9911796707
TMI Blog2015 (10) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... ue. Charging of interest under section 234B - ignoring adjustment of amount lying in P.D. Account - Held that:- The case laws referred by the assessee are squarely applicable. Therefore, interest charged under section 234B is not justified as assessee’s cash was lying with the department in P.D. account. The assessee had made request to adjust the advance tax from the cash seized and lying in P.D. Account, from time to time. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 declaring total income of ₹ 1,09,99,050/-. The case was scrutinized under section 143(3) of the IT Act. During the course of search, the assessee in his statement recorded on oath under section 132(4) of the Act on 20.10.2009 admitted to an undisclosed income which was advanced by him as loans through his relatives and acquaintances. In reply to question no. 18, the assessee stated that he has no account of the amounts of loans advanced to persons which according to him was done only on the basis faith and confidence of his close relatives as well as friends. This fact was again admitted by the assessee in reply to question no. 19 in which he additionally stated that he has discussed the matter of surrender with his wife. The AO further observed that the assessee vide his letter dated 10.11.2009 submitted to the Income Tax Department and gave details of the surrender under various heads and reiterated the surrender made by him in his above referred statement. The assessee surrendered an amount of ₹ 34,60,400/- on account of the loans advanced to peoples as well as to cover up discrepancies found during the course of search. While examining the return of income for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement dated 20.10.2009 under section 132(4) of the IT Act :- Particulars Amount Cash found 98,39,600/- Advances given by Rajul Sodhani through Manish Tambi 10,00,000/- Advance through Anil Maheshwari Ann. A-9 pg.77 10,00,000/- Payment for cash purchases as per annexure A-5 pg. 3-8 10,00,000/- Construction of factory at Kartapura Ind. Area 22,00,000/- Construction of house in front of shop of Sodhani Sweets 10,00,000/- Investment in Jewellery 5,00,000/- Balance advanced on interest through relatives 34,60,400/- Total 200,00,000/- Subsequently, by letter dated 01.12.2009 and 15.12.2009 submitted to the DDIT(Inv.), income sought to be surrendered at ₹ 2,00,00,000/- was stated to be not correct. The correct income was determined at ₹ 96,15,124/-. Finally, such surrendered income was enhanced to ₹ 1,10,40,000/-. The amount was offered in the return of income filed by the assessee and that of M/s. Sodhani Sweets Pvt. Ltd. The difference between original disclosure of ₹ 2,00,00,000/- and the revised disclosure of ₹ 1,10,40,000/- was on account of two reasons. First, the cash surrendered at the time of search was ₹ 98,39,600/- which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i and Manish Tambi and this disclosure is also specific in as much as very specific names are given. Another surrender of ₹ 10 lac was made on account of advances through Sh. Anil Maheshwari which is based on incriminating document. Surrender of ₹ 10 lacs on account of cash purchases was also based on incriminating documents. Surrender of construction of factories at Kartar Pura Industrial areas at ₹ 22 lacs and on account of constriction of house in front of shop of Sodhani Sweets for ₹ 10 lacswere also based on specific investment made by the appellant. Another surrender of ₹ 5 lacs on account investment in jewellery is also very specific. However the surrender of ₹ 34.60 lacs which is stated to be on account of loan advanced through relatives etc. is definitely not specific in as much as no supporting details as to whom loan were advanced are on record. Even during the search also, no evidence of whatsoever nature were found which may indicate that such advances were genuinely made. Such corroborative facts give credence to the contention of the appellant as if surrender on account of advances through relative was recorded to round about the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down by Hon'ble Supreme Court and Hon'ble Jurisdictional High Court it is noted that surrender and admission may be a strong piece of evidence but the same can be explained by the person who makes such confession. The facts and circumstances of the appellant's case indicate that whatever was surrendered in totality was not found correct. The appellant surrendered cash amounting to ₹ 9845770/- but finally part of such surrender was retracted and admission to the extent of ₹ 2163520/- was only found to be correct. The retraction of such surrendered income was not objected by the AO. The appellant also surrendered ₹ 3460400/- on account of loan and advances through relatives but retracted the same by stating that such surrender was obtained under duress to make total surrender of ₹ 2 Cr. And that there was nothing on record documentary and otherwise that such advances have been ever been made by the appellant. There is no dispute on the fact that during the course of search no documentary evidence or any corroborative evidence are found which may indicate that any such advances have been made. It may further be noted that the appellant has also shown certain ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A/R prayed to confirm the order of ld. CIT (A). 7. We have heard rival contentions and perused the material on record. The ld. CIT (A) has decided the case categorically and assessee has not honoured the disclosure in the return because no incriminating documents were found during the course of search. The ld. CIT (A) had given various reasons of retraction and also has considered the evidence for not honouring the statement made under section 132(4) of the IT Act. The ld. D/R had not controverted the findings given by ld. CIT (A). It is a legal proposition that statement recorded under section 132(4) has evidentiary value but is rebuttable presumption. The assessee has produced the evidence before ld. CIT (A) and he came to the conclusion that addition made by the AO was not justified. The case laws referred by the assessee also support the assessee's case. Therefore, we uphold the order of ld. CIT (A). The Revenue's appeal is dismissed. 8. Now we take up the Cross Objection of the assessee. The sole ground of the assessee is against charging of interest under section 234B without considering the adjustment of amount lying in P.D. Account. 9. The AO charged the interest of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the report to the ld. CIT (A) which has been reproduced on pages 16 & 17 of his order. A copy of the report was also given to the assessee and held that as per section 132B the said cash can only be appropriated against the existing liability determined on completion of assessment. Further, the CBDT Instruction No. 11/2006 dated 1.12.2006 has again emphasized that seized assets are to be adjusted for recovery of any existing liability. Further, the CBDT vide Instruction No. F.No.286/105/2005-IT(Inv)-2 dated 13.07.2006 had clarified that existing provisions of law do not permit application of seized cash against the advance tax liability of the assessee for the year in which search took place. Therefore, provisions for application of seized cash are crystal clear and very specifically provide that the seized assets including cash can be adjusted only against existing liability determined on completion of assessment. Therefore, he confirmed the order of A.O. 11. Now the assessee is before us. The ld. A/R of the assessee reiterated the same argument made before ld. CIT (A) and relied on the following decisions CIT vs. Arun Kapoor (2011) 334 ITR 351 (P&H) CIT vs. Ashok Kumar 334 I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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