AI Drafter 
TaxTMI 
TaxTMI 
2021 (9) TMI 1073
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....ecorded in the books of account for the period 01.04.2010 to 14.12.2016 Rs. 25.00 lacs." 3. However, the AO, during the course of assessment proceedings, noted that the assessee firm had not shown the aforesaid amount of Rs. 25 lakhs in the return filed u/s 139(1) and has not offered to tax. Since the assessee had suo motu offered the above amount and has not retracted specifically, but, had retracted by not offering the above amount as its income, the AO held that the above amount is liable to be added back to the returned income of the assessee firm. He, therefore, issued the notice u/s 142(1) asking the assessee firm to explain as to why the amount of Rs. 25 lakh should not be added to the total income of the assessee. 4. It was explained that the assessee firm is engaged in the business of manufacturing and export of Indian handicrafts. During the search on 15th December, 2016, the statement of the partner was recorded and no additional income was disclosed. It was submitted that search was conducted at the premises of the partnership firm M/s Vision Exports where both the sons of the deponent Mr. Danish Ali and Mr. Tariq Ali are partners. Mr. Tariq Ali in his statement r....
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....IT v. Ashok Kumar Soni (2007) 291 ITR 172; (xi) Ravi Mathur & Others (DB Appeal No.67/2002 & Others - Rajasthan High Court); (xii) Pr. CIT vs. Avinash Kumar Setai (ITA 935/2016 dated 01.05.2017); (xiii) Kanti Lal Parbhu Das Patel vs. DCIT (2005) 93 ITD 117 (Indore); (xiv) Dr. SC Gupta vs. CIT (2001) ITR 782 (All); (xv) Kantilal C. Shah vs. ACIT (2011) 133 ITD 57 (Ahd); & (xvi) ACIT vs. Hukumchand Jain (2011) 337 ITR 238 (Chattisgarh). 6. In appeal, the ld.CIT(A) upheld the action of the AO. While doing so, he relied on the decision of the Hon'ble Allahabad High Court in the case of Ravi Kumar Verma vs. CIT reported in 214 Taxmann 117, wherein it has been held that retraction made after four years is an afterthought and the decision of the Hon'ble Allahabad High Court in the case of Dr. S.C. Gupta vs. CIT, reported in 248 ITR 782 wherein it is held that retraction of statement made voluntarily is not sufficient and the burden is on the assessee to establish that earlier admission is wrong. 7. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:- " ....
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....e assessee in the 131(1A) proceedings, he submitted that the reply of the assessee mentions that income pertains to the period from 01.04.2010 to 14th December, 2016. However, the AO, in the instant case, has added the whole income in the impugned assessment year without making any further inquiry for the impugned assessment year and has not made any addition during A.Y. 2011-12 to 2016-17. 9. Referring to the decision of the Hon'ble Supreme Court in the case of CIT vs. Mantri Share Brokers Pvt. Ltd., 96 taxmann.com 280, he submitted that the Hon'ble Supreme Court has held that no addition u/s 69B can be made in the hands of the assessee where except the statement of Director of the assessee company offering additional income, there was no other material found in the form of cash, bullion or jewellery or document in any other form to justify the said additional income. Referring to the decision of the Hon'ble Allahabad High Court in the case of CIT vs. Dilbagh Rai Arora, reported in 263 Taxman 30, he submitted that the Hon'ble High Court in the said decision has held that merely because during the search the assessee surrendered an amount in stipulation that details of same woul....
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....n the books of account for the period 01.04.2010 to 14th December, 2016." I find, the AO, while making the addition has also observed that the assessee had not disclosed the above amount in his return of income, the retraction letter filed vide affidavit dated 15th October, 2018 was at the fag end of the assessment proceedings and the assessee did not file any evidence to prove the bona fide on its part. I find, the ld.CIT(A) upheld the action of the AO on the ground that the assessee had voluntarily disclosed Rs. 25 lakhs during post search investigation proceedings which was not disclosed in the return of income filed u/s 139(1) of the Act and this act of the assessee tantamount to retraction from disclosure of Rs. 25 lakhs made by the assessee. According to the ld.CIT(A), the retraction from the disclosure of income of Rs. 25 lakhs made by the assessee is clearly an afterthought and, therefore, is not acceptable. It is the submission of the ld. Counsel that no material pertaining to the assessee was found during the search on 15th December, 2016 showing the existence of any unexplained investment which is evident from 'Panchnama.' Further, no admission was made in the statement ....
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....s no other material on record to assess the income of Rs. 1,82,00,000/-. 11. It is settled proposition of law that merely on the statement that too also was taken in view of threat given in question No.36 as narrated by Mr. Gupta and the same sought to have been relied upon, there is no other material either in the form of cash, bullion, jewellery or document in any other form which can come to the conclusion that the statement made was supported by some documentary evidence. We have gone through the record and find that the CIT (A) has rightly observed as stated hereinabove, which was confirmed by the Tribunal. 12. That in view of the matter the issue is required to be answered in favour of the assessee against the Department. 13. The appeal stands dismissed." 12. Similarly, the Hon'ble Allahabad High Court in the case of CIT vs. Dilbagh Rai Arora, reported in 263 Taxman 30, has held that merely because during search the assessee surrendered an amount in stipulation that details of the same would be given in due course of time, but, no such assets were ever found/identified by the authorities, no addition could be made to assessee's income. The releva....
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.... The case law cited by the department in the case of Ravinder Kumar Verma (supra) wherein the search was conducted on 14.5.1998 at the business premises in Lucknow and various papers, books of account and cash were seized and later on by letter dated 5.4.2002 the assessee retracted the confessional statement and on that basis the Hon'ble Court came to the conclusion that after almost 4 years the retraction was made and further there was no allegation of coercion or any threat whereupon addition was made, which is afterthought. 19. Paragraph 29 of the judgment in M/S Vertex Chemical Industries (Supra) is quoted herein below:- "29. In our case, the aforesaid judgment has no application. The reason is that here is not a case of retraction by Assessee but during the course of assessment, documents produced by him have been examined threadbare and thereafter, reasons for addition have been given. This approach is evident from the fact that Assessing Officer has not mechanically made addition of Rs. 9 lacs which was disclosed in the statement under Section 132(4) of Act, 1961 but actual addition is only Rs. 8,12,360/- which shows due application of mind on the part ....