TaxTMI 
TaxTMI 
2018 (2) TMI 1690
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....action u/s 132(1) of LT. Act 1961 on 22.11.2006 which the assessee retracted. Reliance is placed on the decision of the Hon'ble Supreme Court of India dated 25.10.1996 in Special Leave Petition (e) No. 14028 of 1996 in the case of Surjeet Singh Chhabra Vs. Union of India and Others wherein the Apex Court has held that the Revenue Officials are not Police Officers and the confession, though retracted, is an admission and binds the petitioner. Reliance is also place on the decision of the Punjab and Haryana High Court in the case of Rakesh Mahajan vs. ClT cited at 6420f 2007 (Taxpert) and 214 CTR 218 wherein it has been held that" It is well settled that admissions constitute best piece of evidence because admission are self-harming statements made by the maker believing it to be based on truth It is well known that no one will tell a lie especially harming one's own interest unless such a statement is true." Further reliance is placed on the decision of The Kerala High Court in the case of Kunhambu(V) and Sons vs. CIT cited at (1996) 219 ITR 235 wherein it has been held that "Assessment on the basis of the voluntary statement during search under the provisions of I.....
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....gricultural commodities are seasonal products and only one transaction was undertaken by him in November, 2006 for which he has made a profit of approximately Rs. 48 lacs which has been surrendered by him in the return of income and other than this, no evidence of any other income or investment was found at the time of search to suggest some more income has been earned on this account. Entire speculative profit which has been earned in the earlier years has duly been declared in those years in the regular books of accounts. Apart from that, he also stated that similar disclosure was taken from his father and from the company MDH Ltd. and no corresponding investment/ expenditure were found from any of the premises during the search carried out at various places. However, the Ld. AO rejected the assessee's contention after observing and holding as under:- "The claim of the assessee that he was under mental pressure at the time of giving the statement u/s 132(4) on 22.11.2006 is not at all borne out by the facts on record. He has given the statement without any fear, favour or coercion. He has given the disclosure after noticing various discrepancies in the accounts and stock and af....
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...., he has also given a reasonable justification regarding the improbability of earning such a huge amount within a calendar year. xxx xxx xxx xxx xxx xxx 7.5 As regards, the contention of the appellant that he was under pressure at the time of giving the statement and the counter argument of the Assessing Officer that two neutral witness were present to oversee the search proceedings. It is my view that such a issue shall not go to determine whether the assessee can retract the statement or not, for the fact remains that the surrendered income has to be quantified on the basis of the incriminating material found during the search or on the basis of any other evidence collected during the assessment proceedings. Neither in the assessment proceedings nor in the remand report has any such quantification of concealed income has taken place. 7.6 The further argument given by the Assessing Officer that huge cash was found from the premises does not imply that it can form the basis of making an addition without any evidence. The ....
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....vs. CIT reported in (2015) 373 ITR 9 (Delhi), wherein it was held that where the assessee had not offered any explanation regarding surrendered amount being not bonafide and it was also not borne out from the contention raised by the assessee before the lower authorities, then such a surrendered income needs to be added. Similarly, she relied upon another judgment of Bombay High Court in the case of Paras Shantilal Shah vs. DCIT reported in (2015) 378 ITR 41. 7. We have heard the contentions made by the parties and also the relevant finding given in the impugned order as well as the order of the Tribunal. In the case, though it is seen that the assessee during the statement recorded on oath u/s 132(4) at the time of search has stated that he has earned Rs. 15 crores during the last eight months from speculative trading which he has spent in purchase of jewellery and investment in home and also advances against purchase of properties, but later on, this statement has been retracted and AO had also called upon the assessee post retraction to record his statement. In said statement he has categorically stated that no undisclosed income or expenses of corresponding investment was fou....
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....usiness carried out by the assessee from 01.04.2006 till the date of search. The Assessing Officer made the reliance for the existence of such business on account of income declared by the assessee from such business in the months of June and August, 2003 for which the assessee received profit earned by the cheques. There was no incriminating document or supporting document found or seized during the search operation carried out at the premises of the assessee which could suggest that assessee was doing the business of speculation in commodities during the relevant period stated in statement. No incriminating document was found and seized which could put a light in respect of the speculative business stated by the assessee in its statement. This statement was recorded when the search was continuing for 28 hours from 8.00 AM on 22.11.2006 to 11.57 AM on 23.11.2006. We also find that although there was seizure of some papers/documents as per panchnama, annexure A-1 to A-11, however, no question was asked pertaining to these papers or documents. This fact shows that the disclosure was not based on any calculation of undisclosed income on the basis of seized papers/documents. The discl....
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....has carried out speculation trading during the relevant period. No document in this regard was seized from the premises of the assessee. The documents seized from the residence of Shri Prem Arora was related to the financial year 2003-04 and the income earned in those transactions has been received by the assessee through banking channels and not by cash and the same has been duly accounted for. In such a situation, the presumption that assessee might have carried out speculation business during the year on the basis of such document seized is completely untenable and unsustainable and additions based on such presumption cannot be sustained. The inference that Shri Prem Arora was in possession of the cash and being the close person of the assessee, assessee might have been indulging in the speculation business of the commodity trading is also unsustainable presumption. No adverse inference can be drawn about the assessee on such presumption. The Assessing Officer's reliance that assessee has also narrated about the investment of the undisclosed speculative income in the purchase of gold and jarau jewellery, investment in shares and investment in vaida bazaar and advances given t....
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....opt a figure merely as per admission of assessee - Held, yes. c. Shree Chand Soni Vs DCIT (2006) 101 TTJ (JD) 1028 Search and seizure - Block assessment - consumption of undisclosed income - Addition based on the assessee's statement under s. 132 (4) - Admittedly, no incriminating document was found to support the impugned addition regarding bogus capital - Statement recorded under s. 132(4) does not tantamount to unearthing any incriminating evidence during the course of search - Therefore, no addition could be made only on the basis of such statement. d. Rajesh Jain Vs DCIT (2006) 100 TTJ (Del) 929 Search and seizure - Block assessment - Retraction of statement - Addition of Rs. 25 Lakhs made solely on the basis of confessional statement of assessee that he earned the said amount in the last Ten years was not justified - Confessional statement should be corroborated with some material to show that assessment made is just and fair - Conduct of affairs by the revenue authorities shows that good amount of psychological pressure was built on the assessee to make the said statement, which was retracted - Further, the addition was illegal as while the assessee spoke of e....
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....sion or misapprehension if it is not otherwise taxable." We would also like to state that assessee retracted by filing a written submission before the DIT, Inv.-I, New Delhi on 28.11.2006 which is 6 days after the search. There was sufficient time with the Investigation Wing to carry on the investigation and to collect the evidence against the retraction. However, records show that nothing has been done in this regard. In such a situation, the retraction of the assessee cannot be said to be invalid in absence of any incriminating documents. In view of these facts, we uphold the order of the CIT (A)." 8. Since similar facts are permitting in this appeal also, therefore, respectfully following the aforesaid decisions rendered on similar facts, we also uphold order of Ld. CIT (A) on the ground that such a surrender made by the assessee is not supported by any incriminating material or evidence unearthed during the course of search or has been found during the course of the assessment proceedings. Accordingly the revenue's appeal is dismissed. 9. Now we will come to the assessee's appeal, wherein following grounds have been raised:- "1. The Id. CIT (Appeals) erred in law and on....
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....port) : 38,45,840 Jewellery found from the bank locker on November 5, 2007 (as per Departmental valuation report) : 26,40,331 Total Jewellery found during the search : 64,86,171 Less : Declared by Mrs. Jyoti Gulati (wife of the assessee) : 17,27,702 Jewellery belonging to Mr. Rajiv Gulati (the assessee) : 47,58,469 Less : Already declared as per books by the assessee : 27,40,732 Declared in the return filed for the assessment year 2007-08 after search : 20,17,737 So far as the jewellery already declared by the assessee amounting to Rs. 27,40,732/- the same is not in dispute. The dispute is only with regard to certain items of jewellery which assessee has stated to have been purchased from the Jeweller M/s. R R Gems (P) Ltd. for sum of Rs. 5,09,600/- on 30.8.2006 vide bill No. 1269; and sum of Rs. 4,79,750/- vide bill No. 1270 dated 30.8.2006. However, the Departmental Valuation Officer has valued the same at Rs. 23,23,325/- which as per the bill aggregated to Rs. 9,89,350/-. The difference between the valuation report as well as in the purchase bills submitted by the assessee is as under:- As per Valuation report dated 22/11/06 Sl. No. ....
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....re that, one seized document 'page No. 18 of Annexure A-1' mentioned receipt of Rs. 5 lacs in cash from Shri Rajiv Gulati (assessee) on 14.11.2006 by the owner of the flat No. B-525 Sushant Lok-I, New Delhi. The AO did not find assessee's submission as satisfactory and thus, had added the same as unexplained cash credit. Before the Ld. CIT(A) the assessee had stated as under :- "9.2 The appellant has stated that as per the facts of the issue, a receipt for payment of Rs. 5,00,000/- towards purchase of a property was found from the factory premises of M/s Mahashian Di Hatti Ltd. at 139, Udyog Vihar Phase-I, Gurgaon (Party 0-3) during the course of search proceedings. The same was seized at page no. 18 of Annexure A-I, photocopy of which was furnished in the paper book. During the course of the assessment proceedings, it was explained to the assessing authority that the appellant received a proposal from some Mr. Rajeev Sethi c/o Graph Associates, C-889A, Sushant Lok-I, Gurgaon, who was a property dealer, to purchase Plot No. B-525 at Sushant Lok-I, Gurgaon. In order to prove his genuineness, as is a standard practice of the property brokers in Gurgaon, the said broker brought a co....