Madhuri Hingorani Pradeep , Bangalore Vs Income Tax Officer Ward-1(2)(4), Bangalore

This case involves an appeal by Madhuri Hingorani Pradeep against an order from the Income Tax Officer, Bangalore, for the assessment year 2011-12. The appeal concerns two main issues: an addition of Rs. 60 lakhs related to income surrendered during a survey, and the non-allowance of set-off for brought-forward losses and depreciation. The assessee had previously run a garment business, which was discontinued, and later started a spa and beauty parlour. During a survey at the spa, the assessee surrendered Rs. 60 lakhs as additional income, though later claimed in a letter that her estimated income was Rs. 35.68 lakhs and that brought-forward losses would result in NIL taxable income for the relevant assessment year.

IN THE INCOME TAX APPELLATE TRIBUNAL
“C’’ BENCH: BANGALORE

BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER
AND
SMT. BEENA PILLAI, JUDICIAL MEMBER

ITA No.773/Bang/2019
Assessment Year: 2011-12

Madhuri Hingorani Pradeep G-1, Promenade, 763 Nandidurga Road,Benson Town Bangalore PAN NO : AFUPP6959G
APPELLANT 
Vs.
ITO Ward-1(2)(4) Bangalore
RESPONDENT

Appellant by : Shri V. Sridhar, A.R.
Respondent by : Smt. R. Premi, D.R.

Date of Hearing : 15.10.2020
Date of Pronouncement : 22.10.2020

O R D E R

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

The assessee has filed this appeal challenging the order dated 20-02-2019 passed by Ld CIT(A)-1, Bengaluru and it relates to the assessment year 2011-12.

2. The grounds urged by the assessee relate to the following issues:-
(a) Addition of Rs.60.00 lakhs pertaining to surrender made during the course of survey.
(b) non-granting of set off of brought forward loss and depreciation.

3. The assessee was earlier running a garment manufacturing unit under the name and style M/s MSR Clothing Company. It was discontinued in 2006. After that, the assessee was in employment for some time. Subsequently, the assessee started a SPA and beauty parlour by name M/s Energie Inc in October, 2009.

4. The revenue carried out survey operations u/s 133A of the Act in M/s Energie Inc on 27-09-2010. A statement under oath was taken during the course of survey. In the statement, the assessee admitted that she did not maintain books of accounts. She also submitted that she has maintained receipt books, but not recorded all the transactions. Finally, she surrendered a sum of Rs.60.00 lakhs as additional income. Subsequently, the assessee has claimed to have filed a letter date 11th October 2010 giving various details relating to her income and investments. In the said letter, the income of the year was estimated at Rs.35.68 lakhs. It was also stated that the brought ward losses to the tune of Rs.33.94 lakhs are available for set off and hence no significant taxable income shall be available
for AY 2011-12.

5. Subsequently, the assessee filed her return of income on 29-09-2011. In the return of income she declared her business income at Rs.26,69,449/- and set off the same against brought forward losses and unabsorbed depreciation. Accordingly the total income was declared at NIL. The assessee did not offer additional income of Rs.60.00 lakhs in the return of income.

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