TaxTMI 
TaxTMI 
1999 (7) TMI 97
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....ip firm engaged in the business of giving furniture, utensils etc. on hire basis under the name and style of Bipin Faraskhana. Search operations were conducted by the I.T. Department under section 132 at the business premises of the assessee firm on February 20, 1991 resulting in the seizure of documents and records etc. Statement of Shri Kantilal Rana, partner of the assessee firm was recorded under section 132 of the Income-tax Act, 1961 wherein it was admitted that unaccounted receipts amounted to Rs. 5,00,000 for the period 1-4-1990 to 20-2-1991. Subsequently, the assessee firm filed an affidavit of the said partner Shri Kantilal Rana retracting from the aforesaid statement dated 20-2-1991. The assessee filed the return of income for As....
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....; 3,000 30-04-1990 3,000 30-04-1990 4,000 23-03-1991 4,500 24-03-1991 8,500 &nbs....
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....essee under section 132(4) the Assessing Officer made an addition of Rs. 5,00,000 as income from undisclosed sources. Since the assessee had already included an amount of Rs. 37,115 in the return, the Assessing Officer made an addition of the balance amount of Rs. 4,62,885. 5. The assessee carried the matter in appeal and the CIT (A) held that the statement of the assessee recorded at the time of search operations has been retracted from and cannot be relied upon by the Assessing Officer. The CIT (A) sustained the addition to the extent of Rs. 50,000 as against Rs. 4,62,885 added by the Assessing Officer. The revenue is aggrieved and has come up in appeal before us. 6. The ld. D.R., appealing on behalf of the department, strongly urge....
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....ficer. The ld. counsel referred to the valuation report placed at page 23 of the paper book and argued that there is no justification for the presumption that the assessee firm has invested the unaccounted income in the construction of house property. 8. On careful consideration of the facts and circumstances of the case as well as the rival submissions made before us we are inclined to sustain the addition of Rs. 4,62,885 made by the Assessing Officer on the basis of the sworn statement of the assessee dated 20-2-1991. During search operations incriminating documents and records have been seized by the income-tax department which provide irrefutable evidence of inflation of expenses as well as suppression of receipts by the assessee fir....
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....lpatory in nature. The substantial portion of the sworn statement relating to admission of suppression of business receipts as well as inflation of expenses has not been retracted by the assessee at any stage. The retraction by means of an affidavit is merely in respect of estimate of suppressed receipts. In the facts and circumstances of the case we feel that the estimate of suppressed income at Rs. 5 lakhs, given by the assessee during the course of search operation constitute the valid basis for making the assessment by the Assessing Officer. After the assessee has itself estimated its undisclosed income at Rs. 5 lakhs, it cannot be allowed to retract from the admission without adducing cogent evidence on record. A very heavy onus lay up....