TaxTMI 
TaxTMI 
2018 (12) TMI 641
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..... 1,11,64,700/- made by the AO on account of unexplained money u/s. 69A of the I.T. Act, by ignoring the fact that the assessee himself declared additional income of Rs. 1,20,00,000/- during the course of post search proceedings and offered income of Rs. 8,35,300/- only in his return of income out of declaration made. 2. The Ld. CIT(A) has erred in law and on the facts in deleting the addition of Rs. 1,11,64,700/- made by AO, without appreciating the facts that the assessee never retracted in her statement made under oath u/s. 132(4) and 131(1A) of the I.T. Act during the assessment proceedings. 3(a) The order of the CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 3. The grounds raised by the Revenue in ITA No. 6320/Del/2015 (AY 2012-13) in the case of ACIT vs. Usha Bhatt read as under:- 1. The Ld. CIT(A) has erred in law and on the facts in deleting the addition of Rs. 1,25,00,000/- made by the AO on account of unexplained money u/s. 69A of the I.T. Act, by ignoring the fact that the assessee hi....
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....91/- on 6.5.2013. Notice u/s. 143(2) of the Act was issued on 6.5.2013 and notice u/s. 142(1) of the Act alongwith detailed questionnaire was issued on 9.4.2013. In response to the notices, the AR for the assessee attended the proceedings from time to time and filed the required details. During the year assessee has declared income under the head income from 'salary', income from 'house property' and income from 'other sources'. AO observed that assessee is a owner of a Flat at GF-8, Narain Manzil, 23, Barakhamba Road, New Delhi measuring 498 sq.feet. This flat remain vacant throughout the previous year and no income has been declared from this property. It was observed by the AO that a similar flat at GF-9, in the same building also owned by the assessee was let out and the assessee has declared an income of Rs. 4,09,351/- from this flat. Therefore, the deemed income from the let out property is also computed as Rs. 4,09,351/- was considered as his unaccounted income which is included in the undisclosed income as declared by the assessee during the course of post search proceedings amounting to Rs. 1,20,00,000/- as his undisclosed income u/s. 132(4) of the Act for the AY 2012-1....
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....se of search, no documents pertaining to the details of the undisclosed income earned by the assessee as has been disclosed by him or was found and neither the same has been submitted by the assessee during the assessment proceedings also." 5. The above observation clearly shows that no incriminating material was found during the course of search or post search investigations. 6. Further the facts of the case are identical to the case before Hon'ble Andhra Pradesh High Court in the case of Commissioner of Income Tax-II, Hyderabad vs. naresh Kumar Agarwal (2015) 53 taxmann.com 306 (Andhra Pradesh.). 7. Thus the addition f Rs. 1,11,64,700/- is hereby deleted. Appellant will get relief to this extent." 8.1 We further note that the case laws cited by the Ld. DR are not directly applicable on the present case. However, ITAT, 'G' Bench decision dated 16.8.2016 in the case of ACIT vs. Sh. Subhash Chander Sudha is directly applicable in the present case wherein the Tribunal has adjudicated the similar and identical issue as under:- "2. Ground No. 1 and 2 of the appeal are related to additions of Rs. 30 lakhs and Rs. 23.20 lakhs made by the Assessing O....
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....d during the course of search cannot on a standalone basis without reference to any other material discovered during search and seizure operation would empower the Assessing Officer to make the addition. The words "evidence found as a result of search" would not take within its sweep statement recorded during search and seizure operations. Therefore, the Revenue's stand that the addition u/s 153A can be made in respect of share capital on account of statement of Shri Tarun Goyal and Shri Anu Aggarwal cannot be accepted. (iii) ............................. (iv) .............................." 2.4 The Tribunal, while concluding above, has relied on the judgment of the Hon'ble Jurisdictional High Court in the case of CIT Vs. Harjeet Aggarwal vide ITA No. 8/2004. The relevant paragraphs of the order of the Tribunal are as under: "11. In the case of Harjeev Aggarwal (supra), Hon'ble Jurisdictional High Court considered the evidentiary value of the statement recorded during the course of search. The relevant portion is paragraph 19, 20 & 24, which are reproduced below for ready reference:- "19. In view of the settled legal position, the fi....
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.... assessee during search operation". In paragraph 24, their Lordships have mentioned about the prevailing practice of extracting statement by exerting undue influence or coercion by the search party. Though the above decision in the case of Harjeev Aggarwal is with reference to the meaning of undisclosed income u/s 158BB of the Income-tax Act, however, in our opinion, the above observation of Hon'ble Jurisdictional High Court would be squarely applicable while considering the evidentiary value of the statement while making the assessment u/s 153A." 2.4 Thus, we find that the Hon'ble Jurisdictional High Court as well as the Tribunal has held that no addition can be made merely on the basis of statement recorded during the search and seizure operations on standalone basis without reference to any other material discovered during search and seizure operation. The Tribunal has particularly held that no such additions could have been made in proceedings under section 153A of the Act. 2.5 When we advert to the facts of the case in hand, we find that in the course of search proceedings inventory of the consolidated stock of the five firms was prepared. The list of the....
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....d during the assessment proceeding in reply to the questionnaire issued by the AO. No difference was found in the inventory valuation of stock on the search in between physical stock and stock as per stock registers of the business concerns. It is also undisputed that the surrender of additional income was made to cover difference in stock if any in respect of the different business concerns. No doubt the offer of surrender was made u/s 132(4). The legality and validity of a statement taken on oath has great evidentiary value but it is trite law that the same is not conclusive. The admission has to be necessarily corroborated with material evidence to stand the test of appeal. In this case as there was no stock difference found on reconciling, which has also been admitted by the AO in the impugned order, I am afraid the surrender of additional income on this account has no basis. The assessee deserves to succeed on this ground of appeal." 2.7 Similarly, in respect of another addition of Rs. 23.20 Lacs, the Assessing Officer has mentioned that certain loose documents containing expenses on education of children, purchase of personal items, investment in co....
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.... assessee had admitted the undisclosed income in the statement recorded under section 132(4) of the Act. It is clear that there is no material or corroborative evidence to support the statement made under section 132(4) of the Act in respect of the addition of Rs. 30 lakh against unexplained investment in stock and Rs. 23.20 Lacs against the unexplained expenditure. The assessee did not admit the addition, which means, he retracted the said surrender in the return of income filed. We find that the Tribunal in the case of best infrastructure (India) Private Limited (supra) and the Hon'ble Jurisdictional High Court in the case of Harjeev Aggarwal (supra) have in the similar facts and circumstances, held that no addition can be made merely on the statement recorded under search and seizure proceedings on a standalone basis without any supporting or corroborative material. Thus, respectfully following the findings of the Tribunal in the case of Best Infrastructure (India) Private Limited (supra) and Hon'ble Jurisdictional High Court in the case of Harjeev Aggarwal (supra), we hold that order passed by the learned Commissioner of Income-tax (Appeals) on the issue in dispute is ....