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TMI Blog2010 (8) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 6-8-2010 - ADARSH KUMAR GOEL and AJAY KUMAR MITTA, JJ. Judgment: Adarsh Kumar Goel J.- The Income-tax Appellate Tribunal, Chan-digarh Bench (in short "the Tribunal") has referred the following questions of law for opinion of this court arising out of its order dated January 26, 1997 in RA Nos. 56 and 57/Chandi/96 in I. T. A. Nos. 31/Chandi/93 and 34/Chandi/94 for the assessment year 1989-90: "RA No. 56/Chandi/96 1. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that assumption of jurisdiction under section 263 by the Commissioner of Income-tax without giving a specific finding as to whether the amount of Rs. 48 lakhs was assessable under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving regard to the facts and circumstances on record. The assessee was apprehended by the officials of the Enforcement Directorate onMay 14, 1989atDelhiand a cash amount of Rs. 21.10 lakhs was seized from him. His statement was recorded which was to the effect that he had already paid a sum of Rs. 48 lakhs to one Shri J. M. Paul as illegal gratification for securing Maruti car agency. The amount seized was intended to be paid as further payment to the said Shri J. M. Paul for the same purpose. The statement of his son-in-law Dr. Arun Gupta who accompanied him was also recorded on the same date corroborating the version given by the assessee. Thereafter, onMay 16, 1989, the assessee surrendered the amount of Rs. 48 lakhs claimed to have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view taken by the Tribunal was erroneous. It was wrongly presumed that finding was not recorded by the Commissioner as to under which section the amount was assessable. He further submitted that having regard to the nature of order, it would not be held that there was no application of mind by the Com-missioner to the correctness of the view taken by the Assessing Officer. It was held by the Commissioner that the amount surrendered by the asses-see himself should have been included in the taxable income and, thus, the order of the Assessing Officer was erroneous. This being the position, requirements of section 263 of the Act, i.e., order sought to be revised being erroneous and against the interest of the Revenue were fully met. The s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 (SC) has been followed. He also submitted that Shri J. M. Paul denied having received the money and, thus, the statement of the assessee that the amount was paid to Shri J. M. Paul was not justified. 6. We have considered the rival submissions and are of the view that the questions referred have to be answered in favour of the Revenue. 7. The questions of law raised in these references require answer to the following issues: (i) Whether the Commissioner of Income-tax had invoked the pro-visions of section 263 of the Act in accordance with law ? (ii) Whether the Income-tax Appellate Tribunal was justified in deleting the addition of Rs. 48 lakhs ? (iii) Whether the assessee was entitled to deduction of Rs. 48 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to make enquiries while completing the assessment w.r.t. nature and source of Rs. 48 lakhs. Therefore, the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of Revenue. The assessment is, therefore, set aside with the directions to the Income-tax Officer to complete the assessment afresh, after allowing the assessee reasonable opportunity of being heard and to consider the taxability and inclusion of this amount of Rs. 48 lakhs under section 68/69 of the Income-tax Act, 1961." 11. In the existing facts and circumstances, the Commissioner had in no uncertain terms recorded the failure of the Assessing Officer to advert to exigibility of Rs. 48 lakhs to tax in the hands of the assessee wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealership which was not reflected in the books of account of the assessee. The assessee had sought to retract from his statement onSeptember 11, 1989after about 4 months. The confessional statement made by a person would be very material and relevant consideration in recording a finding as the facts are in the personal knowledge of the person who makes the statement. However, an admission wrongly made can be withdrawn in a given situation but when the statement made was corroborated by circumstances and was not shown to be erroneous; the retraction thereof would not deviate from its correctness. No doubt, the statement made by the assessee was withdrawn; mere withdrawal of such a statement could not be taken to be conclusive. No explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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