AI Drafter 
TaxTMI 
TaxTMI 
2017 (11) TMI 683
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....as right in law in confirming the addition made by the respondent u/s 145(3) of the Act ignoring the provision of Section 44AF of the IT Act, 1961 and at Rs. 77,298/-." 3. Counsel for the appellant has taken us to Annexure-1 which reads as under:- "This is to request you to kindly left the released good lying at J.M. Cool House Pvt. Ltd. in the name of M/s Narsingh Dass Ved Prakash, Delhi details of which is enclosed. These good actually belongs to me. Investment in these goods have been out of my declared income for the current financial year and this I paid an advance tax (including cess and of Rs. For A.Y. 2005-06 Copy of Challan/proof of payment is also enclosed for ready reference. You honour would revel your con that are duly or produce would be are concealed income as accept if above mentioned." 4. He has also taken us to the questions which are put to him on the same day by the Delhi Office on 23rd February, 2005 more particularly question no. 3, 5 & 6 which reads as under:- 5. He further contended that on the basis of this, the appellant has filed his return on 17th August, 2005 which was accepted and refund was granted on 19th October, 2005 at Annexure-4....
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....corded under Section 132(4) of the Act. Despite the fact that the said statement was later on retracted no evidence has been led by the Revenue authority. We are, therefore, of the view that merely on the basis of admission the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such admission. We are also of the view that the statement recorded at such odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence there is no reason not (sic) to disbelieve the retraction made by the AO (sic-assessee) and explanation duly supported by the evidence. We are, therefore, of the view that the Tribunal was not justified in making addition of Rs. 6 lacs on the basis of statement recorded by the AO under Section 132(4) of the Act. The Tribunal has committed an error in ignoring the retraction made by the assessee. 8. He has also relied upon the decision of Gujarat High Court in case of The Commissioner of Income Tax-IV vs. Ramanbhai B Patel in Tax Appeal No. 207/2008 decided on 20th July, 2016 wherein it has been held as u....
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....he appeal. He further submitted that the Tribunal has not given any cogent reasons in its order. "4. As against this, Mr. Soparkar, learned Senior counsel heavily relied upon the decision of this Court in the case of Kailashben Manharlal Chokshi v. Commissioner of Income Tax, reported in MANU/GJ/0744/2008 : [2010] 328 ITR 411 (Guj.), more particularly paragraph No. 23. In the aforesaid case, the judgment rendered in CIT v. D.L.F., reported in MANU/SC/1059/1999 : [2000] ITR 855 has been referred. Paragraph No. 23 of the decision of Kailashben Manharlal Choksh (supra) reads as under:-- 23. The main grievance of the Assessing Officer was that the statement was not retracted immediately and it was done after two months. It was an afterthought and made under legal advise. However, if such retraction is to be viewed in light of the evidence furnished alongwith the affidavit, it would immediately be clear that the assessee has given proper explanation for all the items under which disclosure was sought to be obtained from the assessee. So far as amount invested in house property is concerned, the assessee has specifically stated in his explanation dated 28.2.1989 that th....
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....ny middle class Indian family may be having jewellery and gold ornaments to that extent. Hence, no addition can be made on that count. Even if the board Circular may not have retrospective operation, looking to the quantum of holding and assessee's explanation, we are of the view that this is a normal holding which can be found in any middle class Indian family and hence no addition could have been justified on that count. So far as addition of Rs. 1 lac on account of unaccounted investment in furniture is concerned, it is stated by the assessee that on the ground floor furniture was made before 15 years and assessee had spent Rs. 25,000/- for renovation after making withdrawal from the firm's account. It is further submitted that the furniture on the first floor was partly received and paid out of withdrawals from the firm. At the time of the search additional furniture meant for the first floor was just received by way of parcel from Ahmedabad and was lying in bundles. A detailed source of investment of furniture purchased from Ahmedabad with a due confirmation from the party concerned have been filed by the assessee before the Assessing Officer. Since no payment....
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.... 27 he further agreed that all the deposits made in the name of his employees are his deposits. In answer to question No. 33 he disclosed an income of Rs. 15 lakhs. He could not give any further details on that date. On 31.8.90 another statement of this assessee was recorded. In that he accepted that he was a partner in Padam Enterprises as individual and in Mahavir Trading Co. as HUF. In answer to question No. 14 he stated that through the two concerns of Sugam Textiles and Shanti Traders the profits of 14 concerns belonging to his group were reduced. The name of 14 concerns are given on assessees paper book page No. 28. In answer to question No. 12 he made a disclosure of Rs. 24 lakhs in all including Rs. 15 lakhs disclosed on 8.8.90. From the above statements one thing is clear that in the first statement made in the morning of 8.8.90 this assessee did not disclosure any benamidari and it was only in the second statement taken from 8:45 pm. onwards that he disclosed certain benamidaris and proceeded make certain disclosure. It is notable that the disclosure. Made in answer to question No. 12 appearing on assessees paper book page No. 32 in the statement given on 31.8.90 talks ab....
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....rt in the case of Kailashben Manharlal Chokshi v. Commissioner of Income-tax (supra), mere speculation cannot be a ground for addition of income. There must be a some material substance either in the form of documents or the like to arrive at a ground for addition of income. Considering the ratio laid down in the above decision and in the facts of the present case, we are of the view that the issue raised in this Appeal is required to be answered in favour of the assessee and against the Department." 10. He contended that the authority has accepted the return and refunded the amount and the Delhi Authority has compelled him to make the statement to release goods worth more than Rs. 2,00,000/- on which he was required to pay tax Rs. 86, 000/-. 11. Counsel for the respondent has supported the order of the Tribunal and contended that the retraction is made subsequently and reasoning adopted by the Tribunal is required to be affirmed. 12. We have heard counsel for both the sides. 13. Firstly, the statement which was recorded on 23rd February, 2005 if it is taken alongwith the letter dated 23rd February, 2005 at Annexure-A, the contention raised by the appellant with regard ....
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