2019 (2) TMI 1832 - AT - Income Tax

Undisclosed investment of the assessee in the mines - HELD THAT - During the course of search, an original Ikarnama dated 17.09.2010 has been found which has been executed by Shri Jagdish Panjwani with the assessee, his brother Shri Vijay Makhija, and Kapil Marwah wherein the latter three persons have joined hands as partners in running of the mine owned by Shri Jagdish Panjwani and share of their respective profits and losses have been stated therein. The existence and contents of the said agreement found at the premises of the assessee during the course of search remain undisputed. Shri Jagdish Panjwani in his statement recorded u/s 131on 09.11.2011 has also admitted that he was only the name lender and actually the investment was made by his relatives i.e. Shri Prakash Makhija and Shri Vijay Makhija. The said statement also remains unrebutted before us. Retraction so made during the course of assessment proceedings after a considerable lapse of time is clearly an afterthought and there is nothing which support such retraction so made by the assessee. No justifiable reasons to disturb the detailed and well-reasoned findings so given by the AO and the ld CIT(A). Ground of appeal is dismissed. Undisclosed investment of the assessee in the house - HELD THAT - The statement of the assessee, Vijay Kumar Makhija was also recorded during post-search investigation u/s 131 wherein he has confirmed the purchase of the house and also confirmed the surrender of ₹ 6 lacs so made by his brother Prakash Makhija on his behalf. Shri Ramesh Chand Jain in his statement recorded u/s 131 on 09.11.2011 has also admitted that he managed the sale of the property to the assessee for a consideration of ₹ 20.75 lacs. The existence and contents of the said agreement found at the premises of the assessee during the course of search therefore remain undisputed. The retraction so made during the course of assessment proceedings after a considerable lapse of time is clearly an afterthought and there is nothing which support such retraction so made by the assessee. We see no justifiable reasons to disturb the detailed and well-reasoned findings so given by the AO and the ld CIT(A). In the result, the ground of appeal is dismissed.

Summary

Issues Involved:
1. Addition of ?20,00,000 as undisclosed investment in mines.
2. Addition of ?12,25,000 as undisclosed investment in a house.

Issue-wise Detailed Analysis:

1. Addition of ?20,00,000 as Undisclosed Investment in Mines:
Facts and Proceedings:
A search was conducted on 12.10.2011 at the residence of the assessee, during which certain documents were seized, including an agreement dated 17.09.2010 for the purchase of a mine for ?40,00,000. The agreement was executed by Jagdish Panjwani with the assessee and his brother. During the search, Prakash Makhija admitted to an undisclosed investment of ?40,00,000 in the mine, which was corroborated by his brother Vijay Makhija in a statement recorded under section 131. However, the assessee did not disclose ?20,00,000 as his share of the investment in his return of income filed in response to a notice under section 153A.

Assessee's Argument:
The assessee argued that the agreement was not acted upon as Jagdish Panjwani was not the actual owner of the mine, and the real owner was Devkaran Sharma. The assessee claimed the statement made during the search was under mental stress and should not be considered conclusive evidence.

Assessing Officer's Findings:
The AO did not accept the assessee's explanation, stating that the assessee had admitted the investment in a sworn statement during the search. The AO also noted that Jagdish Panjwani admitted to being a name lender and that the actual investment was made by the assessee and his brother.

CIT(A)'s Findings:
The CIT(A) upheld the AO's findings, noting that the agreement was found at the assessee's premises and was duly notarized and registered. The CIT(A) stated that the assessee did not object to the agreement's contents during the search or appellate proceedings and that the retraction made during the assessment proceedings was an afterthought without supportive evidence.

Tribunal's Decision:
The Tribunal dismissed the appeal, agreeing with the AO and CIT(A) that the statements made during the search and post-search investigations had evidentiary value. The Tribunal found no justifiable reasons to disturb the detailed and well-reasoned findings of the lower authorities.

2. Addition of ?12,25,000 as Undisclosed Investment in a House:
Facts and Proceedings:
During the search, an agreement dated 16.09.2008 was found, indicating the purchase of a house for ?20,75,000, with an advance of ?6,00,000 paid by the assessee. The assessee admitted the advance payment during the search but later disclosed only ?8,90,000 as the investment in the house in his return of income.

Assessing Officer's Findings:
The AO added the balance amount of ?12,25,000 as undisclosed investment, stating that the agreement mentioned the total purchase consideration as ?20,75,000, and the assessee had admitted to paying ?6,00,000 in advance.

CIT(A)'s Findings:
The CIT(A) confirmed the AO's findings, noting that the confessional statements and the agreement had evidentiary value. The CIT(A) found the retraction made by the assessee during the assessment proceedings to be general and vague, lacking supportive evidence.

Tribunal's Decision:
The Tribunal dismissed the appeal, agreeing with the AO and CIT(A) that the statements made during the search and the agreement found at the assessee's premises had evidentiary value. The Tribunal found no justifiable reasons to disturb the detailed and well-reasoned findings of the lower authorities.

Conclusion:
The Tribunal dismissed all the appeals filed by the assessees, upholding the additions made by the Assessing Officer and confirmed by the CIT(A) for undisclosed investments in mines and a house. The Tribunal found the statements made during the search and the agreements found at the assessee's premises to have significant evidentiary value, and the retractions made by the assessees were considered general, vague, and unsupported by evidence.