9911796707
TMI Blog2010 (12) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee firm but in fact based upon the loose paper found during the course of survey - Decided against the assessee - ITA No.3250/Ahd/2008 - - - Dated:- 30-12-2010 - Bhavnesh Saini, D.C. Agrawal, JJ. R.N. Vepari, AR for the Appellant R.K. Dhanistha, DR for the Respondent ORDER Per: Bhavnesh Saini: This appeal by the assessee is directed against the order of the learned CIT(A), Valsad dated 12-05-2008 for assessment year 2005-06, challenging the addition of Rs.15,00,000/- 2. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the materials available on record. We have also taken into consideration the written submissions filed by the learned Counsel for the assessee. Vide order sheet dated 27-10-2010 the learned Counsel for the assessee was directed to file affidavit of the assessee to explain where the affidavit in original (copy PB 19 to 21 dated 19-1- 2007) was filed. It was also directed to explain whether original affidavit was filed before the AO of this case. Sufficient time was given to the assessee to file the affidavit as directed above, but the assessee refused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- was made under the specific head not recorded in the books of account. The disclosure under these specific head further show that it was made voluntary and by application of mind and it was not a forced disclosure as contended by the assessee. It is relevant to note that the facts which are in the knowledge of the assessee and which are voluntary admitted needs no further proof. What is admitted by the assessee to be true must be presumed to be true unless the contrary is proved by the assessee itself. 10. ........There is nothing on record that the said disclosure was made by the assessee under duress and pressure and retraction of disclosure after a lapse of 2.5 years from the date of survey is an afterthought." The AO has also relied upon the following judgments while making the addition in respect of disclosure of Rs.15,00,000/- made by the assessee at the time of survey: 1. B. D. Dal and Oil Industries vs. Income Tax Officer (40 ITD 180) ITAT, Jaipur 2. Asstt. CIT vs. Mrs. Sushiladevi S. Agarwal (1994) 50 ITD 524 ITAT, Ahmedabad 3. Kapoor Sons vs. ITO 46 ITD 497, Chandigarh 4. CIT vs. Biju Patnaik 190 ITR 397 (Orissa) 5. ACIT vs. Yerra Nagbh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the copies of agreement with Shri I. R. Parmar for purchase of Agriculture Land Worth Rs.17,95,000/-." The A. O. as further in paragraph 20 of his order stated as under: "Since it is very clear fact that the assessee has incurred land development charges of Rs.15 lacs, then a natural question arises is that on which land the assessee has incurred such expenses. However, against the specific show cause letter dated 08/10/2007, the assessee remained silent on this point and retracted to the disclosure made during the course of survey operations. The partnership deed dated 16/07/1994, specifically states the object of the partnership shall be that of purchase and sale of land, particularly mutually decided amongst the partners. Since no any explanations is forthcoming that in which land the developments are made, which clearly shows that the assessee has purchased some plot of land, and developed by expending a sum of Rs.15,00,000/- and sold." (emphasis supplied. This view get support from the fact that as per the balance sheet of the assessee, the assessee has given advances to two other persons for plot of lands and this fact very much establish hat the assessee is purchasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which such expenses were expended. However, in paragraph 20 of the order he states that - " which clearly shows that the assessee has purchased some plot of land, and developed by expending a sum of Rs.15,00,000/- and sold (emphasis supplied). 7. The A. O. has sought to draw support for his assumptions from the fact that in the Balance Sheet as on 31st March, 2005, of the assessee firm, two advances are appearing. How can advances lead to conclusion that assessee had purchased land, developed it and sold it. If it were so, the advances would have got squared off. The A.O. has utterly failed to even prima facie establish any transaction relating to purchase of any land or ownership of any land by the assessee firm. 8. The A. O., further, put in his conjecture that the appellant must have had land, developed same and sold the same and must have made a profit of Rs.5.00 lakhs. The A. O. in his zeal to some how pass a high pitched order, missed the point that the sale and purchase of land requires registration with the Sub Registrar and the onus was on him (A.O.) to at least prima facie establish such a fact. In our humble submissions the A. O. has not even attempted to do so. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Madras High Court in the case of CIT vs S. Khader Khan Son 300 ITR 157. He has submitted that there is no date on the seized paper and that the seized paper PB-34 is fabricated and planted upon the assessee. He has submitted that the finding on ground No.2 for deleting the addition of Rs.5,00,000/- is relevant for deleting the addition on this issue and that though section 292C of the IT Act is applicable to the assessment year under appeal but such presumption is rebuttable which is rebutted by the assessee. He has submitted that a piece of paper is not a document nor material, therefore, it cannot be relied upon against the assessee. He has relied upon the decision of the Hon'ble Delhi High Court in the case of CIT vs Dhingra Metal Works 328 ITR 384 in which it was held that "statement made under Section 133A not conclusive proof and assessee can explain the discrepancy in the stock found during the course of survey by production of relevant record including excise register of the associate concern." He has also relied upon the decision of the Hon'ble Chhattisgarh High Court in the case of ITO vs Vijay Kumar Kesar 327 ITR 497 in which it was held "statement made at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument accepted unaccounted land development expenses which have not been recorded in the books of accounts. He has submitted that the assessee has not produced any evidence of coercion or fabrication of the record or the seized document. No complaint has been made to the senior authorities in this regard. Therefore, addition has been rightly made by the authorities below. He has relied upon the order of the ITAT Ahmedabad Bench in the case of Manharlal Kasturchand Chokshi 61 ITR 55 in which it was held that "in the absence of any evidence to show that the assessee had made a disclosure under duress, pressure and coercion, retraction after lapse of two months was an afterthought and addition is justified". He has also relied upon the order of the ITAT Bangalore Bench in the case of Carpenters Classics (Exim) (P.) Ltd. vs DCIT 108 ITD 142 in which it was held that "Since the assessee had not taken any step to rectify its declaration before the authorities below before whom such declaration was made, there was no valid reason for retraction of the same after about a gap of two and half months in block assessment proceedings." He has also relied upon the decision of the Hon'ble Rajasth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that the assessee or its partner never retracted from such statement and the seized material after conclusion of the survey proceedings. The assessee or its partner never filed any complaint to the senior authorities of the Income Tax Department for any alleged fabrication of the seized material or for recording statement under duress or coercion. The assessee and its partner remained silent for about 2 years and did not object to the seizure of the incriminating document or material and the statement made by Mr. Kopikar. Copy in the affidavit dated 19-01-2007 copy is filed in the paper book but the original of the affidavit was never filed before the AO of this case. The assessee's Counsel contended that only copy was filed and the original was filed in some other proceedings of the group case. The learned Counsel for the assessee was accordingly directed vide order sheet dated 27-10-2010 to file affidavit of the assessee to explain where the affidavit in original was filed. The assessee was also directed to explain whether original affidavit was filed before the AO of this case. The assessee however, did not file any affidavit in this regard as was directed by the Tribunal vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been so executed or attested.] [(2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of subsection (1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132.]" It may be noted here that section 292C of the IT Act was made applicable to the survey proceedings u/s 133A of the IT Act with effect from 01-06-2002. Thus, it is applicable to the assessment year under appeal i.e. 2005-06. The learned Counsel for the assessee also did not dispute the applicability of the provisions of section 292 C of the IT Act to the case of the assessee. In seized document (PB - 34), it is clearly mentioned "Development Expenses of Naroli Developers". 8.1 The Hon'ble Bombay High Court in the case of Surendra M. Khandhar vs ACIT 321 ITR 254 held as under: "The language of section 132(4A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e resiled statement was supported by the diary recovered during the survey. The Tribunal reversed the view taken by the Commissioner (Appeals). On appeal: Held, dismissing the appeal, that it was not disputed that the statement was made by the assessee at the time of survey, which was retracted on May 28, 2003 and he did not take any further action for a period of more than two months. In such circumstances, the view taken by the Tribunal that retraction of the earlier statement was not permissible, was a possible view. The mere fact that some entries were made in a diary could not be held to be sufficient and conclusive to hold that the statement earlier made was false. The assessee failed to produce books of account which may have been maintained during the regular course of business or any other authentic contemporaneous evidence of agricultural income." 8.3 The Hon'ble Chhattisgarh High Court in the case of CIT vs D. R. Bansal 327 ITR 44 noted the explanation of the assessee that papers have been planted by the Accountant but no police action taken against the Accountant who is continuing in service. The addition to income based on loose papers. It was held that the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies and the assessee. Therefore, the above provisions would be read against the assessee for the purpose of confirming the addition. 9. The learned Counsel for the assessee referred to the CBDT circular dated 10-03-2003 which would not support the case of the assessee because in this case no attempt has been made by the survey party to obtain any confession of the assessee in duress or coercion. The partner of the assessee firm was directed to explain the contents of the seized documents found during the course of survey to which he has replied to it to be the expenses incurred under the head land development and road leveling etc. which were incurred outside the books of accounts. Therefore, it is not a case where addition is merely made on the basis of statement of the partner of the assessee firm but in fact based upon the loose paper found during the course of survey. This circular, therefore, would not support the case of the assessee. 10. The learned DR also referred to Para 18, 19 and 20 of the assessment order in which the AO has specifically noted that in order to find out in which land the assessee has incurred such expenses; the assessee was directed to produce c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
