TaxTMI 
TaxTMI 
2018 (6) TMI 1512
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.... was recorded u/s 132(4) of the Act. At that time, the assessee made the following declarations: S.No. Item Amount (Res. 1 Cash 1,29,33,500 2 Unaccounted sales 2,60,00,000 3 Unaccounted advances receivable 2,44,00,000 4 Cash in locker 1,15,00,000 5 Jewellery in locker 2,55,00,000 4. Notices u/s 142(1) and 143(2) of the Act were issued. Assessee filed the return of income for the Asstt. Year 2011-12 including therein an amount of Rs. 4 crores as additional income over and above the income filed in the returned income on 30.9.2011. Learned AO found that the assessee had failed to include the sum of Rs. 2.44 crore as declared by the assessee at the time of search, basing on the jottings in the diary. On being questioned, assessee replied that the alleged declaration in the statement u/s 132(4) was retracted by him on 30.12.2010 vide letter addressed to the Director of Income-tax (Investigation). Learned AO did not accept the contention of the assessee that the alleged jottings in the diary have nothing to do with the present assessment year because such diary belong to the year 1998 and jottings indicate the outstanding balances as on 1.1.1998, a....
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....reas Rs. 2.60 crore was the unaccounted sales turnover, as such, they are not telescopable. 9. Basing on the decision of the Hon'ble Allahabad High Court in the case of Hemant Kumar Sindhi vs CIT, 45 Taxmann.com 103 (Allahabad), learned CIT(A) observed that Section 132B deals with the application of seized and requisitioned assets. Clause (i) of sub section (1) of Section 132B of the Act refers to the application of seized assets towards the amount of any existing liability and the amount of the liability determined and in view of the clarification issued by way of Explanation 2 to Section 132B of the Act by the Finance Act, 2013, the existing liability does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII. On this premise, learned CIT(A) turned down all the grounds of appeal preferred by the assessee and dismissed the same refusing to interfere with the assessment order. 10. The assessee is, therefore, before us now in this appeal challenging the addition and upholding thereof in respect of Rs. 2.44 crore, and not accepting the retraction made by the assessee immediately after opening the locker of the assessee, and the alternate plea o....
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....ing on the fact that the learned AO accepted the retraction of the declaration relating to Rs. 2.3 crores on account of the cash and jewellery in the locker, after the lockers are opened and cash and jewellery to that extent were not found therein. He, therefore, submits that in these circumstances, the declaration is not sacrosanct or not retractable and on the other hand, the acceptance of the retraction on account of Rs. 3.7 crore lends any amount of support to the contention that the assessee was made to declare Rs. 2.44 crore also basing on the relevant documents. 13. Learned DR placed reliance on the orders of the authorities below. He further submitted that here the declaration of Rs. 2.44 crore by the assessee in his statement u/s 132(4) is coupled with the fact that the corresponding entries are to be found in the alleged diary. When the diary belongs to the year 1999, if an entry relating to the earlier year is found, such an entry falsifies the transaction but there is no improbability of making use of a diary of earlier years for jotting down some transactions of the later years. He further argued that there is a presumption under law under section 292C of the Act in f....
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....atool Gilani vs ACIT (2008) 21 SOT 323 (Delhi) wherein the Hon'ble Bench examined the ratio of the decisions in Pullan Gode Rubber Produce Co. Ltd. vs State of Kerala (1973) 91 ITR 18 (SC); ACIT vs Ramesh Chandra R. Patel, 361 ITAT (Adh); Surjeet Singh Chhabra AIT 1997 SC 2560; Dr. S.C. Gupta vs CIT (2001) 248 ITR 782 (All) and Greenview Restaurant vs ACIT (2003) 263 ITR 169 (Gauhati) and held that the assessee must give justifiable reason and material for the retraction to be acceptable and also give cogent material to show that the admission made in the statement was under pressure or coercion and was not voluntary. 17. When viewed from the ratio of this decision, the retraction of the declaration initially after more than 1 ½ month on the ground of coercion and subsequently, after 1 ½ year on the ground of mistaken understanding of fact or law, do not appear to be justifiable. In the peculiarity of the circumstances, the burden is on the assessee to show that the entries in the alleged diary do not belong to the Asstt. Year 2011-12 by producing cogent evidence to show they relate to the year 1998-99. Revenue cannot be expected to prove that these entries relate to....
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....he assessee. 20. Now turning to the 5th ground relating to the adjustment of the seized amount against the advance tax liability, reliance is placed by the assessee on the decision reported in the case of Nikka Mal Babu Ram, 41 SPT 407 (Chd); Mahabir Prasad Gupta (Delhi Bench) and Kanishka Prints P. Ltd., 143 ITD 716 (Ahd). In the case of Kanishka Prints P. Ltd., the Ahmedabad Bench of the Tribunal held as follows: "11. We have heard that the rival submissions and perused the material on record. It is an undisputed fact that during the course of search at the residence of directors on 8.2.2007 and locker on 7.3.2007 aggregate cash of Rs. 43 lacs was seized. It is also an undisputed fact that Assessee vide his letter dated 13.3.2007 submitted that out of the cash seized, Rs. 10 lacs be treated towards payment of advance tax in the case of assessee and similarly balance of Rs. 33 lacs be treated towards payment of advance tax in case of family members/group companies. It is also a fact that vide aforesaid letter, the Assessee had requested that cash of Rs. 8 lacs be considered as advance tax in the case of Shreeji Prints P. Ltd. The coordinate Bench of Tribunal in the case of Shre....
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.... the ratio laid therein we do not find any infirmity into the impugned order." 12. Before us, Ld. D.R. has relied on the amendment made to s. 132A vide Finance Bill of 2013, We find that the amendment has been made by insertion of Explanation and the Explanation has been made applicable with effect from 1st June, 2013,. For ready reference, the amendment made by Finance Bill 2013 and the memorandum is reproduced hereunder:- 13. The amendment made by Finance Bill 2013 reads asunder:- Amendment of section 132B. 34. In section 132B of the Income-tax Act, the Explanation shall be numbered as explanation 1 thereof and after explanation 1 as so numbered the following explanation shall be inserted with effect from the 1st day of June, 2013, (emphasis supplied) namely:- Explanation 2.- For the removal of doubts it is hereby declared that the "existing liability" does not include advance tax payable in accordance with the provisions of Par C of Chapter XVII." The explanatory memorandum to the Finance Bill reads as under:- The existing provisions contained in section 132B of the Income-tax Act, inter alia, provide that seized assets may be adjusted against any existing liab....