TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 1480
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..../- made by the A.O. on account of retraction from surrendered income. 3. On the facts and in the circumstances of the case, the ld. CIT(A) erred in law in deleting the addition of Rs. 10,00,000/- made by the A.O. on account of cash loan given to Sh. Vishal Chouhan. 4. On the facts and in the circumstances of the case, the ld. CIT(A) erred in law in deleting the addition of Rs. 3,50,000/- Rs. 3,50,000/- Rs. 17,04,000/- & Rs. 8,52,000/- made by the A.O. on account of on money payment against land purchase." 2. Heard the learned Representatives of both sides at length and case- records perused. 3. The registry has informed that the present appeal is filed after a delay of 151 days and therefore time-barred. Ld. DR prayed that the delay has occurred due to Covid-19 Pandemic. Ld. DR further placed reliance on the order of Hon'ble Supreme Court in Suo Motu Writ Petition (C) No. 3 of 2020 read with Misc. Applications, by which suo motu extension of the limitation-period for filing of appeals w.e.f. 15.03.2020 under all laws has been granted and hence there is no delay in fact. We confronted Ld. AR who agreed to the submission of Ld. DR. In view of this, the app....
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.... controverted by revenue. We find that the balance of Rs. 13,50,334/- shown by cash-book is sufficient to cover the imprest cash of Rs. 4,71,000/- . Thus, there is no infirmity in the explanation given by assessee to lower- authorities. Therefore, in our view, the CIT(A) is fully justified in deleting the addition. We do not find anything wrong in the action of CIT(A). This ground is, thus, dismissed. Ground No. 2: 8. In this ground, the revenue claims that Ld. CIT(A) has erred in deleting the addition of Rs. 2,50,00,000/- made by AO in respect of income surrendered by assessee. 9. Apropos to this ground, Ld. DR submitted that the AO was right in making this addition because in the statement recorded u/s 132(4) on 24.10.2011 and 08.11.2011, the assessee himself admitted/surrendered undisclosed income of Rs. 12.75 crore in the hands of himself/his family members/business concerns and subsequently vide letter dated 08.11.2011, the assessee again confirmed the said surrender of Rs. 12.75 crores. Despite such admission/surrender, the assessee-group declared only Rs. 10.25 crores of income in their returns and did not offer differential of Rs. 2.50 crores. Ld. DR submitted that....
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....tion carried out by assessee or by pointing out anything incriminating in assessee's name or otherwise which could be linked with the "miscellaneous surrender" of Rs. 2.50 crore; still the AO has made addition of Rs. 2.50 crore without considering that the surrender by assessee to that extent was purely conditional or contingent. Therefore, it was rightly concluded by Ld. CIT(A) that the addition of Rs. 2.50 crore made by the AO was not on the basis of any incriminating material found during the course of search but only on the basis of statement of assessee. Ld. AR also pointed out that during post- search enquiries no irregularity or adverse material has been brought on record qua the impugned "miscellaneous surrender". Ld. AR placed reliance on following decisions: i. ACIT (1) vs. Sudeep Maheshwari ITA No. 524/Ind/2013 ii. Kailasben Mangarlal Chokshi Vs. Commissioner of Income Tax (2008) 14 DTR 257 (Guj.) iii. Shree Ganesh Trading Co. Vs. Commissioner of Income Tax, Tax Case No. 8 of 1999 iv. M/s Ultimate Builders vs. ACIT Central-II, Bhopal ITA No. 134/Ind/2019 5. Kailashben Manharlal Choksi 328 ITR 411 v. CIT vs. Jaya Lakshmi Am....
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....ng that no such undisclosed income was earned and therefore no such income was required to be offered to tax. For the sake of completeness, we find it appropriate to reproduce the relevant operative part of the first appellate order which reads as follows :- "4.4 Ground No. 5: Through this ground of appeal, the appellant has challenged the addition of Rs. 2,50,00,000/- on account of voluntary surrender of undisclosed income. During the course of search vide statement u/s 132(4) dated 24.10.2011, the appellant has admitted undisclosed income of Rs. 12.75 Crores on behalf of himself, his family members and his business concerns. Various documents were found and seized containing details of undisclosed cash and undisclosed expenditure incurred by the assessee in his various projects by the month of April 2011. The relevant extract of loose paper are scanned on page no 7 & 8 of the assessment order. Therefore, the appellant was required to furnish explanation regarding surrender made during the course of search. The assessee in reply furnished bifurcated details of surrender made including sum of Rs. 10.25 crores made on account of miscellaneous surrender on account of loose p....
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....as again confirmed the above surrender. d. In the case of ACIT vs Hukum Chand Jain (2010) 191 Taxman 319 (Chhatisgarh), the Hon'ble Chhatisgarh High Court has held that admission is one important piece of evidence but it cannot be said that it is conclusive. It is rebuttable. It is open to the assessee who made admission to establish that confession was involuntary and the same was extracted under duress and coercion. The burden of proving that the statement was obtained by coercion or intimidation lies upon the assessee. In this it was held by the Hon'ble Chhattisgarh High Court that where the assessee had voluntarily surrendered the undisclosed income during the course of search in the statement recorded u/s 132(4) to avoid the dispute with the I.T. Department and for mental peace, the onus of proving that confession made by him u/s 132(4) was a result of intimidation, duress and coercion or that the same was made as a result of mistaken belief of law or facts was on the assessee; assessee having failed to discharge his burden the AO was justified in not accepting the retraction and assessing the income of the assessee on the basis of surrender of undisclosed inc....
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.... of income & accepted in the assessment M/s Agrawal Builders & Colonizers (AATFA1630P) 12500000 Disclosed in the return of income & accepted in the assessment Total Amount Rs. 10,25,00,000 The appellant on ad-hoc made voluntary surrender of Rs. 17.25 crores which was reduced to Rs. 10.25 crores and the balance amount of Rs. 2.50 crores was retracted. The appellant has strongly contended that no corroborative evidence on record to corroborate the conclusion of the AO, the assessee had earned income from undisclosed sources at Rs. 2.50 crores over and above Rs. 2.66 crores disclosed in the return. 4.4.2 I have considered the facts of the case, plea of the appellant, case laws relied upon by the appellant and AO and findings of the AO. During the assessment proceedings u/s 143(3)/153A of the Act, assessee made the retraction by submitting that no such undisclosed income was earned and therefore no such income was required to be offered to tax. However, the A.O giving reference to the statement of appellant and also giving reference to the seized documents found during the search, made addition for undisclosed income. However, no specific r....
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....re in the case of ACIT(1) VS. Sudeep Maheshwari ITA No. 524/Ind/2013 dated 13.02.2019 has held as under :- "6. It is the case of the assessee that during the course of search & seizure, no incriminating material or undisclosed income or investments were found. It is stated that the assessee was under mental pressure and tired. Therefore, to buy peace of mind, he accepted and declared Rs.3 crores in personal name. It is also stated that the case laws as relied by the A.O. are not applicable on the facts of the present case. The assessee has relied on the decision of the Hon'ble Supreme Court rendered in the case of Pullangode Rubber Produce Co. Ltd. 91 ITR 18 (SC), wherein the Hon'ble Court has held that admission cannot be said that it is conclusive. Retraction from admission was permissible in law and it was open to the person who made the admission to show that it was incorrect. However, reliance is placed on the judgement of the Hon'ble Gujarat High Court rendered in the case of CIT Vs. Chandrakumar Jethmal Kochar (2015) 55 Taxmann.com 292 (Gujarat), wherein it has been held that merely on the basis of admission that few benami concerns were being run by ass....
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....had been recorded under section 132(4) of the Income Tax Act and in the statement, he stated that he was partner in the Ganesh Trading Company, i.e. the present assessee-firm in his individual status and that he surrendered Rs. 20 lacs for the assessment year 1988-89 as income, on which tax would be paid. He further stated that other partners would agree to the same; otherwise it would be his personal liability. However, in the returns filed after search, the income of Rs. 20 lacs surrendered by Shri Sheo Kumar Kejriwal was not declared by the assessee-firm. On being judhir Kumar Agrawal, appeal No. CIT(A)-3/BPL/IT-10124/2014-15 asked to explain the reason for not showing the surrendered amount in the returns, it was submitted by the assessee that declaration made by the partner was misconceived and divorced from real facts. It was contended that the declaration was made after persuasion, which, according to the learned counsel for the assessee, Shri Binod Poddar, in fact, was because of coercion exerted by the search officers. In explanation, it was submitted that the firm or the individual had no undisclosed income. The assessee's said retraction was not accepted by any of th....
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....awn by the authorities below in holding that there was undisclosed income to the tune of Rs. 20 lacs. 7. In view of the above reasons, without answering the question about retrospective operation of the proviso to section 134(4), we are holding that the authorities below have committed error of law in drawing inference from the materials placed on record, i.e. admission of the assessee coupled with its retraction by the assessee. The Revenue may now proceed accordingly". 4.4.6 Further, Hon'ble ITAT in the case of M/s Ultimate Builders vs ACIT Central-II, Bhopal ITA No 134/Ind/2019 dated 09.08.2019, wherein it has been held that the statement given by the assessee was without any specific reference to any incriminating material therefore, addition on account of undisclosed income offered in statement was deleted. Besides this, decision of Hon'ble Gujarat High Court in the case of Kailashben Manharlal Choksi 328 ITA 411 (2008) also supports the contention that merely on the basis of admission, the assessee could not be subjected to addition unless & until some corroborative evidences is found in support of such addition. 4.4.7 In the case of CIT vs ....
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....n addition of disclosure made by the assessee in statement recorded u/s 132(4), it cannot be sustained despite retraction, when Revenue could not furnish any positive evidence in support of such addition. Therefore, we are unable to uphold the findings of the AO and inclined to agree with Ld. CIT(A). Further, the Hon'ble Rajasthan High Court in the case of Jagdish Narayan Ratan Kumar (supra) has held that statement made during search must be correlated with records, which are found and if there is no ambiguity, explanation given by the assessee should be taken into consideration before making assessment. Thus, based on these decisions, we are of the opinion that the addition made by merely based on statement u/s 132(4) without linking to the seized books of accounts, other documents, money, bullion, jewellery, other valuable articles or things is not sustainable in law 4.4.9 In view of the above discussion & facts stated above, I come to unescapable conclusion that the AO was not justified in making addition of Rs. 2,50,00,000/- as unaccounted income based on disclosure made during the search because no specific reference has been made by the AO to any incriminating ma....
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....elf-incriminating. In this case the Hon'ble High Court noted that the authorities below have not considered a fact that in a case where there was a search operation, no asset or cash was recovered from the assessee, in such a situation what had prompted the assessee to make declaration of undisclosed income of Rs. 20 lakhs. 17. In the present case also the assessee during the course of search operation in the statement and subsequently by way of letter dated 08.11.2011, as has been reproduced above, was sure about the surrender of Rs. 10.25 crores under various heads, however regarding remaining Rs. 2.50 crore, the assessee in the said letter clarified that the said amount pertaining to miscellaneous surrender shall be confirmed after study of all papers. Subsequently at the time of filing return u/s 153A of the Act, the assessee-group included Rs. 10.25 crore leaving the amount of Rs. 2.50 crore for the precise reason, which has been clearly accepted by Ld. CIT(A), that the assessee right from search and seizure operation till filing of return could not find any substantive material or investment which could be considered for supporting the surrender of remaining amount Rs.....
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....ceived call from Shri Vishal Chouhan and he stated that the said amount was never taken by Shri Vishal Chouhan and no entry was made in books of account. In support appellant has filed copy of cash book as on 05.07.2011. On perusal of the copy of the cash book it is evidently clear that appellant was having total cash of Rs. 26,40,918/-. I find strong force in the plea raised by the appellant that he was having sufficient cash in hand out of which sum of Rs. 10 lacs was proposed to be handed over to Shri Vishal Chouhan, however, the same was never handed over to Shri Vishal Chouhan therefore, no book entry was passed. The AO on other hand failed to bring on record any evidence showing the said amount was actually paid by the appellant. Further, no enquiry was made by the AO from Shri Vishal Chouhan. Therefore, in absence of any cogent evidence and statement of the beneficiary, the addition made by the AO amounting to Rs. 10,00,000/- is Deleted. Therefore, appeal on this ground is Allowed." [Emphasis supplied] 21. Before us, Ld. DR representing the revenue strongly opposed the order passed by CIT(A). He argued that the assessee has himself admitted before AO in his reply dated....
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....o entry was made in the books of account. On perusal of order of first-appeal, we observe that the CIT(A) has concluded "The AO on other hand failed to bring on record any evidence showing the said amount was actually paid by appellant". We are unable to understand how such irresponsible conclusion blaming the AO has been noted by CIT(A) when the AO has categorically re-produced assessee's own submission in Para No. 31.2 of assessment-order which reads thus "The assessee vide reply dated 17/02/2014 stated that - Regarding the receipt of Vishal Chouhan the submission of the asessee is that the assessee had given temporary loan to Mr. Vishal Chouhan and as mentioned in the receipt itself it was returned by him after one week." Be that as it may, we are confined to adjudicate the controversy. For that, in the scenario before us, we are certainly in agreement with Ld. DR that the assessee's explanation before CIT(A) is deceptive/false/contradictory to assessee's own explanation before AO and hence the same cannot be given any credence. From the aforesaid reply dated 17.02.2014 filed by assessee to AO, we find that the assessee has himself admitted having given a loan of Rs.....
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....ney payment against purchase of land 3,23,15,190 6. Aggrieved by order of assessment, the assessee filed appeal to Ld. CIT(A). During appellate-proceeding, the Ld. CIT(A) deleted all additions. Now, the revenue has come in appeal before us challenging the action of Ld. CIT(A), on the following Grounds: "(1) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 3,50,000/- made by Assessing Officer on account of on-money payment of against land of the Income Tax Act, 1961 (2) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 3,50,000/- made by Assessing Officer on account of on-money payment of against land of the Income Tax Act, 1961 (3) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 17,04,000/- made by Assessing Officer on account of on-money payment of against land of the Income Tax Act, 1961 (4) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 8,52,000/- made by Assessing Officer on account of on-money payment of against....