9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 1083 - AT - Income TaxAddition as per disclosure made by the assessee - Held that - We find that there is no basis for making this disclosure and thereafter addition made by AO to the returned income of the assessee as there is no corroborative or direct evidence which shows that the assessee has earned this amount of ₹ 1 cr. There is no deposit in the bank account and there is no cash or incriminating papers found during the course of search on the premises of the assessee or there is no unaccounted deposits found in the above-stated two bank accounts relating to which this income is to be declared. But the AO added the sum of ₹ 1 cr. to the returned income of the assessee on the basis of disclosure letter dated 06.05.210 filed before DDIT, Investigation, Unit 1(4), Kolkata. As there is no basis for making this addition, CIT(A) has rightly deleted the addition based on the submissions and relying on various authorities. We confirm the order of CIT(A).
Issues Involved:
1. Deletion of addition made by AO based on the assessee's disclosure during search. 2. Reliance on case laws by CIT(A) that were against the revenue. Detailed Analysis: Issue 1: Deletion of Addition Made by AO Based on Disclosure During Search A search and seizure operation was conducted on a group of companies on 26.03.2010, and a consequential search was conducted on bank accounts associated with these companies. The assessee, a director in these companies, submitted a letter on 06.05.2010 disclosing an additional income of Rs. 1 crore. The AO initiated proceedings under section 153C of the Income-tax Act, 1961, and added Rs. 1 crore to the assessee's returned income based on this disclosure. The assessee contended that the disclosure was made under coercion and threat, and there was no corroborative evidence to support the addition. The CIT(A) deleted the addition, noting that no incriminating documents were found, and the bank accounts were regular and disclosed in the books of the respective companies. The CIT(A) relied on various judicial pronouncements, including the Supreme Court's ruling in Pullangode Rubber Produce Company Ltd. vs. State of Kerala, which stated that an admission is an important piece of evidence but not conclusive, and the person making the admission can show it is incorrect. The CIT(A) also referenced the CBDT Circular dated 10.03.2003, which advised against placing undue emphasis on statements recorded during search operations and emphasized the need for credible evidence. The CIT(A) concluded that the addition was not justified as it was based solely on the retracted statement without any supporting evidence. Issue 2: Reliance on Case Laws by CIT(A) Against the Revenue The CIT(A) relied on several case laws that supported the assessee's position. These included: - CIT vs. Ravindra Kumar Jain: Held that no addition can be made solely based on a statement recorded under section 132(4) if the assessee later retracts it and the surrender is not corroborated by independent evidence. - Kailashben Manharlal Choksi vs. CIT: Held that an assessee cannot be subjected to addition merely on the basis of a statement made under section 132(4) unless corroborated by evidence. - CIT vs. Khader Khan Son: Referred to the CBDT Circular emphasizing the need for evidence rather than confessions during search operations. The Tribunal upheld the CIT(A)'s decision, agreeing that there was no basis for the addition as there was no corroborative or direct evidence of the assessee earning the Rs. 1 crore. The Tribunal confirmed that the CIT(A) rightly deleted the addition based on the submissions and reliance on various authorities. Conclusion: The Tribunal dismissed the revenue's appeal, confirming the CIT(A)'s order to delete the addition of Rs. 1 crore. The Tribunal emphasized the lack of corroborative evidence and the improper reliance on a retracted disclosure made under alleged coercion. The judgment reinforced the principle that additions cannot be made solely based on uncorroborated statements obtained during search operations.
|
