2024 (12) TMI 314 - AT - Income Tax

Addition on account of cash found during the search - Addition on relying on the statement of the assessee, recorded on oath during search and seized during search being the cash to be received back against purchase bill to be discussed and reconcile with management - HELD THAT - CIT(A) relied on submissions of assessee that surrender in hands Director of companies made by the assessee regarding seven pages of diary Annexure-1 was due to wrong impression and under coercion, assessee had made surrender on 10/11/2016 at 11.30 A.M. Assessee was not given enough time to consulting Sh. Sandeep Kumar Pandit (only five minutes time was allowed for the same) and statement of Sandeep Pandit who had written pages of Annexure-1 was not recorded. Entries made in seven pages of Annexure-1 were explained as mere projections and not the income. The detail in Annexure-A (1) were sought to be explained. CIT(A) had analyzed pages of spiral note book and analyzed that the Explanation offered by the assessee was allowable. The act of assessee from his statement during search based on evidence found during the search was justified and upheld. Therefore, the arguments of Learned Authorized Representative for Department being devoid of merit are untenable and deserve dismissal. The grounds of appeal of department are dismissed.

Summary

Issues:
Appeals against separate orders of the Commissioner of Income Tax (Appeals) for the Assessment Year 2017-18 involving similar facts and issues.

Analysis:
The judgment involves multiple appeals by the Assessee and the Department against separate orders of the Commissioner of Income Tax (Appeals) for the Assessment Year 2017-18. The appeals encompass similar facts and issues, leading to a common decision being made for all the appeals. The lead case, ITA No.1176/Del/2021, sets the precedent for the other appeals. The facts of this lead case involve a search and seizure operation under section 132(1) of the Income Tax Act, 1961, conducted on the ABA Group of companies. Various incriminating documents were found, leading to the admission of undisclosed income by the director. The jurisdiction over the group cases was centralized to Central Circle, Noida, and assessment proceedings resulted in additions to the undisclosed income.

The Assessee challenged the additions made by the Assessing Officer before the Commissioner of Income Tax (Appeals). The Department of Revenue, through cross-appeals, challenged the deletion of certain additions. The arguments presented by both parties revolved around the correctness of the additions made, the validity of the admissions, and the interpretation of seized documents. The Assessee contended that the additions were unjustified, while the Department argued for upholding the additions based on various legal precedents and the evidence found during the search operation.

The Commissioner of Income Tax (Appeals) analyzed the evidence, including seized documents and statements made during the search, to make a decision. The Commissioner allowed certain additions and deleted others based on the explanations provided by the Assessee. The judgment highlighted the importance of considering all relevant facts and evidence before making additions to the income. The decision-making process involved a thorough examination of the seized documents, explanations provided by the Assessee, and legal precedents cited by both parties.

Ultimately, the judgment concluded by allowing the appeal of the Assessee and dismissing the appeal of the Department of Revenue in the lead case, ITA No.1176/Del/2021. The judgment also addressed similar appeals related to other individuals, where the decisions were consistent with the lead case. The overall outcome of the judgment favored the Assessee, with all appeals filed by the Assessee being allowed and those filed by the Revenue being dismissed.

In summary, the judgment dealt with appeals arising from assessment orders for the Assessment Year 2017-18, involving issues of undisclosed income, seized documents, admissions made during search operations, and the validity of additions to the income. The decision-making process emphasized the importance of considering all relevant evidence and legal precedents before determining the additions to the income.