2010 (7) TMI 211

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e following substantial questions of law : "(i) Whether in the facts and circumstances of the case, the Income-tax Appellate Tribunal was correct in law in sustaining the addition of Rs. 19 lakhs made solely on the basis of the statement of the assessee recorded on March 21, 2003 which was retracted on May 28, 2003, which was recorroborated by evidence collected during the course of survey, contrary to the ratio of the Supreme Court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 ? (ii) Whether the hon'ble Income-tax Appellate Tribunal was correct in law in sustaining the addition of Rs. 19 lakhs when the assessee was able to explain the source of investment through entries made in his gatta d....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... incorrect and the resiled statement was supported by diary recovered during the survey. On further appeal, the Tribunal reversed the view taken by the Commissioner of Income-tax (Appeals). It was held that the burden was on the assessee to establish that the admission made by him during the survey was wrong. The assessee had failed to produce the books of account or contemporaneous record of the period during which agricultural income was earned. The statement having not been retracted at the earliest opportunity, voluntary statement made in the presence of family members was an important piece of evidence which could not be brushed aside. It was held that the statement of the assessee was material during survey and could be basis of asses....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....could be acted upon. The relevant observations are : "It is not the case that the assessee produced the records, books of account or the income-tax record of the period when the assessee claimed to have done potato business by claiming bad debt. As far as the question posed by the learned Commissioner of Income-tax (Appeals) in his order, 'whether the assessee can retract his statement' the obvious reply is 'yes' but that should be at the earliest opportunity when the statement was recorded or at least within a reasonable time, consequently, the voluntary statement that too recorded in the presence of family members and counsel is an important piece of evidence which simply cannot be brushed aside unless and until o....