1999 (11) TMI 9 - HC - Income Tax

Applications dismissed; voluntary survey admission of extra income upheld as valid despite retraction; assessee failed to prove duress or falsity

Dr. SC. Gupta Versus Commissioner Of Income-Tax

The HC dismissed the applications, upholding the Tribunal's factual finding that no duress was proved and that the assessee's voluntary survey statement ... Income From Undisclosed Sources - statement recorded under duress - Whether, the Tribunal was legally right in holding that the addition on each in the assessment years 1985-86 to 1987-88 could be made merely on the basis of the statement tendered during the survey without there being any documentary evidence or material suggesting such income ? - HELD THAT:- What was the nature of the duress has not been specified before us and has also not been stated in the applications under consideration. The Tribunal's finding is that no pressure or duress was exercised on the assessee. This is a finding of fact. That in the statement during the survey the assessee had offered additional income as mentioned above, is admitted even in the present applications As regards the assessee's contention that the statement having been retracted the Assessing Officer should have independently come to a conclusion that there was additional income as sought to be assessed and that there was no material to support that there was such income, this contention in our view is not correct. As held by the Supreme Court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1971 (9) TMI 64 - SUPREME COURT] an admission is an extremely important piece of evidence though it is not conclusive. Therefore, a statement made voluntarily by the assessee could from the basis of assessment. The mere fact that the assessee retracted the statement could not make the statement unacceptable. The burden lay on the assessee to establish that the admission made in the statement at the time of survey was wrong and in fact there was no additional income. This burden does not even seem to have been attempted to be discharged. Similarly, P. K. Palwankar v. CGT [1978 (10) TMI 30 - MADHYA PRADESH HIGH COURT] and CIT v. Mrs. Doris S. Luiz [1973 (12) TMI 11 - KERALA HIGH COURT] on which also learned counsel for the assessee placed reliance are of no help to the assessee. The Tribunal's order is concluded by findings of fact and in our view no question of law arises. The applications are, accordingly, rejected. Issues involved: Application u/s 256(2) of the Income-tax Act, 1961 seeking direction for the Income-tax Appellate Tribunal to state a case and refer a legal question regarding addition of income based on a survey statement.Summary:The case involved three applications u/s 256(2) of the Income-tax Act, 1961, requesting the Income-tax Appellate Tribunal to refer a legal question arising from an order related to addition of income based on a survey statement. The assessee, a medical practitioner, had filed returns for certain years which were accepted under section 143(1) of the Act. Subsequently, during a survey, the assessee surrendered additional income, which was then assessed by the Assessing Officer. The assessee contested this additional income during assessment proceedings, claiming it was under duress. The Deputy Commissioner (Appeals) later deleted the additional amounts, but the Tribunal upheld the assessment, finding the survey statement to be valid. The Tribunal held that no duress was involved in obtaining the statement. The High Court rejected the contention that the statement was invalid due to duress, citing legal precedents that an admission by the assessee is significant evidence for assessment, and the burden lies on the assessee to prove the admission wrong. As the burden was not discharged, the High Court concluded that no legal question arose, and thus rejected the applications.In conclusion, the High Court dismissed the applications, upholding the Tribunal's decision that the additional income based on the survey statement was valid for assessment, as the burden of proof to show the statement was incorrect was not met by the assessee.