TaxTMI 
TaxTMI 
2015 (10) TMI 2577
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....ncies, errors, omissions, mistakes, etc., in the seized documents and seized assets vis-a-vis the regular books, Even though on completion of the assessment proceedings, the AO has not been able to identify any unexplained asset, unexplained investment, undisclosed income or expenditure or point out any other noting, error or discrepancy in the seized documents / assets as amounting to income. Hence, the appellant prays that the tax paid of Rs. 54,85,781/- on the amount of Rs. 1,48,00,000/-, offered conditionally but remaining unidentified even after the completion of assessment, needs to be refunded since, under no section of the Income Tax Act, the said amount of Rs. 1,48,00,000/- can be treated as income chargeable to tax." 3. The assessee company manufactures and sells PVC films. It generates and sells power as well. The department carried out a search at business and residential premises of M/s Manish Group of cases on 24-092008. It recorded statement of assessee's director Shri Kanaiyalal B. Patel on 24-25/09/2008 at plot no 539, 541-43, Road No. 5, Sachin GITC, Surat (Pages 141to 155 of the paper book). He stated that four entities namely; M/s Manish Packaging Pvt. Ltd (as....
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....unsecured loans to different share holders from 2003- 04 to 2008-09 amounting to Rs. 2,10,62,605/- and Rs. 6,60,31,650/- respectively attracting deemed dividend u/s. 2(22)(e) of the Act. Shri Patel expressed his lack of knowledge about this provision. His next statement came on 01-102008 (pages 101-104 of the paper book) recorded in income tax office, Surat admitting further unaccounted income of Rs. 1,15,00,000/- over and above Rs. 1,10,00,000/- declared earlier. The same reads as under:- Q.2 During the course of search proceedings certain books of accounts in physical as well as digitized form were seized. Are you willing explain the entries mentioned such books of accounts? A.2 No. The explanation for each and every entry in such books of accounts will be submitted later on. However, having gone through some of the seized materials presented to me and on the basis of further discussion with the investigating officials, I propose to make further disclosure of unaccounted income of Rs. 1,15,00,000/- (Rupees one crore fifteen lacs only) in addition to the amounts disclosed by me in my earlier statement dated 25/09/2008 to cover all possible contingencies and irregularities that....
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....n No. 32 of statement 29/09/2008 with regard to financial transactions carried out by my companies with my other group concerns, family members and myself of Rs. 4,00,00,000/- (Rupees Four Crore only) for which I accept that income arising due to the provision of section 2(22)(e) is not disclosed in our books of accounts. In this regard, I hereby abide to pay tax on the said amount with interest that arise finally based on judicious and legal application of law on facts and on merits in totality of the respective transactions. Although the amount pointed out to me was Rs. 8,70,94,255/- with regard to the provisions of section 2(22)(e) which according to us would be Rs. 400,00,000/- (Rupees four crore only). Whatever stated above is true and correct to the best of my knowledge and belief. I have given this statement in sound state of mind and I stick to it. The above stament is given without any threat, coercion, or under any under influence. I know giving false statement on oath is an offence punishable under I.T. Act and Cr. P.C." 6. The assessee files a written note in the course of hearing before us inter alia averring that the impugned search commenced on 24-09-2008 at 8.35 a....
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....onscious ones since administered under oath. And that the same had gone un-rebutted for want of tangible evidence. Retraction time period of 11 months was held to be based on legal advice only. The Assessing Officer took into account all these conclusions for rejecting assesee's retraction qua the impugned sum of Rs. 1.48 lacs and held that the entire sum of Rs. 1.75 crores (supra) was its unaccounted income. 9. The CIT(A) has upheld the Assessing Officer's action under challenge. 10. The learned authorized representative invites our attention to the above extracted statement for terming the same as a conditional disallowance and not a categoric one. He submits that the same lacks any supportive evidence as well i.e. the four basic ingredients of the concerned assessee's identity out of the above stated four entities (supra), corresponding assessment year, source thereof along with its application and unexplained expenditure is nowhere forthcoming. The assessee pleads that both the alleged sums of Rs. 2.25 crores and deemed dividend amount of Rs. 4 crores (supra) stand on identical footing being based on Shri Patel's statements. It highlights the fact that the latter deemed....
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..../-. We observe in these peculiar circumstances that there is no specific incriminating material supportive of the above stated addition right from search till date. We quote Board's circular (supra) issued much prior to the search in question directing the investigating officers to focus on collection of evidence pointing towards unaccounted income rather than requesting such confessional disclosure statements. We accordingly hold that the Revenue has not collected any specific material supporting the impugned addition. 14. Now we come to relevant case law quoted. The first one (2010) 328 ITR 411 (Guj) Kailashben Manohar Choksi vs. CIT. The department had recorded disclosure statement at midnight hours. The same stood retracted after two months. There was no evidence collected in support of the said disclosures. We find that their lordships accepted retraction since the statement was recorded in very much odd hours. It has been held thereafter that the additions in question are not sustainable since no material evidence supporting the same are forthcoming. It is further evident that this case law pertains to a search conducted well before the Board's circular (supra) quoted therei....