TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 1661
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....ncriminating materials. This is against the legal position held by various courts. In the case of Kishore Kumar Vs CIT (62 taxmann.com 215, 234 Taxman 771), Hon'ble Supreme Court dismissed SLP against High Court's order where it was held that since assessee himself had stated in sworn statement during search and seizure about his undisclosed income, tax was to be levied on basis of admission without scrutinizing documents. 2. Ld. CIT (A) has erred in facts or law in stating that retracted statements have no evidentiary value. Ld. CIT (A) has failed to appreciate the fact that assessee has not brought any facts during the assessment proceedings or appellate proceedings on the basis of which retraction would be held valid. 3. Ld. CIT (A) has erred in facts in ignoring the statements of Anil Sankhwal, recorded u/s 132(4) of the IT Act where he had categorically accepted that he and his son regularly visited Kuwait for the purpose of exhibition. They had clients in Kuwait to whom, they exported jewellery and diamond. They did under-invoicing, so that they could save some custom duty. The difference amount of these sales made to clients in Kuwait was given to his daughter in....
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....of the Act after reducing an amount of Rs. 6,930/-, from the return originally filed u/s 139 of the Act. 6. Aggrieved, the assessee went in appeal before the ld. CIT(A) who after discussing the case and evidence submitted, deleted the additions made. 7. Now the aggrieved Revenue is in appeal before us. 8. Before us, the ld DR strongly supporting the order of the assessing officer, argued that in the course of the search, Mr. Anil Sankhwal [Father of Amit Sankhwal (son) and Anjali Shah (daughter)] gave a statement u/s 132(4) on 28/29.07.2016 where he admitted that the assessee, his wife Priti Sankhwal and his son Amit Sankhwal had received 7.21 crore as foreign remittances from his daughter Anjali Shah in F.Ys. 2014-15 and 2015-16. The ld. DR referred to the statement where the assessee explained in detail that he under invoiced the export sale to save custom duties and the difference in the sale proceeds were collected from the clients in Kuwait by his daughter Anjali Shah. The collection of the under-invoiced export sales proceeds was remitted as gifts by Anjali Shah from Kuwait to India in the assessee's books to evade income tax. The ld DR emphasized that the assessee volunta....
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....gh entity "Wow Ballons and Gifts & Accessories" in Kuwait in support of credit worthiness; Copies of Foreign and Indian Bank Accounts of Mrs Anjali Shah as also of the recipient of Gift along-with memorandum of Gift in support of genuineness and Copy of Passport & Residency permit of Mrs Anjali Shah in support of Identity. 12. It was also submitted that the assessee has few more concerns such as (i) J H Jewellers LLP, (ii) JH Jewellers Pvt Ltd; (iii) Maharaja Tie Up Pvt Ltd ;(iv) Dynamic Enclave Pvt Ltd involved in the business of jewellery. It was submitted that there was a survey conducted simultaneously on the same day i.e. 27.07.2016 on the above entities. It was the say of the ld AR that no incriminating material was found at the premises of these entities. It was submitted that a statement of Amit Sankhwal (son) was recorded u/s 133A on 29.07.2016 wherein Amit Sankhwal categorically stated that gifts received by Anil Sankhwal/Priti Sankhwal from Anjali Shah were out of her earning from apparel business. 13. The ld AR further submitted that the JH Jewellers LLP has made exports of jewellery to Raaya Fine Jewellery, Kuwait from time to time, all of which have been recorded in....
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....s case laws regarding validity of retraction and for the proposition that the statement recorded u/s 132(4) of the Act, can form a basis for a search assessment only if such statement is corroborated with any incriminating evidence of undisclosed income unearthed during search. The statement solely cannot be the basis for making an assessment as follows: (1) Vinod Solanki Vs. Union of Indian SLP (C) No. 3537 of 2008 Civil Appeal No. 7407 of 2008 (SC) (ii) Pullangode Rubber Produce Co. (1973) 91 ITR 18 [SC] (iii) CIT v. Sunil Aggarwal[2015] 64 taxmann.com 107 (Delhi) iv) PCIT V Meeta Gutgutia Prop. M/S. Ferns 'N' Petals 017 (5) Tmi 1224 - Delhi High Court (v) CIT v. Uttamchand Jain [2009] 182 Taxman 243 (Bombay) (vi) Abhi Developers v. Income-tax Officer, Ward 2(1), Surat (2007) 12 SOT 44 (ahd.) (vii) CIT-II, Hyderabad v. Naresh Kumar Agarwal [2015] 53 taxmann.com 306 (Andhra Pradesh) (viii) Deputy Commissioner of Income-tax, Circle 6(1), Ahmedabad v. Pramukh Builders [2008] 112 ITD 179 (Ahmedabad) (TM). 18. The ld AR relied on the following judicial pronouncement for the proposition that statement recorded u/s 132(4), which were retracted, without reference....
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....to tax in India under the jurisdiction of Ward-32 (5), New Delhi under PAN: ABIPS9071 Q in Status of Non Resident. Creditworthiness: As mentioned is the above paragraphs, Mrs. Anjali Shah and her husband Mr. Abhinn Shah are capable enough to gift the mentioned sum of money as evident from the Audited financial statements of Mrs. Anjali Shah and Mr. Abhinn Shah, Thus, the creditworthiness of the Donor stands explained. Genuineness: The copy of gift deeds and the copy of Bank Statements from where the amounts were transferred to the appellants Bank Account, are part of the record. Also the source i.e. from where the donor received the funds was filed. 22. The ld AR relied on the following judgements: (1) CIT, Delhi-2 vs Kinetic Capital Finance Ltd [2011] 14 taxmann.com 150 (Delhi) (ii) CIT v. Dwarkadhish Investment (P.) Ltd. [2010] 194 Taxman 43(Delhi) iii) Neelamben Gopaldas Agrawal v. Income-tax Officer (iv) Smt (iv) CIT vs Dr. Kodela Siva Prasada Rao [2013] 29 taxmann.com 18 (Andhra Pradesh) (v) Nirmal Rani v. DCIT, Ambala City [2017] 79 taxmann.com 180(Chandigarh - Trib.) (vi) CIT-VI v. Heena Sharma [2013] 33 taxmann.com 176 (Gujarat) 23. We have heard the rival s....
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.... during search and cannot be the sole basis for making a block assessment. If the revenue's contention that the block assessment can be framed only on the basis of a statement recorded under section 132(4) is accepted, it would result in ignoring an important check on the power of the Assessing Officer and would expose assessees to arbitrary assessments based only on the statements, sometimes extracted by exerting undue influence or by coercion. Sometimes statements are recorded by officers in circumstances which can most charitably be described as oppressive and in most such cases, are subsequently retracted. Therefore, it is necessary to ensure that such statements, which are retracted subsequently, do not form the sole basis for computing undisclosed income of an assessee. (Para 24)" 25. In accordance with the Delhi High Court decision in Best Infrastructure, we note that the statements of Anil Sankhwal and Anjali Shah cannot be considered as incriminating material by themselves. Furthermore, we find that these statements were retracted within 10 days i.e., on 05.08.2016 through affidavits clearly stating that the initial statement was recorded under duress and coercion. ....
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....hjewellers.com and [email protected] and [email protected] to allege that Mr. Abhinn Shah and Mrs. Anjali Abhinn Shah were managing the jewellery business for the Sankhwals in Kuwait. However, we could not find any instance where either the AO or the ld DR has dislodged or controverted the assessee's claim that all the sales made by M/s JH Jewellers LLP to Raaya Fine Jewellery, Kuwait were duly recorded in the books of accounts of the Firm. 29. We are inclined to agree with the assessee's submission that the reliance of the AO, for the validity of statement u/s 132(4), on the decisions of B. Kishore Kumar Vs CIT; Bhagirath Aggarwal vs. CIT and CIT Vs M.S. Aggarwal are distinguishable on facts. We are also inclined to agree with ld AR that decisions in the cases of M/s Pebble Investment and Finance Ltd. Vs. ITO; Raj Hans Towers (P) Ltd. Vs. CIT; PCIT Vs. Avinash Kumar Setia are related to survey proceeding, hence distinguishable. 30. Further, the assessee has placed on record the order of the coordinate Delhi bench in the case of Shri Amit Sankhwal (son of Anil Sankhwal) in ITA 1564 & 1565/Del/2020 for A.Ys 2011-12 and 2013-14 wherein the issue of incriminating mate....