TaxTMI 
TaxTMI 
2019 (1) TMI 697
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....was no separate search warrant in Appellant's case the search operation u/s 132 was illegal; iii) in holding that there was no violation of the principles of natural justice by the A.O in completing the assessment without giving adequate opportunity and issuing show cause regarding the additions made; iv) in confirming the addition of Rs. 2,05,00,742/- as unexplained cash credit u/s 68 of the I.T. Act ignoring the facts and material evidences to the effect that the amount was long term capital gain exempt u/s 10 (38) of the Act; v) in confirming the interest charged by the AO u/s 234A and 234B of the Act. Above actions being arbitrary, erroneous and unjust be quashed with directions for relief. Grounds raised in A.Y. 2006-07: 1. On the facts and in the circumstances of the case, Id. CIT (A) erred:- i) in holding that there was no infirmity in the action of the A.O. assuming jurisdiction and passing order u/s 153A/143 (3) of the Income-tax Act despite the fact that 3 there was no undisclosed income and no materials found during the search showing undisclosed income; ii) in declining to justly and fairly adju....
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....he AO u/s 234A and 234B of the Act; Above actions being arbitrary, erroneous and unjust be quashed with directions for relief. 2. Since most of the grounds are common in all the three appeals, the same are considered together and are disposed of by this common order. 3. The brief facts of the case are that the a search and seizure operation u/s. 132 of the Act was conducted in assessee's case on 26.03.2010. Accordingly, notice u/s. 153A of the Act was issued on 20.04.2011 and other statutory notices were issued to the assessee. The returns were filed in compliance of the notice. The assessee was engaged in the business of hardware and steel goods. The assessee had shown income from business or profession and capital gains. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee has shown Long-term capital gains on sale of shares of Rs. 2,05,00,742/- and has claimed it exempt u/s. 10(38) of the IT Act. The details of longterm capital gains shown by the assessee are as under : A.Y. 2005-06 : Name Purchase Cost (Rs.) Sold Amount (Rs.) Konark Commerce & Industries Ltd. 14.04.2003 1,21,200 3.11.2....
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....n the Balance Sheet as on 31/3/2003 filed along with the income tax return. The assesses has now sold the said shares on 2/4/2004 for the value of Rs. 19,34,099/- and had declared long term capital gain of Rs. 1 7,33,789/-. The payment for the purchases of said shares was made through the bank account maintained in the regular course of the business. Similarly the assessee has shown long term capital gain of Rs. 1,40,83,166/- and Rs. 64,17,575/- on the sale of 60,000 equity shares each of M/s Konark Commercial Industries Ltd. and Lemtex Investment Ltd. The detailed chart showing the name of the script, date of purchase, number of shares, amount of purchases, date of sale and the closing stock are enclosed for your perusal and ready reference. Further assesses is filing herewith the copies of the contract notes issued by the registered share brokers for the sale and purchase of securities and Investment Ledger Account. The Demat Account Statement would show the receipt of the various securities sold during the year under assessment Certificate in respect of the Security Transaction Tax paid is also enclosed herewith. The purchase and sale consideration of the securities was....
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....l gain for the assessee group through stock broker Sh. P.K. Aggarwal of Kolkata. This fact was not denied by Sh. I.C. Jindal. This fact is also a proof that the assessee and its other group companies were involved in taking accommodation entries of long term capital gain in shares to evade tax and to bring to books their undisclosed income in the garb of exempt income." "6.10 In view of the above discussion, it can be easily concluded that the share broker M/s P.K. Aggarwal & Co. was involved in cross trading and price manipulation of shares of M/s Konark Commerce and Industries Ltd. and M/s Limtex Investment Ltd. as found by the SEBI. The broker manipulated the price of above mentioned shares and provided entries of bogus capital gain to the assessee. Subsequently assessee with the help of the share broker tried to give impression that transactions were genuine and STT was paid on them by furnishing brokers bill in respect of STT payment. The fact is contrary to day to day experience as STT is deducted/paid at the time of execution of transaction at the trading platform and amount of STT paid is always mentioned on the Settlement note. There is no provision for payment of....
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....res is tabulated hereunder: Sr. No. Particulars Assessment year 2005-06 2006-07 2007-08 i) Details of Gain 8 8 8 ii) Ledger Account of investment in shares 9 9 9 iii) Ledger account of the broker (M/s P.K. Aggarwal & Co) in the books of the assessee 10 10-12 10-11 iv) Ledger account of the assessee in the books of the Broker (M/s P.K. Aggarwal & Co) 11 13 12 v) Letter confirming issue of the shares of Bluepring in lieu of shares of Basuknath Coal Pvt. Ltd. on account of amalgamations 13 vi) Purchase Bill and contract note 12-15 14-15 14-21 vii) Ledger Account of the sale of the shares 17-18 17 24-25 viii) Ledger account of the broker in respect of the gain earned from the sale of the shares 19-21 18 26 ix) Sale Bill and contract notes 22-54 19-22 30-42 x) Ledger account of the assessee in the books of the Broker (M/s P.K. Aggarwal & Co) 55-57 23 27-29 xi) Bank account of the assessee 58-76 24 ....
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....for no fault of the assessee. Once the assessee had discharged its initial burden, no investigation or proper steps had been taken by the ITO to bring on record the materials to controvert the claim of the assessee." 1.6 It is submitted that while making the aforesaid addition, the learned Assessing Officer has sought to place reliance on the statement of Shri. I.C. Jindal recorded during the course of the search. It is most humbly submitted that aforesaid statement which was recorded during the course of the search has no connection with the appellant company and in any since the same was recorded under pressure and,the same was not acted upon. 1.7 It is submitted that since the appellant has not acted upon such a statement, as such, unless some corroborative evidence is brought on record, reliance placed on the such statement is unsustainable in law. It is a settled rule of evidence that unless a retracted ITA Nos. 4964 to 4966/Del/2012 14 confession is corroborated in material particulars it is not prudent to base the decision on the confessional statement alone, (A.I.R. 1953 SC 459). It is submitted that, in Instruction No. F no. 286/2/2003- IT (Inv) dated 10.....
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....v CIT reported in 184 ITR 404. It is further submitted that, admission made by the assessee is an important piece of Nos. 4964 to 4966/Del/2012 15 evidence, but it cannot be held to be conclusive. It is open to the assessee who made the admission to show that it is incorrect as has been held in the case of Pullangode Rubber Produce Co. Ltd. vs. Swift of Kerala by Apex Court reported in 91 ITR 18.. 1.11 Further, the Hon'ble Madras High Court in the case of M. Narayanan & Bros, vs. ACIT, Special Investigation Circle, Salem reported in 13 taxmann.com 49 (Mad.) has held that "Whether when assessee had explained his statement as not correct in context of materials produced, amount of Rs. 4 lakhs could be added to assessee's income on basis of his statement - held, no". Similarly, in the case of ACIT vs. Jorawar Singh M. Rathod reported in 148 taxman 35 (Ahd.) (Mag.), it has been held by ITAT, Ahmedabad 'B' Bench that "addition made by the Assessing Officer merely on the basis of retracted statement u/s 132(4) could not be sustained in the absence of anv evidence, material or recovery of any movable or immovable assets at the time of search to corroborate the dis....
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....essee to show the creditworthiness of strangers. If the Revenue has any doubt with regard to their ability to make the investment, their returns may be reopened by the department. In any case, what is clinching is the additional burden on the Revenue. It must show that even if the applicant does not have the means to make the investment, the investment made by the applicant actually emanated from the coffers of the Assessee so as to enable it to be treated as the undisclosed income of the Assessee. This has not been shown insofar as the present case is concerned and that has been noted by the Tribunal also." [Emphasis Supplied] 1.15 Infact, Hon'ble Delhi High Court in the case of CIT v Real Time Marketing (P) Ltd reported in 306 ITR 35 has held as under: "8. There is a finding of fact given by the two authorities namely CIT(A) and the Tribunal to the effect that:- The confirmation of M/s. ACL has been filed by the Assessee. The said company was assessed to tax. The source of ACL had been explained as out of transfer of funds from the accounts of M/s. BTL. Thus, the Assessee discharged its burden of proving identity, capacity and genuineness of the transac....
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.... Merely because summons issued to some of the creditors could not be served or they failed to attend before the Assessing Officer, cannot be a ground to treat the loans taken by the assessee from those creditors as non-genuine in view of the principles laid down by the Supreme Court in the case of Orissa Corporation [1986] 159 ITR 78. In the said decision the Supreme Court has observed that when the assessee furnishes names and addresses of the alleged creditors and the GIR numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non- compliance of summons issued by the Assessing Officer under section 131, by the alleged creditors will not be sufficient to draw an adverse inference against the assessee.." [Emphasis Supplied] 1.17 It was thus submitted that, since the money has originated from the account of appellant, no addition can be made u/s 68 in the hands of the appellant. It is submitted that, the learned officer has failed to appreciate that, entire monies originated from the bank account of parties who are income tax....
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....n a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law could have found, or the finding was, in other words, perverse and the Court is entitled to interfere. 2. In view of the aforesaid, it is submitted that the addition made by the learned AO and sustained by the learned CIT(A) is wholly unsustainable and deserves to be deleted. 3. Ground No. l(v) and (vi) of Grounds of Appeal for Assessment Year 2007-08: Next issue pertains to the disallowance of the short term capital loss of Rs. 1,42,66,800/- and addition made of Rs. 43,25,000/- under section 2(22)(e) of the Act in assessment year 2007-2008. 3.1 At the outset it is submitted that the both the aforesaid additions/disallowances made by the learned Assessing Officer and sustained by the learned C1T(A) is not based on any material detected as a result of search on the appellant. It is therefore submitted that aforesaid addition/disallowance are outside the scope of section 153A of the Act as on the date of search on 26.03.2010, assessment for AY 2007- 2008 has become final and in such circumstances, while f....
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....43,25,000/- under section 2(22)(e) of the Act, it is most respectfully submitted that aforesaid addition has been made protectively in the hands of the appellant and substantive addition has been made in the hands of Shri. I.C. Jindal being the beneficial shareholder, which addition has also been sustained on the protective basis. It is submitted that the CIT (A) could not confirm an addition on protective basis, though the Id AO can make the addition protectively, but CIT(A) has to adjudicate the validity of such addition independently by holding in whose hand addition has to be made on substantiate basis and as such the addition made has to be deleted. Reliance is placed on the judgment of the High Court of Allahabad in the case of Smt. Hemlata Agarwal vs CIT U.P. reported in 64 ITR 428. In any case, no addition can be sustained in the hands of the concern but has to be taxed in the hands of shareholder as has held by Delhi High Court in the case of CIT vs. Ankitech (P) Ltd. reported in 340 ITR 14 5.1 It is next submitted that appellant has received the aforesaid sum as advance from M/s Courage Financial Services Pvt. Ltd. for the purchase of the manufacturing unit as the appe....
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....10-11 and statement of Shri. I.C. Jindal) and PB-III (containing the enquiries made by the AO from the stock exchange, excerpt of monthly update of NEST for the month of January, 2005, copy of demat account of the assessee and also copy of the confirmation from M/s P.K. Aggarwal & CO). In addition to the aforesaid paper books, appellant has filed its synopsis dated 01.09.2014 before the Hon'ble Tribunal wherein appellant has made its submission contending that additions/disallowances made in the order of assessment, and sustained by the learned CIT(A) are unsustainable in law. 3. In addition to the aforesaid synopsis, appellant seeks to supplement its submissions that the assessment framed by the learned AO u/s 153 A of the Act and sustained by the learned CIT(A) is legally unsustainable. In support of the aforesaid contention, appellant seeks to submit as under: 4.1 The appellant is a private limited company and was incorporated in the year 1987 with main object of doing business of chemicals and bake lite power. This project did not get through and company acquired land during the year 1987-1988 at Banmore, Distt. Morena, MP, near Gwalior for putting up steel pl....
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.... and during the course of the search, his statement was also recorded. It is submitted that search commenced around 8.00AM in the morning of 26.03.2010 and authorized officer started the recording of statement of Shri. I. C. Jindal then aged about 54 years at 8.40 PM (as is evident from the statement) in the evening and was concluded in the late morning of 27.03.2010. (Copy of the statement has been placed at pages 137-148 of PB-II) As such, evidently his statement was recorded for more than 12 hours which started in the evening and was concluded in the morning and he was not even allowed to sleep whole night. That from the perusal of the copy of the statement, it would be seen that total 21 questions was put to him. and out of 21 questions, 7 questions were put to him on 26.03.2010 whereas remaining 14 questions were put to him on 27.03.2010. Infact, in the early morning of 27.03.2010, when Shri. Jmdal was totally exhausted because of the ordeal which started in the morning of 26.03.2010 and continued whole night, Shri. Jindal who was wholly exhausted till morning, in the early morning of 27.03.2010 was confronted with Shri. Aseem Kumar Gupta, who in his statement under duress has....
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....0.12.2011, interalia making following additions disallowances: S. No Particulars of the addition Assessment years 2005-06 2006-07 2007-08 I Unexplained cash credit under section 68 of the Act 2,08,80,997 86,15,583 5,21,88,167 II Disallowance under section 14 A of the Act - 9,980 34,740 III Disallowance of Short Term capital loss - - 1,42,66,800 IV Addition on account of deemed dividend - - 43,25,000 4.10 It is submitted that from the perusal of the orders of assessment, it would be seen that while making the impugned additions, except the reference made of statement of Shri. Jindal and statement of Shri. Aseem Kumar Gupta, no incriminating material what so ever has been referred to in the order of assessment which has been found as a result of search of the appellant. It is submitted that in para 6.7 at page 6 of the order of assessment for the AY 2005-06. learned AO has observed as under: "6.7 This conclusion is not a long drawn one as this has been substantiated during the search and seizure operation in the case of entry operator Aseem Kumar Gupta and group of which a....
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....t, when the proceedings u/s 153A of the Act was initiated by issuance of notice u/s 153A of the Act dated 20.04.2011, Shri. Jindal filed a letter dated 15.09.2011 (copy annexed as Annexure- B), wherein it was submitted as under: " The recording of statement was started at 8:40 p, on 26-03- 2010 and continued till 27-03-2010 up to 10:00 AM in which merely 20 questions have been asked and I was regularly forced to surrender income. I finally have to surrender Rs. 51 crores as additional undisclosed income for buying peace of mind and in respect of the following: 1. Magnum Steels Ltd. - Rs. 2.80 crores asintroduction in share capital 2. Other flagship concerns - Rs. 48.20 crores asincome from operations of group companies i.e. i) M/s Magnum Steel Ltd. ii) M/s Magnum International Ltd. iii) M/s Courage Financial Services Pvt. Ltd. iv) M/s N.R. Sponge Pvt. Ltd. It was also stated by me that the details of above mentioned surrender company wise will be submitted later on. I also presented 2 cheques towards payment of tax on surrendered additional undisclosed income of Rs. 51 crores, of Rs. 3.40 crores dated on 30-04-....
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.... Aseem Gupta. It is also relevant to state that no corroborative material was found from the premises of the appellant nor any corroborative material has been brought on record by the revenue. 4.14 It is further submitted that before the learned C1T(A), appellant filed its written submission wherein again it was stated that statement made by the Shri. Jindal has immediately been retracted. For the sake of convenience, aforesaid relevant para of written submission field before CIT(A) (see page 5 of PB) is extracted hereunder: "6.2 The statement of I.C. Jindal recorded during the search operation on 27.03.2010 was not valid in law because it was given under pressure, threat and coercion. I. C. Jindal was also not in proper state of mind at that time. The surrender of amount of Rs. 51 crores was obtained under pressure, threat and coercion and as such it was not valid in law. I.C. Jindal had retracted the statement as well as the surrender immediately after the search. No incriminating nuiterial was found during the search which could indicate so much undisclosed income. Such surrender is not valid in law as held by the Hon 'ble Supreme Court in Pullangode Rubber Produce C....
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....earned counsels appearing for the respective parties at great length and considered the submissions. We have also gone through the orders passed by the authorities below. It is true that in normal circumstances this Court would not interfere in the finding of fact arrived at by the authorities. It is, however, to be seen as to whether the explanation tendered by the assessee would be considered by the authorities below. It is also to be seen as to whether an addition made is merely based on the statement recorded by the Assessing Officer under section 132(4) of the Act and whether any cognizance may be taken of the retracted statement. So far as case on hand is concerned, the glaring fact required to be noted is that the statement of the assessee was recorded under section 132(4) of the Act at mid night In normal circumstances, it is too much to give any credit to the statement recorded at such odd hours. The person may not be in a position to make any correct or conscious disclosure in a statement if such statement is recorded at such odd hours. Moreover. this statement was retracted after two months. 26. In view of what has been stated hereinabove we are of the view that....
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....g search operation. 5.3 Further in the case of Commissioner of Income-tax v. Naresh Kumar Agarwal reported in [2015] 53 taxmann.com 306, Hon'ble High Court of Andhra Pradesh has held as under: "24 ................ In such a case, when the managing director or any other persons were found to be not in possession of any incriminating material, the question of examining them by the authorised officer during the course of search and recording any statement from them by invoking the powers under section!32(4) of the Act, does not arise. Therefore, the statement of the managing director of the assessee, recorded patently under Section 132(4) of the Act, does not have any evidentiary value. This provision embedded in sub-section (4) is obviously based on the well established rule of evidence that mere confessional statement without there being any documentary proof shall not be used in evidence against the person who made such statement. The finding of the Tribunal was based on the above well settled principle. '' 5.4 Further in respect of the Mr. Assem Kumar Gupta, as has been submitted hereinabove, in his statement there is no allegation whatsoever qua the assessee and fu....
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....useful purpose. It is, therefore advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before Income Tax Departments. Similarly, while statement during the course of search & seizure and survey operations, no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further in respect of pending assessment proceedings also, assessing officer should be rely upon the evidences/material gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders. " 5.6 Infact, CBDT in instruction no. F.No. 286/98/2013-IT (Inv.II) dated 18.12.2014 has again stated as under: "Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessees were coerced to admit undisclosed income during search/surveys conducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence. Such action defeat the very purpose o....
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....Jayalakshmi Ammal reported in [2016] 74 taxmann.com 35 (Madras), Hon'ble High Court has held as under: "20. In the case on hand, statement recorded on 29.12.1999 from the son of the assessee under Section 132(4) of the Act is not corroborated by any material document. Admittedly, Revenue has also not confronted the assessee, with the said statement of his son. If that be the case, it can be safely concluded that, there was no material Nos. 4964 to 4966/Del/2012 34 documentary evidence, to substantiate and corroborate the statement of Mr. Natarajan, son of the assessee. If the assessee makes a statement under Section 132(4) of the Act, and if there are any incriminating documents found in his possession, then the case is different. On the contra, if mere statement made under Section 132(4) of the Act, without any corroborative material, has to be given credence, than it would lead to disastrous results. Considering the nature of the order of assessment, in the instant case characterised as undisclosed and on the facts and circumstances of the case, we are of the view that mere statement without there being any corroborative evidence, should not be treated as conclusive ....
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....of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "ca....
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.... India vs ACIT viii) 120 DTR 79 (Bom) CIT vs. Sinhgad Technical Education Society ix) W.P. (C) 8721/2014 & CM No. 20052/2014 Praveen Kumar Jolly 5.12 Recently Hon'ble Delhi High Court on 25-05-2017 held in ITA No. 306 to 310 of 2017 in the case of Pr.CIT V. Meeta Gutgutia Prop. Ferns N Petals, again analyzed all the aspects and the decisions laid down and held at para 71 that "invocation of section 153A by the revenue for AYs 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those AYs". 6 In view of the aforesaid, it is submitted that since while making the additions in the orders of assessment for the AY 2005-06, 2006-07 and 2007-08, no incriminating material which can be said to be found from the premises of the appellant has even been referred to as such, addition made is outside the scope of section 153A of the Act as such, additions made are liable to be deleted." 7. On the other hand, the ld. Departmental Representative relied on the order of the lower authorities and submitted that during the course of search proceedings, the statements of IC Jindal was recorded on 26/27.03.2010 was confronted to Shri....
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.... is found during the course of search, but not otherwise. 36. In AY 2007-08, originally the Assessing Officer framed assessment also u/s 143(3) of the Act by making a disallowance of Rs. 3,06,421/- u/s 14A of the Act r/w Rule 8D. in the assessment u/s 153A AO has merely repeated the disallowance without referring to any incriminating material unearthed during the search. 37. In making assessment u/s 153A of the Act, the AO has to bring an incriminating material, which is contrary to declaration made by the assessee. The reliance in making assessment for the AY 2005- 06 and 2006-07 was made on the surrender made in the statement recorded during the search u/s 132(4) of the Act and the statement of one Shri. Aseem Gupta but no discussion has been made of the proceedings after the statement on the encashment of cheques taken towards tax payment referred to in that statement. The Ld DR vehemently objected that deposition of cheques is the sole discretion of the ld AO and revenue can only deposit cheques against the tax demanded which event has happened later on. We do not see any reason why these cheques which have been part of the statement were not encashed when the....
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....7.03.2010 when he stated that he has given Rs. 2 crores from M/s Moderate Credit Corporation Ltd. and Rs. 80 Lacs from M/s Ravnet Solutions Pvt. Ltd. in lieu of cash to the assessee. He further stated that he has received Rs. 20 crores in cash for arranging capital gain. He stated cash was received by him from Shri Somnath, employee of the assessee company. It was stated by him that cash was paid to Shri. Santosh Shah who arranged capital gain through stock broker M/s P.K. Aggarwal & Co. On cross examination by Shri. Jindal, he confirmed that he had not received any cash from him. He also confirmed that he had never introduced M/s P.K. Aggarwal & Co. and Shri. Santosh Shah to the assessee. And at the end, Shri. I.C. Jindal surrendered Rupees fifty one crores in the hands of four companies and paid cheques in respect of tax demand arising on account of surrender. 40. As submitted, Shri IC Jindal retracted this statement on 29.03.2010 before the DGIT (Inv) and ADIT (Inv) as 28th March, 2010 was Sunday. The assessee further submitted a detailed letter on 15/09/2010 of which certified copy is produced before us, where in such claim is made. 41. The argument of the lea....
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....ecifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that crossexamination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the p....
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....hri. Aseem Gupta) has been received from M/s Ravnet Solutions Pvt. Ltd. as share application money. Despite referring name of Shri. Somnath and Shri. Santosh Shah and the broker Shri. P.K. Aggarwal & Co. in the statement, nobody was ever examined by the revenue despite time and again Shri P.K. Aggarwal confirming the transactions. The revenue cannot make allegation unless prove them by brining tangible material on record. The statement, which was recorded in mid night, cannot be said to be voluntary as recording of statement in the midnight itself shows that the statement was recorded when the person was not in a fit state of mind and would be fully exhausted. From the questions raised and answered, whole night it is evident that the statement was made under forceful circumstances and hence cannot be treated as voluntary. In fact in the identical circumstances, the Hon'ble High Court of Gujarat in the case of Kailashben Manharlal Chokshi vs. CIT reported in [2010] 328 ITR 411 (Gujarat) has been pleased to hold that the statement recorded at odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admi....
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.... of Rs. 1.25 crores, he should be deemed to have resiled from the said declaration cannot be accepted. The retraction in writing happened only on December 16, 2010. It was much too delayed to be taken to be bona fide. The circumstances under which the retraction was made has also not been explained. The court finds that the above retraction, without any explanation whatsoever, and without mentioning the offer of surrender of Rs. 1.25 crores made earlier on December 18, 2008 is not a retraction at all in the eyes of law. The above decision of this court, therefore, does not come to the assistance of the assessee. 12. Learned counsel for the assessee next relied upon the decision of this court dated October 4, 2010 in I. T. A. No. 1111 of 2010 (CIT v. Dhingra Metal Works [2010] 328 ITR 384 (Delhi)). Here again, during the course of the survey conducted on September 14, 2004, the respondent-assessee surrendered an amount of Rs. 99.5 lakhs and offered it to tax. Within a period of slightly over two months thereafter, on November 29, 2004, he gave a letter stating that the statement was incorrect and that no discrepancy had to be reconciled as it was only a mistake. 13....