TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 953
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....ition of surrendered income by observing that affidavit of retraction filed by the assessee on 19.05.2013 has not been examined by the AO at any stage despite the facts that income surrendered in the statement under Section 132(4) of the Income Tax Act, 1961 dated 26.09.2012 was affirmed by the assessee in the statement recorded u/s 131 of the Income Tax Act on 15.10.2012?" The skeletal facts essential for deciding the appeal are that search and seizure proceedings under Section 132 of the Act were carried out on 26.09.2012 at the residential premises of the assessee group and his family members. According to the revenue, certain incriminating documents/lose papers/books of accounts, etc. were found there, which were inventorized. Some of them were also seized at the time of search/survey under Section 132 of the Act. Thereafter, statement of the assessee was recorded on 27.09.2012, where a surrender of Rs. 2,28,44,545/- was extracted from the assessee and his statement was concluded at 9.00 P.M. on 27.09.2012. This statement surrendering the income was again reconfirmed from the assessee before the ADIT in statement under Section 131 of the Act on 15.10.2012 and 17.12.2012. Howev....
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.... The six ground of appeal in respect of addition of Rs. 7,77,000/- was also deleted." The revenue preferred appeal against the aforesaid order of CIT(A) before the Tribunal whereas the assessee also preferred appeal against the part of order of CIT(A). The Tribunal vide judgment dated 15.09.2017 dismissed the appeal of the revenue, however, allowed the appeal of the assessee in respect of addition upheld by the CIT(A) amounting to Rs. 15,00,000/- as advance to one Kaluram Gurjar. Hence this appeal. Mr. Siddharth Bapna, learned counsel for the appellantrevenue, submitted that there is no material whatsoever on record to suggest that surrender was made by the assessee under any pressure, coercion or threat. Search proceedings were carried out at the residential premises of the assessee on 26.09.2012 and 27.09.2012. Statement under Section 132(4) of the assessee was recorded in the presence of two witnesses, who were called at the choice of the assessee from his own locality. This statement was again confirmed by the assessee in front of ADIT in the statement under Section 131 of the Act recorded on 15.10.2012 and later in statement dated 17.12.2012. In the search, on the basis of s....
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....h Court, Commissioner of Income-Tax Vs. Lekh Raj Dhunna - (2012) 344 ITR 352 of the Punjab and Haryana High Court, The Commissioner of Income Tax Vs. O. Abdul Razak - (2013) 350 ITR 71 of the High Court of Kerala, and ACTO, Anti Evasion-I, Alwar Vs. M/s. Khandelwal Foods Products, Station Road, Alwar - 2017 (1) RLW 612 (Raj.) of this Court. Per contra, Mr. Prakul Khurana, learned counsel for the respondent-assessee submitted that the surrender was extracted from the assessee by income tax authorities during the search proceedings by use of coercion, duress and threat, which facts have been explained by the assessee in greater detail in the affidavit of retraction. It is argued that affidavits of Shri Suresh, Shri Ashok Jat and Shri Padam Kumar Jain were also filed, in which they have stated on oath that they did not own any land and therefore there did not arise any question of their accepting any advance from the assessee. Learned counsel referred to Instruction No. 286/2003-IT(Inv.) dated 10.03.2003 issued by the Central Board of Direct Taxes which acknowledges the fact that in certain cases, assessees are forced to disclosed the income during the course of search, seizure and s....
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....not be made merely on the basis of statements which are subsequently retracted even belatedly as held by Delhi High Court in CIT Vs. Sunil Aggarwal, (2015) 64 Taxmann.com 107 (Delhi). Learned counsel relied on the judgment of this Court in Escorts Heart Institute and Research Centre Limited Vs. DCIT (TDS) JP, (2017) 87 Taxmann.com 184 Rajasthan; Commissioner of Income Tax Vs. Vegetable Products Ltd. (1973) 88 ITR 192 (SC) and argued that if two views are possible, the view in favour of the assessee should be preferred. Reliance is also placed on the judgments in Commissioner of Income Tax Vs. K.Y. Pilliah & Sons, (1967) 63 ITR 411 (SC); Deputy Commissioner of Income Tax Vs. Ratan Corpn., (2005) 197 CTR 536 (Gujarat); The Assistant Commissioner of Income Tax, Central Circle, Ajmer Vs. Shri Devendra Kumar Choudhary, 2-S-10 to 2-S-18, Basant Vihar, Bhilwara, ITA No. 828/JP/16; Commissioner of Income Tax Vs. Ashok Kumar Soni, (2007) 291, ITR, 172 (Raj.); Kailashben Manharlal Chokshi Vs. Commissioner of Income Tax, (2008) 174 Taxman 466 (Gujarat); Commissioner of Income Tax, Central-II, Mumbai Vs. Omprakash K. Jain, (2009) 178 Taxman 179 (Bombay); Mehta Parikh & Co. Vs. Commissioner of ....
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....entative of the department would not carry the original documents of the sale deeds. In para 8 of the affidavit, it was alleged that the representative of the department got seven papers prepared for surrender of Rs. 2.25 crores on account of which he was made to surrender a sum of Rs. 2,28,44,545/-. In para 9 of the affidavit it was stated that the aforesaid surrender was got verified by him in subsequent statement under Section 131 on 15.10.2012 followed by 17.10.2012. On the basis of aforesaid seven papers, further surrender of Rs. 10,00,000/- was also extracted from the assessee. Confirmation statement given by the assessee under Section 131 of the Act was recorded on 25.10.2012 wherein details of various transactions of sale and purchase of the land and property by the appellant was made. In para 15 of the affidavit, the assessee alleged that on the basis of two documents marked as AS-2, advance amount of Rs. 25 lacs was shown to have been given as loan and a sum of Rs. 21,00,000/- was shown to have been given to Shri Ashok Jat for his land ad-measuring 8 bigha in village Suwan. In para 16 of the affidavit, advance of Rs. 15,00,000/- was shown to have been given in papers AS-2....
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....recorded were under pressure/coercion and factually incorrect. In our view, retraction after a sufficient long gap or point of time, as in the instant case, loses its significance and is an afterthought. Once statements have been recorded on oath, duly signed, it has a great evidentiary value and it is normally presumed that whatever stated at the time of recording of statements under Section 132(4), are true and correct and brings out the correct picture, as by that time the assessee is uninfluenced by external agencies. Thus, whenever an assessee pleads that the statements have been obtained forcefully/by coercion/undue influence without material/contrary to the material, then it should be supported by strong evidence which we have observed hereinbefore. Once a statement is recorded under Section 132(4), such a statement can be used as a strong evidence against the assessee in assessing the income, the burden lies on the assessee to establish that the admission made in the statements are incorrect/wrong and that burden has to be discharged by an assessee at the earliest point of time and in the instant case we notice that the AO in the Assessment Order observes:- "Regarding the....
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....eturn filed by him and certain documents were seized which bore the signature of the assessee, held in para 16 of the report as under:- "16. Thus, in view of sub-sections (4) and (4A) of Section 132 of the Act, the Assessing Officer was justified in drawing presumption against the assessee and had made addition of Rs. 9 lakhs in his income under Section 68 of the Act. The onus was upon the assessee to have produced cogent material to rebut the aforesaid presumption which he had failed to displace. The assessee retracted from the said statement, vide letters dated November 24, 1998, and March 11, 1999, during the course of assessment proceedings. However, no value could be attached thereto in the present case. In case the statement which was made by the assessee at the time of search and seizure was under pressure or due to coercion, the assessee could have retracted from the same at the earliest. No plausible explanation has been furnished as to why the said statement could not be withdrawn earlier. In such a situation, the authenticity of the statement by virtue of which surrender had been made at the time of search cannot be held to be bad. The Tribunal, thus, erred in conc....
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.... of account, documents, money or valuable articles or things etc. and record a statement made by such person which can be used in evidence in any proceedings under the Income Tax Act. The explanation appended to Clause (4) also makes it clear that such examination can be in respect of any matters relevant for the purpose of any investigation and need not be confined to matters pertaining to the material found as a result of the search. A plain reading of Section 132(4) would clearly show that what was intended by empowering an officer conducting the search to take a statement on oath was to record evidence as contemplated in any adjudication especially since Section 131 confers on all officers empowered therein with the same powers as vested in a court under the Code of Criminal Procedure, for the purpose of the Income Tax Act. 10. A Division Bench of this Court in C.I.T. v. Hotel Meriya, (2011) 332 ITR 537 considered the scope of a statement recorded under Section 132(4) and found that such statement recorded by the officer as well as the documents seized would come within the purview of evidence under Section 158(BB) of the Income-tax Act read with Section 3 of the Evidence Act....
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.... in the absence of individual cash-book of respective concerns and other details maintained by him, it is not possible to identify whether the cash so found belongs to the proprietary concern or to the assessee company. Subsequently, when the statement under Section 132(4) of the IT Act was recorded on 10.10.2014, which was concluded at his residence, Shri Bannalal Jat categorically admitted that the cash amount of Rs. 1,21,43,210/- belonged to his company M/s. Bannalal Jat Construction Private Limited and the same was its undisclosed income. Thereafter another statement under Section 132(4) of the IT Act was recorded at his business premises on 11.10.2014. In reply to question No. 8, he was asked to explain the source of cash amounting to Rs. 3,380/- found at his office and Rs. 1,21,43,210/- found at his residence, he submitted regarding the amount of Rs. 1,21,43,210/- found at his residence that he was unable to give any explanation and admitted that he was in the business of civil construction and in such business, various expenses have been inflated and shown in the books of accounts, and that the income so generated on account of such inflation in expenses is represented in th....