TaxTMI 
TaxTMI 
2021 (2) TMI 329
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....ve led the officials to conclude that an on-money was paid. 3. As the assessee had confessed to offer the additional amount as income, only 'tentatively" during a statement recorded at about 2 am, and had retracted it in a return of income furnished on 07- 05-2015 as required by a notice dated 09-04-2015, the addition made on its basis is not justified. 4. Such a statement recorded at odd hours should not have been considered as a voluntary one (328 ITR 4II (Guj). 5. Similar confession retracted only by a return of income, was accepted by the Madras High Court in 303 ITR 235 and deletion of amount treated as on-money held valid, observing that it is harsh and unequitable to tax a notional income. 6 While Madras High Court in 282 ITR 259 (affirmed by Supreme Court in 294 ITR 49) accepted a retraction of confession made on the basis ofa slip seized during search, in spite of transferor's filing a revised return including 'on-money, the Assistant Commissioner ought not to have rejected the retraction, on an incorrect view that it was made only on 20-12-2016. 7. The Department ought to have made independent enquiries on the market value of t....
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....ed that he purchased a property for which requirement of funds has been estimated. However, property has been subsequently purchased for a consideration which is different from the consideration recorded in executive diary. During the course of search, statement u/s. 132(4) of the Act was also recorded wherein assessee admitted maintenance of diary and also confirmed entries recorded therein and accordingly, admitted undisclosed income on account of on-money payment for purchase of property at Rs. 94,28,000/-. The Assessing Officer, on the basis of incriminating materials found during the course of search coupled with statement recorded from assessee has arrived at undisclosed income towards on-money payment for purchase of property on the basis of cash flow statement filed by assessee at Rs. 49,50,000/- and made additions u/s.69 of the Act. The assessee carried the matter in appeal before first appellate authority, but could not succeed. The learned CIT(A), for the reasons recorded in his appellate order dated 01.03.2019, confirmed additions made towards on-money payment for purchase of property on the ground that additions made by Assessing Officer is not only based on statement ....
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....ourt, vide its order dated 05.03.2020 has set aside the appeal to the file of the ITAT 'B' Bench for fresh consideration with a direction to consider orders of Chief Revenue Officer / Inspector General of Registration, Chennai-28 dated 11.02.2013 on the ground that although assessee has specifically taken a ground challenging additions made by Assessing Officer towards on-money payment for purchase of property, ignoring value of property assessed by revenue authorities for payment of stamp duty and such valuation is almost equal to value of property declared in the sale deed, the Tribunal failed to adjudicate specific ground taken by the assessee . The relevant findings of the Hon'ble High Court are as under:- "9. This Court has carefully considered the rival submissions and also perused the materials placed before it. 10. A perusal of the order passed by the CIT (Appeals) dated 01.03.2019 as well as the original order dated 08.11.2019 passed by the Income Tax Appellate Tribunal did not deal with the aspect as to the adjudication done under Section 47 (A) (1) of the Indian Stamp Act. It also appears from the materials placed in the form of additional typed set of ....
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....gh assessee has retracted such statements before completion of assessment proceedings. Therefore, there is no value for the statement which was subsequently retracted and hence, the same cannot be a basis for making addition towards on-money payment for purchase of property. The AR further submitted that assessee has challenged additions made by Assessing Officer on the ground that entries recorded in executive diary is an estimate made for purchase of property, because the property purchased was an old property, which requires reconstruction and hence, assessee has estimated funds required for purchase and construction of building. However, property was purchased at the stated consideration in the sale deed which was ultimately more or less equal to value determined by stamp duty authorities. Further, although there is a minor difference in value shown in sale deed as well as value determined by authorities for the purpose of stamp duty as such difference is less than 6% which is negligible. Therefore, additions made by Assessing Officer only on the basis of statement recorded during the course of search is incorrect. The AR further submitted that when the assessee specifically....
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....or purchase and construction of property, but not amount paid for purchase of property. To strengthen his argument, assessee has taken support from the order of Chief Revenue Officer /Inspector General of Registration, Chennai dated 11.02.2013, where value of property has been arrived at Rs. 44,84,700/-, as against recorded consideration of Rs. 42,00,000/-. We have carefully considered the arguments of assessee in light of facts brought out by the lower authorities including facts recorded by Tribunal. The Tribunal in earlier round of litigation on perusal of various details, recorded categorical finding that sole basis for addition towards on-money payment for purchase of property is an executive diary found during the course of search. It was further noted that when the document found during the course of search was confronted to assesse, the assessee has admitted contents and also admitted undisclosed income towards on-money payment for purchase of property. Therefore, from the above it is very clear that the revenue authorities went on to decide the issue only on limited point of whether assessee has paid on-money for purchase of property and such payment is supported by evi....