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TMI Blog2004 (2) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... upon to explain entries in the seized material and the seized document. The assessee rendered detailed explanations for each of the document found and seized and no adverse comment has been made by the AO on the explanations rendered. This plea that all the entries in the seized documents were explained, was raised before the AO as also before the CIT(A). It has not been held to be wrong. If statement is not wrong, then it is difficult to accept that seized material reflected or established undisclosed income of Rs. 25 lakhs. While the assessee stated that Rs. 20 to 25 lakhs were earned in last 10 years, the AO assessed the total amount in two asst. yrs. 1999-2000 and 2000-2001. i.e., Rs. 12,50,000 each. The assessment is not based on the confession and therefore, the Revenue authorities have to show that assessment refers to material available on record; that the assessee had undisclosed income of Rs. 12,50,000 in each of the two years and thus justify the assessment of the said income. That confession relied upon is not clear as to form basis of assessment of undisclosed income. Provisions of Chapter XIV-B are made applicable in search cases and undisclosed income is defined in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein he is stated to have surrendered Rs. 20 to 25 lakhs as income from share trading and speculation business. On the basis of aforesaid statement, the AO took assessee's undisclosed income at Rs. 25 lakhs. The above amount was added in asst. yrs. 1999-2000 and 2000-2001 in the block assessment. 3. The objection of the assessee that the aforesaid statement was retracted and that above admission in the statement was of no value, was rejected by the AO. He maintained that statement recorded 7 months after the date of search and it is highly unreasonable on the part of the assessee to contend that surrender of Rs. 25 lakhs was without any basis. The AO further mentioned that the assessee did not complain to any IT authorities that he was forced to surrender amount of Rs. 25 lakhs. In the above background a sum of Rs. 25 lakhs was assessed as undisclosed income in the hands of the assessee. 4. The assessee impugned above assessment in appeal before the CIT(A)-III, New Delhi and contended that assessment order dt. 12th Feb., 2001 made on the basis of alleged confession, was illegal as the aforesaid confession was obtained through coercion and pressure and was retracted. The sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement was wrong and was obtained through coercion. The veracity of the statement was admitted by the assessee. With the aforesaid observation, the learned CIT(A) held that AO was justified in making assessment on the basis of confessional statement. 7. The assessee is aggrieved and has brought the issue in appeal. The learned counsel for the assessee Shri S.P. Agarwal reiterated the submissions made before the Revenue authorities. He emphasised that confessional statement was obtained under duress and pressure and was not of any evidentiary value. The same was retracted. He further argued that decisions cited before the CIT(A) were applicable and case law relied upon by the learned CIT(A) did not support the claim of the Revenue. The learned Departmental Representative on the other hand, relied upon impugned order of the CIT(A) which was elaborate and based on cogent reasons. 8. We have given careful thought to the rival submissions of the parties. It is true that authorised officer carrying on search under s. 132 is entitled as per the statutory provision to record statement of the person searched under s. 132(4) of IT Act and use that statement for purposes of assessment. He i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition expressly given in Chapter XIV - B and the amount which is not covered by the said definition cannot be subjected to tax in the block assessment even though declared as such by the assessee in the return of income for block period ..... 2. Control Touch Electronics (Pune) (P) Ltd. vs. Asstt. CIT (2001) 72 TTJ (Pune) 65 : (2001) 77 ITD 522 (Pune) : At para 9 ...... At this stage, it is mentioned that it is a settled legal position that there cannot be any estoppel against the statute. If any income is not taxable by virtue of any provision of the Act, then it cannot be taxed merely because it was offered by the assessee in his return. Therefore, the contention of the learned Departmental Representative in this regard is hereby rejected. Accordingly, the order of the AO is set aside on this issue and is hereby deleted from the assessment of undisclosed income ..... 3. Kasat Paper Pulp Ltd. vs. Asstt. CIT (2000) 69 TTJ (Pune) 924 : (2000) 74 ITD 455 (Pune): At p. 465 para 8 ..... There cannot be estoppel against the legal principles and therefore, if the income does not accrue to the assessee, the same cannot be taxed merely on the ground that it was offered for taxatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be justified by the learned CIT(A). (c) We are unable to hold that above acts of the Revenue authorities would not put any pressure on normal businessman. It is further admitted that the accounts were revoked and released only after Rs. 5 lakhs were deposited by the assessee on 30th March, 2001. In between, on 12th Feb., 2001, the said confessional statement was recorded. We are unable to reject assessee's contention that great psychological pressure was built upon him before he made a statement in February, 2001. It is to be noted that it is not possible to lead direct evidence of use of pressure tactics. It is to be gathered from the evidence, mostly circumstantial. (d) That confession relied upon is not clear as to form basis of assessment of undisclosed income. Provisions of Chapter XIV-B are made applicable in search cases and undisclosed income is defined in s. 158B(b) of IT Act. It is to be assessed on the basis of seized material. It cannot be totally de hors of such material. (e) In the answer given to the question, the assessee stated, I also admit that I earned about Rs. 20 to 25 lakhs from share trading and speculation business in last ten years which has not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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