2018 (2) TMI 1690 - AT - Income Tax

Assessment on the basis of the voluntary statement - Surrender u/s 132(4) - retraction of statement - Held that - Surrender made by the assessee is not supported by any incriminating material or evidence unearthed during the course of search or has been found during the course of the assessment proceedings. Accordingly the revenue s appeal is dismissed. Jewellery found from the residence and was found from the locker - addition to income - Held that - A document was found from the possession of the assessee which clearly shows a receipt of sum of ₹ 5 lacs in cash towards the purchase of the property. The assessee s submission is that the property dealer had given a proposal to the assessee for the purchase of said plot and the signed receipt in cash by the purchaser was given as a matter of practice. Since assessee did not like the location, therefore, he declined to purchase the same. Such an explanation is neither corroborated by any evidence nor any confirmation by the said broker. Once a document has been found from the possession of the assessee then there is a presumption u/s 292C r.w.s. 132(4A) that it belongs to the assessee and onus is very heavy upon the assessee to show that the income/ expenditure mentioned in such document does not pertain to the assessee. Here in this case there is a clear cut receipt of payment of cash of ₹ 5 lacs which assessee has failed to rebut by adducing any proper evidence and therefore, finding given by the Ld. CIT (A) is confirmed. - Decided against assessee.

Summary

Issues Involved:
1. Deletion of addition of ?15,00,00,000 made by the Assessing Officer based on a retracted statement.
2. Confirmation of addition of ?13,33,975 on account of difference in the value of jewelry.
3. Confirmation of addition of ?5,00,000 as unexplained cash credit.

Issue-wise Detailed Analysis:

1. Deletion of Addition of ?15,00,00,000:
The revenue appealed against the deletion of ?15,00,00,000 added by the Assessing Officer (AO) based on the assessee's retracted statement during a search and seizure action. The AO argued that the assessee admitted to earning speculative trading income, which was later retracted. The AO cited Supreme Court and High Court decisions to support that retracted confessions are admissions binding the assessee. However, the CIT(A) deleted the addition, noting no incriminating material was found during the search to justify the addition. The Tribunal upheld the CIT(A)'s decision, emphasizing that the addition was not corroborated by any evidence or material found during the search. The Tribunal also referenced a similar case involving the assessee's father, where the addition was dismissed due to lack of supporting evidence.

2. Confirmation of Addition of ?13,33,975:
The assessee appealed against the confirmation of ?13,33,975 added due to a difference in jewelry valuation. The AO observed that the jewelry was valued higher by the Departmental Valuation Officer (DVO) than the purchase bills provided by the assessee. The CIT(A) upheld the addition, suggesting the difference might have been invested in cash. However, the Tribunal found no quantitative difference in the jewelry's weight and noted that the valuation difference was not substantiated by any material evidence. The Tribunal ruled that the AO should have investigated further with the jeweler and deleted the addition, stating that an estimate by the DVO cannot override actual purchase bills without supporting evidence.

3. Confirmation of Addition of ?5,00,000:
The assessee also appealed against the addition of ?5,00,000 as unexplained cash credit, based on a seized document indicating a cash payment receipt. The AO and CIT(A) found the assessee's explanation—that the receipt was a standard practice by a property broker and no deal occurred—unconvincing. The Tribunal upheld this addition, noting that the document was found in the assessee's possession, and under Section 292C, there is a presumption that it belongs to the assessee. The Tribunal concluded that the assessee failed to provide sufficient evidence to rebut this presumption.

Conclusion:
The Tribunal dismissed the revenue's appeal concerning the ?15,00,00,000 addition due to lack of corroborative evidence and partly allowed the assessee's appeal by deleting the ?13,33,975 addition based on jewelry valuation differences. However, the Tribunal upheld the ?5,00,000 addition as unexplained cash credit due to insufficient rebuttal evidence from the assessee.