9911796707
TMI Blog2014 (12) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... ellappa and G. Anjaiah. The firm is an assessee of Income Tax, and it purchased a plot of land in Nizamabad, in December, 1991, for a consideration of Rs. 3,57,600/-. The Assessing Officer caused survey in the business premises of the firm, on 14.09.1995. He opined that the consideration for the plot of land purchased in December, 1991 is Rs. 6,00,000/- and there was an understatement of the consideration. Statements are said to have been recorded from all the three partners, in this behalf. The differential amount was treated as undisclosed income of the firm and 1/3rd each, of the same was added to the income of the partners. Accordingly, notices were issued under Section 148 of the Income Tax Act, 1961 (for short the Act) and not satisfi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coercion and pressure exerted upon the appellants. He submits that a statement recorded during the course of survey and search can constitute the sole basis for an Assessing Officer to pass orders, only when it is not retracted from, and once it is retracted, the order of assessment must be based upon some other material. He has placed reliance upon certain precedents. Sri J.V.Prasad, learned counsel for the respondent, on the other hand, submits that the statements were made by the appellants on their own accord and obviously, for that reason, the Assessing Officer did not proceed further in the survey, and gather other material. He contends that in case the statements were recorded under threat, coercion or duress, the normal cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empowers the Assessing Officers or other authorities to record the statements of the assesses, whenever a survey or search is conducted under the relevant provisions of law. The statements so recorded are referable to Section 132 of the Act. Sub-section 4 thereof enables the authorities not only to rely upon the statement in the concerned proceedings but also in other proceedings that are pending, by the time the statement was recorded. If the statement is not retracted, the same can constitute the sole basis for the authorities to pass an order of assessment. However, if it is retracted by the person from whom it was recorded, totally different considerations altogether, ensue. The situation resembles the one, which arises on retraction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the very perfunctory nature of the survey. We find that the appellate authority and the Tribunal did not apply the correct parameters, while adjudicating the appeals filed before them. On the undisputed facts of the case, there was absolutely no basis for the Assessing Officer to fasten the liability upon the appellants. Our conclusion find support from the Circular dated 10.03.2003 issued by the Central Board of Direct Taxes, which took exception to the initiation of the proceedings on the basis of retracted statements. Therefore, I.T.T.A Nos.268, 273 and 308 of 2003 are allowed and the orders of assessment dated 01.12.1998 are set aside. Since the orders of assessment are set aside, I.T.T.A.Nos. 287, 291 and 294 of 2006 have virtually ..... X X X X Extracts X X X X X X X X Extracts X X X X
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