TaxTMI 
TaxTMI 
2026 (6) TMI 1197
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....thyanarayana, challenging the order of the Income Tax Appellate Tribunal "C" Bench, Bangalore (hereinafter referred to as 'the Tribunal') dated 29.11.2024 in ITA No.1130/Bang/2024 for the assessment year (hereinafter referred to as 'AY') 2014-15. 2. The brief facts giving rise to the appeal are as follows: A search and seizure action under Section 132 of the Act was conducted in the premises of the assessee on 04.02.2015, wherein several incriminating materials were found. A return of income (hereinafter referred to as 'ITR') under Section 139(1) of the Act was filed by the assessee declaring an income of Rs. 81,26,510/- on 31.03.2015. Subsequently, in response to the notice issued under Section 153A(1)(a) of the Act on 11.08.20....
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.... This appeal was admitted on 11.03.2025 to examine the following substantial questions of law: i. Whether on the facts and circumstances of the case, the findings of the Appellate Tribunal that the Statement recorded under Section 132(4) of the Income Tax Act, cannot be discarded even when appellant has retracted it subsequently, are perverse and contrary to the law laid down by the Hon'ble Apex Court in Pullangode Rubber Products Co. Ltd Vs State of Kerala reported in (1973) 91 ITR 18? ii. Whether on the facts and circumstances of the case, the findings of the Appellate Tribunal that the retraction of Statement recorded under Section 132(4) of the Income Tax Act, was belated and hence cannot be considered valid are pe....
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....Apex Court as well as this Court, wherein it has been held that admission is not a conclusive evidence and it is always open for the assessee to show that it is incorrect, has made the addition of Rs.1.5 crores, which is unsustainable and perverse. It is submitted that the admission made by the assessee has been subsequently retracted by filing of return on 31.03.2015 as well in explanation provided by the assessee before the AO in response to the show cause notice dated 27.10.2016. Learned counsel for the assessee has taken us through the partnership deed dated 03.02.2011 as well as the addendum to partnership dated 22.02.2012 to contend that the assessee produced sufficient material before the CIT(A) as well as AO to prove that addition u....
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....riminating materials were found, including an admission by the assessee in his statement under section 132(4), admitting to investment of Rs. 1.5 crores made over and above the admitted investment for convention hall, namely Sindhur Convention Hall. The relevant extract of the statement of the assessee under section 132(4) of the Act, admitting to unexplained investment of Rs. 1.5 crores are reproduced hereunder: "Q. No. 06 Please produce the detail of receipts and booking register of Sindhoor Convention Hal J P Nagar Mysore, whether separate books of accounts are maintained for above mentioned business activities Ans. 06. Yes all the bills and booking register are maintained with us as such there are no books of accounts ....
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.... the same in his individual capacity for the AY 2014-15, over and above the income. It has been contended on behalf of the assessee that the said admission has been retracted on 2 occasions. It is contended that the firstly, the assessee retracted the statement by filing ITR on 31.03.2015 and secondly, in response to the show cause notice before the AO dated 27.10.2016. We reject the said contention on two counts. Firstly, mere filing of ITR cannot be said to be a retraction of the statement made under Section 132(4) of the Act. By filing ITR, the assessee would only be declaring his income for the specific AY and it has nothing to do with the statement given contrary to the ITR filed. Secondly, if at all the assessee wants to retract a sta....
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....er: "62. It is settled position of law that the admission though important is not conclusive. It is open to the assessee who made the admission to show that it is incorrect as held by the hon'ble Supreme Court in Pullangode Rubber Produce Company Ltd. v. State of Kerala [1973] 91 ITR 18 (SC). The onus falls on the person who had earlier admitted to prove it wrong. Therefore, the statements could form the basis of assessment. 63. The statements given to the Assessing Officer under section 132(4) have legal force. Unless the retractions are made within a short span of time, supported by affidavit swearing that the contents are incorrect and it was obtained under force, coercion and by lodging a complaint with higher offi....