TaxTMI 
TaxTMI 
2019 (4) TMI 1120
X X X X Extracts X X X X
X X X X Extracts X X X X
.... are that a search was conducted at the business/residential premises of Shri Banna Lal Jat, the Director of appellant company - M/s. Bannalal Jat Constructions Private Limited, on 10.10.2014, in which he was also operating his proprietary concern in the name of M/s. Bannalal Jat Contractor. During the search proceedings at residential premises of Shri Bannalal Jat, a cash worth of Rs. 1,21,43,210/- was found and inventorised as per Annexure CF of Panchnama dated 11.10.2014. He, in his statement, recorded under Section 132(4) of the Income Tax Act, 1961 (for short 'the IT Act') during the course of search and even subsequent statement recorded under Section 131 of the IT Act, admitted the same as undisclosed income of the appellant-company. However, subsequently while filing the return of income for the relevant assessment year, the appellant-company did not offer the said undisclosed income to tax. The assessing officer therefore served upon the appellant-company a show cause notice as to why it has failed to disclose the said income and also to get the cash verified from the regular books of accounts. The appellant-company in response to the show cause notice, submitted written r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....st search proceedings and after three months of search action, Shri Bannalal Jat, vide statement recorded under Section 131 on 04.12.2014 again confirmed the admission of undisclosed cash of Rs. 1,21,43,210/- as has already been offered under Section 132(4) of the IT Act. In view thereof, the Assessing Officer made an addition of Rs. 1,21,43,210/- as unaccounted income of the appellant-company. The CIT (Appeals) concurred with the findings recorded by the Assessing Officer and dismissed the appeal filed by the appellant-company. The second appeal filed by the appellant-company was again dismissed by the Income Tax appellate Tribunal (for short, 'the ITAT') vide impugned judgment dated 29.12.2017. Mr. Prakul Khurana, learned counsel for the appellantcompany, has submitted that the appellant-company on updating the books of accounts of M/s. Bannalal Jat (Proprietorship concern of Shri Bannalal Jat), which was stated to be incomplete during the course of statement recorded under Section 132(4) of the IT Act, it was reconciled and it became evident that the aforesaid cash balance of Rs. 1,21,41,528/- was available in the books of accounts of M/s. Bannalal Jat and that the cash found....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nalal Jat, where the amount was seized. The ITAT has not dealt with the contentions raised neutrally and without being influenced by the fact of admission recorded under Section 132(4) of the IT Act. Shri Prakul Khurana, learned counsel for the appellant, argued that reliance placed by the ITAT on the judgment of this Court in CIT, Bikaner Vs. Ravi Mathur - 2017 (1) WLC (Raj.) 387, is wholly misconceived as the aforesaid judgment is distinguishable on facts. Learned counsel submitted that the same Bench of the ITAT constituting of same members in the case titled Assistant Commissioner Income Tax, Central Circle, Ajmer Vs. Shri Devendra Kumar Choudhary (ITA 828/JP/16), has taken a dramatically opposite view. Therein initially jewellery worth Rs. 30 lakh was surrendered as undisclosed income in the statement recorded under Section 132(4) of the IT Act but subsequently the same was not offered for taxation while filing the return of income after a gap of 357 days. The ITAT despite taking note of the judgment of this Court in Ravi Mathur, supra, upheld the deletion of the addition accepting the explanation by relying on CBDT Instruction No.286/2003-IT/INV dated 10.03.2003, which pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ship concern of Shri Bannalal Jat, incorporated number of pending entries, which itself proves that the cash-book and books of accounts of Shri Bannalal Jat were incomplete on the date of search. The correctness and completeness of such cash-book was not accepted by the assessing officer. There was a time gap of more than 10-15 days from the respective dates of withdrawal and the date of search, which defies the argument of the assessee. Even if the 'panchnama' of the cash was found and seized in the name of Shri Bannalal Jat, the same was voluntarily admitted in his statement under Section 132(4) as belonging to the appellant-company. Subsequently, again on 04.12.2014 in his statement recorded under Section 131 of the IT Act, Shri Bannalal Jat admitted surrender of undisclosed income of the M/s. Bannalal Jat Construction Pvt. Ltd. Learned counsel for the respondent-revenue, relying on the judgment of this court in Ravi Mathur, supra, argued that the statements recorded under Section 132(4) of the IT Act have great evidentiary value and cannot be discarded in a summary manner by simply observing that the assessee has retracted the same. The retraction has to be genuinely made....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Branch of Bank of Baroda situated at Jahajpur and Branch of State Bank of Bikaner and Jaipur situated at Jahajpur between the period 20.09.2014 and 30.09.2014 and the same could be verified from the records maintained at his Head Office at Jahajpur. Further, in answer to question no.16 with regard to the amounts of cash of Rs. 70,00,000/-, Rs. 19,92,500/- and Rs. 9,00,000/- found at his residence, he submitted that Rs. 70,00,000/- was withdrawn by his clerk ('munshi') and his sons from the Bank Account and given to him. However, it could not be explained as to from which particular bank the withdrawal was made. Regarding Rs. 19,92,500/- which was stated to be given by Shri Satya Narain, he submitted that there is no supporting evidence available with him; and, in respect of the amount of Rs. 9,00,000/-, he stated the same to be his business receipts. In reply to question no.22 whether he maintains individual cash books being the proprietor of M/s. Bannalal Jat Contractor and also the Director in M/s Bannalal Jat Construction Pvt. Ltd., he submitted that he does not maintain individual cash books. This court in CIT, Bikaner Vs. Ravi Mathur, supra, which was relied by the ITAT i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g 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 amount of Rs. 44.285 lakhs, it is now contended that the statement u/s 132(4) was not correct and these amounts are in ITA No.720/JP/2017 M/s Bannalal Jat Construction Pvt. Ltd., Bhilwara vs. ACIT, Central Circle-Ajmer thousands, not lakhs i.e. it is now attempted to retract from the statements made at the time of S & S operations." Therefore, wha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 concluding otherwise. The Tribunal, therefore, was not justified in reversing the order of the Assessing Officer which was affirmed by the Commissioner of Income-tax (Appeals) also." The Punjab and Haryana High Court in Bachittar Singh Vs, Commissioner of Income-Tax, supra, in para 7 of the report, held as under:- "7. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt 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 and Section 131 of the Income Tax Act. Based on the above finding, it was also held that such evidence would be admissible for the purpose of block assessments too. The explanation to Section 132(4) of the Income Tax Act was also noticed by the Division Bench to further emphasise that the eviden....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orded 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 the form of cash was found at his residence. This undisclosed income belonged to his company M/s Bannalal Jat Construction Pvt. Ltd. In response to question no.11 wherein he was asked to provide any other explanation which he wishes to provide, he submitted that pursuant to search operations where various documents, loose papers, entries, cash, investment, advances and individual expenditure details have been found and taking all that into consideration, he surrendered Rs. 4,01,43,210/- as his undisclosed income. He also categorically stated that the said disclosure is in the hands of M/s Bannalal Jat Constructi....