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TMI Blog2010 (3) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Tribunal for non-prosecution. However, the order was recalled on 16.04.2010 on an application made by the assessee, with a view to decide the appeal on merits. 2. The facts of the case are that the return was filed on 31.10.2005 declaring total loss of ₹ 19,08,840/-. Search and seizure operations were conducted in Nitishree Group of cases and survey was also conducted at the business premises of the assessee. In the course of search, statement of Shri Anil Jain was recorded on oath u/s 132(4) of the Act on 17.02.2006. It was inter alia deposed that unaccounted income of various years has been invested in share capital of some companies in benami names. Cash has also been invested in the real estate business and jewellery. Shri Kashinath Shukla, Director of the assessee company, has also introduced unaccounted money in benami name as share capital. The details of such investments were not known to him on the date of search. However, the total amount was quantified at ₹ 15 crores. The statement was followed up and details of benami investments were furnished. These are available on page nos.15 & 16 of the paper book. According to the statement, the benami share i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of taxation. It is only in the course of proceedings u/s 153A on 14.02.2007 that the assessee has filed a revised computation of income in which the surrendered income has been taken into account. Such computation cannot be taken to be revised return. Therefore, the assessee was taken chance prior to filing the statement and if specific query had not been made, even the surrendered income would have escaped the income. 3. Aggrieved by this order, the assessee moved an appeal before the learned CIT(A). After considering the facts of the case and the submissions made by the assessee before him, the learned CIT(A) confirmed the levy of penalty. His findings are that the assessee had already filed return declaring loss of ₹ 19,08,840/-. The concealed income of ₹ 121.00 lac would not have come to the notice of the revenue but for the searches conducted in the group cases. In these searches, incriminating material regarding benami investment in share capital came in possession of the revenue. Thereafter, there was no option with the assessee but to declare additional income and pay taxes. Therefore, the factum of concealment was there in the original return filed by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n chronological order are tabulated as under:- S.No. Date Remark 1 31.10.2005 Original return filed disclosing loss of `19,08,840/-. 2 17/18.02.2006 Conducting of searches/surveys. 3 18.02.2006 ₹ 121.00 lac surrendered for taxation in respect of benami investments. 4 - Date of notice u/s 153A not ascertainable from the record or submissions. 5 14.08.2007 Deemed date of filing return u/s 153A as per assessee's letter reiterating original return of loss of ₹ 19,08,840/-. 6 14.12.2007 Revised statement filed showing total income of ₹ 1,01,91,165/- 7 31.12.2007 Assessment u/s 153A at total income of Rs .1,01,91,160/-. 5.1 At this point of time we may also reproduce the relevant portion of statement regarding the surrender furnished by the assessee u/s 132(4):- "During the course of search in your premises incriminating documents have been inventeried and are being shown to you. Please explain the same? I admit that I have introduced unaccounted income in various years through share capital in benami name in some of the companies in which I am, my family members are directors and/or shareholde Rs. Instantly, I do not remember exact det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished before the said date, such income has not been declared therein; or b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, (unless,- 1) such income is, or the transactions resulting in such income are recorded,- i) in a case falling under clause (a), before the date of the search and ii) in a case falling under clause (b), on or before such date, in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the (Chief Commissioner or Commissioner) before the said date; or 2) he, in the course of the search, makes a statement under sub-section (4) of section 132 that any money, bullion, jewellery or other valuable article or thing found in his income which has not been disclosed so far in his return of income to be furnished before the expiry of time speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) is not applicable to the facts of this case as the transactions were found to be recorded in the chits and not in the books of account. 6.3 Coming to sub clause (2), the condition is that the assessee makes a statement that the valuable article or thing found in his possession or control has been acquired out of his income, which has not been hitherto disclose in his return of income to be furnished before the expiry of time specified in sub section (1) of section 139. The case of the learned counsel is that the assessee satisfies this condition in view of the decision of Hon'ble Madras High Court in the case of CIT Vs. S.D.V. Chandru (2004) 266 ITR 175. The decision in this case is that the words " ……… has acquired out of his income which has not been disclosed in his return of income to be furnished before the expiry of time specified in Sub Section (1) of Section 139", are not to be read as referring to income so far not disclosed in respect of the previous year which is to end after the date of the search. The words used are "income which has not been so far disclosed in his return of income". The additional words referring to the time specified in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation 5 would amount to be concealment of the income for the purpose of section 271(1)(c), but then, sub-clause (2) being in the nature of the proviso, would come in, and in that event, obviously, the assessee would be not only entitled, rather would be under obligation to make disclosure of the income earned during the relevant previous years, in which the income may have been earned, resulting into the disclosure of the total assets as acquired by undisclosed income, and admitted in statement u/s 132(4). This may be a question of fact, as to whether the particular extent of income shown by the assessee in such revised return in each particular previous year, may be correct or not, but then, there may be cases, where there may be fool proof material to show, that the assets found during the search and disclosed u/s 132(4), were acquired by the assessee during a particular past previous year. For instance, let us take an example, that in case of a search, fixed deposit receipts and/or pass books of undisclosed bank accounts are found, disclosure whereof has been made by the assessee u/s 132(4). Obviously, the dates of the fixed deposit receipts and the entries of the receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Vs. CIT, (2008) 299 ITR 291. 6.6 In the case of CIT Vs. Radha Kishan Goel, (2006) 200 CTR (Alld.) 300, it was held that the deeming provision regarding concealment of income will not apply if during the course of search the assessee makes a statement u/s 132(4) that the money etc. found in his possession or control has been acquired out of his income which has not been hitherto disclosed in any return to be furnished before the expiry of time specified in section 139(1) and also specifies the manner in which such income has been derived and pays the tax together with interest in respect of such income. The exception is meant to give an opportunity to the assessee to make a clean and fair confession with a view to avoid litigation and collect tax. However, an authorized officer records the statement in his own way. Therefore, if there is no statement in respect of manner in which income has been derived but has been stated subsequently, it will satisfy the requirement of the Explanation. Further, if there is no specification about the manner it can be inferred with that the income was derived from the business. In the case of Gulab Rai V. Gandhi Vs ACIT, (2003) 79 TTJ (Mum.) 498 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmunity cannot be taken away. However, this case does not deal with retraction or the manner in which income was derived. The cases of Goetze (India) Limited is distinguishable because that was a case of claiming deduction through the letter. Here, further income has been declared through the letter. In any case, the Tribunal can consider such letter to come to the conclusion whether it could be said to be an addition to the return of income. Similar will be the position arising from the decision in the case of Mittal Alloys & Steel Ltd. Coming to the issue of specifying the manner of earning the income, the facts of the case of Gulab Rai V. Gandhi (supra) are distinguishable in the sense that the declaration was made in respect of family members also but ultimately the whole of the surrendered income was declared in the case of the assessee. We find from the statement recorded u/s 132(4) that no question was put to the assessee regarding the manner in which the income was derived. In view of the decision in the case of Radha Kishan Goel, a presumption can be drawn that the income has been derived from the business. However, this presumption stands rebutted by the fact recorded in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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