DINAKARA SUVARNA Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) These appeals have been admitted to consider following questions of law:

(2.) Brief facts of the case are, the assessee is an individual who carries out contract works. He filed returns of income for the assessment years 2005-06 to 2007-08 as follows: AY Original return of income 2005-06 3,94,513 2006-07 18,09,501 2007-08 14,37,560

(3.) A search was conducted under Sec. 132 of the Income Tax Act, 1961 ('the Act' for short) in the residential premises of one Shri. Ashok Kumar Chowta and among other documents and papers, a diary was also seized. It contained details of payments made by Shri. Ashok Kumar Chowta to the assessee. On April 21, 2009, a survey was conducted in the business premises of the assessee and his statement was recorded on May 11, 2009 and the assessee agreed to offer 8% additional receipts as income but did not file his revised return of income. On March 26, 2010, the Assessing Officer issued notice under Sec. 148 of the Act and called upon the assessee to show cause as to why the amount agreed to be offered to tax was not declared in the returns of income. On April 12, 2010, the assessee filed his return of income and declared the same income as filed in the original return of income. The case of the assessee was selected for scrutiny by issuing notice under Sec. 143(2) of the Act. The assessee vide letter dated May 30, 2010 objected on the ground that there was no reason to believe that the income chargeable to tax had escaped assessment. On December 24, 2010, the Assessing Officer passed Assessment orders for the assessment years 2005-06 to 2007-08. Assessee challenged it before the CIT (A)[Commissioner of Income Tax (Appeals) - VI]. By common order dated March 16, 2012, CIT (A) partly allowed the appeals. The assessee and the Revenue preferred appeals against the said order before the ITAT[Income Tax Appellate Tribunal, 'A' Bench, Bengaluru]. Against the appeal preferred by the Revenue, the assessee preferred cross objections. By its judgment dated August 14, 2014, the Tribunal partly allowed the appeals and cross objections filed by the assessee. The appeal preferred by the Revenue for the assessment year 2007-08 was partly allowed and dismissed the appeals for other assessment years. Questions No.(a) & (b):