2011 (5) TMI 928

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.... ITAT's Rules, they are descriptive and argumentative in nature. In brief, the assessee has pleaded that during the course of search, jewellery of 4682.33 grams was found which belongs to various family members. As per the books of account, jewellery should be7012.56 grams. In the books, jewellery against the name of assessee was shown at 343.79 grams but nothing was found at the time of search. Learned CIT(Appeals) observed that this much jewellery must have been sold by the assessee and a capital gain would be leviable upon the assessee. He directed the Assessing Officer to verify this aspect and ascertain the market value of the jewellery as on the date of the search and after allowing indexation for the cost of jewellery capital gain would be assessable in the hands of the assessee. Learned CIT(Appeals) further directed the Assessing Officer to carry out this exercise in respect of other family members. The assessee is aggrieved with this direction. 3.1 The next grievance of the assessee is that at the time of search, cash of Rs. 18,99,640 was found at the residence and Rs. 3,50,000 recovered from the locker belonging to Shri Sushil Aggarwal. Apart from these two amounts....

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....n undisclosed business income in his hands. In this letter, assessee has put a condition that the surrender would be subject to verification of seized material. Assessing Officer passed the assessment order on 30.12.2007. He determined the taxable income of the assessee at R.1,80,39,960. Assessing Officer has observed in the assessment order that assessee failed to return the income admitted by him during the course of search, hence, an addition of Rs. 1,75,00,000 has to be made in the hands of the assessee. Assessing Officer found that assessee failed to explain the source of the cash found at the time of search but he did not deem it necessary to make separate addition because addition of Rs. 1,75,00,000 would take care of the cash available at the residence. Assessing Officer further found a gift of Rs. 2,50,000 received from the HUF. According to the Assessing Officer, HUF does not fall within the ambit of exclusion of relatives provided in section 56(2(v) of the Income-tax Act, 1961. He made the addition of Rs. 2,50,000 also. 5. On appeal, Learned CIT(Appeals) has deleted the addition of Rs. 1.75 crores on the ground that Assessing Officer has not made a reference to the se....

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.... clean at the first, second and third instances and avoid facing the wrath of the law. Basically, assessee has not retracted his statements rather while filing the return, he did not offer the amounts surrendered for taxation. This stand of the assessee is after thought. For buttressing his contentions, he relied upon the order of the ITAT (tm) in the case of Overseas Chinese Culsine (India) Pvt. Ltd. Vs. DCIT(Assessment) reported in 218 ITR (AT) 80. 8. The learned counsel for the assessee submitted that no addition on the basis of alleged disclosure statement made under sec. 132(4) of the Act can be made. He pointed out that it is not ascertainable whether authorized officer had signed the statement at the end, the statement does not indicate the names and designation of the officer who recorded the statement. When assessee made the statement he was not having old income-tax returns, relevant details, documents and books of accounts. The assessee is an old illiterate Halwai and does not understand the intricacies of the tax matters. The statement does not bear the signatures of the witnesses. On the strength of Hon'ble Gujarat High Court's decision in the case of Kailash Be....

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.... by the Learned CIT(Appeals). Similarly, he pointed out that jewellery not found in the possession of each individuals ought to have not been considered as sold. The jewellery in the books of account was more than the one found at the time of search. 11. We have duly considered the rival contentions and gone through the record carefully. Assessing Officer has reproduced the question and the reply of the assessee given on 10.11.2005/11.11.2005 as well as 21.11.2005 in English Vernacular. Both these questions and replies have a direct bearing on the controversy hence it is imperative to take note of these questions and replies which read as under: 10-10/11/2005 "S.13 Do you want to say anything else Ans: I, Bhatirath s/o Shri Shiv Narain hereby declare additional income of Rs. 1 crore for current financial year 05-06 on account of documents, jewellery, cash property found during action u/s 132 for buying peace of mind and to avoid litigation. I request the Income-tax Department that no penalty proceedings be initiated against me. 21.11.2005: Q.4 Do you want to say anything else. Ans: Yes, My statement was recorded under sec. 132(4) of the Income-tax Act, 1961 on ....

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....ntrol of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act. Explanation.- For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income-tax Act, 1922 ( 11 of 1922 ), or under this Act". 14. With the assistance of learned representatives, we have gone through the statements carefully. The first objection of the assessee is that statements are not signed by the witnesses. We do not find any force in this contention because during the course of assessment proceedings, assessee never took this objection. The assessee has not complained to the higher authorities or to the Assessing Officer that no such statement was ever taken. The veracity of the statement is not in ....

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....ral rule of practice, it is unsafe to rely upon a retracted confession without corroborative evidence. In the present case, assessee was found in possession of unexplained cash, jewellery, books and documents, hence authorized officer has rightly recorded his statement under sec. 132(4) of the Act. The statement made before the officer is an admissible evidence. There is no dispute with regard to this proposition. The sole question before us is whether the statement is sufficient to make the addition or not. As observed above, as a general rule of prudence, it is unsafe to rely upon a retracted confession and judicial as well as quasi-judicial authorities ought to look for corroborative evidence. In the light of this position of law, if he examines the facts of the present case, then it would reveal that assessee fail to bring any evidence on the record which can suggest that statement given by him was under some mistaken belief or facts. He has not retracted the statement rather after two months again confirmed the statement but with a qualification. We could understand the stand of the assessee had he retracted the statement and brought demonstrative evidence on the record showin....