessing Officer was not called for. It is against
        these findings recorded by the CIT (A), the
        department has filed the aforementioned grounds of

4.      The argument of the revenue is that the sum of `. 39,52,293/- was
by way of speculation loss and therefore the said amount had to be added
back to the business income of the assessee. On the other hand the
learned counsel for the respondent/assessee contended that the said sum
of `. 39,52,293/- was already embedded in the additional business income
which was offered by the respondent/ assessee which was to the extent of
`.1,41,68,206/-. The Tribunal has examined this aspect of the matter in

detail and observed that the assessee, in order to make its offer an honest
attempt, apart from declaring the discrepancy pointed out, offered an
additional sum of `. 1,41,68,206/- so as to complete the figure of `.15
crores which was the offer made at the time of survey. The Tribunal
noted that the said amount of `. 1,41,68,206/- exceeded the amount of `.
39,52,293 added by the assessing officer. Consequently the Tribunal held
as under:-

ITA 596/2012                                                      Page 4 of 5
        "Therefore, in our opinion, learned CIT (A) has taken
        a right view that the aforementioned amount should
        have been considered to be embedded in the additional
        income offered by the assessee. We find no infirmity
        in the view taken by the CIT (A) and, therefore, we
        decline to interfere in the order of CIT (A)."

5.      Consequently, we are of the opinion that, first of all, the question is
one which entirely rests on facts and is not a substantial question of law.
Secondly, even if we consider the question on merits the Tribunal has
arrived at the correct decision in concluding that the said sum of `.
39,52,293/ which was added by the assessing officer was embedded in
the additional offer of `.1,41,68,206 made by the assessee at the time of
the survey proceedings.

6.      Consequently, even on merits the question is answered in favour of
the respondent/assessee and against the revenue.

7.      The appeal is dismissed. There shall be no orders as to costs.

                                         BADAR DURREZ AHMED, J

                                          VIBHU BAKHRU, J
MAY 02, 2013

ITA 596/2012                                                        Page 5 of 5
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