TaxTMI 
TaxTMI 
2017 (11) TMI 1594
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....ch was not declaring the correct income in the tax return." (ITA No. 1222/Del/2013) "1. Whether the Ld.CIT(A) has erred on facts and in law in deleting the addition made by the A.O on account of unexplained money amounting to Rs. 10,00,00,000/- ignoring the fact that during the survey carried out on 20/11/2008 at the premises of the assessee company, a large number of documents were impounded, cleanly establishing that the assessee was receiving major portion of the booking amount in cash and as such was not declaring the correct income in the tax return." 4. The brief facts of the case in case of M/s AMR Infrastructure Ltd. is as follows:- The assessee is a developer & builder and was developing various projects at different cites and locations of NCR. It had entered into various agreements with different companies for developing the residential and commercial properties. It has also entered into Memorandum of Understanding with the various companies. It had entered into an agreement dated 30.06.2006(pg 18 to 23 of PB) with M/s Real Gain Estates (P) Ltd., as per which the later was appointed as sole and exclusive agent to sell/book the project for which the appellant was ....
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.... Kumar's was also submitted the contents of which are reproduced as under: "During the course of survey; certain loose papers and documents as per Annexure-A were impounded which were shown to me. I have seen the documents impounded as per annexure A-l to A-13 and A-15 from the Office premises of the company. These have also been discussed with Sh. R.C. Soni', the other director. I am not in a position to explain the same at this point of time. However to by peace of mind, I do hereby declare an additional income of I 10 crores (Rs.Ten crores only) on behalf of the company for the current financial year 2008-09 relevant to the assessment year 2009-10. This offer has been made on account of cash payments received for sale of plots/area which have not been fully accounted or in the regular books of accounts of the company. Amount of expenditure incurred has been deducted out of unaccounted cash payments received. This income has been declared voluntarily without any pressure, coercion or undue influence and is subject to no penal action under section 271(1)1 of the Income Tact Act, 1961. Advance tax will be paid as per Law." However, in the return filed on 30.9.2009 for t....
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....ty of the appellant; same is the position with regard to year ending 31.3.2007. As regards, the previous year ending 31.3.2009 relevant for the AY 2009- 10, there is no change in the method being followed i.e. amounts received on account of advance booking were shown as liability in Schedule-I at Rs. 2,15,07,28,058.83 and the only income shown in Schedule-J is bank interest on FDR at Rs. 1,02,91,650.58. In the Profit & Loss a/c the sales shown at Rs. 3,00,00,000/- are from sale of property and are not sales from the project. Expenditure on construction/building activity has been shown as work-inprogress in the Balance Sheet of all the three years as at 31/3/2007, 31/3/2008 & 31/3/2009 under the head current assets. The purpose of narrating the aforesaid is to confirm that the appellant is following the project completion method. (b) In normal circumstances, cash if any, received but not shown by the appellant in its books of accounts, if detected by the department has to be taken in its receipts; but in the statement recorded during survey, -eproduced above, Shri Krishan Kumar has unambiguously conveyed that he was surrendering Rs. 10 crores on account of cash receipts ....
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.... Estate Pvt. Ltd. Statement of one of the directors namely Sh. Krishen Kumar (in AMR Infrastructure Ltd.) and Sh. Nitin Rekhan (in ARN Infrastructure Ltd.) was recorded u/s 133A wherein he declared additional income of Rs. 10 crores with a view to buy peace of mind. However, in the return filed by the assessee company, this income was not added and thus impliedly the aforesaid statement was retracted, but the AO did not accept the stand of assessee and made the addition on the ground that offer was made in view of documents found showing that assessee received cash payment which was not fully accounted for in regular books of accounts of the Company. The AO did not reject the books of account of the assessee. Therefore, the CIT(A) has rightly deleted the additions made. On merit also the assessee had good case which was taken into consideration by the CIT(A). 8. We have heard both the parties and perused the records. The contentions of the Ld. DR that the statement of the directors of the assessee should have been taken into consideration by the CIT(A) and the addition of the undisclosed income was justified by the assessee. This contention can not have a support unless and until ....
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....of assessment after search". As per the appellant the position is worse u/s 133A which is not having any evidentiary value as such therefore, the statement recorded under duress/stress/exhaustion is not a voluntary statement. The A.O's version is that it is not material because in the absence of cooperation by the party the survey would continue; to which the appellant has stated that it is not backed by evidence that the appellant had not cooperated during the survey operation. The version of the AO and of the appellant have been considered carefully. Normally, when a survey operation is started as per Rules, it continues till the operation is completed. Merely, because the survey continued till the next day would not make the statement recorded under duress; however, a person is normally under stress when a survey party or a search party of the Incometax department visits its office/house and remains there for such a long period. Besides this, the subsequent finding/results: (a) the AO's finding no discrepancy in the books of accounts; and (b) his failure to bring any circumstantial evidence on record to show that cash was received to the extent of ( 10 crores sur....
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....d to follow the cardinal principles of natural justice i.e. no document can be used against any person unless that person is given reasonable opportunity to submit his version thereon. Correspondence between officers of the Directorate of Investigation and an AOis not a 'privileged correspondence'; at the stage of assessment proceedings when actual operation u/s 133A or 132 of the Income-tax Act has already taken place; it has to be confronted to an assessee for its comments/version before being used against the assessee in the asst, order. Similar views have been expressed by the Hon'ble Supreme Court in the case of Kishanchand Chellaram v/s Commissioner Of Income-Tax, Bombay City II125 ITR 713. Further, the full bench of the Hon'ble jurisdictional High Court of Delhi in the case of J.T.(India)Exports & Another v/s Union of India and Another, 262 ITR 269 has observed: "How then have the principles of natural justice been interpreted in the courts and within what limits are they to be confined? Over the years by a process of judicial interpretation two rules have been evolved as representing the principles of natural justice in judicial process, including their q....