TaxTMI 
TaxTMI 
2006 (12) TMI 127
X X X X Extracts X X X X
X X X X Extracts X X X X
....or the assessment year 1997-98 and I. T. A. No. 796/Mds/2004 for the assessment year 1997-98, raising the following common substantial questions of law : "1. Whether the statement made during the course of search under section 132(4) of the Income-tax Act, 1961, voluntarily by a person is admissible in evidence or not ? 2. Whether, on the facts and circumstances of the case an admission made voluntarily relating to undisclosed income, not immediately retracted within a reasonable time, and was retracted only after the service of summons during the course of recording statement would itself negate the admission ?" T. C. (A) No. 2663 of 2006 : 2. The facts arising out of this appeal are as under : (i) There was a search in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....money over and above Rs. 34 lakhs mentioned in the document, by filing an affidavit could not absolve the assessee from the consequences of the sworn testimony recorded under section 132(4) of the Act. Further it is submitted that the assessee had no case to retract that the on-money has not been paid later and also the assessee himself has accepted that the admission given by him before the Deputy Director of Income-tax (Investigation) on the date of search is purely voluntary and not out of compulsion, or there is no undue influence on the assessee. Further it is contended, no more is necessary to prove and hence, the Revenue is right in assessing the sum of Rs. 23 lakhs as undisclosed income for the block period. (iii) Heard counsel. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....seen from the record that the assessee is not the owner of the property and only his wife and children are the co-owners. Later, on January 4, 2001, all the three coowners have also categorically denied payment of any on-money to the seller over and above Rs. 34 lakhs mentioned in the registered document. Two statements were recorded from Shri K. Jagannathan, the seller, on April 23, 1999, as well as on February 8, 2001, and he has also categorically stated that neither he nor any of his family members received any on money from the buyer. Further, there is no documentary evidence found or discovered during the course of search to prove that on-money has passed in the sale transaction. There is no basis for making addition by way of undiscl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed income shall be the aggregate of the total income of the previous years falling within the block period computed in accordance with the provisions of the Income-tax Act on the basis of the evidence found as a result of search or any other material or information available with the Assessing Officer and relatable to the evidence found during the course of search. In this case, admittedly, there is no evidence or material found during the course of search operations. The statement recorded from the assessee was subsequently retracted and rebutted. Further more, the statement is not relatable to any seized material. Therefore, even the statement cannot be the basis for making any addition. When the sale deed discloses a sale considerati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1997-98. The returns were processed under section 143(1)(a) of the Act and, subsequently, notices under section 148 were issued on the basis of the information received from the Deputy Director of Income-tax that a survey was conducted in the business premises of the assessees consequent to the information gathered at the time of search in the case of Sri K. Bhuvanendran, the assessee in T. C. (A) No. 2663 of 2006. At the time of search, the said Bhuvanendran had admitted, while replying to question No. 2 in the sworn statement recorded on March 19, 1999, that his sons Sri K. B. Sreenivasan and B. Sakthivel and his wife Smt. B. Rajalakshmi had purchased a property at 8 and 9, Arunachala Asari Street, Salem, for a sum of Rs. 34 lakhs as r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vanendran on March 19, 1999. Admittedly, the said Shri Bhuvanendran retracted the statement. No other material was available to show that any on-money was paid. The Assessing Officer found that the property was located in a busy commercial locality and the market price is much more than the price quoted in the document. It is well-settled principles of law that market is nothing but the price agreed between a willing purchaser and a willing seller. Therefore, it is for the purchaser and the seller to determine the market price after taking into consideration of the locality of the property. The State Revenue authorities after considering the transaction accepted the market price disclosed in the sale deed. Therefore, the burden of proof is ....