TaxTMI 
TaxTMI 
2016 (10) TMI 1220
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....e statement recorded of Shri Parvez Hasan, a partner of the assessee firm, he declared undisclosed investment of Rs. 38 lacs in the assessee firm M/s Hi-Tech Construction but the said amount is not reflected in the capital of the firm. The assessee was given show cause notice and in reply to the same the assessee has taken the contention that there was no survey against the firm M/s Hi=Tech Construction whi had eight partners including Shri Syed Parvez Hassan who has only 12.5% share in the partnership firm. He was looking after only the construction work and he had no complete knowledge about the sale side of the business which was being looked after by Shri Nafees-ur-rahman and Shri Rajendra Singh Kushwaha. He was a partner with only 12.5% share and he may have some authority to make the declaration on behalf of the partnership firm. Therefore, the Assessing Officer has reproduced the statement of Shri Parvez Hasan which reads as under :- After considering the reply, the Assessing Officer was of the view that the assessee's reply is not acceptable and he has surrendered Rs. 38 lacs as per the statement recorded u/s 131 of the Act on oath. He, therefore, added to the total income....
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....ullangode Rubber Produce Co. Ltd. 91 ITR 18 (SC) 4. On the other hand, the learned DR submitted that in the instant case, the assessee firm is carrying out the business of construction and when the survey u/s 133 was carried out at the business premises of Shri Parvez Hasan on 5.9.2008, who happened to be one of the partners, who has given the statement in which he has declared additional income of Rs. 38 lacs in the hands of the assessee. During the course of survey, the books of accounts of three firms were found which were not maintained properly. The learned DR submitted that one of the partners has made confession and the confession statement can be retracted and if it is retracted then it must be also retracted but with sufficient evidence. The learned DR submitted that as per the decision of the State of U.P. vs. Butasingh; AIR 1978 SC if any confession is made and if it is corroborated with material then the confession can be valid in the eyes of law. In the instant case, the books of accounts were found during the course of survey. If the assessee has made confession then the assessee can retract from the statement on the ground that the statement was not given voluntaril....
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....without consulting the other partners of the firm. We have gone through the record of this case and we find from the assessment order that the survey was conducted at the premises of Shri Parvez Hasan on 5.9.2008 and during the course of survey one of the partners of M/s Hi-Tech Construction has declared Rs. 38 lacs as undisclosed income and investment in the assessee firm M/s Hi-Tech Construction. After making the declaration, the assessee filed the return of income on 30.9.2009 wherein the assessee has not shown Rs. 38 lacs as his income. We find that after the survey took place on 5.5.2009, the statement was recorded on 9.8.2009 and the return was filed on 30.9.2009. In the assessee firm there are eight partners. No partner has retracted that the statement made by Shri Parvez Hasan is not binding upon him. We also find that Shri Parvez Hasan has not made any retraction till filing of the return that whatever statement made by him was made under misunderstanding or without consulting the other partners of the firm. We find that the statement recorded by the partner of the firm is binding upon the assessee. The survey was conducted on 5.9.2008 and 9.9.2008 and it was specifically ....
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....dings, therefore, they should not force the assessee to admit the undisclosed income but in this case there was no retraction. In the case of Kadar Khan; 25 taxman 413(SC) one of the partners has retracted. In the case of the judgment cited by the assessee of Hon'ble Gujrat High Court in 37 Taxman 336 (Guj) and 60 Taxman 205 (Guj.) they have retracted from the statement, therefore, all the judgments cited by the learned counsel for the assessee are not helpful. We are of the view that many High Court have held that the admission made under survey, it is open for the assessee to say that it was incorrect, but the assessee has to prove beyond doubt that the evidence that the disclosure was erroneously made during survey, therefore, we are of the view that the admission made by the assessee can be retracted, but this cannot be applied in every general cases. Therefore, the judgments cited by the learned counsel for the assessee are not useful. Referring to all the cases, we are of the view that in those cases cited by the learned counsel for the assessee, the concerned assessee has retracted in all the cases but in one of the cases, the assessee has not retracted but he was able ....