2016 (8) TMI 464 - AT - Income Tax

Addition on account of surrender made by the assessee under section 132(4) during the course of search as well as during post search proceedings - CIT(A) deleted the addition - Held that - Neither the Investigation Wing nor the Assessing Officer has correlated any seized document with the surrender of unaccounted receipt. After considering entire facts and circumstances of the case and respectfully follow the judicial pronouncements, as discussed in the group cases of DCIT vs. Ramprastha Builders Pvt. Ltd. & Ors. case 2016 (3) TMI 20 - ITAT DELHI we uphold the order of the Ld. CIT(A) on the issue in dispute and dismiss the Appeal filed by the Revenue. - Decided in favour of assessee.

Summary

Issues:
Appeal against deletion of addition made under section 132(4) of the Income Tax Act, 1961 during search and post search proceedings.

Analysis:
1. The Revenue appealed against the deletion of an addition of ?1,00,00,000 made by the Assessing Officer under section 132(4) of the Income Tax Act, 1961. The CIT(A) deleted the addition without considering that the surrender was not disclosed in the return of income filed under section 153A of the Act, and no tax was paid on it. The CIT(A) also erred in deleting the addition without proper documentary evidence supporting the retraction made by the assessee.

2. The CIT(A) based the deletion of the addition on the lack of correlation between seized documents and the surrendered amount. The CIT(A) highlighted that no incriminating material was found during post-search proceedings, and the surrender was made without pinpointing any seized material. The CIT(A) also noted that the surrender was based on mistaken facts, as evidenced by the incorrect statement regarding cash payment for land acquisition. The CIT(A) concluded that the addition based on a retracted statement alone cannot be sustained.

3. The Tribunal upheld the CIT(A)'s order, emphasizing that neither the Investigation Wing nor the Assessing Officer correlated any seized document with the surrendered amount. The Tribunal considered the facts and circumstances of the case, along with judicial pronouncements, and found merit in the CIT(A)'s decision. The Tribunal also referenced a previous ITAT order in related group cases with similar issues, further supporting the decision to dismiss the Revenue's appeal.

4. Ultimately, the Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s deletion of the addition made under section 132(4) of the Income Tax Act, 1961. The decision was based on the lack of evidence linking the surrendered amount to any incriminating material, the retraction of the statement, and the mistaken facts underlying the surrender. The Tribunal's decision aligned with the CIT(A)'s detailed analysis and the precedent set in related cases before the ITAT.