2012 (11) TMI 1105 - AT - Income Tax

Summary

Issues Involved:
1. Justification of the Assessing Officer's reliance on the statement recorded u/s 132(4).
2. Charging of interest u/s 234B on additional income.
3. Deletion of addition of Rs. 1.80 crores based on the assessee's retraction of the initial disclosure.

Summary:

1. Cross Objection by the Assessee:
The assessee raised issues regarding the undue importance given by the Assessing Officer to the answer to question No.14 of the statement recorded u/s 132(4), particularly noting the timing of the questions. The assessee also contested the charging of interest u/s 234B due to the delay in providing seized material/statement. However, the assessee did not press these grounds, leading to their dismissal.

2. Revenue's Appeal:
The revenue contested the deletion of the Rs. 1.80 crores addition made based on the managing partner's admission in the statement recorded u/s 132(4). The revenue argued that the Ld. CIT(A) erred in accepting the assessee's retraction and should have upheld the Assessing Officer's order, as the partner had admitted to an undisclosed income of Rs. 9 crores but only showed Rs. 7.2 crores in the return of income.

3. Facts and Arguments:
The Ld. CIT(A) noted that the assessee had retracted the disclosure of Rs. 1.80 crores, arguing that the initial statement was made without complete information and under duress. The assessee provided a detailed breakup of the Rs. 7.20 crores disclosed in the return of income, which the Assessing Officer did not accept, leading to the addition of Rs. 1.80 crores.

4. Tribunal's Analysis:
The Tribunal considered the rival submissions and the material on record. It was noted that the Ld. CIT(A) had decided the issue in favor of the assessee after considering various judicial pronouncements and the Board's Circular dated 10.03.2003. The Tribunal found that the addition by the Assessing Officer was based solely on the initial statement without any corroborative evidence of additional unaccounted income or investment.

5. Judgment:
The Tribunal upheld the Ld. CIT(A)'s decision, emphasizing that mere admission in the statement u/s 132(4) without corroborative evidence cannot justify the addition. The Tribunal referenced the judgment of the Hon'ble Gujarat High Court in the case of Kailashben Manharlal Choksi, which supported the assessee's position. Consequently, the appeal of the revenue was dismissed.

6. Conclusion:
Both the revenue's appeal and the assessee's cross objection were dismissed. The Tribunal pronounced the order in the open court.