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TMI Blog2015 (7) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt ] for the proposition that admission in statement during search proceedings is not conclusive proof. Besides Hon'ble Supreme Court in the case of Pullangode Rubber Produce (1971 (9) TMI 64 - SUPREME Court ) has also held so that such statement can be explained in the light of correct facts. Whether in the light of CBDT instruction dtd 10-03-2003, search proceedings and assessment can be based incriminating material and not on such disclosures - Held that:- A perusal of the CBDT instruction reveals that even Board is aware of such laconic disclosures and expects its officers to rely on incriminating evidence. Thus CBDT also is not in favor of search assessments being based only on such disclosures; it wants them to be based on incriminating material. In view the facts, circumstances, CBDT instruction and various case laws relied on by the assessee we are unable to uphold the additions solely on the basis of disclosure which doesn't meet the eye and have been hold by us to involuntary. Whether the additions are based on any incriminating material discovered as a result of search in terms of sec. 153A - Held that:- There is no reference to impugned additions being based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P Tolani, JM And T R Meena, AM,JJ. For the Appellants : Shri Rakesh Gupta Shri Milay Chaturvedi, Advs. For the Respondent : Smt Rolee Agarwal, CIT - DR ORDER Per R. P. Tolani, JM. These are two assessee's appeals against two separate orders of the ld. CIT(A)-Central Jaipur dated 30-03-2012 and 11-07-2012 respectively for the assessment year 2008-09: assessee being related, facts and grounds of both the assessee's are similar, are being disposed of by a common order for the sake of convenience. Grounds raised are as under:- Shri Basant Bansal (ITA No. 534/JP/2012 - A.Y. 2008-09) 1 That on the facts and in the circumstances of the case and in law, the order dated 30-03-2012 passed by CIT(A)- Central, Jaipur [herein referred to as The CIT (A)'' to the extend the same related to addition of ₹ 20 crores made on the basis of admission of the appellant was bad in law and has been passed without application of mind in a rushed manner. 2. That on the facts and in the circumstances of the case and in law, ld. CIT(A) erred in holding that no coercion, pressure, undue harassment was exerted on the appellant to make surrender of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any cogent material but on presumption and extraneous considerations. 4. That on the facts and in the circumstances of the case, the ld. CIT(A) has erred in not appreciating that in law addition cannot be sustained solely on the basis of statement, there must be independent material, evidence to corroborate the surrender, which was retracted. 5. That on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in arriving at a conclusion and basing his decision merely on a statement, the implications of which were, admittedly, not understood by him. 6. Without prejudice and in alternative, on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in not reducing the amount of ₹ 39 lacs declared in the Income Tax Return filed by the appellant out of the alleged surrender of ₹ 4.99 crores confirmed by him. 7. Without prejudice and in alternative, on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in upholding the assessment / addition of ₹ 4.99 crores on protective basis in the hands of Shri Basant Bansal, who was not a party to appeal while passing the order of appellant, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able, owning to achieve peace of mind; to avoid litigation with the understanding with the Income-tax department that no penalty and prosecution proceedings will be initiated against the group entities i.e. companies, their directors and family members. Notices for filing returns u/s 153A of the Act were issued on both assessee's on 28-04-2010. In pursuance thereto both the assessee's filed their respective returns on 28-09-2010. Assessment u/s 153A r/w Section 143(3) of the Act in both cases were framed by AO on 28-9-2010. In furtherance of 1st search and survey inquiries on 14.01.2008 assessee was asked queries relating to an alleged property transaction for which Shri Raghubir had paid to one Shri Ranga Rao an amount of ₹ 62.75 lacs from his Corporation Bank account no. SB- 01/024061, Maruthi Kunj, Gurgaon. Assessee explained that Shri Raghubir, s/o Shri Kehar had sold his share of ancestral co-ownership property through assessee and it had no relation to the property and payment to Shri Rangarao. The payment reflected in Raghubir's bank a/c was made to Shri Ranga Rao out of his said proceeds of share of ancestral land. Since department in the quest of disclosu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DDIT (Intelligence - 1) Sub: Offer of Income/Investment/Expenditure. Reg.: Basant Bansal/ Roop Kumar Bansal, C- 13, Sushant Lok, Phase-1, Gurgaon, Haryana. This is with reference to search and seizure operation under section 132 and survey under section 132 and survey under section 133A of the Income-tax Act, 1961 carried on 12.09.2007 and 11.10.2007 at my residential premises and the business premises of the concerns/companies in which I am interested as director, I would like to submit that during the search seizure/survey operation certain documents, cash, valuables etc. were found and seized/impounded from such business and residential premises and to clarify our previous letter dated 19.11.2007 offering income of 20 Crores and further querries raised by you on 14.01.2008 in respect of property purchased from Ranga Rao and amount of ₹ 62.75 lacs received by Ranga Rao from Raghubir, S/o Kehar. In this regard we would like to submit that the co-owner Raghubir, s/o Kehar has sold his ancestral property and we do not have any relation or interest in the said land/sale proceeds and the bank account no SB - 01/ 024061 maintained with Corporation Bank, Maruthi Kunj, G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... why against the surrendered income of ₹ 10 Crores in his hands only ₹ 39 lacs was declared as additional Income. The assessee in his reply dated 06.12.2010 contended that the letters of surrender of undisclosed income before the ld. DDIT (Intelligence-1), New Delhi regarding alleged transaction of Shri Raghubir and some bank accounts the relevant details were not allowed to be reconciled by the assessee. After search detailed reconciliation of accounts before filing of the return of income was made. It was found that neither assessee nor any group concern had any connection with the alleged deal or bank account of Raghubir consequently no undisclosed income accrued in this behalf. The AO held that relevant documented were consulted by assessee before filing the letter of surrender before the DDIT (Intelligence-1), New Delhi on 15.01.2008 and they were again provided to him on 07.12.2010. The assessee however insisted on his letter dated 6.12.10 to be correct version of related affairs and explanation of alleged transaction and relied upon various judicial pronouncements for the propositions that:- (i) Any adverse material used against assessee needs to be confronted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s 142(1) dated 04.10.2010 to be complied by 12.10.2010 but he filed reply to that on 06.12.2010 knowing very well that the assessment proceedings were to be completed by 31.12.2010. In his this reply he sought cross examination of S. Raghbir Singh, a person for whom he has acted as introducer for opening of bank account with Corporation Bank, Maruti Kunj, P.O.-Bhondsi, Gurgaon (Copy of account opening form enclosed). 2.3 Moreover, no statement of Sh. Raghubir or Sh. Ranga Rao has been used against the assessee by me. Even the Investigation Wing, Delhi has only showed him the bank statement of account no.SB/01/024061 of Sh. Raghbir with Corporation Bank, Maruti Kunj, Gurgaon as is evident from the statement of Sh. Basant Bansal dated 15.01.2008 a copy of which has been provided to the assessee, receipt of which has been accepted by the assessee in his letter dated 14.12.2010. After seeing the above mentioned bank statement the assessee said We are hereby submitting letter dated 15.01.2008 in which we have clarified that in the surrender of additional income of ₹ 20 crores vide out letter dated 19.11.2007 although the credit entries in the account of Sh. Raghbir we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , statement of Sh. Rang Rao is not reliable. AO Comments: There is no bar in any law that the statement of a person who has not been filing return of income can not be relied upon. Copy of statement of Sh. Rang Rao has been provided to the assessee and can be very well seen from it that there is not statement from Sh. Rang Rao where he has said anything adverse against the assessee except that he received ₹ 62,75,000/- from Sh. Basant Bansal has not been used by the department against him. The information received from Sh. Rang Rao has ultimately led to account no.SB/01/024061 of Sh. Raghbir with Corporation Bank, Maruti Kunj, Gurgaon which the assessee owned up in his letter of surrender. 2.7 The assessee has also mentioned in his reply dated 06.12.2010 that he has been able to lay hands of some legal documents which show that the alleged bank account i.e. SB/01024061 with Corporation Bank, Maruti Kunj, Gurgaon is owned by Sh. Raghbir S/o Sh. Kehar Singh. The assessee has enclosed copy of letter issued by Corporation Bank certifying that the transactions in the said bank account had been conducted by Shri Raghbir. The assessee has also enclosed copy of Compromise Deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of these figures very clearly points towards the fact that there was an unaccounted/unexplained income of ₹ 10 crores with the assessee which he did not include in his income while filing the return of income. 2.9 Sh. Basant Bansal Sh. Roop Bansal have surrendered undisclosed/unaccounted income vide letters dated 19.11.2007 and 15.01.2008 before the DDIT (Intelligence-I), New Delhi will after the date of search which 12.09.2007. They had ample time to think and deliberate, consult their counsel and advisers before making the surrender of income of ₹ 20 crores. Therefore, I hold that the surrender made by them is final and is binding on them. This view is also upheld by the Hon'ble Supreme Court of India in very explicit terms in its decision dated 25.10.1996 in Special Leave Petition (C) No.14028 of 1996 in the case of Surjeet Singh Chhabra Vs. Union of India and Others, wherein it has held that the Revenue officials are not Police Officers and the confession, though retracted, is an admission and binds the petitioner. As such whatever the assessee has admitted during the search operation and in post search operation before the Income-tax authorities is binding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is statement recorded u/s 132(4) of the Income Tax Act on 12.09.2007. Later on DDIT(Intelligence-1), New Delhi recorded the statements of various farmers around Gurgaon who have sold land to Sh. Basant Bansal, Sh. Roop Bansal the companies in which they had interest. One Sh. Ranga Rao of Village-Dhorkha, Distt.- Gurgaon admitted that he had received ₹ 30 lacs by cheque no.596557 and ₹ 62,75,000/- through cheque no.122224 dated 18.12.2006 from Bansals of Tauru, Distt.- Gurgaon which is the Village of Sh. Roop Bansal Sh. Basant Bansal. Enquiries were conducted regarding cheque no.122224 and it was found that the cheque was issued for A/c No.SB/01/024061 of Corporation Bank, Maruti Kunj, Gurgaon held in the name of Sh. Raghuveer S/o Kehar of Village-Badshahpur, Gurgoan. In this account which was opened on 11.12.2006 initial amount of ₹ 9.66 crores was deposited. In order to know the source of this amount further enquiries were conducted by DDIT (Intelligence-1), New Delhi, however before the completion of the enquiries, Sh. Basant Bansal Sh. Roop Bansal again filed a letter dated 15.01.2008 to the DDIT(Ingelliegnec-1), New Delhi stating that, to clarify our pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bansal to the DDIT(Intelligence-1), New Delhi for himself and on behalf of Sh. Roop Bansal. But the fact remains that Sh. Basant Bansal made a surrender of ₹ 20 crores as per the letters submitted by him, therefore, amount of ₹ 20 crores is considered to be undisclosed income of Sh. Basant Bansal as Sh. Roop Bansal has denied having anything to do with the letters of surrender filed by Sh. Basant Bansal. The AO thus framed the assessments u/s 153A r/w 143(3) by making additions of income only on the basis of disclosure of ₹ 20 crores in the hands of Shri Basant Bansal and ₹ 4.99 crs In the case of Roop Bansal. 2.13 Aggrieved both the assessee filed first appeals raising grounds about (i) validity of 153A proceedings (ii) illegal extraction of disclosure of ₹ 20 crores. (iii) Challenge to the rejection of explanation about the Raghubir bank a/c without any cross examoination or verification. (iv) Unsustainable additions being based only on surmises, conjecture and not based on any incriminating material, etc. 2.14 Ld. CIT(A) after considering the same and material available on the record awarded part relief based on following observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs of search. I am unable to understand the significance of this argument and rather the argument itself. However, as already mentioned in detail by the A.O. and also partly mentioned in the above para, the appellant had filed letter dated 19.11.2007 admitting income of ₹ 20 crore after two months of search and seizure operation, obviously after consulting the team of taxation experts and weighing the pros and cons of the enquires being undertaken by the Intelligence Unit at that point of time. By no stretch of imagination it can even be presumed that the appellant was under threat or coercion while writing this letter of surrender ob obviously sitting in his office and/or in the office of his tax advisors and fully assisted by tax advisors/consultants. 5.5.3 The other argument taken is that it cannot be denied that amount of ₹ 9.66 crore deposited in this bank account (referring to bank account S/B 01/024061 with Corporation Bank) represented sale proceeds of land sold by Mr. Ranga Rao and Others.' Firstly the aforesaid bank account is apparently in the name of Sh. Raghuvir S/o of Keher Singh and not in the name of Sh. Ranga Rao. Hence sale proceeds of land of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement of Sh. Raghuvir Singh which has been used against the appellant and it is to mention here that the copy of the bank statement of Sh. Raghuvir Singh was already shown to the appellant by the Intelligence Unit Delhi while recording his statement on 15.1.2008. Since after confronting these documents to the appellant, he has himself admitted ₹ 20 crore as his undisclosed income including the bank deposits of ₹ 9.66 Crores in the impugned bank account apparently in the name of Sh. Raghuvir Singh, the natural justice by way of providing opportunity as envisaged by Hon'ble Court has already been fully met. Without prejudice to above, the A.O. on receiving request for cross examination of Sh. Raghuvir Sing, has issued summon to the appellant for attending personally on 14.12.2010 but the appellant failed to attend. Therefore the A.O. observed that his objection regarding cross examination of Sh. Raghuvir Singh and Mr. Ranga Rao is not justified and is merely a plea taken to delay the filing of details and entangle the assessment proceedings. 5. 6 The A.R. has referred to the various decisions. The decision in the case of Pullangode Rubber Produce Co.vs. State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplete statement of appellant dated 20.11.2007. Hence, it is not known to the undersigned as to what were the other questions and answers and what is their implication on the issue under consideration. Without prejudice to above, it is further mentioned that this answer of the appellant given at the early stage of the enquires is of no significance, when the appellant himself in the subsequent letter dated 15.1.2008 has admitted to pay tax on the deposits/credit entries in the impugned bank account apparently in the name of Sh. Raghuvir Singh. 5.8 In view of the facts and circumstances and the legal position on the issue under consideration including the various case laws cited by the A.O as mentioned in the relevant para, the admission of the additional income of ₹ 20 crore so made by the appellant on behalf of himself and his brother Sh. Roop Bansal, as a result of impending enquiries vide letter dated 19.12007 wherein he has included the surrender of ₹ 4.99 crore made by his brother Sh. Roop Bansal on 12.9.2007 and subsequently as a result of enquiries, reiterated the offer of additional income of ₹ 20 crore vide letter dated 15.1.2008, wherein also he inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This makes it prima facie clear that search assessments are a result of guess work and not based on any worthwhile material, information or documentary evidence. Consequent to these searches assessee's was under bona fide impression that though there was no incriminating evidence or record found as a result of search or any defect in the books of accounts and business dealings: the bank accounts of the group will be seized or put under restraint by department to recover the taxes. To avoid such a situation of seizure of bank accounts which had propensity to stop their business operations and bring bad repute for the stake holders including banks, the amount of about ₹ 31.48 crores lying in these accounts was converted into demand drafts 12-9-07 i.e. one day after the search. Unfortunately the department came to know about the DDs and seized the demand drafts on 29-9-07. This again lead to a peculiar situation as the entire business was crippled and an amount of ₹ 31.48 crores was lying idle, locked up in unproductive DDs yielding not even interest. Assessee made fervent efforts for release of the DDs by applying to many authorities, copies of the correspondenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsal Sh. Roop Bansal, which was opened with an initial deposit of ₹ 9.66 Cr. 12.12.2006. Out of it, except for ₹ 5000/-, whole amount was withdrawn with in a period of 1 month upto 12.1 2007. The account was finally closed on 1.3.2007. On being confronted by the DDIT (Intelligence-1), New Delhi, Sh. Basant Bansal made a surrender of ₹ 20 Cr as per letter dated 19.11.2007 and letter dated15.1.2008 . 2.18 From a bare reading of letter dated 19.11.2007 it is evident that surrender was protem which means for the time being; made to buy peace of mind and to avoid unnecessary harassment. The said letter dated 19.11.2007 did not refer to any fact about Raghubir, owning up of any Benami transaction or ₹ 5000/-; the entire addition is sans any other incriminatory material whatsoever. It was a non-specific simple statement made under the aforementioned to buy peace for release of seized DDs; getting over the duress and conducting the obstructed business. 2.19 On 11.10.2007, again a survey under section 133A of the Act was carried out and hard pressed by repeated onslaught of proceedings, for release of DDs the fateful letter dated 19.11.2007 surrendering ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bansal was recorded by DDIT. The queries raised related to number of issues, which included inter-alia (i) cheques found during the course of search, (ii) purpose of payment of ₹ 16 Cr. by Emaar MGF Land Pvt. Ltd. source of 13 demand draft referred to in letter dated 27.9.2007, (iii) explanation as to sale deeds found during the course of search on 12.9.2007 survey operation on 11.10.2007 (iv) transaction of purchase of land from Ranga Rao son of Shriram. The Appellant was only informed that Mr. Ranga Rao in his statement recorded on 26.10.2007 has stated that he has received approximately ₹ 93 lacs and his bank statement indicated that a part of amount was paid from an account in Corporation Bank, Gurgaon in the name of Sh. Raghubir in which credit entries of ₹ 9.66 Cr. appear. 2.21 In response, to the relevant question (No.6) in the statement recorded on 20.11.2007, the Appellant stated that he had purchased the land from Mr. Ranga Rao at ₹ 30 lacs in total and that he had not paid any other amount either in cash or cheque and that he is not aware of transaction between Sh. Raghubir and Mr. Ranga Rao. 2.22 On 15.1.2008, statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le the Appellant to cross examine him. - Court order Dtd. 12-9-09, compromising the disputes between Sh. Raghubir other co-owners on one side and GP Realtors Pvt. Ltd on the other side was filed to prove that A/c No. SB/01/024061 with Corporation Bank belonged to the Raghubir and appellant had nothing to do with the A/c. the cause title mentions the assessee's capacity as Broker which is evident from paper book page no. 63 to 68. Thus the deal was between G P Realtors and Raghubir; as the it fell into dispute Raghubir instituted legal proceedings in lower court against G P Realtors their directors as main respondents and assessee's as broker. The sale proceeds and Corporation bank a/c were connected with this deal. Since the deal did not materialize assessee's could not earned any income. It was a complete and convincing explanation which none of the authorities below considered for obvious reason i.e. accepting the explanation would have demolished their entire case. - The compromise deed dated 12.9.2009 records that Sh. Raghubir son of Sh. Kehar Singh and five other persons had sold land admeasuring 102 kanal and half marla in village Behrampur, Gurgaon to M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies of the Appellant. (ii) To enable the Appellant to cross examine the witness, summons dated 7.12.2010 was sent to his address at Tauru Distt. Gurgaon. However, the Appellant did not attend the hearing on 14.12.2010 i.e. the day fixed for cross examination of Sh. Raghubir and Sh. Ranga Rao. (iii) Statement of Mr. Ranga Rao or Mr. Raghubir or any other third party was not relied upon / used, therefore, opportunity to cross examine was denied. As per settled principles of natural justice such denial not tenable consequently no reliance can be placed by department thereon. (iv) On the basis of information received from various sources including Mr. Ranga Rao and Mr. Raghubir that the Investigation Wing examined SB/01/024061 of Mr. Raghubir maintained with Corporation Bank, Maruti Kunj, Gurgaon and came to conclusion that the same was used to purchase land. (v) Mr. Ranga Rao in his statement (dated 26.10.2007) had admitted that he had received ₹ 30 lacs and ₹ 62.75 lacs from Bansals of village Tauru, which is the village of the Appellant. The cheque for ₹ 62,75,000/- was issued from SB/01/024061. To know the source further enquiries were started, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas, the surrender was made on 19.11.2007. Even the statement of Mr. Ranga Rao recorded on 26.10.2007 was provided to the Appellant on 7.12.2010. - In the statement recorded on 11.10.2007, there is nothing adverse which meets the eyes. If the search conducted on 12.9.2007 and subsequent survey carried out on 11.10.2007 discovered any adverse material or incriminating document, the Appellant would have been confronted before recording his statement on 11.10.2007. The survey Dtd 11.10.2007 was off shoot of post search enquiries; with two massive actions there is no justifiable reason for not confronting such incriminating material to the Appellant while recording his statement two months after the search on 12.9.2007. The fact is no incriminating material was recovered and disclosure was a result of arm twisting. Therefore, no adverse inference can be drawn from the fact that surrender was made after two months of search. - The allegation that SB/01/024061 with Corporation Bank, Gurgaon was benami account being operated by the Appellant has no legs to stand. It is undisputed that the amount of ₹ 9.66 Cr. deposited in this bank account represented sale proceeds of land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant requested the concerned parties to help him who provided the documents which go to the root of the matter by explaining the issue threadbare. Revenue by defeating the principles of natural justice and by a design ignored the actual explanation to uphold their presumptions. - In the light of compromise deed dated 12.9.2009, letter to bank and affidavit of Mr. Raghubir dated 8.9.2009, the statement of Mr. Raghubir cannot be given credence. Therefore, the case made out against the Appellant does not survive. Thus the reasons recorded by the Assessing Officer have no merit and the surrender has no objective basis except the letters and statements dtd. 19.11.2007 and 15.1.2008 which were given in very peculiar circumstances. Except the letters and statement, there is no evidence on record to justify addition of ₹ 20 Crores as undisclosed income of the Appellant. Reference was made to Instruction F.No.286/2/2003-IT (Inv.II) dated 10.3.2003, whereby, the Central Board of Direct Taxes has advised that in search proceedings focus should not be on confessions and the same should be on discovery of incriminating material. In this backdrop, except for bank statement of SB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -95. Since tax was not deposited, therefore, benefit of VDIS was not admissible to him. In regular assessment, the assessee could not satisfactorily explain the source of deposit in his bank account. In appeal, the CIT(A) confirmed the addition to the extent of amount found deposited in the bank account and granted the benefit of telescoping. On further appeal, ITAT deleted the addition on the ground that VDIS declaration not accepted by the appellant cannot be sufficient and the Assessing Officer failed to collect any evidence. 2.26 Going by these judgments and plethora of other judicial precedents, it is well settled legal position that merely on the basis of a statement which is not supported by the department with cogent corroborative material cannot be a valid addition basis for sustaining such adhoc additions. It is the burden of the department to prove that there existed relevant and cogent material to enable the AO to make such additions. The department has grossly failed to prove or demonstrate existence of any such relevant or cogent material. Assessee has demonstrated the background under which assessee was compelled to make a surrender due to seizure of 30 crores of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and sold did not belong to Sh. Raghubir and others, therefore, the allegation that A/c No. SB/01/024061 was benami account of the Appellant cannot be sustained because to say so, it will have to be held that the land sold, the proceeds of which were credited to this bank account did not belong to Sh. Raghubir. It is on record that Sh. Raghubir and others had sold its land for ₹ 22.81 Cr., out of which ₹ 9.66 Cr. was deposited in A/c No. SB/01/024061 in the name of Sh. Raghubir. (iv) The aforesaid conclusion is further substantiated by the documents relating to resolution of dispute between Raghubir Singh others (the sellers) and G.P. Realtors Pvt. Ltd. (the buyer). There is nothing to discredit the veracity of the said documents which were filed before the Assessing Officer. The Manager of Corporation Bank, Maruti Kunj, Gurgaon also certified that Sh. Raghubir himself operated the A/c No. SB/01/024061. (v) The department did not provide the copy of statement of Sh. Raghubir. In any case, in view of independent corroborative material / evidence by way of compromise deed, order of Mediation and Conciliation Centre resolving the dispute between Raghubir Singh and G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eizure operation on 12.9.2007 nor during survey operation on 11.10.2007, any surrender was made because nothing incriminating was found. By passing restraint order on 20.9.2007, the pressure was built on the Appellant to make surrender to show that search and seizure operation was a success. It is not correct that since surrender was made after two months of the search, therefore, no pressure / coercion was exercised in obtaining the surrender. The fact of the matter, however, is that surrender was made with a view to secure release of order restraining encashment of demand drafts. Here it may be noted that the genesis of surrender is the A/c No. SB/01/024061, the amount credited in this account was ₹ 9.66 Cr. On the basis of this account, there was no reason for the Appellant to make surrender of more than ₹ 9.66 Cr. However, the Appellant was made to surrender more than double the amount of ₹ 9.66 Cr. which indicates that primarily, the surrender did not have nexus with A/c No. SB/01/024061. In Instruction F.No.286/2/2003-IT (Inv.II) dated 10.3.2003, referred to in paragraph 47, the CBDT has acknowledged that instances of forced surrender have come to their know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 671/Del/2012 dated 20-06-2013) 6. Mayak Poddar (HUF ) 130 Taxman 500 (Cal.) 7. Yogesh Thakkar vs. DCIT (ITA No. 3372/3373/5745/Mum/2010 dated 09-04-2013 8. Maruti Mills (P) Ltd. vs. Union of India, 123 Taxman 737 (Raj.) 9. Basant Singh vs. Janki Singh (Appeal No.1967/341 dated 02-08- 1966 (SC) 10. Shri Kishori Lal 1959 AIR 504 dated 01-12-1958. 11.R.R. Gavit vs. Sherbanoo Hasan Daya, 28 Taxman 349 (Bom.) 12. Vadilal Panchal vs. Dattatraya Dulaji Ghadigaonker 1960 AIR 1113 dated 6-05-1960 (SC) 13. Devendra Prasad Tiwari vs. State of U.P. AIR 1978 SC 1544 14. Babubhai Udesingh Parmar vs. State of Gujarat (Appeal No.1635of 2005 date of 24-1-2006 (SC) 15. CIT - II vs. Naresh Kumar Agarwal (2014) (11 TMI 57 (Andhra) 16. ACIT vs. Jorawar Singh M, Radhod (2005) 148 Taxman 35 (Ahd.) (Mag.) 17. CIT vs. S. Khader Khan Son, 79 DTR 184 (SC) 18. DCIT vs. Premsons 37 DTR 150 (Mumbai B) 19. CIT vs. S Khader Khan Son 214 CTR 589 (Mad.) 20. Bhagirath Agarwal vs. CIT, 351 ITR 143 (Del.) 21. Smt. Ranjnaben Mansukshlal Shah vs. ACIT, 83 TTJ 369 (Rajkot) 2.29 Ld. CIT(DR) in reply contends that : (i) Surrender letter dated 19.11.2007 is under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record. Department contends that the disclosure was voluntary and reconfirmed by a letter and statement u/s 131. Per contra assessee contends that the the letters are dtd. 19-11-07, 15-1-08 and statement was taken along with second letter; all these dates fall between the restraint period i.e. from 20- 9-07 and 1st week of February 2008. This huge quantum of freezing of liquid funds by itself proves that the assessee was under tremendous pressure and harassment. Ld. CIT(A) has conveniently ignored these crucial aspects and summary confirmed the AO's findings in this behalf. Ld. Counsel has raised the issue that assessee was searched not once but twice and to add to his miseries survey proceedings were also taken. With multitude of enforcement action if there was any incriminating material it would have surfaced and the AO would have made the additions on the basis thereof as ordained by sec. 153A and CBDT circulars. Since in first search dtd.12-9-07 department could not lay hands on any incriminating material but coincidently could restrain assessee DDs. worth ₹ 31.48 crs, pressure was built on assessee for disclosure. Since no incriminating material was found asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on Hon'ble Rajasthan High Court in the case of CIT v. Ashok Kumar Soni 291 ITR 172 for the proposition that admission in statement during search proceedings is not conclusive proof. Besides Hon'ble Supreme Court in the case of Pullangode Rubber Produce (supra) has also held so that such statement can be explained in the light of correct facts. ii. Whether in the light of CBDT instruction dtd 10-03-2003, search proceedings and assessment can be based incriminating material and not on such disclosures. Conclusion: A perusal of the CBDT instruction reveals that even Board is aware of such laconic disclosures and expects its officers to rely on incriminating evidence. Thus CBDT also is not in favor of search assessments being based only on such disclosures; it wants them to be based on incriminating material. In view the facts, circumstances, CBDT instruction and various case laws relied on by the assessee we are unable to uphold the additions solely on the basis of disclosure which doesn't meet the eye and have been hold by us to involuntary. iii. Whether the additions are based on any incriminating material discovered as a result of search in terms of sc. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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