TaxTMI 
TaxTMI 
2004 (2) TMI 286
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....uments were explained to the AO during the course of assessment proceedings. However, pressure was put on the assessee and his statement under s. 131 was recorded by Dy. DIT (Investigation) on 12th Feb., 2001 wherein he is stated to have surrendered Rs. 20 to 25 lakhs as income from share trading and speculation business. On the basis of aforesaid statement, the AO took assessee's undisclosed income at Rs. 25 lakhs. The above amount was added in asst. yrs. 1999-2000 and 2000-2001 in the block assessment. 3. The objection of the assessee that the aforesaid statement was retracted and that above admission in the statement was of no value, was rejected by the AO. He maintained that statement recorded 7 months after the date of search and it is highly unreasonable on the part of the assessee to contend that surrender of Rs. 25 lakhs was without any basis. The AO further mentioned that the assessee did not complain to any IT authorities that he was forced to surrender amount of Rs. 25 lakhs. In the above background a sum of Rs. 25 lakhs was assessed as undisclosed income in the hands of the assessee. 4. The assessee impugned above assessment in appeal before the CIT(A)-III, Ne....
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....at he did carryon transaction outside regular books of accounts. It has been observed that the assessee admitted fact of undisclosed income in his block return and therefore, was not right in contending that confessional statement was wrong and was obtained through coercion. The veracity of the statement was admitted by the assessee. With the aforesaid observation, the learned CIT(A) held that AO was justified in making assessment on the basis of confessional statement. 7. The assessee is aggrieved and has brought the issue in appeal. The learned counsel for the assessee Shri S.P. Agarwal reiterated the submissions made before the Revenue authorities. He emphasised that confessional statement was obtained under duress and pressure and was not of any evidentiary value. The same was retracted. He further argued that decisions cited before the CIT(A) were applicable and case law relied upon by the learned CIT(A) did not support the claim of the Revenue. The learned Departmental Representative on the other hand, relied upon impugned order of the CIT(A) which was elaborate and based on cogent reasons. 8. We have given careful thought to the rival submissions of the parties. It is ....
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....ecific manner and the findings of the AO regarding the undisclosed income are to be based on the material found as a result of search. A combined reading of these provisions makes it clear that the amount which is taxable as "undisclosed income" in the block assessment should fall within the scope and ambit of the definition expressly given in Chapter XIV - B and the amount which is not covered by the said definition cannot be subjected to tax in the block assessment even though declared as such by the assessee in the return of income for block period ....." 2. Control Touch Electronics (Pune) (P) Ltd. vs. Asstt. CIT (2001) 72 TTJ (Pune) 65 : (2001) 77 ITD 522 (Pune) : At para 9 "...... At this stage, it is mentioned that it is a settled legal position that there cannot be any estoppel against the statute. If any income is not taxable by virtue of any provision of the Act, then it cannot be taxed merely because it was offered by the assessee in his return. Therefore, the contention of the learned Departmental Representative in this regard is hereby rejected. Accordingly, the order of the AO is set aside on this issue and is hereby deleted from the assessment of un....
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.... (b) The restraint continued from 20th July, 2000 to 12th Feb., 2001. The assessee made several requests to release business bank accounts and depositors' accounts, thus permit the assessee to carryon the business. Requests were not accepted and assessee could not resume his business. The above allegation and claim are not denied by the Revenue authorities and acts are specifically stated to be justified by the learned CIT(A). (c) We are unable to hold that above acts of the Revenue authorities would not put any pressure on normal businessman. It is further admitted that the accounts were revoked and released only after Rs. 5 lakhs were deposited by the assessee on 30th March, 2001. In between, on 12th Feb., 2001, the said confessional statement was recorded. We are unable to reject assessee's contention that great psychological pressure was built upon him before he made a statement in February, 2001. It is to be noted that it is not possible to lead direct evidence of use of pressure tactics. It is to be gathered from the evidence, mostly circumstantial. (d) That confession relied upon is not clear as to form basis of assessment of undisclosed incom....