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TMI Blog2010 (6) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... rrender, she had no other choice except to sign the statement recorded by the visiting officials. In the facts and circumstances, there may not be any evidence of coercion or undue influence being exercised by the Departmental officers, but the existence of duress/disturbed state of mind at such a crucial moment cannot be ruled out. It is an undisputed fact that no documents or papers were found during the course of survey indicating any expenditure having been incurred by the assessee for renovation of the showroom or any cash of the assessee being left at the showroom of M/s. Vishal Jewellers, from where M/s. Vishal Gold and Precious Stones Pvt. Ltd. was carrying on its business. The High Court in the case of Krishan Lal Shiv Chand Rai v. CIT [ 1972 (12) TMI 6 - PUNJAB AND HARYANA HIGH COURT] observed that it is an established principle of law that a party is entitled to show and prove that an admission made by him previously is in fact not correct and true. Such admission raises a presumption against the person making the admission but such presumption is rebuttable. We found that categorical finding was recorded by the CIT (A) to the effect that no material was b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated March 3, 2005 was given to the Additional Commissioner of Income-tax, Ward-25(3), New Delhi, under whose guidance survey was conducted wherein it was stated that post-dated cheques of Rs. 30,14,400 had been obtained from the assessee Smt. Usha Rani Talla, which cheques are not issued from her and she had categorically denied to have spent any amount on renovation of the showroom during the year under consideration and that cash of Rs. 14 lakhs alleged as belonging to her did not in fact belong to Smt. Usha Rani Talla nor has been handed over back to her by the visiting officials. The said cash was handed over to the directors of M/s. Vishal Gold and Precious Stones Pvt. Ltd., which was carrying on business at premises B-5, Moti Nagar, New Delhi, which company had agreed to offer the correct amount of tax payable thereon. It was also stated in the letter that cheques collected may not be presented and the company, viz., M/s. Vishal Gold and Precious Stones Pvt. Ltd. may be intimated the correct amount of tax payable, which would be deposited by the company as admitted by them separately. In the return of income filed, the assessee did not offer the amount of surrender. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly denies to have spent any amount on the renovation of the showroom during the year under consideration, i.e., financial year 2004-05. The assessee spent about over Rs. 10,00,000 45 years earlier and the amount was spent out of the assessee's bank account. The cash of Rs. 14,00,000 in a bag available in the shop did not belong to the assessee nor any such amount was handed over back to the assessee by the visiting officials. The visiting officials concluded the survey after getting three cheques from Rajinder Kumar, Vikram Talla and Usha Rani after recording the statements of the family members, determining certain arbitrary taxes payable which were disputed immediately, as not payable. Thus the surrenders were withdrawn immediately, to which the Department agreed and did not present the cheques for payment. No addition on account of income from undisclosed sources, on the basis of a statement recorded in an invalid and ab initio void survey under section 133A of the Income tax Act, 1961, would be justified, in the light of the above facts and circumstances." The Commissioner of Income-tax (Appeals) called for the assessment records and after examining the same, he observed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfactory. As per the Commissioner of Income-tax (Appeals), the above circumstances are cumulative. If all these circumstances exist, the excess amount may be deemed to be the income of the assessee for the financial year in which such investment was made or the assessee became the owner of bullion, etc. The Commissioner of Income-tax (Appeals) further observed that the legal fiction enacted in section 69B comes into effect only where all the above circumstances do factually exist. The onus to prove the existence of all these circumstances lies on the Department. Thus, there is no room or scope for making any presumption about the existence of any of the requisite circumstances. The Commissioner of Income-tax (Appeals) stated that the Commentary on Income-tax law by Chaturvedi and Pithisaria observes as under : Per Chaturvedi and Pithisaria Commentary on Income-tax law : section 69/69B, page 3211, Volume 2, Fifth Edition : "It may be noted that the legal fiction enacted in section 69B comes into effect only where all the above circumstances do factually exist. The onus to prove the existence of all these circumstances lies on the Department. Thus, there is no room or sco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made the basis for explaining the implication of the expression "expended". Thus, the addition of Rs. 20 lakhs made by the Assessing Officer on account of renovation was also deleted by the Commissioner of Income-tax (Appeals) against this order of the Commissioner of Incometax (Appeals), the Revenue is in further appeal before us. We have considered the rival contentions, carefully gone through the orders of authorities below and also perused the statement recorded during the course of survey as well as material placed on record to which our attention was invited during the course of hearing. We have also considered the ratio of case law cited by the lower authorities in their respective orders as well as referred to by the learned authorised representative and the learned Departmental representative during the course of hearing before us. From the records, we found that there was survey under section 133A of the Act on February 24, 2005 of M/s. Vishal Jewellers, B-5, Moti Nagar, New Delhi. During the course of survey, it was found by the survey officials that M/s. Vishal Gold and Precious Stones Pvt. Ltd. was carrying on business from the said premises. During the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) also observed that even after the retraction of having made any investment in the renovation, the Assessing Officer was having sufficient time to refer the matter for determining the actual value of the showroom, its cost of construction, cost of renovation, etc., but nothing was done by the Assessing Officer to find out the correct state of affairs. The Departmental valuation cell is meant to find out the correct cost of construction and which is fully supported by technical staff employed therein. In the instant case, immediately after survey, the assessee Smt. Usha Rani Talla has retracted and for which letter was duly filed with the competent authority, the amount of surrender was also not offered in the return of income. It was upon the Assessing Officer to find out the actual cost of the building and renovation to substantiate the statement given by the assessee wherein surrender was made. The statement so recorded by the survey team was also alleged to be under influence, coercion and under a confused state of mind. In the letter of retraction the factual position was stated by Smt. Usha Rani Talla to the effect that her husband, an acute diabetic patient, was made to sit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18, wherein it was held that an admission is not conclusive and the assessee is fully entitled to rebut and controvert the admission. Furthermore, the hon'ble Supreme Court in the case of R. S. Sarwan Singh, AIR 1957 SC 637 held that the confession of an accused would need corroboration to convict the accused. The hon'ble Delhi High Court in the case of S. Arjun Singh v. CWT [1989] 175 ITR 91 held that an admission is an important piece of evidence but it is not conclusive and it is open to the assessee to show that it is incorrect. It is an undisputed fact that no documents or papers were found during the course of survey indicating any expenditure having been incurred by the assessee for renovation of the showroom or any cash of the assessee being left at the showroom of M/s. Vishal Jewellers, from where M/s. Vishal Gold and Precious Stones Pvt. Ltd. was carrying on its business. The hon'ble Punjab and Haryana High Court in the case of Krishan Lal Shiv Chand Rai v. CIT [1973] 88 ITR 293 observed that "it is an established principle of law that a party is entitled to show and prove that an admission made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of affairs. It was also observed that in contradistinction to the power under section 133A, section 132(4) of the Act enables the authorised officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act. On the other hand, whatever statement is recorded under section 133A of the Act, it is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone lends evidentiary value as contemplated under the law. Applying the above proposition of law to the facts of the case, we found that categorical finding was recorded by the Commissioner of Income-tax (Appeals) to the effect that no material was brought on record by the Assessing Officer to substantiate that any expenditure on renovation was incurred by the assessee during the assessment year 2005-06, nor the Assessing Officer has made any reference to the Departmental Valuation Officer to find out the correct state of affairs, and it was merely on the basis of statement given by Smt. Usha Rani Talla in a disturbed state of mind, which cannot be made the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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