TaxTMI 
TaxTMI 
2025 (6) TMI 558
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....assessee are as under :- ITA No. 1149/JP/2024 - A.Y. 2017-18 (Revenue) "1. Whether on the facts and in the circumstances of the case, the Id. CIT(A) has erred in giving a relief of Rs. 1,01,18,885/- in AY 2017-18 by unlawfully and erroneously determining the cost of acquisition in AY 2016-17 and giving its set off of against income of A. Y. 2017-18, when the fact of receiving of on money of Rs. 1,43,40,000/- has not been disputed by the Id. CIT(A)? 2. Whether on the facts and in the circumstances of the case, the Id. CIT(A) has travelled beyond his jurisdiction and erred in holding for A. Y. 2017-18 that "In the assessment order for AY 2016-17, the appellant has disputed the cost and the payment of on money and the appellant has contended that the total payment or the total cost was Rs. 2.5 Crore and has made such statement on oath also in the statement recorded u/s 131 of the Act. The total cost of acquisition is taken at Rs. 2.5 crores in this order subject to any further orders in proceedings in the case of the appellant" when the appeal of AY 2016-17 is still pending with CIT(A)? 3. Whether on the facts and in the circumstances of the case, the Id. CIT(A) has erred in gi....
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....r Shri Chandra Prakash Agarwal admitted of having paid on money in the purchase of Agricultural land from the assessee without allowing cross examination of Shri Chandra Prakash Agarwal. 7. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in restricting and confirming addition of Rs. 42,21,115/- as against addition of Rs. 1,43,40,000/- which was made by the learned AO despite there being contradictory statements of assessee and Shri Chandra Mohan Badaya regarding the sale consideration of land 8. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in not holding that the learned AO was not justified in applying the provisions of section 68 of the income Tax Act. 1961. 9. That in the facts and circumstances of the case and in law the learned CIT(A) has not held that in the case of the assessee section 68 was not at all applicable. 4. Apropos Ground of appeal of the assessee and that of the Department, the brief facts of the case are that the assessee filed a return of income on 01-08-2017 for the assessment year 2017-18 declaring a total income of Rs. 10,29,710/-. It is noted that a search and seizure ....
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....their partnership firm / proprietary concern as mentioned in above table. The land was subsequently sold to Shri Chandra Prakash Agarwal on 10-05-2016 through a deal and Shri Chandra Mohan Badaya, one of the purchaser, admitted at Question No. 6 in the statement recorded u/s 132(4) of the Act during the search proceedings u/s 132 of the Act conducted on 29-07-2016 at his residential premises at A-178, Surya Nagar, Taroo Ki Koot, Tonk Road, Jaipur that on 10-05-2016, he made a deal of 10 bigha land bearing khasra No. 379 and 384 situated at Sikar Road, Nindar and adjacent to Green Triveni with Shri Jitendra Kumar Garg at the consideration of Rs. 14.51 Crore in the presence of Shri Kailash Chand Maheshwari. This deal was made through Shri Kailash Chand Maheshwari for which he received Rs. 4.50 crores by Shri Chandra Prakash Agarwal and Rs. 25 lacs as brokerage by Shri Chandra Mohan Badaya. It is noted that in continuation to the answer of Q. No.6 of his statement recorded on 29-07-2016 Shri Chandra Mohan Badaya had stated that in this sale proceedings 10 bigha land at Nindar, he had to receive Rs. 10 Crores from Shri Chandra Prakash Agarwal. Shri Chandra Mohan Badaya had further stat....
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..... The AO has taken reference to the statement taken in respect of Shri Chandra Prakash Agarwal as mentioned at pages 6 to 9 of the assessment order. The AO on perusal of the statement of Shri Chandra Prakash Badaya felt that Shri Chandra Prakash Badaya not only accepted the receipt of on money from sale of total land situated at Vilage Nindar constituting 10 bighas but also the assessee named Shri Pradeep Dusad has also accepted having been paid on money pertaining to share in land viz. 3 Bighas. He noted that if the cheque portion and on money portion is quantified then it will emerge that the assessee out of total consideration of Rs. 3 crores approx. paid Rs. 1.62 crores through cheque/ banking channel and balance Rs. 1.38 crore thorough cash being on money portion. Thus the AO during assessment proceedings vide questionnaire dated 18-10-2018 asked the assessee to explain the transaction of sale of land situated at Village Nindad and further show cause as to why the on money received in the deal to the extent of Rs. 4.78 should not be considered as his undisclosed income The assessee submitted reply to the AO at page 10 of the assessment order as under:- "would be Rs. 1.48 cro....
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.... the entire land or 10 bigha which comes to Rs. 4.78 crores and the same has been admitted by Shri Chandra Mohan Badaya and Shri Chandra Prakash Agarwal as well as the assessee in their statement recorded during the search and post search proceedings and there is no ambiguity in respect of payment of on money of Rs. 4.78 crores. It is pertinent to mention that the assessee had accepted that 3 bighas of land (approx) was purchased and sold in his partnership firm M/s. Eminent Builders Developers but the deal had happened through him and the "on money" in the deal was to be received by him only. Hence, the same is undisclosed income in the hands of the assessee. Therefore, the assessee's contention is that he has already declared a gain of Rs. 7,78,885/-, is not accepted as the same has been declared in partnership firm M/s. Eminent Builders Developers. The AO noted that the assessee has put forward argument that the land purchase on 'on money' was subsequently sold on 'on money' to Shri Chandra Prakash Agarwal. Hence, there is only exchange of 'on money' i.e. on money received from Shri Chandra Prakash Agarwal was transferred to seller of 10 biigha land t....
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....roperty was registered in the name of the partnership firm of the appellant, and the sale and purchase of the land was done in the name of the partnership firm, however the transaction of giving and taking of the on money was done by the appellant. From the statements of the buyer of the property Shri Chanda Prakash Agarwal during search and seizure and also from the statement on oath of the appellant, the unaccounted money was received by the appellant and there is no reference to any other name or any other party The unaccounted cash is not shown in the books of accounts of the partnership firm. There is no record that the unaccounted cash was firstly received by the partnership firm as a whole and thereafter it was handed over to the appellant Partnership firm is a legal entity and there is no such entry of receipt of cash and giving of cash to the appellant. Appellants also received Rs. 18 lakhs in his bank account which is part of the unaccounted income received by the appellant from Shri Chandra Mohan Badaya. Hence the action of the learned AO is appellant in this regard. The appellant has also contended that the Ld. AO has erred in making the impugned addition by rejecting....
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....chase of the same property is allowable. The appellant has challenged the addition of Rs. 1,43,40,000 in the hands of the appellant on account of alleged on money received on sale of property. The appellant has also referred to the assessment order in the case of the appellant himself for the immediately previous assessment year which is assessment year 2016-17. Appellant has contended that search was also conducted in the case of Shri Chandra Mohan Badaya simultaneously when search was conducted in the case of Shi Chandra Prakash Agarwal It so happened that the firms in which Shri Chandra Mohan Badaya was partner namely AR property & Colonizers and M/s Fortune Real Estate had also purchased agricultural land from the same seller(s) Smt. Prabhat Devi and other(s) on the same date 28.07.2015 Copies of agreements of purchase of land pertaining to the firm where Shri Chandra Mohan Badaya was partner were also found during the course of search in the case of Shri Chandra prakash Agarwal where documents of agreement of Eminent Build Developers was also found. In his statement that Shri Chandra Mohan Badaya stated that the cost of land (3 bighas) purchased by M/s Eminent Build Develo....
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....the addition made in the assessment order is restricted hereby to the difference of on money transaction (including cheque receipt) in hands of appellant which is Rs. 42,21,115 and the remaining addition is directed to be deleted Accordingly, this ground of appeal is partly allowed." 6. While hearing of the appeal, the ld. AR of the assessee has filed the detailed written submission praying that the addition so sustained amounting to Rs. 42,21,115/- by the ld. CIT(A) needs to be deleted and further submitted that the Revenue has wrongly stated that the ld. CIT(A) has not disputed the receipt of on money of Rs. 1,43,40,000/- on sale of land whereas the ld. CIT(A) in fact in the appellate order has taken the on money which is on sale of land at Rs. 1,38,00,000/- and thus the issue raised by the Revenue has no relevance which needs to be disallowed. The written submissions as advanced by the ld. AR of the assessee is reproduced as under :- "The assessee is an individual, return of income for A Y 2017-2018 was filed on 01.08.2017 declaring total income at Rs. 10,29,710/-. In the case of the assessee assessment proceeding were taken for scrutiny w r to search conducted in the case ....
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....ep kumar Dusad (assessee), wherein shri Pradeep kumar Dusad acted as partner of firm M/s Eminent Build developers 2.2 3 bigha to A R Properties and colonizers through proprietor shri Chandra Mohan Badaya 2.3 4 bigha to M/s Fortune Real Estate through partner Shri Chandra Mohan Badaya, where shri Chandra Mohan Badaya acted as partner of firm M/s Fortune Real Estate 3. These deeds of sale were found with Shri Chandra Prakash Agarwal as later-on the entire 10 bighas land was purchased by him from M/s Eminent Build developers through Shri Pradeep Kumar Dusad (ii) M/s A R Properties and colonizers (iii) M/s Fortune Real Estate through partner Shri Chandra Mohan Badaya. These were part of chain document of these Agricultural land. 4. The Purchase of 3 bighas land by M/s Eminent Build Developers through partner shri Pradeep Kumar Dusad as per sale deeds found during search stand fully accounted for in the books of accounts of the firm M/s Eminent Build developers. The investment was also made by the firm. Copy of relevant account of land, Bank account, Balance sheet are available on paper book. 5. Beside the sale deeds no other documents were found in search in the case of Shri ....
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....d of Rs. 1,48,20,000/- as per statement only and the statements was without any supporting documents. 9. Satisfaction note is faulty and is irrelevant In view of the aforesaid statements recorded under section 132(4) of Shri Chandra Prakash Agarwal on 28.07.2016 and of Shri Chandra Mohan Badaya on 29.07.2016 and under section 131 of assessee shri Pradeep Kumar Dusad on 10.11.2016, the learned AO drew a satisfaction note for taking action in the hands of the assessee under section 153C. The satisfaction note is reproduced here under Satisfaction Note as required u/s 153C of the I.T. Act, 1961 In the caese of Shri Pradeep Dusad (PAN: ABLPD4678H) AY 2011-12 & 2017-18 A search action u/s 132(1) of the IT act was conducted on 28-07-2016 at the residential cum business premises of Shri Chandra Prakash Agarwal at 1756, Telipada, Choura Rasta, SMS Highway, Jaipur, where certain documents were found & seized and inventorized as Annexure A, Exhibit-28, pages no. 13 to 17, Pages 44 to 48. These documents are copies of agreement executed between the sellers and purchasers of 10 bigha lands at Village- Nindar. The details of the agreements has been summarised as under: Name of Sellers....
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....ti Devi and other by three parties i.e. M/s Eminent build developers through partner Shri Pradeep Kumar Dusad for Rs. 1,54,21,115/-, M/s A R properties and Containers through proprietor Shri Chandra Mohan Badaya and M/s Fortune Real Estate through partner Shri Chandra Mohan Badaya. It is submitted that the amount mentioned in this para is duly accounted for in the regular books of accounts of M/s Eminent Build Developers where the assesseeshri Pradeep kumarDusad is partner. Further there is no murmur of his satisfaction that these have a bearing on the determination of the income of the assessee. a. The satisfaction note drawn by the learned AO on 18.09.2018 contains following information which is in respect of the M/s Eminent Build Developers who purchased Agricultural Land from Smt. Prabhati Devi and others on 28.07.2015 for a sum of Rs. 1,54,21,115/-. Thus the information is strictly speaking in respect of and pertains to M/s Eminent Build Developers who purchased the land through partner Shri Pradeep Kumar Dusad wherein Shri Pradeep Kumar Dusad acted in representative capacity as partner of M/s Eminent Build Developers. The owner of the land is M/s Eminent Build Developers an....
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....sked about the consideration paid for the debt. The reply appears to be extracted under pressure suiting to the Revenue. The reply is not relevant to the seized material which are purchased deeds found during the course of search. The purchase deeds of Agricultural land have been registered with the Registration Authorities and nothing was found during search controverting the contents of these deeds. The statement is an aberration and has no live relationship with the seized material. Therefore it is not part of the seized material and cannot be considered as incriminating material in any way. The satisfaction note has not considered this statement of Shri Chandra Mohan Badaya as having a bearing on the determination of income of the assessee because the statement solely pertains to Shri Chandra Mohan Badaya. No connection has been established in this second para of the satisfaction note between the statement of Shri Chandra Mohan Badaya and the assesseee. Hence no action was warranted on the basis of these statements. Further the learned AO himself has not consider it usefull while drafting the order for the A Y 2016-2017 hence this is not of any importance. (iii) Third p....
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....through partner. The fact of sale has emanated by answer to question No. 8 in the statement of Shri Pradeep Kumar Dusad recorded on 10.11.2016. Position of law with respect to drawing satisfaction note by the learned AO of the other person. It is submitted that the provisions of section 153C(1) very clearly stipulate that with effect from 01.10.2014 the learned AO of the other person is required to issue notice under section 153C only after satisfying that the seized material has a bearing on the determination of the income of such other person. In this case satisfaction note has also been drawn after 01.10.2014. The satisfaction note is of dated 18.09.2018. In the circumstances it is amply clear that for taking action in different years the learned AO of the other person is mandatorily required to draw satisfaction note for each such assessment year where he is satisfied that the seized material has a bearing on the determination of the income of the other person. In this case of the assessee the learned AO has not shown as what is the seized material which has a bearing on the determination of income of the assessee for A Y 2011-2012 to A Y 2016-2017, wherein he has issued no....
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....ce for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section-153A except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section- 132 or requisition is made under section-132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section-142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section-143 has been served and limitation of serving the notice under sub-section (2) of section-143 has expired, or (c) assessment or reassessme....
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.... of the above facts it is submitted that the proceeding initiated under section 153C by the learned AO for the assessment year 2016-2017 is unlawful, illegal and unjust. The Hon'ble CIT (A) is therefore requested that the unlawful, illegal, and unjustified proceeding initiated by the learned AO may kindly be quashed. The assessment completed under section 153C in pursuance of such unlawful proceedings should also be quashed. The perusal of the afore said provisions very specifically stipulates that the learned AO is required to proceed against other person and issue notice and assess the income of the other person only if he is satisfied that the seized material has a bearing on the determination of total income of such other person. In this case the learned AO has not stipulated in the satisfaction note drawn by him that how the seized material which in the case are only purchase deed from Prabhatidevi and others have a bearing on the determination of income of the assesee. There is absolutely no discussion in the satisfaction note by the learned AO in so far as purchased deeds are concerned. The learned AO has only adversely stated about the sale transaction of these very A....
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....he light of the statements recorded followed by retractions on the ground of coercion and threat in the course of Search and Survey operations, the Board issued the Instructions F.No. 286/2/2003 - IT (Inv.) dated March 23, 2003 stating as follows: "Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess undisclosed income during the course of the search and seizure and survey operation. Such confession, if not based on credible evidence, are taken/retracted by the concerned assessees while filing return of income. In these circumstances, confession during the search and seizure and survey operation 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 department. Similarly, while recording statement during the course of search and seizure operation, no attempt should be made to obtain confession as to the undisclosed income." CBDT Instruction dated December 18, 2014: F.No. 286/98/2013-IT (Inv.II) Government of India Minis....
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....pite this the case of the assessee was taken for scrutiny and the learned AO made addition of receipt of on money of Rs. 1,48,20,000/- purely on the basis of confessional statement of Shri Pradeep Kumar Dusad. The learned CIT(A) has reduced the same to Rs. 42,21,115/-. The learned AO had made the additions under section 68 of the receipt of on money of Rs. 1,48,20,000/- on sale of land by the assessee to Shri Chandra Prakash Agarwal. Whereas the learned CIT (A) has taxed the difference between the on money paid on purchases of Agricultural land and on money received on sale of Agricultural land Rs 42,21,115/- {(Rs 1,38,00,000/- - Rs. 96,78,885/- - Rs. 7,78,885/- (Gain already shown in the hands of M/s eminent Build Developers in their return of income for the year)} The following case laws are quoted in support wherein it has been held that no additions can be made in such cases simply on the ground of statements which are not supported by the documentary evidences. It has been further held that statements are not incriminating material . i. Hon'ble High Court of Rajasthan in the case of Mantry Share Brokers Pvt. ltd. (96 taxmann.com I am in agreement with the Ld. A/R tha....
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....e Tax Act, 1961 have to consider,. as to whether there is any corroborative material evidence. If there is no corroborating documentary evidence, then statement recorded under Section 132(4) of the Income Tax Act, 1961, alone should not be the basis, for arriving at any adverse decision against the assessee. If the authorities under the Income Tax Act, 1961, have to be conferred with the power, to be exercised, solely on the basis of a statement, then it may lead to an arbitrary exercise of such power. An order of assessment entails civil consequences. Therefore, under judicial review, courts have to exercise due care and caution that no man is condemned, due to erroneous or arbitrary exercise of authority conferred." iii. Naresh Kumar Agarwal [2015] 53 taxmann.com 306 (Andhra Pradesh) "it is admitted by the Revenue that on the dates of search, the Department was not able to find any unaccounted money, unaccounted bullion nor any other valuable articles or things, nor any unaccounted documents nor any other valuable articles or things, nor any unaccounted documents nor any such incriminating material either from the premises of the company or from the residential houses of the ....
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....) An admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect. vi. Satinder Kumar (HUF) v. CIT [1977] 106 ITR 64 (SC): It was held that it is true that an admission made by an assessee constitutes a relevant piece of evidence but if the assessee contends that in making the admission he had proceeded on a mistaken understanding or on misconception of facts or on untrue facts such an admission cannot be relied upon without first considering the aforesaid contention. vii. Chetna ben Shah Vs ITO (2016) 146 DTR 235 (Guj) We have heard learned Counsel for the respective parties and perused the records of the case. We are of the view that the CIT (Appeals) has rightly appreciated the case based on the sound principles of law and has also considered the statement made by the Page 13 of 14 HC-NIC Page 13 of 14 Created On Mon Feb 13 19:29:05 IST 2017 O/TAXAP/1437/2007 JUDGMENT assessee at the relevant point of time. We are of the view that in light of the observations made by this Court in the case of Kailashben Manharlal Chokshi v. Commissioner of Income-tax (s....
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.... having no cogent basis or approval of law that should not stop a taxpayer from correcting his mistake. It was the duly of the A.O. to tax only the legitimate amount from a taxpayer xiv. 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) xv. 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. Thus in view of the aforesaid decisions including the decision of Hon, ble Apex court and decisions of Honble Rajasthan (jurisdictional) High Court the additions made on the basis of standalone statement is unlawful. The assessee was under a state of total confirmation and narrated incorrect facts. There is no adjustment of this amount in next assessment year i.e A Y 2016-2017 but remains a creditor. xvi. Honorable Delhi High Court in a judgment dated 29.05.2024 in Pavitra Realcon Private Limited in ITA 579/2018 has held that solely statement made during the search can not be the basis of an addition. It was further held that the state....
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....d was to reckoned for issuance of notice- Search and seizure proceedings were conducted in premises of one M/s K-A.O was opinion that some documents and material belonging to respondent(s) assessee. were involved - Notice was issued by concerned jurisdiction AOs, to assessee's who contended that period for which they were required to file returns, commenced only from date materials were forwarded to their A.Os. Held it is evident on a plain interpretation of section 153(1) that parliamentary intent to enact proviso was to cater no merely to question the abatement but also with regard to date from which six year period was to be reckoned. In respect of which returns were to be filed by third party (whose premises are not searched and in respect of whom specific provisions under section 153C was enacted-Revenue argued that proviso (to section 153(c)(1) is confined in its application to question of abatement- Revenue's argument is Insubstantial and without merit -- It is quiet plausible that without kind of interpretation which SSP Aviation adopted. A O. seized of materials of searched party, under section 132 - would take his own time to forward papers and materials belonging....
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....e without issuance of notice under section 153C deserves to be quashed. The decision of the Hon'ble Supreme Court is law of land to be followed by all and sundry. 13. No Incriminating material found during search It is further submitted that in the entire assessment order/appellate order there is no mention of any incriminating seized material, which is mandatory as per provisions of section 153C, which can be said to have a bearing on the determination of the income of the assessee for taking action under section 153C. Additions have been made by the learned AO and partly sustained by the learned CIT(A) purely on the basis of confessional statements. It is trite law that additions cannot be made solely on the basis of statements recorded under section 132(4)/131 unless there is material to substantiate the same. In the case of the assessee there is no murmur or mention of any incriminating material found during the course of search in the case of both Shri Chandra Prakash Agarwal and Shri Chandra Mohan badaya. In view of this no action is possible either in the hands of the assessee or the firm M/s Eminent Build Developers. The Hon'ble ITAT is humbly requested to kindl....
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....d on the statement recorded. " Smt. S.Jayalakshmi Ammal [2016] 74 taxmann.com 35 (Madras)". While adverting to the above, we are of the considered view that, for deciding any issue, against the assessee, the Authorities under the Income Tax Act, 1961 have to consider,. as to whether there is any corroborative material evidence. If there is no corroborating documentary evidence, then statement recorded under Section 132(4) of the Income Tax Act, 1961, alone should not be the basis, for arriving at any adverse decision against the assessee. If the authorities under the Income Tax Act, 1961, have to be conferred with the power, to be exercised, solely on the basis of a statement, then it may lead to an arbitrary exercise of such power. An order of assessment entails civil consequences. Therefore, under judicial review, courts have to exercise due care and caution that no man is condemned, due to erroneous or arbitrary exercise of authority conferred." ii. Naresh Kumar Agarwal [2015] 53 taxmann.com 306 (Andhra Pradesh) "it is admitted by the Revenue that on the dates of search, the Department was not able to find any unaccounted money, unaccounted bullion nor any other valuable art....
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.... reference to any undisclosed cash, jewellery, bullion, valuable article or documents containing any undisclosed income having been found during the search " iv. Chetna ben Shah Vs ITO (2016) 146 DTR 235 (Guj) We have heard learned Counsel for the respective parties and perused the records of the case. We are of the view that the CIT (Appeals) has rightly appreciated the case based on the sound principles of law and has also considered the statement made by the Page 13 of 14 HC-NIC Page 13 of 14 Created On Mon Feb 13 19:29:05 IST 2017 O/TAXAP/1437/2007 JUDGMENT assessee at the relevant point of time. We are of the view that in light of the observations made by this Court in the case of Kailashben Manharlal Chokshi v. Commissioner of Income-tax (supra), mere speculation cannot be a ground for addition of income. There must be a some material substance either in the form of documents or the like to arrive at a ground for addition of income. Considering the ratio laid down in the above decision and in the facts of the present case, we are of the view that the issue raised in this Appeal is required to be answered in favour of the assessee and against the Department. v Chitra Dev....
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.... no search material, Additions are not based with reference to searched material. In view of this the learned CITA erred in not deleting the additions . The Hon'ble ITAT is requested to delete the additions and accept the appeal of the assessee. The above facts fully explain that in the case of the assessee, assessment has been framed in violation of law, the same deserves to be quashed. Now in the background of these facts, the individual grounds of appeal are discussed in detail hereunder Ground No 1 & 2 1. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in not considering the decision of the Hon'ble Supreme court in the case of Commissioner of Income Tax -14 versus Jasjit Singh (SC) (Civil appeal No. of 2023 @ SLP(C) No. 6644 of 2016) holding that the AO of the other person shall issue notice of earlier six years excluding the year in which the information/material is received from the AO of the searched person. Thus the learned CIT (A) has violated the principle of judicial discipline. 2. That in the facts and circumstances of the case and in law the learned CIT(A) has erred in not accepting the plea of the assessee that i....
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....as is sought to be contended by revenue (to date of seizure), prejudice caused to third party, who would be drawn into proceedings as it were unwittingly ( and in many cases have no concern with it at all), is disproportionate - for instance, if papers are in fact assigned under section 153C after a period of four years. third party assessee's prejudice is writ large as it would have to virtually preserve records for at least 10 years which is not requirement in law. - such disastrous and hash consequences cannot be attributed to parliament --" It is submitted that the AO of the other person shall be competent to take action under section 153C in respect of the preceding six years immediately preceding the assessment year relevant to the previous year in which information is received from the AO of the searched person. In other words as per the decisions of the Hon'ble Apex Court the AO will not construe the date of receipt of information from the AO of the searched person as the date of search. To be more plain AO of the other person would not be able to take action in respect of the preceding six assessment years from the actual date of search, but would be competent on....
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.... six yea s from the date of receipt of seized material and the date of search shall be irrelevant. It is submitted that in this case the search was conducted in the case of Shri Chandra Prakash Agarwal on 28.07.2016, However the learned AO made a satisfaction note only on 18.09.2018 for proposing action in the hands of assessee under section 153C. In view of this, the learned AO could take action under section 153C in the case of the assessee in respect of assessment years (A Y 2018-2019, 2017-2018, 2016-2017, 2015- 2016, 2014-2015 and 2013-2014) where the learned AO was satisfied that the seized material had a bearing on the determination of the income of the assessee of the other person. Notice under section 153C in such circumstances could be issued for the A Y 2018-2019, 2017-2018, 2016-2017, 2015-2016, 2014-2015 and 2013-2014. The assessment year of the assessee under consideration is A Y 2017-2018. The learned AO therefore was required to issue notice under section 153C in the case of the assessee for A Y 2017-2018, on having a satisfaction that the seized material received from AO of the searched person had information having a bearing on the determination of the income of....
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..... 144 all authorities, Civil and judicial, in the territory of India shall acrt in aid of the Supreme Court. ii. Nepal chand Day Vs ACIT 2023 224 TTJ 0222 (Ranchi Trib) 7. It has been held time and again that law declared by a court will have retrospective effect, if not otherwise stated to be so specifically. It is also well settled proposition that whenever, a previous decision is overruled by a larger bench of the Supreme Court, the previous decision is completely wiped out and Article 141 will have no application to the decision which has already been overruled and the court would have to decide the cases according to the law laid down by the latest decision of the Hon'ble Supreme Court and not by the decision which has been expressly overruled. The above reasoning stems from the principle that when a court decides a matter, it is not as if it is making any new law but it is as if it is only restating what the law has always been. The reliance in this respect can be placed on the decision of the Hon'ble Supreme Court in the case of "Ramdas Bhikaji and Choudhary vs. Sadananda" (1980) 1 SCC 550 and on the recent decision of the Hon'ble Supreme Court in the case of....
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....mstances of the case and in law the learned CIT(A) has erred in restricting and confirming addition of Rs 42,21,115/- as against addition of Rs.1,43,40,000/- which was made by the learned AO despite there being contradictory statements of assessee and Shri Chandra Mohan Badaya regarding the sale consideration of land. In the above regard it is the submission of the assessee that assessee had submitted a detailed submission covering the afore said issue on 10.04.2023 before the leaaned CIT(A). A copy of the submission made before the learned CIT(A) dated 10.04.2023 is available on paper book page No . 51 to 170. and the relevant part is quoted here. "Facts It is submitted that during the course of search in the case of Shri Chandra Prakash Agarwal, copies of agreement for purchaser of agricultural land were found which disclosed that M/s Eminent Build developers a partnership firm (where the assessee is also a one of the partner) have purchased some agricultural land from Smt. Prabhati Devi and other(s) on 28.07.2015 for an apparent consideration of Rs. 1,54,21,115/-. The entire amount as per agreement was paid through banking channels and was fully accounted for in the books ....
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....ssessment year 2016-2017 works out to Rs. 3,00,00,000/- It so happened that M/s Eminent build developers sold the land on 31.05.2016 to Shri Chandra Prakash Agarwal for an apparent consideration of Rs. 1,62,00,000/-. In respect of the sale registered on 31.05.2016. Copy of sale deed is available on paper book page No 171 to 188. As the land was purchased together with the firms of Shri Chandra Mohan Badaya so also the land was sold by M/s Eminent Build Developers along with the firms of Shri Chandra Mohan Badaya. Accordingly Shri Chandra Mohan Badaya was examined during the course of search under section 132 on the same issue of sale of agricultural land. His statement has been reproduced on page No. 4 of the assessment order. It is on the basis of his statement that the learned AO concluded that on the entire sale of 10 bighas land which included 3 bighas of M/s Eminent Build Developers an amount of Rs. 4,78,00,000/- was received over and above the apparent consideration of Rs. 5,22,00,000/- (This included Rs 1,62,00,000/- of the firm M/s Eminent Build Developers). The learned AO accordingly calculated the share of on money in the hands of the assessee at Rs. 1,43,40,000/- (30% ....
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....on. It is further submitted that the learned AO erred in not accepting the plea of the assessee that the transaction of sale did not deserve to be considered in his hands as the sale was made by firm M/s Eminent Build Developers. The learned AO was not in a position to controvert the following documentary evidences furnished before him. a. The purchase agreement dated 28.07.2015 in the name of the firm M/s Eminent Build Developers for an apparent consideration of Rs. 1,54,21,115/- b. The entire amount of Rs. 1,54,21,115/- was paid by firm M/s Eminent Build developers from bank account with ICICI Bank in the name of M/s Eminent Build Developers though banking channels. Copy of the bank account of the firm M/s Eminent Build Developers as supporting document is available on paper book page No. 48., c. In the Balance sheet as on 31.03.2016 of the firm M/s Eminent build developers the purchaser of land was disclosed,. Copy of audited Balance sheet is available on paper book page No 49 to 58. d. The sales deed dated 31.05.2016 in the name of the Firm M/s Eminent build developers for an apparent consideration of Rs. 1,62,00,000/- e. The entire amount of Rs. 1,62,00,000/- was rec....
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....and that of shri Chandra prakash Agarwal no documentary evidence was found which disclosed payment or receipt over and above the apparent consideration in the transaction of agricultural land . In the absence of any documentary evidence additions on the basis of statements alone were not justified. The following case laws are quoted in support 1. Smt. Aruna Sankhla Jaipur Vs DCIT Central Circle Jaipur ITA No. 483/JP/2016 A Y 2005-2006 date of order 16.05.2019 It has been held by the jurisdiction ITAT that AO received the statements of the sellers recorded by ACB u/s 161 of CRPC wherein they have admitted on money receipt in respect of the land purchase by the assessee. The statements under section 131 of The Act, there was nothing either found or in possession of the AO to show that any undisclosed income on account of on money payment by the assessee. Hence addition made by the AO on the basis of information received from ACB and consequential inquiry conducted by the AO during the assessment proceedings cannot be treated as incriminating material to justify the addition on account of on money when the assessment was completed and not pending at the time of search. Accordin....
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.... agricultural land but at the same time he has rejected the sale consideration as disclosed by him. Having rejected the statement of shri Chandra Mohan Badaya there was no case left for making the additions. The assessee wonders that when no document was found in search in both the cases namely Shri Chandra Mohan Badaya and Shri Chandra Prakash Agarwal evidencing any payment or receipts or on money over and above the apparent consideration then what was the occasion for examining Shri Chanra Mohan Badaya and Shri Chandra prakash Agrawal except to obtain to surrender by way exerting threat and coercion. Therefore also the statement cannot be made the basis of the addition. The learned AO was precluded in partial acceptance of the statement of shri Chandra Mohan Badaya. This vitiates the assessment order The following case laws are quoted in support. CIT Vs Indeoairways Private limited (2012) 79 DTR 289 (Del) c. Discrepancies in the statement of Shri Chanra Mohan Badava and that of assessee The statement of shri Chandra mohan Badaya and that of the assessee are reproduced below The perusal of the afore said reveals a major discrepancy that where as in the statement recorded....
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....t allowing cross examination is a serious flaw and makes the order nullity. Andman Timber Ind. Vs. Commission of Central Excise (2015) 281 CTR 211 (SC). "not allowing the assessee to cross examine the witness by the adjudicating authority though the statements of those witnesses were made the basis of the impugned order, is a serious flaw which makes the order nullity in as much as it amounted to violation of principle of natural justice because of which the assessee was adversely affected. ii. COMMISSIONER OF INCOME TAX vs. BIJU PATNAIK HIGH COURT OF ORISSA 190 ITR 0396 Although answers can be recorded either in favour of the Department or against it, ultimately each answer would again become inconclusive on account of the final findings of fact of the Tribunal that ITO has not given reasonable opportunity to the assessee to rebut the statements recorded ex parte under s. 131 of the Act and to furnish explanation to some of the materials. It is true that Tribunal has not given due weight to the relevant and admissible evidence while recording the findings of fact. However, the findings of the Tribunal on such fact are also vulnerable as they may require reconsideration. If ans....
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....ssessment order is vitiated iv. HEIRS AND LRS OF LATE LAXMANBHAI S. PATEL vs. COMMISSIONER OF INCOME TAX (HIGH COURT OF GUJARAT ) (2010) 327 ITR 0290 Opportunity of being heard-During search of one R, key of bank locker along with two packets containing six promissory notes were recovered-Out of those six promissory notes, one was in the sum of Rs. 8,78,358 executed by one K in the capacity of partner of firm DCI-In his statement recorded during search, R stated that the key of locker and the two envelopes were handed over to him by the assessee-K also admitted in his statement recorded on the same day at 2.00 AM midnight that he had executed the pronote and signed it on behalf of DCI after obtaining a sum of Rs. 8,78,358- Later, K filed an affidavit that his statement was recorded at late hours in the night under coercion and pressure-Subsequently, K along with two other partners of DCI, made a voluntary disclosure of a sum of Rs. 11 lacs including the amount of Rs. 8,78,358 and same was assessed in the hands of the three partners- Relying on the statement of R and the retracted statement of K, AO made addition of Rs. 8,78,358 under s. 68 in the hands of assessee also and the ....
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....nd brough on record without the knowledge of the assessee or without allowing the assessee an opportunity to controvert or disapprove the information, evidence or statement of fact contained in such information or without allowing the assessee to cross-examined such thirty party, the order has to be found violative of principal of natural justice i.e. such an order is an order in violation of principle of natural justice the assessment order for the block period has been passed solely in the basis on the statements of persons referred to in the facts already extracted and the assessee was not allowed to cross examine any one of them. The undisclosed income referred to in the arguments of the assessee has been determined as a result of assessment order which is completely in violation of principle of natural justice. Therefore once the assessment is found to be in violation of principal of natural justice, It has to be quashed as b being bad in law and void or a nullity. ix. Kellogg India P Limited & Madhukar Patil Vs, UOI *(2006)(193) E L T. 385 (Bombay High court) = 2007 (8) S,T. T 84 (Bom). Wherein it has been held Adjudication - Natural justice- Affected persons must be gi....
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....e statements recorded in both the cases of Shri Chandra Prakash Agarwal or in the case of Shri Chandra Mohan Badaya are purely of confessional nature extracted by the revenue authorities exerting undue pressure. These statements are in total violation of Board circular F.No. 286/2/2003 - IT (Inv.) dated March 23, 2003, F.No. 286/98/2013-IT (Inv.II), dated 18.12.2014, CBDT letter F.No. 286/57/2002-IT(Inv.II) dt. 03-07-2002, CBDT letter F.No. 286/2/2003-IT(Inv.11) dt. 10-03-2003 and CBDT letter F.No. 286/98/2013- IT(Inv.11) dt. 09-01-2014 which advices the revenue authorities for not recording for any confession statement. Additions made on the basis of such confessional statements without there being any substantive evidences deserves to knocked down. The relevant circulars of CBDT is quoted below CBDT Instruction dated March 23, 2003: In the light of the statements recorded followed by retractions on the ground of coercion and threat in the course of Search and Survey operations, the Board issued the Instructions F.No. 286/2/2003 - IT (Inv.) dated March 23, 2003 stating as follows: "Instances have come to the notice of the Board where assessees have claimed that they have be....
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....nt during Search/Survey/Other proceeding under the I.T.Act, 1961 and/or recording a disclosure of undisclosed income under undue pressure/ coercion shall be viewed by the Board adversely. 4. These guidelines may be brought to the notice of all concerned in your Region for strict compliance. 5. I have been further directed to request you to closely observe/oversee the actions of the officers functioning under you in this regard. 6. This issues with approval of the Chairperson, CBDT c. In the case of the assessee the purchase and sale of land was for and on behalf of the firm M/s Eminent Build Developers and assessee acted as a representative being partner in the firm. The payment was made by the firm from its books of account the registration of land was in the name of the firm. Therefore the proceedings in the hands of the assessee are totally misplaced and unlawful. Ground NO. 8 & 9 That in the facts and circumstances of the case and in law the learned CIT(A) has erred in not holding that the learned AO was not justified in applying the provisions of section 68 of the income Tax Act. 1961. 9. That in the facts and circumstances of the case and in law the learned CIT(....
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....ooks of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB)of section 10 It is submitted that in the case of the assessee nothing is found credited in the books of accounts of the assessee maintained for any previous year and Hence the provisions of section 68 are not applicable in the case of the assessee. Regarding the applicability of section 68 the supreme court in the case of Baladin Ram V/s CIT 71 ITR 427 has held as under :- It was observed that section 68 arises for consideration only when the following circumstances exist :- i. The matter concerns event was that took place on or after 1st April, 1962 (the date of the coming into force of the Act 1961 Act), ii. The assessee maintains account books for his previous year iii. The cash credit entry appears in such books of account : and ....
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....appeal of the revenue ITA No. 1149/JPR/2024 Now after discussing the appeal of the assessee, the appeal of the revenue taken is for discussion as under A Ground No 1, 2 and 3 of Departmental Appeal It is submitted that in all the aforesaid Grounds of Appeal of the revenue the issue is one and the same, it is submitted that while deciding the appeal for the A Y 2017-2018, the learned CIT(A) was seized with the issue of sale of land by the assessee. The land in question has been sold for a apparent consideration for Rs. 1,62,00,000/- but the learned CIT(A) has adopted the sale price at Rs. 3.00 Cr. on the basis of statements of the assessee. Similarly the cost of land which falls in assessment year 2016-2017 was purchased for an apparent consideration of Rs. 1,56,42,115/- whereas the assessee has deposed in his statement that the same was purchased for Rs. 2.50 Cr. In view of this the learned CIT(A) has adopted the purchase cost of land at Rs. 2.50 Cr, It is submitted that the entire order of learned CIT(A) in respect of cost of land as well as sale consideration of land is based on the statement of the assessee recorded lateron under section 131. It is relevant to mention ....
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.... In the caese of Shri Pradeep Dusad (PAN: ABLPD4678H) AY 2011-12 & 2017-18 A search action u/s 132(1) of the IT act was conducted on 28-07-2016 at the residential cum business premises of Shri Chandra Prakash Agarwal at 1756, Telipada, Choura Rasta, SMS Highway, Jaipur, where certain documents were found & seized and inventorized as Annexure A, Exhibit-28, pages no. 13 to 17, Pages 44 to 48. These documents are copies of agreement executed between the sellers and purchasers of 10 bigha lands at Village- Nindar. The details of the agreements has been summarised as under: Name of Sellers Name of Purchasers Description of land Date of agreement Amount of sale value (In Rs.) Details of annexure Smt. Prabhati Devi, S/Shri Chittarmal, Rampal, Kaluram, Nanchuram M/s Eminent Build Developers through Partner Shri Pradeep Kumar Dusad Agriculture land at ArajiKhasra No. 384 area 2.99 hectare at Village-Nindar, Tehsil-Amer, Jaipur 28.07.2015 15421115 Party No. 1 Annexure-A Exhibit-28 Page No.13 to 17 -do- M/s A R. Properties & Colonizers through Proprietor Shri Chandra Mohan Badaya Agriculture land at ArajiKhasra No. 384 area 2.99 hectare at Village-Nindar, Tehsil-Ame....
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.... of the assessee. a. The satisfaction note drawn by the learned AO on 18.09.2018 contains following information which is in respect of the M/s Eminent Build Developers who purchased Agricultural Land from Smt. Prabhati Devi and others on 28.07.2015 for a sum of Rs. 1,54,21,115/-. Thus the information is strictly speaking in respect of and pertains to M/s Eminent Build Developers who purchased the land through partner Shri Pradeep Kumar Dusad wherein Shri Pradeep Kumar Dusad acted in representative capacity as partner of M/s Eminent Build Developers. The owner of the land is M/s Eminent Build Developers and payment through banking channels was also made by them. In this regard copy of the purchase deed, copy of land account in the books of accounts of M/s Eminent Build Developers are furnished and are available on paper book page. No 19. These are documentary evidences which establish that the land was purchased by the firm M/s Eminent Build Developers and not by Shri Pradeep Kumar Dusad in his individual capacity b. The information in so far as is in respect of purchase of agricultural land from Smt. Prabhati Devi and others by M/s Eminent building developers through partner Sh....
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....erial in any way. The satisfaction note has not considered this statement of Shri Chandra Mohan Badaya as having a bearing on the determination of income of the assessee because the statement solely pertains to Shri Chandra Mohan Badaya. No connection has been established in this second para of the satisfaction note between the statement of Shri Chandra Mohan Badaya and the assesseee. Hence no action was warranted on the basis of these statements. Further the learned AO himself has not consider it usefull while drafting the order for the A Y 2016-2017 hence this is not of any importance. (iii) Third para of the satisfaction note Further in the third and last para of the satisfaction note the learned AO is mentioned that in reply to question NO. 5 to 8 of the statement of shri Pradeep kumar Dusad stated that he had purchased 3 bigha land from Smt. Prabhatidevi and four other persons and sold it to shri Chandra Prakash Agarwa. He also admitted to have taken on money to the extent to Rs. 4.78 on this land deal from Shri Chanra Prakash Agarwal. From the above discussion of the learned AO it is crystal clear that in this para the learned AO is discussing the selling part of the ....
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....so been drawn after 01.10.2014. The satisfaction note is of dated 18.09.2018. In the circumstances it is amply clear that for taking action in different years the learned AO of the other person is mandatorily required to draw satisfaction note for each such assessment year where he is satisfied that the seized material has a bearing on the determination of the income of the other person. In this case of the assessee the learned AO has not shown as what is the seized material which has a bearing on the determination of income of the assessee for A Y 2011-2012 to A Y 2016-2017, wherein he has issued notice under section 153C. The seized document (purchased deed) firstly do not belong to the assessee, these belong to the firm M/s Eminent Build Developers secondly the seized document which is purchased deed has not been adversely commented upon by the learned AO hence no action could have been contemplated on the basis of purchased deed which alone are the seized material. The provision of section 153C(1) are quoted below for ready reference. "153C. (1) Notwithstanding anything contained in section-139, section- 147, section-148, section-149, section-151 and section-153, where the As....
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....nishing the return of income for the assessment year relevant to the previous year in which search is conducted under section- 132 or requisition is made under section-132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section-142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section-143 has been served and limitation of serving the notice under sub-section (2) of section-143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section-153.A. 14[(3) Nothing contained in this section shall apply in relation to a search initiated under section-132 or books of account, other documents or any assets requisitioned under section-132A on or after the 1st day of April, 202....
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.... assess the income of the other person only if he is satisfied that the seized material has a bearing on the determination of total income of such other person. In this case the learned AO has not stipulated in the satisfaction note drawn by him that how the seized material which in the case are only purchase deed from Prabhatidevi and others have a bearing on the determination of income of the assesee. There is absolutely no discussion in the satisfaction note by the learned AO in so far as purchased deeds are concerned. The learned AO has only adversely stated about the sale transaction of these very Agricultural lands with Shri Chandra Praksash Agarwal from whom 4.78 Cr was alleged received as on money. This transaction has taken place on 31.05.2016 relevant to assessment year 2017-2018. The observation of on money of Rs. 4.78 cr. alleged to have been taken from Shri Chandra Prakash Agarwal is not on the basis of any seized material but it is on the basis of statement of assesseeshri Pradeep Kumar Dusad. There is no seized material pertaining to A Y 2016-2017. In these circumstance the entire satisfaction note is confusion worst confounded. Absolutely ni action for any year coul....
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....he 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. It would not be out of place to mention that this order of Hon'ble Rajasthan High Court has been confirmed by Hon'ble Supreme Court also. (ii) Hon'ble Delhi High Court in case of Harjeev Agarwal (70 Taxmann.com 95) held thus: A statement of a M/S Maverick Commodity Brokers Pvt. Ltd.& others person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material ....
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.... K. SHAH, in TAX APPEAL NO. 1437 of 2007, laid down the ratio that no additions can be made In the hands of the assessee merely on the basis of statements recorded, during the course of search, under section 132(4). Hon'ble High Court in the above mentioned case relied on its earlier order in the case of Kailashben Manharlal Chokshi [2008] 174 Taxman 466 (Guj.), wherein a similar ratio was laid down. Further, in the case of Narendra Garg & Ashok Garg (AOP) [2016] 72 taxmann.com 355 (Gujarat), Hon'ble Gujarat High Court held that " It is required to be borne in mind that the revenue ought to have collected enough evidence during the search in support of the disclosure statement. It is a settled position of law that if an assessee, under a mistake, misconception or on not being properly instructed, is over assessed, the authorities are required to assist him and ensure that only legitimate taxes are collected. The Assessing Officer cannot proceed on presumption u/s 134(2) of the Act and there must be something more than bare suspicion to support the assessment or addition. In the present case, though the revenue's case is based on disclosure of the assessee stated to ha....
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.... ITAT That merely because an offer was made having no cogent basis or approval of law that should not stop a taxpayer from correcting his mistake. It was the duty of the A.O. to tax only the legitimate amount from a taxpayer. x. Hukum Chand Jain Vs. Income Tax Officer (2011) 334 ITR 197 (Raj) Hon'ble jurisdiction High Court has held that : Admission despite being an important piece of evidence was not conclusive and it was open to the assessee to show that it was not correct. xi. CIT Vs Ashok kumar Jain (2014) 111 DTR 291 (Raj) 369 ITR 145 It was held that if the assessee does not adhere to the surrender made than it is for the learned AO to bring on record cogent material and other evidences to support the addition rather than rely on the statements xii. CIT Vs. Bhaskar Mittal 73 Taxman 437 (Cal) The Law empowers the ITO to assess the income of an assessee according to law and determine the tax payable thereon. In doing so he cannot assess an assessee on an amount, which is not taxable in law, even if the same is shown by an assessee. There is no estoppels by conduct against law nor is there any waiver of the legal right as much as the legal liability to be assessed ....
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....come to the notice of the Board where assessees have claimed that they have been forced to confess undisclosed income during the course of the search and seizure and survey operation. Such confession, if not based on credible evidence, are taken/retracted by the concerned assessees while filing return of income. In these circumstances, confession during the search and seizure and survey operation 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 department. Similarly, while recording statement during the course of search and seizure operation, no attempt should be made to obtain confession as to the undisclosed income." CBDT Instruction dated December 18, 2014: F.No. 286/98/2013-IT (Inv.II) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Dated- 18th December, 2014 "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) CB....
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.... statements may have evidentiary value but it is not conclusive. The courts have held that instead of depending upon the statement of the assessee, the revenue should exert in the collecting evidence in support of additions. With respect to retraction of statements the following case laws are also quoted. i. Hukum Chand Jain Vs. Income Tax Officer (2011) 334 ITR 197 (Raj) Hon,ble jurisdiction High Court has held that : Admission despite being an important piece of evidence was not conclusive and it was open to the assessee to show that it was not correct. ii. CIT Vs Ashok kumar Jain (2014) 111 DTR 291 (Raj) 369 ITR 145 It was held that if the assessee does not adhere to the surrender made than it is for the learned AO to bring on record cogent material and other evidences to support the addition rather than rely on the statements Conclusion In view of this the learned AO first erred in making addition solely on statement. it is submitted that addition could not have been made by the learned AO exclusively on the basis of statements. The additions besides being based on statements should have been substantiated with reference to other material and evidences, which in thi....
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....fter reasonable opportunity is given to the assessee as found by the Tribunal. No answer should be given in advisory jurisdiction which would not finally decide the issue since final finding can be arrived at only after giving reasonable opportunity to the assessee and explanation given by the assessee would have material bearing on the finding. It is necessary that the Assessing Officer gives opportunity to the assessee. Tribunal has not considered the evidence in its proper perspective while rendering the decision in appeal and accordingly, the findings of the Tribunal are vitiated in law. As the final fact-finding forum, the Tribunal has to consider the same again. Since Tribunal has recorded a finding that reasonable opportunity has not been given to the assessee to give rebuttal evidence and explanation, this can effectively be done by the Assessing Officer. The reference applications are disposed of as above leaving it to the Tribunal to pass consequential orders. iii. CIT Vs Sunita Dhadda (Supreme Court) Cross-examination is one part of the principles of natural justice: A Constitution Bench of this Court in State of M.P. v. Chintaman Sadashiva Vaishampayan AIR 1961 SC 1....
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....me day at 2.00 AM midnight that he had executed the pronote and signed it on behalf of DCI after obtaining a sum of Rs. 8,78,358/- Later, K filed an affidavit that his statement was recorded at late hours in the night under coercion and pressure-Subsequently, K along with two other partners of DCI, made a voluntary disclosure of a sum of Rs. 11 lacs including the amount of Rs. 8,78,358 and same was assessed in the hands of the three partners-Relying on the statement of R and the retracted statement of K, AO made addition of Rs. 8,78,358 under s. 68 in the hands of assessee also and the same was confirmed by CIT(A) and Tribunal-Not justified-Apparently, there was a violation of principles of natural justice as the statement of one of the important witnesses, namely, R on which heavy reliance was placed by the AO is neither referred to in the assessment order nor copy thereof was given to the assessee nor the assessee was given an opportunity of cross- examining the said R-Authorities could not be absolved from doing so on the ground that the facts stated by R were admitted by the assessee-K had not only retracted his earlier statement but also made a voluntary disclosure, along with....
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....ly in violation of principle of natural justice. Therefore once the assessment is found to be in violation of principal of natural justice, It has to be quashed as b being bad in law and void or a nullity. xi. Kellogg India P Limited & Madhukar Patil Vs, UOI (2006)(193) E L T. 385 (Bombay High court) = 2007 (8) S,T. T 84 (Bom). Wherein it has been held Adjudication - Natural justice- Affected persons must be given fair opportunity not only to answer case against him but to adduce positive evidence in support of his own case together with right to contradict all adverse allegations, if necessary, by permitting him to cross -examine witnesses of opponent. (para 46) The ground of the revenue, that the learned CIT(A) has erred in taking the cost of land of the asseseee at Rs 2.50 crores is without any basis. It is submitted that the issue of purchase of land by the asseseee falls in A Y 2016-2017 which is pending before the learned CIT(A). In view of this the revenue has taken objection that when the appeal is pending for 2016-17 and the issue of cost of land pertains to A Y 2016-2017, hence learned CIT(A) was not justified to determine the cost of land at Rs. 2.50 Cr, and fina....
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....pellate order has taken the on money which is on sale of land at Rs. 1,38,00,000/-. Hence the ground has been carelessly taken by the revenue. 7. To support his case, the ld.AR of the assessee has filed the index paper book containing 188 pages. Index paper Book S No Particulars Paper book page No(s) 1 Copy of purchase deed, relevant account of land in the books of firm M/s Eminent Build Developers, Bank account, Balance sheet 1 to 15 2 Copies of computation of income/return of income of firm disclosing income on sale of land 2 to 36 3 copy of the submission dated 18.06.2024 furnished on 25.06.2024 submitted before the learned CIT( A) 37 to 50 4 copy of the submission made before the learned CIT(A) dated 10.04.2023 51 to 170 5 Copy of purchase and sale deed of 3 bighas of Agricultural land in the name of firm M/s Eminent Build Developers 171 to 188 8. The ld. AR of the assessee vehemently argued that the assessment year in the year under consideration is 7th year and the same cannot be subjected to the assessment year and for that he relied upon the written submission. Whereas on the merits of the case he stated that when the ld.CIT(A) appreciated that the land....
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....the remaining addition is directed to be deleted Accordingly this ground of appeal is partly allowed." The Bench considered the submissions of the assessee and the ld. DR. It is noticed from the records that while proceeding before the ld. CIT(A) as well as now the assessee has successfully made out a case that the land in question was purchased and sold by the firm M/s Eminent Build Developers, a sperate entity having three partners including assessee Shri Pradeep Kuamr Dusad. The entire amount of purchases of Rs. 1,54,21,115/- was paid by firm M/s Eminent Build Developers from bank account of the firm with ICICI Bank. Copy of the bank account has been placed on record (Paper book page No. 13). Further the purchase of land on 28.07.2015 is duly reflected in the Balance Sheet of the firm M/s Eminent Build Developers as on 31.03.2016. Copy of Audited Balance Sheet as on 31.03.2016 of firm M/s Eminent Build Developers is available on record (paper book page No. 15). The Sale deed is registered on 31.05.2016 in the name of the firm M/s Eminent Build developers wherein the assessee through partner Shri Pradeep Kumar Dusad who has acted in representative capacity. The entire amount o....
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....ted his statements given before the Assessing Officer. Even otherwise, an admission by the assessee cannot be said to be a conclusive piece of evidence. The admission of the assessee in absence of any corroborative evidence to strengthen the case of the Revenue cannot be made the basis for any addition. Therefore, the substantial questions of law framed by the appellant pertained to an open issue which stands concluded by the decision of the Hon'ble Supreme Court; one such decision was rendered in "M/s Pullangode Rubber Produce Co. Ltd. v. State of Kerala And Another" (1973) 19ITR18. 12. Therefore, we hold that no substantial question of law arises between the parties and while so, the present Income Tax Appeal is not maintainable. 13. For the foregoing reasons, D.B. Income Tax Appeal No.25/2024 is dismissed. Based on these observations, Ground no. 3 to 9 are allowed. The above finding is given based on the specific fact that the property in dispute is of firm and not of the assessee and ld. CIT(A) has already considered the set off of that property and allowed the benefit to the assessee and therefore, based on that specific fact the assessee gets relief. 11. Ground no.....
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....e date of search shall be irrelevant. Since the bench has allowed the appeal of the assessee on its merits the technical ground raised by the assessee become academic and left open. 12. In the result, the appeal of the assessee is allowed. 13. Now coming to the appeal of the revenue the bench noted that in the first ground the revenue has challenged the finding of the ld. CIT(A) while deleting the part on money allowing the set of on money in purchase and sale and thereby sustained the balance amount only and thereby submit that the ld. CIT(A) should not have considered that plea of the assessee and should have confirmed the whole amount added by the ld. AO. The bench noted that since we have while dealing with the ground no. 3 to 9 of the assessee directed to delete the addition and therefore, on that ground we hold that ground no. 1 raised by the revenue has no merits and thereby required to be dismissed. 14. Ground no. 2 raised by the revenue challenges the finding of the ld. CIT(A) in holding in the assessment order for AY 2016-17, the appellant has disputed the cost and the payment of on money and the appellant has contended that the total payment or the total cost was Rs. ....