TaxTMI 
TaxTMI 
2019 (1) TMI 697
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....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 adjudicate Appellant's contention that since there was no separate search warrant in Appellant's case the sear....
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....eals, 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 3.11.2004 1,42,04,366 Limtex Investment Ltd. 23.06.2003 10,69,200 14.01.2005 74,86,776 Total Rs.11,90,400/- Rs. 2,16,91,142/- A.Y. 2006-07: Name Purchase Cost (Rs.) Sold Amount (Rs.) ....
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....sessee 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 duly shown in the books of account maintained in the regular course of business. The books of account and bank statement showing the purchase and sale are being produced." 5. From the above submissions, the Assessing Officer observed that the assessee has not given reply of specific questions. He has submitted general reply. The Assessing Officer also referred the case ....
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....n 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 STT in the off market transactions. Therefore, in totality of the circumstances it is concluded that the long term capital gain of Rs. 2,05,00,742/- shown by the assessees in its return of income and claimed exempt u/s 10(38) of the Act is accommodation entries taken in the garb of capital gain. Therefore, the same is treated as assessee's undisclosed income found debited in the assess....
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....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 43-54 xii) Ledger account of capital gain 16 16 1.3 From the perusal of the aforesaid tabulated evidences, it would be seen that appellant has produced complete documentary evidences in respect of the purchase and sale of the shares. It would also be seen from the sale bill, contract notes and ledger account that the Broker has duly paid the STT and as such learned Assessing Officer could not have validly held that transaction to the unexplained cash credit u/s 68 of the Act. 1.4 It is submitted that despite the aforesaid evidences, the learned Assessing Of....
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....essure 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 10.03.2003 (copy enclosed), the CBDT has directed that, "Instances have come to the notice of the Board where assessee have claimed that they have been forced to confess the undisclosed income during the course of search & seizure and survey operations. Such confessions, if not based upon reliable evidence, are later retracted by the concerned assessees while filing return of income. In these circumstances, on confessions during the course of search & seizure and survey operations do not serve any useful purpose. It is, therefore advised that there should be focus and concentration on collection of evidence of income which ....
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.... 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 disclosure made by the assessee." It is also added that that no assessing authority can proceed the assessment on the basis of surrender made at the time of search when corroboration through an independent source is a must which has not been done by Assessing Authority as has been held in the following cases: i) 1956 (SC) 9 Pangamban Kalanjoy Singh vs. State of Manipur ii) 109 ITR 324 (Cal) CIT vs. Chrestin Vies Industries Ltd. iii) 96 ITR 646 (ker) CIT vs. Ms. Dris S. Luiz iv) 108 TTJ 575 (Nag) S. K. Jain vs. JCIT 1.12 Reliance is placed on the following judicial pronouncements: i) 299 ITR 179 (P&H) CIT vs. Anupam Kapuur (pages 294-296 of JPB) ii) 43....
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....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 transaction. The Assessing Officer has not brought any material to show that the funds to ACL were provided by the Assessee. Under the circumstances, it cannot be said that the cash credit in question has remained unexplained. There is absolutely no material to link the Assessee with the sum of Rs. 22,97,000/- deposited in cash in the bank account of M/s. FBSL. 9. In view of the concurrent findings of the fact given by the two authorities that there is no material to link the Assessee with a sum of Rs. 22,97.000/- deposited in cash in the bank account of M/s. FBSL. as such, no case is made out for making addition under Section 68 of the Act, since there was no material with the Assessing Officer to come to the conclusion regarding any genuineness or f....
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....ll 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 assessee's and therefore no adverse inference can be drawn. 1.18 It is settled law that no addition can be made on the basis of surmises, suspicion and conjectures. Reliance for this proposition is placed on 37 ITR 271 (SC) Uma Charan Shaw & Bros. Co. v. CIT. It has been further held in the following cases that suspicion howsoever strong cannot take the place of proof: i) 37 ITR 151(SC) Omar Salay Mohammad Sait v CIT The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there are any circumstances which required to be explained by the assessee, the assessee should be given an opportunity of doing so. On no account whatever should the Tribunal base its findings on suspicious, conjectures or surmises nor should ....
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....r 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 framing the assessment under section 153A of the Act, addition made should be restricted to the material gathered during the course of the search. The aforesaid submission is supported by the various judgments which has already been mentioned in para 3.4 to 3.6 hereinabove which for the sake of brevity is not repeated here. 4. Without prejudice to the aforesaid, it is submitted that the appellant has purchased 2.58.520 shares of M/s NR Sponge Pvt. Ltd. @ Rs. 100/- per share. Out of the aforesaid shares, appellant sold 1.58.520 shares to M/s Magnum Steels Ltd. @Rs. 10 per share and thereby incurred a short term capital loss of Rs. 1.42.66.800/-. It is submitted that the learned Assessing Officer has disallowed the said sum on the ground that assessee did not file the documentary evidences in support of the aforesaid transaction. It is most r....
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....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 appellant was looking for the potential buyer to sell the manufacturing unit. It is submitted that aforesaid manufacturing unit was ultimately sold to M/s Magnum Steels Ltd. as the better price was offered by the aforesaid company. It is submitted that since the appellant has received the sum as advance and was for the purchase of the manufacturing unit as such, same cannot be treated deemed dividend as envisaged under section 2(22)(e) of the Act. In support of the aforesaid submissions appellant seeks to place reliance on the following judicial pronouncements: i) 318 ITR 476 (Del) CIT vs. Creative Dyeing and Printing (P) Ltd ii) 318 ITR 376 (Del) CIT vs. Amabassador Travels (P) Ltd iii) 318 ITR 462 (Del) CIT vs. Raj Kumar iv) ITA No. 569/2009(Del) dated 3.2.2010 CIT vs. Sunil Sethi v) ITA NO. 589/2011 (Del) dated 30.09.2011 CIT vs. Arvind Kumar Jain vi) ITA No. 1296, 1297/20....
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....in 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 plant. The steel plant started its production in August, 1989 and since then the appellant was carrying on the business of hardware and steel goods. 4.2 For the aforesaid three assessment years, appellant has filed its return of income under section 139(1) of the Act, details of which are as under: S. No. AY Date of Filing of retjrfrn of Income /income declared Returned processed under section i. 2005-06 / 24.10.2005 . / Rs. 21,36,130/- 143(1) _ / / (see Page 86 of PB) ii. 2006-07 [ 29.11.2006/ Rs. 13,51,603/- 143(1) (see Page 40 of PB) Assessment u/s 143(3/ of the Act was made on 15.12.2008 (see page 66-67 of PB) iii. 2007-08 01.11.2007 Rs. 11,86,760/- (see Page 117 of PB) 143(1) 4.3 From the perusal of the aforesaid table, it would be seen that the returns filed by the assessee for AY 2005-06 and 2007-08 had become final as no notice u/s 143(2) of the Act was issued within the prescrib....
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....2010 was confronted with Shri. Aseem Kumar Gupta, who in his statement under duress has alleged that he has arranged capital gain of Rs. 20 crores for M/s magnum Steel Limited. After recording of the aforesaid statement, Shri. Jindal was allegedly asked to cross examine and in reply he made contradictory statements. It is submitted that since the revenue officials put pressure on Shri. Jindal to surrender, and he was also fully exhausted as search commenced in the early morning of 26.03.2010, and he was not even allowed to sleep whole night, as such, whatever was dictated by the revenue officials, Shri. Jindal signed on the statement. It is submitted that he has forcefully been made to surrender in respect of following companies: i. M/s Magnum Steels Ltd. ii. M/s Magnum InternationalLtd. iii. M/s Courage Financial Services Pvt. Ltd. iv. M/s N.R. Sponge Pvt. Ltd. 4.7 It is submitted that in the statement of Shri. Jindal no reference of the appellant was made and even in the statement of Shri. Aseem Kumar Gupta, there is no mention of the appellant at all. As such, neither the statement of Shri. Jindal nor the statement of Shri. Aseem Guota is incriminating qua the assessee.....
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....s also one of beneficiary. In his statement recorded u/s 132(4) of the act of Shri. I.C. Jinal on 26/27.03.2010 was confronted to Sh. Aseem Kumar Gupta. Sh. Aseem Kumar Gupta has admitted to have arranged entries of bogus capitaI gain to the assessee sroup by arranging entries of purchase in back dates. He has admitted before Sh. I.C. Jindal that he had arranged entries of capital sain for the assessee sroup through stock broker Sh. P.K. Aggarwal of Kolkata. This fact was not denied by Sh. Jindal. This fact is also a proof that the assessee and its other group companies were involved in taking accommodation entires of long term capital gain in shares to evade tax and to bring to books their undisclosed income in the garb of exempt income. " 4. 11 It is submitted that aforesaid observation of the learned AO is factually incorrect. As in so far the statement of Sh. Aseem Kumar Gupta recorded on 27.03.2010 is concerned, he has not made any statement with regard to the assessee. For the sake of convenience, same is reproduced hereinbelow: "I have given Rs. 2 crores from M/'s Moderate Credit Corporation Ltd. to M/s Magnum Steel Limited and another Rs. 80 lakhs through Ravnet Sol....
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....776 respectively drawn on AXIS Bank Ltd., Gwalior. It is submitted that the summons have been issued in the name of the undersigned and other to appear personally at various places on 26- 03-2010 and 27-03-2010 to appear on 29-03-2010 and 30-03-2010. That on 28-03-2010 it was Sunday and so on 29-03-2010 I personally met D.G.IT(Inv.) at Delhi and narrated to her all facts and circumstances under which statements were recorded due to which I was forced to surrender and I requested D.G.IT(Inv.) that I wanted to retract from the statement because the surrender was made under forced circumstances and also requested her to give suitable directions for not depositing cheques. She immediately called the concerned officials and asked them not to deposit and cheque. On the same date I also met ACIT(inv.) in response to summon and asked him to return the cheques as I stated that neither I am surrendering any income nor depositing any tax because it was forceful surrender and statement was not recorded with free will. Your good self are aware that due to retraction no cheque was deposited. It is thus submitted that no adverse inference be drawn in our case in view of aforesaid forcefu....
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....nt of Aseem Gupta is not valid in law as the same was also obtained under pressure, threat and coercion...... " 4.15 It is submitted that despite the aforesaid factual position, and without there being any incriminating material found as a result of search, learned AO framed the assessment by making impugned additions as if it is a case of normal assessment. Against the order of assessment, assessee preferred appeal before the learned CIT(A) and it was specifically contended that addition made in the order of assessment without any reference to the incriminating material found as a result of search is unsustainable in law' and learned CIT(A) in his order dated 13.08.2012 rejected the contention of the appellant by holding that provisions of section 153A of the Act is mandatory even where no incriminating material is found in the course of search. 5. From the perusal of the facts stated hereinabove, it is evident and infact admitted by the learned CIT(A), that in the, case of the appellant no incriminating material has been found as a result of search. In so far as the statement of Shri. I.C. Jindal is concerned, it is submitted that such statement is not incriminating qua th....
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.... and/or confirmed merely on the basis of statement recorded under section 132(4) of the Act. Despite the fact that the said statement was later on retracted no evidence has been led by the Revenue authority. We are, therefore, of the view that merely on the basis of admission the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such admission. We are also of the view that from the statement recorded at such odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence there is no reason not to disbelieve the retraction made by the Assessing Officer and explanation duly supported by the evidence. We are, therefore, of the view that the Tribunal was not justified in making addition of Rs. 6 lakhs on the basis of statement recorded by the Assessing Officer under section 132(4) of the Act. The Tribunal has committed an error in ignoring the retraction made by the assessee. " 5.2 In view of the aforesaid since the statement of the Shri. Jindal has been recorded in the night, which has immediately been retracted same ....
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....the specific requested he has not been confronted for the cross examination. In fact, on the basis of the independent enquiry conducted by the learned AO, aforesaid broker has confirmed the factum of sale and purchase of the shares, in such circumstances, the statement of Shri. Aseem Kumar Gupta is of no much credence, more so when he has also not been confronted for the cross examination of the assessee, despite specific request. It is submitted that AO also loosely referred the search and seizure operation in the case of Sh. Aseem Kumar Gupta, however neither any material was referred in respect of the aforesaid search nor any such material was confronted to the appellant before drawing any adverse inference. It is therefore submitted that neither the statement of Shri. Aseem Kumar Gupta nor any alleged material found from his premises can form the basis of the addition. In support of the same, reliance is placed upon the following judgments,: a. Andaman Timber Industries Vs. Commissioner of Central Excise (2015) 281 CTR (SC) 241 b. Vinod Solanki Vs. Union of India (2008) 16 SCC 535 (SC) c. Kishni Chand Chella Ram v CIT 125 ITR 713 (SC) d. CIT V SMC Share Stock Brokers 28....
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.... a whole and officers concerned in poor light. 2 I am further directed to invite your attention to the Instructions/Guidelines issued by CBDT from time to time, as referred above, through which the Board has emphasized upon the need to focus on gathering evidences during search/survey and to stiictly avoid obtaining admission of undisclosed income under coercion/undue influence 3 In view of the above, while reiterating the aforesaid guidelines of the Board, I am directed to convey that any instance of undue influence/coercion in the recording of the statement during search/survey/other proceedings under the IT. Act, 1961 and/or recording a disclosure of undisclosed income under undue pressure/coercion shall be viewed by the Board of adversely.'" 5.7 It would be evident from the aforesaid instruction that statement/surrender by itself cannot be made a basis to make addition. In the instant case, since the surrender was made under pressure which was immediately retracted, and except the aforesaid, no adverse material has been found from the premises of the appellant, as such, such statement cannot be made the basis for the assessment. Furthermore in the case of G. Chinna ....
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....i) c) CIT vs. Tara Chand Mahipal [2016] 65 taxmann.com 29 (Calcutta) d) CIT vs. Sunil Aggarwal [2015] 379 ITR 367 (Delhi) 5.9 It is also submitted that statement recorded under section 132(4) of the Act does not constitute incriminating material found as a result of search. Aforesaid submissions is supported by the order of the Tribunal in the case of DCIT vs. Pratap Singh Rajendra Hamola & Co. reported in 19 DTR (Chd) 182, wherein it has been held that "statements" recorded by itself cannot constitute evidence found as a result of search for purpose of determining undisclosed income under Chapter XIV-B of the Act. The Jodhpur Bench of the Tribunal in the case of Shree Chand Soni vs. Dy. CIT reported in 101 TTJ has held as under: "47. This addition is based on the statement alone and no such income was disclosed in the returns filed for the block period. Admittedly no incriminating document was found to support the impugned addition. This Bench has been continuously taking the view that a statement recorded under s. 132(4) of the Act does not tantamount to unearthing any incriminating evidence during the course of search, therefore, no addition can be made on that score alon....
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....he word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Conclusion 38. The present appeals concern AYs, 2002-03, 2005-06 and 2006- 07.On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed." [E....
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....ed by both the parties, the ld. AR drew our attention that the case is covered by the decision of co-ordinate Bench of Tribunal in group case of assessee of M/s. Magnum Steels Limited vs. ACIT dated 18.08.2017 ( ITA No. 1342, 1343 & 2004/Del/2013- A. Yrs. 2005-06 to 2007-08), which is as under : 33. Now we shall examine the additions made by the AO in each of three assessment years separately. 34. In AY 2005-06, the additions were made on account of unexplained cash credit u/s 68 of the Act (i) Rs. 5 crores relates to share capital allotted to 7 companies and (ii) Rs. 6,59,04,383/- relating to long term capital gain declared by the assessee as undisclosed income. Apart from this there is a disallowance of R. 74,741/- u/s 14A of the Act. After examining the order of assessment, on the aforesaid additions, we find that there were a lot of discussion but no material has been referred to which was relied upon and found during the search. In fact, share capital and long-term capital gain were declared by the assessee in the books of account and along with the return all the necessary details were filed. Further this assessment was specifically taken under scrutiny to examine the in....
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....ority of law. Similar view is also expressed by the Hon. High court in Capri Bathaid Private Limited v. Commissioner of Trade & Taxes 2016 (155) DRJ 526 . Further no orders were also passed u/s 210(3) of the act, or any other action has been taken to recover the demand on the income surrendered by Shri. IC Jindal in relation to aforesaid assessee. This action itself proves that the assessee was under financial threat for payment of such taxes , which may have dire consequences. The assessment proceedings were initiated after one and half year later but during this period, there is no proceedings or action by ld AO or fresh statements recorded as the same was retracted if cheques were not encahsed. 38. Now we have to examine whether such statement of Shri. IC Jindal, MD of the assessee company recorded on 26/-27.03.2010 can be treated as incriminating material, specifically when it was retracted and no other incriminating material supporting the statement was found. This statement of Shri. I.C. Jindal was made the basis for making the addition in AY 2005-06 and 2006-07, however same was not referred to at all in AY 2007-08. 39. Ld AR has claimed that the examination of Shri. I....
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....accepted the disclosure or not. In the letter dated 15.09.2010, assessee had stated the circumstances in which the statement was recorded and asked the revenue authorities to examine Shri. Aseem Gupta and Shri. Somnath and also insisted to verify each and every transaction before drawing any conclusion. It was stated that no adverse inference be drawn in view of forced surrender. The Assessing Officer has neither examined Shri. Somnath nor Shri. Aseem Gupta, despite the request of the assessee and relied upon the statement of Shri Aseem Gupta that too in his assessment proceedings. Such evidence which was taken at the back of the assessee and no opportunity was provided to cross examine them cannot be a piece of evidence which can be relied upon for making the addition. Hon'ble Supreme Court in the case of Andaman Timber Industries Vs. Commissioner of Central Excise (2015) 281 CTR (SC) 241, has again reiterated their earlier view and expressed their opinion that the evidence/statement relied upon by the Assessing Officer for making addition which was not confronted cannot be used against the assessee. The Hon. SC has held that : "6.According to us, not allowing the assessee to c....
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.... its reasons for accepting or rejecting the submissions. 8. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the Show Cause Notice." 42. In the present case, the statement of Shri. Assem Gupta recorded in his assessment was never confronted and after retraction by Shri. IC Jindal, despite specific request, Shri. Aseem Gupta was not confronted for cross examination. Therefore, Such statement cannot be held to be an evidence for making the addition. Even otherwise, no supporting material was brought on record despite highlighting that the statement of Shri. Aseem Gupta is factually incorrect. 43. Regarding the authenticity of the retraction statement the arguments of the revenue fails when the same is available on the file of the ld AO and ld AO himself has issued certified copy of that retraction letter, same letter is also referred to in the order of ld CIT (A). Revenue before us could not submit any evidences that the retraction statement is not authen....
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....traction, the case of Revenue should not fail. In the present case also, apart from the statement, no efforts were made by the Revenue to gather evidence during the search. 46. Ld DR has relied up on the decision of PCIT V Bhagirath Agarwal 351 ITR 143. We have carefully perused that decision. In that decision the facts were that it was not a case of retracted confession but in fact statement was further confirmed by the assessee vide letter dated 9/1/2006. In the present case there is retraction of the statement, which is by way of stated meeting with the higher official as well as before ld AO reiterated before CIT (A). In view of this, reliance on the above decision is misplaced. 47. Second decision relied up on by revenue is in the case PCIT vs. Avinash Kumar Setia 81 Taxmann.com 486. In this case, statement was recorded during the survey and not during the search. Assessee made a statement after two months of survey on his own and assessee waited for two years to retract it. Assessee in that case pleaded that non-disclosure of sum in the return of income is a retraction by the assessee and retraction in writing was only on 16/12/2010. Therefore Hon high court held that r....
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....lower authorities that he immediately met the higher official stating his retraction and which was also mentioned before the ld AO and CIT (A) also mentioning this fact in his appellate order, it is not correct to say that assessee has not retracted the statement in time. Further, the facts recorded in the statement are also not matching with the others sums mentioned in the transaction. The retraction letter is also part of the record of the ld AO who has issued the certified copy of that letter , therefore, in view of the above facts, reliance on the above decision by the revenue is misplaced. 49. In view of the aforesaid, we hereby hold that statement of Shri. I C. Jindal is not incriminating material once the same has been retracted and the statement of Shri. Aseem Gupta recorded on the same date is also not incriminating material as after the retraction, no efforts have been made by the AO to bring any other material in support of that statement. Moreover, facts and figures stated by Shri. Aseem Gupta are totally incorrect as per record. The additions had already been made in the original assessment u/s 143(3) in AY 2006-07 and 2007-08 and which were merely repeated in the ....