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2020 (10) TMI 976
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....facts and the circumstances of the case, the ld. CIT(A) was right in deleting the addition of Rs. 25,86,60,550/- ignoring the fact that assessee himself stated in his statements recorded U/s 132(4) of the Act during the course of search as well as past search proceedings that he has received on-money in cash from the buyers of various flats and subsequently he failed to show the same in the return of income. 2. Whether on the facts and the circumstances of the case, ld. CIT(A) was right in deleting the addition of Rs. 2,50,00,000/- ignoring the fact that the assessee himself stated in his statements recorded U/s 132(4) of the Act during the course of search as well as post search proceedings that there are certain discrepancies in the documents seized from his house and subsequently he failed to show the same in the return of income." 4. The brief facts of the case are that the assessee is a private limited company engaged in the business of real estate. A search was conducted at the premises of the assessee on 04.09.2013. Subsequently, return was filed on 29.11.2014 declaring loss of Rs. 1,47,63,169/- in response to notice u/s 153A of the Income Tax Act, 1961 (in short....
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.... the assessee retracted from the said disclosure and consequently, in its return of income for the AY 2014-15 filed on 29.11.2014, no such surrender income was shown. In view of the above, the AO has issued show cause notice to the assessee and after considering its reply and dealing with various contentions raised by the assessee, the AO has given detailed findings in the assessment order and has made the addition of Rs. 30.01 Crore to the income of the assessee and for the sake of brevity, the same are not repeated here. 2 Findings of ld. CIT(A) Vide the impugned appellate order, the Ld. CIT(A) has deleted the addition of Rs. 25.01 Crore by observing that: (i) The AO has solely relied upon the statement of director of the assessee company and has not carried out any enquiries to prove the receipt of on money. (ii) The seized documents are dumb documents. (iii) The onus is on the AO to prove the contents of the seized documents are true u/s 292C. (iv) The AO has not brought on record any independent corroborative evidence to support the addition. (v) No enquiries were made from the buyers of the flats. (vi) No....
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....tating total payment at Rs. 1,03,33,820/- DPB-18 Seized document wherein, accounted payment 'A' is stated at 1,02,81,250/- and on money stated at Rs. 98,40,625/- under "B" DPB-28 Ledger account, wherein individual payments are tallying with payments stated in the affidavit. Payments upto 25.06.2013 were stated at Rs. 92.50 Lac Flat No. 501 & 502 JKD Pearl APB-3 Affidavit of Shri Sudhakar Rao stating total payment at Rs. 2,06,72,190/- DPB-18 Seized document wherein, accounted payment 'A' is stated at Rs. 2,01,21,875/- and on money stated at Rs. 1,93,40,625/- (98,40,625 + 95,00,000) under "B" DPB-30 Ledger account, wherein individual payments are tallying with the payments stated in the affidavit. Payments upto 04.06.2013 were stated at Rs. 81.20 lac and upto 22.10.2013 at Rs. 1.56 lac. 3.1 Thus, it is evident from the above examples that the recorded payments upto the date of search were subset of the 'A' i.e. accounted payments stated in the seized document and rightly so, as the sale deeds of the flats were not made till the date of search and thus, no question of making entire 'A' payments. ....
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.... may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. 4.1 Thus, it is evident from the above that u/s 292C of the Act, the presumption is that the content of the documents seized during search are true. The said presumption is rebuttable but the burden is on the assessee to prove that the contents of the seized documents are not true and not on the AO to prove that the contents of the seized documents are true. It may be mentioned that in the instant case under consideration, the assessee has failed miserably to rebut such presumption. Finding No. 4 & 5 5 It is an undisputed fact that the director of the assessee company made disclosure under consideration in its statement recorded u/s 132(4), affirmed the same in statement recorded u/s 131 during post search enquiries and reaffirmed in affidavit of the director of the assessee company, which was issued after getting the consent of other....
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.... D. B. ITA No. 47/2018 judgement dated 30.10.2018, V Bhagirath Aggarwal Vs CIT [2013] 31 taxmann.com 274 (Delhi), VI. CIT Vs Abdul Razak [2012] 20 taxmann.com 48 (Ker.), VII CIT Vs Lekh Raj Dhunna [2012] 20 taxmann.com 554 (Punjab & Haryana), VIII Thiru S. Shyam Kumar Vs ACIT [2018] 99 taxmann.com 39 (Madras), IX CFI Vs M. S. Aggarwal [2018] 93 taxmann.com 247 (Delhi) X Ravindra Kumar Verma Vs CIT [2013] 30 taxmann.com 367 (Allahabad) XI Sudharshan P. Amin Vs ACIT [2013] 35 taxmann.com 370 (Gujarat) XII Lakhamshi Ladha & Co. Vs CIT 2016] 73 taxmann.com 117 (Bombay), XIII Manmohansingh Vig Vs DCIT [2006] 6 SOT 18 (MUM.), Thus, in view of the above discussion, it was submitted that the impugned appellate order of Ld. CIT(A) may kindly be set aside and the order of AO may be restored." 9. On the other hand, the ld AR appearing on behalf of the assessee has reiterated the same argument as was raised before the ld. CIT(A) and also filed written submissions in order to controvert the ground of appeal raised by the revenue, the same is reproduced below: The assessee made following submission be....
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.... it is for the Learned Assessing Officer to bring on record cogent material and other evidences to support the addition rather than simply rely on the statement. In this case the position is exactly the same. The Learned Assessing Officer has just made addition on the basis of statement recorded u/s 132(4) which has been retracted by the assessee and without bringing any material on record. It is further relevant to submit that the Learned Assessing Officer has made additions without making any post search enquiries with reference to contents of pages 1 to 4 of annexure A-2. No material has been brought on record that the assessee company received any on money on sale of flats. During the course of search no receipt of on money was found signed and issued by the assesse to buyers. Although the Learned Assessing Officer has admitted as mentioned in the assessment order on page 24 & 25 that the pages 1 to 4 are undated, that the amount noted on these pages does not exactly tally with the amount of sale as per registered sale deeds and these pages admittedly do not contain name of any buyer yet additions have been made solely on the basis of these papers on presumption and as....
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.... ITR 0019 AIR 1977 SC 796 (vii) Dhakeshwari Cotton Mills 26 ITR 775 (SC) (viii) Omar Shaa 37 ITR 151 (SC) (ix) Lal Chand Bhagat Ambika Ram (1959) 37 ITR 288 It is further submitted that on page 25 of the assessment order the Learned Assessing Officer has admitted that the amount of sale mentioned in these papers is not verifiable with reference to actual sale consideration. He has also admitted that the name of buyer is also not mentioned. Despite these admitted defects the Learned Assessing Officer has placed reliance and has made the additions. The contents of page 1 to 4 of annexure A-2 are discussed and analyzed below: - Page No. 1 of annexure A-2 JKD Pearl landmark (Jaipur) Sr. no. Flat No Flat Area in Sq.ft Rate/Sq.ft Amount A @3500 Per sq.ft B 1 201 6850.00 9500000.0 2 202 6850.00 9500000.0 3 301 6850.00 9500000.0 4 302 6850.00 9500000.0 5 401 2937.50 6850.00 20121875.00 10281250.00 9840625.00 6 402 2937.50 68....
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.... 8 501 2491.25 5500.00 13701875.00 6228125.00 7,473,750.00 9 502 2491.25 5500.00 13701875.00 6228125.00 7,473,750.00 10 602 2491.25 5500.00 13701875.00 6228125.00 7,473,750.00 11 801 2491.25 5500.00 13701875.00 6228125.00 7,473,750.00 12 802 2491.25 5500.00 13701875.00 6228125.00 7,473,750.00 87,790,000.00 Page No. 4 of annexure A-2 Pearl Divine Banipark, Jaipur Sr. no. Flat No Flat Area in Sq.ft Rate/Sq.ft Amount A @3000 Per sq.ft B 1 209 1742.63 6100.00 10630043.00 5227890.00 5402153.00 2 210 1742.63 6100.00 10630043.00 5227890.00 5402153.00 3 302 1795.60 6100.00 10953160.00 5386800.00 5566360.00 16370666.00 (i) Papers are computer printouts having no date: - The papers were found during the course of search at the office premises located at 401, Pearl Survanshi, A-5, Sardar Patel Marg, Jaipur are nothing but computer printou....
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....is of a loose paper which does not contain the name and the date of payment. The department is precluded in drawing inferences on the basis of suspicion, conjecture and surmises and no addition can be made on the basis of such dump document or loose sheets. In view of this it is clear that when the paper is undated and does not contain any name the same has to be treated as a dump document. (ii) The contents are unverified: - The papers found contain column 'A' and 'B' respectively reflecting money received on sale accounted and unaccounted. However it is submitted that even the accounted money on alleged sale of flats as shown in these papers is not verifiable from the books of accounts then the natural conclusion is that these papers are rough papers only. The papers contained only projections of the expected sale price of a flat. The same is not at all connected with any real transactions. Therefore the papers are not related to any sale of any flat of any building. The entire surrender obtained is unlawful and illegal. The Revenue has not been able to link the transactions of these papers either with the material seized during the course of search or ....
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....ted that not only the pages are undated and do not contain the name of buyers and also do not contain the date of payments, further whatever is noted on these pages such as the area of the flat is also at variance with the actual area of the flat, the same is reflected in the following table. Therefore this further strengthen the submission of the assessee that these paper are only rough papers. JKD Pearl Landmark FLAT NO. AREA AS PER SEIZED PAPERS (Sq. ft) AREA AS PER SALE DEED (Sq. ft) 101 493.75 792.3 301 * 3033.4 302 3033.4 401 2937.50 2952.5 402 2937.50 2952.5 501 & 502 5875.00 5906.4 601 & 102 2937.50 3033.4+792.3 602 * 2937.50 3033.4 701 2865.25 2865.9 702 2865.25 2865.9 801 2571.25 2660.3 JKD Pearl Stylome FLAT NO. AREA AS PER SEIZED PAPERS (Sq. ft) AREA AS PER SALE DEED (Sq. ft) 101 * 2615.6 102 * 2615.6 201 & * 201 5231.1 301 2491.25 2615.6 302 * 2491.25 2615.6 401 2491.25 2615.6 501 2491.25 2586.3 502 2491.25 2586.3 801 2491.25....
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....uine then the amount of sale mentioned in these papers should have tallied with the regular records. The variance in the amount establishes the submission of the assessee that these papers are rough and dump. (viii) Details of Buyers: - It is submitted that all these four pages do not contain name of any person who has purchased the flats. This itself shows that these papers are rough. It is further submitted that the assessee has submitted complete name and address of the buyers of the flats so as to facilitate any enquiry by the Learned Assessing Officer with respect to the submission of the assessee of the sale amount etc. The assessee also furnished affidavits of buyers to the effect of sale price and date of sale. These are available on paper book page no. 1 to 28. Further copies of ledger accounts of these buyers are also available on paper book page no. 29 to 80. These ledger accounts disclose the date of payment received and also the amount. Copies of sale deeds in respect of certain facts were also made available before the Learned Assessing Officer. During the course of assessment proceedings the Learned Assessing Officer issued summons u/s 131 as well a....
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.... Mal (1991) 42 TTJ 423 (JP) (5) CIT Vs. NareshKhattar (HUF) (2003) 261 ITR 664 (Del) (6) Lal Chand AgarwalvsACIT 21 TW 213 (ITAT Jaipur) (7) CIT Vs. S.M. Agarwal (2007) 293 ITR 43 (Del) (8) CIT Vs. GirishChoudhary (2008) 296 ITR 619 (Del) (9) JayantiLal Patel Vs. ACIT (1998) 233 ITR 588 (Raj) (10) RakeshGoyal Vs. ACIT (2004) 87 TTJ 151 (Del) (11) ITO Vs. Manna LalJhalani 22 TW 551 (ITAT Jaipur) (12) Hissaria Brother Vs. ACIT 22 TW 684 (ITAT Jaipur) (13) DCIT Vs. Countrywide BuildestatePvt Ltd. (2012) 48 TW 50 (Jaipur ITAT) order dated 29.06.2012 ITA No. 961/JP/2011 It is submitted that the ratio of the aforesaid cases is fully applicable to the facts of the case. 3. Retraction not considered by the Learned Assessing Officer/Addition not warranted solely on the basis of statement - It is submitted that the above facts make it crystal clear that the surrender obtained on the basis of dump papers no. 1 to 4 of annexure eA-2 has no legs. The papers which have been referred to in the statement contain fake noting and these have no nexus with the business affairs of the assessee. T....
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....f the Income Tax Act, 1961. It is settled position of law that no addition can be made simply and simply only and only on the basis of a naked statement having no clothing. The Learned Assessing Officer has not brought any material to establish the truthfulness of the contents of pages 1 to 4 on the basis of which surrender was obtained. On the other hand the assessee has established that these pages 1 to 4 are dump papers. In the case of Shri Ashok Kumar Jain 369 ITR 145 the Jurisdictional High Court of Rajasthan has held that if the assessee does not adhere to the surrender made then it is for the Learned Assessing Officer to bring on record cogent material and other evidences to support the addition rather than simply rely on the statement. In this case the position is exactly the same. The following case laws are cited in support: - (a) Contech Transport Service (P) ltd Ors V/s ACIT (2009) 19 DTR 191 (Mumbai) 28-11-08 (b) Chitra Devi V/s ACIT (Jodhpur Branch) (2002) 77 TTJ (Jd) 640 (c) KailashhenManharlalChokshiVs CIT (2008) 14 DTR 257 (Guj) (d) Pullanguegode Rubber & Produce Co. Ltd. Vs. State of Kerala 91 ITR 18 (Supreme Court) (e)....
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.... the statement u/s 132(4) of the Income Tax Act, 1961. The case of the assessee is further strengthened by the following circulars of the board wherein the revenue authorities have been advised not to obtain surrender of income during search proceedings. 4. Surrender against the circulars and instruction of the Board - unlawful addition - The following instructions issued by the Board are quoted wherein stress has been laid that no surrender should be obtained and assessment should be completed not on the basis of such surrender but on the basis of material gathered during search. However in the case of the assessee in clear cut violation of the circulars/instructions the income tax authorities exerted pressure and obtained surrender of income in statement recorded u/s 132(4). The same is therefore unlawful and illegal and addition made on such confessional statement automatically becomes unlawful and deserves to be deleted. In the case of CWT vs. Sanwarmal Shivkumar 171 ITR 337 the Jurisdictional High Court of Rajasthan held that the officers of the Department are bound by the circulars of the board. Further in the following cases the Courts have held that circul....
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....tion on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, assessing officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders Yours faithfully, Sd/- (S. R. Mahapatra] Under Secretary (Inv. II) (ii) F.No. 286/98/2013-IT (Inv.II) dated 18.12.2014 Admissions of Undisclosed Income under coercion/pressure during Search/Survey Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Dated- 18th December, 2014 To 1. All Principal Chief Commissioners of Income Tax 2. All Chief Commissioners of Income Tax 3. All Directors General of Income Tax (Inv.) 4. Director General of Income Tax (I & CI), New Delhi Subject: Admissions of Undisclosed Income under coercion/pressure during Search/Survey - reg. Ref: 1) CBDT letter F.No. 286/57/2002-IT(Inv.II) dt. 03-07-2002 2) CBDT letter F.No. 286/2/2003-IT(Inv.11) dt. 10-03-2003 3) CBDT letter F.No. 286/98/2013-IT(Inv.11) dt. 09-01-2014 Sir/Madam, Instances/complaints of undue influence/coercion ....
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....292C the assessee cannot claim these papers as dump papers. In this regard it is submitted that the presumption available under section 132(4A) is limited to search period and is not available in the assessment proceedings. P.R. METRANI vs. COMMISSIONER OF INCOME TAX (SUPREME COURT OF INDIA) (2006) 287 ITR 209. Further any presumption available under the Act is always rebuttable. In the case of the assessee the pages 1 to 4 found during search have been established by the assessee as fake/dump, as such the Learned Assessing Officer was precluded in making additions simply invoking presumption. What was required on his part was to establish that the contents of these papers related to the business of the assessee and were true. This has not been done. Addition cannot be made simply on the basis of presumption. The following case laws of the Jurisdictional High Court of Rajasthan and ITAT Jaipur Bench are quoted in support: - (i) ACIT Vs. Thahrayamal Balchand (1980) 124 ITR 111 (Raj) (ii) CIT vs. SMS Investment Corporation Pvt ltd (1994) 207 ITR 364 (Raj) (iii) CIT vs. Kishanchand (1993) 45 TTJ (JP) 20 6. Affidavits furnished remain uncont....
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....thereof or the explanation offered by him is not, in the opinion of the ^32[Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year." The perusal of the aforesaid provision reveals that the first and foremost condition of making addition under this section is that the sum is required to be credited in the books of the assessee maintained for the previous year. In the instant case admittedly the on money amount was not credited in the books maintained by the assessee. Therefore the provisions could not be ignored and no addition could be made under this section. Therefore the addition so made by the Learned Assessing Officer deserves to be deleted. The primary condition for invoking the provisions of section 68 is that there should be books of accounts and the sum should be found credited in such books of accounts. In the case of the assessee there is nothing so. Only a few pages were found which do not constitute books of accounts. The courts have gone to the extent of holding that a bank account, or a balance sheet or a profit & loss account alone also do not constitute books of accoun....
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....mission, evidences and subsequent retraction letter filed by the assessee dated 30.03.2015 and has given his finding in para 4.1.2 on page 28 of the order. The Learned CIT(A) further on page 35 in last three lines has analyzed the situation with regard to the retraction which is as under:- The assessee's contention with regard to the retraction as reiterated vide letters (Dt 27.06.2014, 30.03.2015, 22.01.2016 & 13.02.2016) submitted during assessment proceedings can be summarized as under:- a) The voluntary surrender made by Sh Vijay Kr Jain was on the basis of seized documents which is computer printout taken from assessee's hard dish found during the search operation from his premises located at 401, Pearl Survanshi, A-5, Sardar Patel Marg, Jaipur. b) No money trail or cash seizure evidencing receipt of on-money was found during the search operation. c) The area as per seized documents (in sq. ft.) does not match with the area mentioned in the Sale Deed. The Sale Deed in respect of flats mentioned had not been executed by the date of search; accordingly, the amount mentioned in these papers is not verifiable vis-å-vis total sales ....
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....with respect to the same issue, the Hon 'ble the Tribunal has held as under : "The crux of these decisions is that a document found during the course of search must be a speaking one and without any second interpretation. must reflect the details about the transactions of the assessee in the relevant assessment year. Any gap in the various components as mentioned in section 4 of the Income tax Act must be filled up by the Assessing officer through investigations and correlations with the other material found either during the course of the search or on Investigation..." From above decision of Hon'ble ITAT Jabalpur Bench it is pertinent to note that c charge can be levied on the basis of document only when the document is a speaking one. The document should speak either out of itself or in the company of other material found on investigation and /or in the search. The document should be clear and unambiguous in respect of all four components of charge of tax. If it is not so, the document is only c dumb document and no charge of tax can be levied on the assessee on the basis of a dumb document. The search action at the appellant's premises has yielded mate....
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....t it cannot be applied in the absence of corroborative evidence. In case of Straplex India P Lid. v DCIT [2003] 84 ITO 320 (Mum), Hon'ble ITAT Mumbai Bench has held inter alia as under: .....lt follows that, if a statement taken merely confessing to some income without any to support same, it have no validity even according to Board Circular apart from general law..." It is an established principle of law that a party is entitled to show and prove that the statement made by it is in fact no correct and true. In Pullangode Rubber Produce co. Ltd. V. state of Kerala (1973) 91 ITR 18 (SC), Hon'ble Apex Court has been held that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the assessee who made the admission to show that it is incorrect. The Hon'ble Apex Court again in Nagubai Armal v. B. Sharma Rao AIR 1956 SC 100, has laid down that an admission is not conclusive as to the truth of the matters stated therein. It is only a piece of evidence, the weight to be attached to which must depend on the circumstances under which it is made. It can be shown to be erroneous or untrue. According to....
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.... Now coming to the question of addition of Rs. 25,86,60,550/= made u/s 68 of the Act, on plain reading it is seen that where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source there of or the explanation offered by him is not, in the opinion of the AO. satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. The perusal of the aforesaid provision reveals that the first and foremost condition of making addition under this section is that the sum reached to be credited in the books of the assessee maintained for the previous year. In the instant case admittedly the on money amount was not credited in the books maintained by the assessee. Therefore, the provisions could not be ignored and no addition could be made under this section. From the aforementioned judgments, it is seen that an admission is not conclusive as to the truth of the matters stated therein. If is only a piece of evidence, the weight to be attached to which must depend on the circumstances in which it is made. If can be shown to be erroneous or untrue. ....
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....recorded on 05.09.2013, had admitted to have received on-money of Rs. 27,50,31,216/= and Rs. 2.5 crore on a/c of other discrepancies, the gist of head wise & entry wise break up of admission of undisclosed income is mentioned as under: S. No. Amount admitted in Rs. Basis of admission of undisclosed income Relevant question No. of the sworn statement Remark 1. 27,50,31,216/- Unaccounted receipts in cash on sale of flats Q. No. 1 & 12 of statements of Shri Vijay Jain director of M/s JKD Pearl India Developers Pvt. Ltd. dt. 04/09/2013 Shri Vijay Jain director of M/s JKD Pearl India Developers Pvt. Ltd. had admitted the undisclosed income of Rs. 30,00,31,216/- in the hands of the company 2. 2,50,00,000/- Other discrepancies Q. No. 13 of statements of Shri Vijay Jain director of M/s JKD Pearl India Developers Pvt. Ltd. dated 04/09/2013 Shri Vijay Kumar Jain has also furnished affidavit dated 18/09/2013 for confirming the admission of on-money of Rs. 27,50,31,216/- and for other discrepancies of Rs. 2.5 crore. On perusal of assessment record, it is also seen that the assessee vide letter dt 27.06.2014 has filed retraction letter with ....
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....e transactions recorded in the regular books of accounts. e) The assessee company recognizes the sale of flats only when the flats are fully ready to be sold and title is transferred to the purchaser and the possession is give. But during the year under consideration the flats were not fully developed and also the title of property was not transferred and no possession was given. Hence there was no sale of flats. There was only booking of flats in advance. The person who made the advance payment against purchase of property deduct TDS as per provision of section 192(IA) of the Act. So the amount received on which TDS was deducted is shown in advance received and not in the sales of the assessee company. Therefore the sale consideration of property in ITR is less than consideration. The flats are fully prepared in AY 2015-16 and then they are sold. On perusal of assessment record, it is seen that AO has not carried out any investigation/enquiry to prove his contention with regard to receipt of on-money as mentioned in the seized documents (Supra). AO has simply relied upon the admission based on the recorded sworn statement u/s 132(2) of Act of Sh Vijay Kr Jain & a....
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....re, onus is on the AO to prove that what was stated in the seized document, are true. Such an interpretation would render the deeming provisions of section 292C otiose and presumption as to the correctness of seized documents is automatic under section 292C of the Act unless the contrary is proved and as such, the assessee was legally required to substantiate the seized documents with supporting evidence. Here I would also like to quote decision in case of ACIT vs. VATIKA GREENFIELD (P) LTD (Del) 121 TTJ 208 (2009), wherein Hon'ble Delhi High Court has held that unless some evidence or material is brought on record by the assessee to show that what is stated in the seized document is not correct state of affairs and the state of affairs stated in the seized document has to be presumed to be true as mandated by Sec.292C of the Act. In this regard, AO has also not brought out any further corroborative evidence to support his contention. However, appellant submits that even there are other corroborative evidences to suggest and confirm its contention. Therefore, in view of the facts and circumstances of the case itself would be sufficient to rebut the presumption u/s 292C....
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....e at time of search under section 132(4) may be used in evidence in any proceeding, yet that, by itself, does not become sole material to rest assessment, more so when assessee seeks to withdraw same by producing material in support of such retraction " Or similar facts, Hon'ble Ranchi High Court in case of CIT vs. Ravindra Kumar Jain (2011) 201 Taxman 95 (Jharkhand) in retraction case has held as under: "........Assessee retracted his statement- Surrender was not corroborated by independent EL7dence - Assessing Officer was duty bound to collect more evidence in respect of r disclosed income of assessee to justify the addition.." Now, facts of the case are that during the post search investigation and also during assessment proceeding, no effort was made to investigate from buyers of the flats about alleged on-money payment made to the assessee. During the search no other evidence including money trail evidencing on-payment by the buyers of the flats to assessee has been found. Even during the appellate proceeding, the AO vide letter dt 07.12.2016 has been asked to carry out necessary enquiry u/s 250(4) of the Act to substantiate his contenti....
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....er appreciating the facts contained in the present case, we found that the addition in the present case was made by the A.O. by simply relying upon the sworn statement made U/s 132(4) of the Act by Shri Vijay Kumar Jain Director, of the assessee company without placing any further corroborative evidence to prove his contentions. The ld. CIT(A)after going through the facts of the case, had passed a detailed order discussing entire facts and circumstances and also controverted all the findings and observation of the A.O. As per the factual position during the course of search, statement of one of the directors of Shri Vijay Kumar Jain was recorded. During the course of statement Shri Vijay Kumar Jain was examined with reference to certain rough papers found during the course of search. These papers have already been placed on record as page no. 1 to 4 of Annexure A-2. We have also perused the scanned copies of those page Nos. 1 to 4 put up as Annexure-A2. However, the A.O. has made additions without making any post search enquiries with reference to contents of pages 1 to 4 of annexure A-2. We have also perused the copies of affidavits of the buyers which have been placed on record b....
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....as categorically admitted that these papers do not have any date but he still presumed that these belong to the period when found and seized. In our view, no liability can be fastened on the basis of assumptions and presumptions and it is a settled law that the presumption whosoever strong may be but it cannot take place of proof and thus the A.O. has acted more on suspicion and doubt than on evidence. It is settled principle of law that suspicion however strong cannot take the place of evidence. We also drawn our attentions from the decisions in different cases wherein it has been time and again held that suspicion howsoever cannot take place of evidence. In this respect we relied upon the following decisions: (i) Uma Charan Shaw & Brothers 37 ITR 271 (ii) CIT vs. AnupamKapoor 299 ITR 179 (P&H) (iii) CIT vs. DhirajLalGirdhariLal 26 OTR 736 (iv) State Vs. GuljariLalTondon AIR 1979 (SC) 1382 (v) J.A. Naidu vs. State of Maharastra SC 1537 (vi) Krishnand vs. State of Mandharsinghji P. Jadera (2005) 281 ITR 0019 AIR 1977 SC 796 (vii) Dhakeshwari Cotton Mills 26 ITR 775 (SC) (viii) Omar Shaa 37 ITR 151 (SC) ....
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....an be made on the basis of a loose paper which does not contain the name and the date of payment. The department is precluded in drawing inferences on the basis of suspicion, conjecture and surmises and no addition can be made on the basis of such dump document or loose sheets. The ld AR also invited our attention to the chart which was also filed before lower authorities, which discloses certain flats were not sold upto the date of search as such there was no question of receiving any amount on account of on-money. Even in the written submissions filed before lower authorities, it has categorically mentioned by the assessee that flat no. 201, 202, 301, 602 of JKD Pearl Landmark and flat no. 101, 102, 302 of JKD Pearl Stylome i.e. Mahaver Nagar Jaipur and flat no. 102, 604 of JKD Pearl Aura, Alwar were sold much later i.e. in the year 2014 whereas the search was conducted on 05.09.2013.The assessee had also specifically submitted that mentioning of receipt of amount against these flats in the seized papers is therefore fake as these have been sold at a later date. Therefore, in these circumstances the sale amount mentioned against these flats and shown to be have been received by t....
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....lar records. The assessee had also drawn our attention to the comparison made by him with respect to amount of sale with regular books vis a vis seized papers. The assessee had also drawn our attention to the fact that even the accounted amount mentioned in column 'A' of these pages i.e. page Nos. 1 to 4 of Annexure-A2 also do not tally with the consideration shown in the registered sale deeds and in this respect, following chart has been placed on record, which is reproduced below: JKD Pearl Landmark FLAT NO. SALE PRICE AS PER SEIZED PAPERS SALE PRICE AS PER SALE DEED 101 1728125 2242209 301 * 10616900 10616900 302 10616900 10616900 401 10281250 10333820 402 10281250 10333820 501 & 502 20562500 20672190 601 & 102 10281250 12201500 602 * 10281250 10616900 701 10028375 10030720 702 10028375 10030720 801 8999375 9310980 JKD Pearl Stylome FLAT NO. SALE PRICE AS PER SEIZED PAPERS SALE PRICE AS PER SALE DEED 101 * 6538925 102 * 9572985 201 & * 201 13077850 301 6228125 6538925 302 * 6228125 ....
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....closed income of the assessee. No inference could be drawn against the assessee much less any inference of unexplained expenses on the basis of a dumb document found at the residence of its director as there is no proof to show that the amount mentioned in the said document was paid by the company. (iii) MoolchandKumawat& Sons Vs. DCIT (Ajmer) ITAT Jaipur Bench 42 Taxworld241 in M.A. No. 93/JP/2008 arising out of ITSSA No. 24/JP/2005 order dated 20.02.2009 Addition cannot be made on the basis of a dumb document or on the basis of entries found recorded on a paper seized during search without conducting any enquiry from the concerned party. (iv) Assistant Commissioner of Income Tax Vs. Satya Pal Wassan (2007) 295 ITR 9 AT 352 (Jabalpur) A document found during the course of a search must be a speaking one and without any second interpretation, must reflect all the details about the transaction of the assessee in the relevant Assessment Year. Any gap in the various components for the charge of tax must be filled up by the Assessing Officer through investigation and correlation with the other material found either during the course of the s....
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....der duress and whether it was retracted lawfully would have no relevance at this stage. However, the Tribunal went into these issues as well and ultimately, found that the statement could be used as evidence. Further, it examined other corroborative evidence referred to in the assessment order and arrived at a finding that the added income would be income which can be added under section 158BC for the block assessment period in question. In an appeal filed under section 260A to the Bombay High Court, the High Court found, after narrating the facts, that no substantial question of law arises. 4. We are of the view, in accordance with the view of the High Court, that no substantial question of law arises. Further, though it was vehemently argued by Shri Devansh A. Mohta, learned counsel appearing for the assessee, that this was a case both of perversity and of there being no evidence at all. We find that not only are the findings of fact recorded in some detail but that it is not possible to say that this is a case of no evidence at all inasmuch as evidence in the form of the statement made by the assessee himself and other corroborative material are there on record. ....
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....deration the finding of the Tribunal about retraction/resiling of the statements recorded under Section 132 (4) as the Tribunal has primarily come to a finding that retraction is proper. We would also deal with the judgments relied on by the learned counsel which has a bearing on the issues and would then give our own view on questions posed by the Revenue. 15. In our view, the statements recorded under Section 132 (4) have great evidentiary value and it cannot be discarded as in the instant case by the Tribunal in a summary or in a cryptic manner. Statements recorded under Section 132 (4) cannot be discarded by simply observing that the assessee retracted the statements. One has to come to a definite finding as to the manner in which retraction takes place. On perusal of the facts noticed hereinbefore, we have noticed that while the statements were recorded at the time of search on 9-11-1995 and onwards but retraction, is almost after an year and that too when the assessment proceedings were being taken up in November 1996. We may observe that retraction should be made as soon as possible and immediately after such a statement has been recorded, either by filing a complai....
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....his very view that retraction after a sufficient long gap loses its sanctity." 24. In light of legal proposition laid down by the Hon'ble Rajasthan High Court, there is clearly an inordinate delay in retraction and no justifiable explanation has been given by the assessee company for such delay. It is clearly an afterthought and loses its signifance. The statement recorded under section 132 (4) has great evidentiary value and there is no material which has been brought on record that such statement has been recorded and obtained forcefully/by coercion/undue influence. Further, the assessee has been consistent in his statements so recorded even during the post search proceedings when his statement was recorded under section 131. Hence, in light of above discussions, the retraction of the statement recorded under section 132 (4) cannot be accepted in the instant case." III It may be mentioned that in D.B. ITA No.140/2018 in the case of M/s Bannalal Jat Constructions Pvt. Ltd. Vs ACIT, the Hon'ble High Court of Rajasthan vide its judgement dated 31.08.2018 has upheld the order of Hon'ble ITAT, Jaipur and has observed that: "This court in CIT, Bik....
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....ss 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 Construction Private Limited in respect of unexplained cash amounting to Rs. 1,21,43,210/-and Rs. 2,50,00,000 and Rs. 30,00,000/- totalling to Rs. 2,80,00,000 in his individual capacity. Subsequently, on 04.12.2014 during the post-search proceedings, statement of Shri Bannalal fat was again recorded under Section 131 of the IT Act, wherein he was again confronted with ....
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....is not permissible in the eyes of law. The statement recorded during the course of search action which was in presence of independent witnesses has overriding effect over the subsequent retraction. In view of the above discussion, the question formulated vide order dated 09.05.2018 is answered in favour of the revenue and against the assessee." II-A It may be mentioned that the SLP filed by the assessee in the above case has been dismissed by the Hon'ble Apex Court as reported in Bannalal Jat Constructions (P.) Ltd. Vs CIT [2019] 106 taxmann.com 128 (SC). III-A In the case of PCIT Vs Shri Roshan Lal Sancheti, in D. B. ITA No. 47/2018 vide its judgement dated 30.10.2018, the Hon'ble Rajasthan High Court has affirmed its above referred earlier judgement in the case of Banna Lal Jat and held as under: "In view of the law discussed above, it must be held that statement recorded under Section 132(4) of the Act and later confirmed in statement recorded under Section 131 of the Act, cannot be discarded simply by observing that the assessee has retracted the same because such retraction ought to have been generally made within reasonable time or ....
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....disclosed income. It was incumbent upon him to show that he had made a mistake in making that admission and that the said admission was incorrect. He had access to all the documents which has been seized inasmuch as the copies had been supplied to him. However, he did not produce anything to establish that the admission was incorrect in any way. That being the position, the appellant/assessee cannot resile from his earlier statement made on 10-11.11.2005 and 21.11.2005. 12. The learned counsel for the appellant/assessee also referred to the Supreme Court decision in the case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [19731 91 ITR 18 for the proposition that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It was contended that it was open to the person who made the statement to show that it was incorrect. There cannot be any doubt about this position in law, but, in the present case the appellant/assessee has not produced any material to show that the admissions made by him were incorrect. The statements recorded u/s 132(4) of the said Act are clearly relevant and admissible and they can be used as evidenc....
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....nt ought to have proved retraction to be untrue cannot be countenanced in view of the specific words employed in Section 132(4)." VI In the case of CIT Vs Lekh Raj Dhunna [2012] 20 taxmann.com 554 (Punjab & Haryana), it has been held by the Hon'ble High court that: "17. Thus, in view of sub-ss. (4) and (4A) of s. 132 of the Act, the AO was justified in drawing presumption against the assessee and had made addition of Rs. 9,00,000 in his income under s. 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 dt. 24th Nov., 1998 and 11th March, 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....
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....ficer as well as the Commissioner of Income Tax (Appeals) and the Tribunal. The notings are clear and it is not any scribbling, which shows the figures and also shows whether the payments were in cash or in cheque. The retraction made by the assessee, after a period of two years, was rightly rejected as an afterthought." 18. Whereas on the contrary, the assessee has relied upon the following decisions: (a) Contech Transport Service (P) ltd Ors V/s ACIT (2009) 19 DTR 191 (Mumbai) 28-11-08 No addition can be made only on the basis of admission in statement u/s 132 (4) (b) Chitra Devi V/s ACIT (Jodhpur Branch) (2002) 77 TTJ (Jd) 640 Statements recorded during search are not evidences found during search. Addition cannot be made on the basis of statement alone. (c) KailashhenManharlalChokshiVs CIT (2008) 14 DTR 257 (Guj) It is also to be seen as to whether an addition made is merely based on the statement recorded by the AO under s. 132(4) 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....
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....er harassment. In the normal course if the surrender was genuine the revenue authorities should have and would have crossed checked the details and facts of amount mentioned in these pages. They should have verified at least a few entries of the accounted amount mentioned in these pages. No such exercise was done neither during the search nor during the course of assessment proceedings the post search enquiries do not reveal anything against the assessee. Merely harping on the rough pages and on the statement of the assessee u/s 132(4) wont help in making additions. Further during the course of assessment proceedings parties have been called u/s 131 who have purchased the flats and they have stated that no on money was paid by them. The Learned Assessing Officer also called for information u/s 133(6). Despite a written request the Learned Assessing Officer has not furnished copies of statement recorded u/s 131 and information collected u/s 133(6) as these go in favour of the assessee. The assessee humbly requests that the records of the Learned Assessing Officer may be called for the purpose and verified. Further a number of affidavits were furnished by the assessee from persons wh....
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.... details of transactions and it is a settled proposition of law that if a document does not contain any date and name and only contains numerical figures then such document is vague and dump document and no addition can be made on the basis of such document. In order to avoid any repetition, we would like to confine ourselves to the glaring errors in the investigation/verifications carried out by the revenue authorities. The ld. CIT(A) has already mentioned in detail the deficiencies/discrepancies in the verifications carried out by the revenue department and even according to the assessee, since the sale already stood completed, there was no occasion for the assessee to have shown outstanding amount against the sale of flats and apart from the above certain flats have been sold much after the date of search details of which have also been supplied by the assessee to the revenue authorities. Therefore, according to the assessee, it was all enough to establish that the papers were rough and deserves no consideration, therefore, surrender made on the basis of these papers was correctly retracted. The assessee had retracted on the surrender vide letter dated 29.02.2016 to the DGIT(Inv....
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....s the undisclosed income during the course of the search &seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessees while filing returns 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 leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Departments. Similarly, while recording statement during the course of search it seizures 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 officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders Yours faithfully, Sd/- (S. R. Mahapatra] Under Secretary (Inv. II) (ix) F.No. 286/98/2013-IT (I....
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....T- 21. The CBDT had issued instructions wherein it has been instructed that no surrender should be obtained and assessment should be completed not on the basis of such surrender but on the basis of material gathered during search. However, in the present case, the A.O. had made additions solely on the basis of solitary statement made by the Director of the assessee. Even the Hon'ble Jurisdictional High Court of Rajasthan in the case of CWT vs. Sanwarmal Shivkumar 171 ITR 337 has held that the officers of the Department are bound by the circulars of the board. Further in the following cases the Courts have held that circulars issued by the Board are binding: - (i) Navnit Lal C Javeri Vs. Sen (1965) 56 ITR 198 (SC) (ii) K.P. Varghese vs. ITO (1981) 131 ITR 597 (SC) (iii) UCO Bank vs. CIT (1999) 237 ITR 889 (SC) (iv) Union of India vs. Azadi Bachoo Andolan (2003) 263 ITR 706(SC) 22. Although, ld CIT-DR has stressed on the fact that the presumption of correctness is attached to the statement recorded U/s 132(4) of the Act and even the A.O. has categorically mentioned that page No. 1 to 4 of Annexure-A2 were found and seized during the course of....
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....he ld. CIT(A) and also filed written submissions in order to controvert the ground of appeal raised by the revenue, the same is reproduced below: "The assessee made following submission before the Learned CIT(A) and who has deleted the entire addition made by the Learned Assessing Officer after considering the submission of the assessee and has given the finding that Assessing Officer has simply relied upon the sworn statement of Shri Vijay Kumar Jain Director of the appellant company without placing any further corroborative evidence to prove his contention. Therefore, Assessing Officer has failed to establish the contrary. Following the same principle other addition was also made of Rs. 2.5 Crore without carrying out any enquiry or placing any corroborative evidence in support of his contention is hereby deleted. The submission made before the Learned CIT(A) is quoted as under: - The Learned Assessing Officer has made addition of Rs. 2,50,00,000/- as per para 9(b) of the assessment order appearing on page 28. The same is reproduced as under: - "It is worthwhile to mention here that vide show cause notice referred in above paras of this order assessee wa....
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.... quoted below: - "Unexplained expenditure, etc. 69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year: Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income." The perusal of the aforesaid provisions reveals that it is applicable in the following conditions: - (i) When the assessee has incurred any expenditure. (ii) When assessee fails to offer no explanation about the source of such expenditure. It is submitted that in the case of the assessee no such conditions exist. The Learned Assessing Officer has not pointed out any expenditure incurred by the assessee of which the source could not be explained. I....
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....aised by the revenue in ITA No. 324/JP/2017. Since the facts and circumstances, submissions made by both the parties as well as judicial pronouncements referred by both the parties are pari materia to the facts and submissions made in the ground No. 1 raised by the revenue in ITA No. 324/JP/2017. Therefore, we do not find any reason to interfere in the finding so recorded by the ld. CIT(A) and hence, we uphold the same. 29. In the result, both the appeals of the revenue are dismissed. Order pronounced in the open court on 09th September, 2020. ============= Document 1 To, The Deputy Commissioner of Income Tax, Central Circle - 2, Jaipur Sub: Application for providing copy of statement recorded during the course of assessment proceedings in the case of M/s JKD Pearl India Developers Pvt Ltd 205, 2nd Floor, Gaurav Tower, JLN Marg, Malviya Nagar, Jaipur Assessment Year - PAN 2014-15 AAFCA5640Q Respected Sir, The assessee is in appeal against your order for the Assessment Year 2014-15 before the CIT(Appeals)-4, Jaipur For contesting the case and for preparing the submissions in this regard copies of following documents are require....
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....sessee and nothing is verifiable with reference to any other record found during the course of search and there is no nexus of these papers, with the material found during search DP Developers Pvt Ltd JKD Pearl JKD Pearl India Developers (P) Ltd. Pearl Suryavanshi 401, A-5, Sardar Patel Marg, C-Scheme, Jaipur-302001 Ph: +91 1414014044 e-mail: [email protected] www.pearlgroupindia.com Page No. 4 of annexure A-2 Pearl Divine Banipark, Jaipur Flat Area I A @3000 Per Flat No. Rate/Sq.ft Amount Sq.ft. sq.ft 1 209 1742.63 6100.00 10630043.00 5227890.00 5402153.00 2 210 1742.63 6100.00 10630043.00 5227890.00 5402153.00 3 302 1795.60 6100.00 10953160.00 5386800.00 $566360.00 16370666.00 Details of total surrender: Sr. No. Page no. of annexure A-2 1 1 2 2 3 3 4 4 عرية Amount surrendered 126168050 44703000 87790000 16370666 275031716 5/9/13. The printouts of the above papers were taken out from the computer at the office premises located at 401, Pearl Survanshi, A-5, Sardar Patel Marg, Jaipur. The surrender was made on the....
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.... (i) The papers do not contain the date of transaction. It is settled position of law that undated papers found during search have to be treated as dump papers. It has been held in the case of Mool Chand Kumar & Sons Vs. DCIT 42 Taxworld 241 that "A document which does not contain any date or name and only contain numerical figure is vague and dump paper". (ii) The names of buyers are not available on these papers which only establishes that these papers contain only projections of prospective sales. (iii) Even the amount shown in column 'A' which is alleged to be the accounted part of the sale price is also not verifiable from the.... books of accounts. This, shows that the figures which are available. on these papers are not relatable to the business of the assessee and these are only rough papers. If a sale had taken place as per noting on these papers then atleast part of the accounted amount would have been reflected in the regular books of accounts. Thus these papers have no nexus with the business of the assessee. Any surrender obtained on the basis of these papers is unjustified and unlawful. This is supported b....
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.... 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 s. 132(4) at midnight. 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. The main grievance of the AO was that the statement was not retracted immediately and it was done after two months. It was an afterthought and made under legal advise. However, if such retraction is to be viewed in light of the evidence furnished along with the affidavit, it would immediately be clear that the assessee has given proper explanation for all the items under which disclosure was sought to be obtained from the assessee. Thanking You. Yours faithfully, For JKD Pearl Indie Developers Pvt. Ltd. Date: 27.06.2014 Place: Delhi Юрий Director (Vijay Kumar Jain) Director of M/s JKD Pearl Developers Pvt Ltd Sidde S.L. Poddar) Counsel for....