9911796707
TMI Blog2003 (5) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... mises. Out of that assessee has explained ₹ 9,64,419 and balance amount of ₹ 2,97,09,940 was surrendered by the assessee for taxation. This amount was bifurcated into three hands i.e., Ram Jas Nawal and his two sons namely, K.G. Nawal and K.K. Maheshwari in equal proportion. Thereafter returns were filed. Though in the statement recorded during search, the assessee could not explain the profit of M/s Shree Products to the tune of ₹ 23,18,210 and also gifts shown in the papers seized but in the return the assessee retracted from his statement and claimed that ₹ 23,18,210 is income from the firm M/s Shree Products and gifts received were also genuine. Therefore, this amount was not offered from taxation in the income-tax returns. The income pertains to the asst. yrs. 1987-88 to 1991-92 has been assessed. 3. Before joining the business, assessee Ram Jaw Nawal was in service in the railway department. At the time of search, in the statement it was admitted that income of ₹ 23,18,210 shown as export profits of M/s Shree Products represents undisclosed income of Ram Jas Nawal, K.G. Nawal and K.K. Maheshwari-1/3rd share each. During the course of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so noticed that by making investment of ₹ 4,500, it can't be believed that firm has earned such huge profits to the tune of ₹ 23,18,210 and. he affirmed the view taken by the AO, 7. Heard learned counsel for the parties. 8. In appeal before us, learned counsel for the appellant, Mr. Jhanwar, submits that though assessee has surrendered the income shown from export through M/s Shree Products and also gifts received were surrendered for tax at the time of search and the statements also made to this effect, but when the income from M/s Shree Products and the amount received in gifts which has been shown in the cash book of M/s Shree Products, which was found during search, that amount cannot be taxed under Section 158BB of the IT Act, 1961. 9. Learned counsel submits that if any entry is made in the books of accounts, that should not be taxed in view of Sub-clause (B) of Clause (c) of Section 158BB. He further submits that M/s Shree Products also filed the return disclosing that income as income of M/s Shree Products. He further submits that if the statements are recorded under threat or duress, the assessee can retract from those statements and can claim that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have distributed the fund available as under : 1. Loan to M/s. Rajan Products ₹ 25,00,000 2. Advance/loan to Shri Ram Jas Nawal ₹ 3,24,000 3. Loan to Shri K.G. Nawal ₹ 2,68,000 4. Advance or loan to Shri K.K. Maheshwari ₹ 4,45,000 5. Loan to Smt. Shanta Devi Nawal ₹ 3,62,000 6. Loan to Smt. Manju Devi Nawal ₹ 2,88,000 7. Loan to Smt. Sunita Devi Nawal ₹ 2,84,000. The fund was utilised for payments against purchase price of landed property by the members of the family and the firm for its business purpose. Thus, it is clear that the assessee has made the firm M/s Shree Products as a conduit to siphon his undisclosed money in the shape of exempt export income. Nothing has been paid to Shri Rajesh Patel, alleged representative. It is clear that when the actual state of affairs was detected by the Department in course of search, the assessee admitted that it was undisclosed income but now retracts. It may be added that statement on oath was made without any duress or coercion. Now retraction cannot be accepted. It is a settled principle of law that any admission made in ignorance of law or under duress cannot bind the mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown of M/s Shree Products. The amount of gift received by the assessee and shown in the books has been surrendered in the statement under Section 132(4) of the Act, but when returns are filed, that income has not been offered for tax. The ITO has considered the submissions is detail and given reason for not accepting the genuineness of the gifts. The reasons given by the AO reads as under : "(1) On the similar evidence in possession of the assessee, in course of statement he admitted that gifts were made out of the undisclosed income of male members of family now he contradicts but no new evidence has been adduced. (2) It is settled principle of law that burden to prove lies on the assessee to substantiate the identity of the donor or creditor, their capacity to possess the amount as on the date of advance and genuineness of transaction. But the assessee has failed to do so. (3) Neither the assessee nor his wife knew anything about the donors namely, Shri Gurnomal Purwani, Usha Paraswani, Saroj Vijay Vargiya. or 0,P. Vijayvargia, when questioned at the time of statement recorded. (4) Neither the assessee nor his wife have given any gift to anyone. (5) The date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Tribunal, the Tribunal has also considered the material on record and also the reasons given by the assessee. The Tribunal also not found that gifts in question are genuine, therefore, the addition made by the AO has been sustained. 15. Mr. Jhanwar, learned counsel for the appellant, submits that if any statements are given the assessee can retract from his statements given under threat or duress during search. We agree with Mr. Jhanwar that if statements are given under threat or duress, the assessee can retract from his statements given under threat or duress during search. But the material on fact shows otherwise. When the statements are taken, the assessee has admitted that he is disclosing undisclosed income at his free-will and are given without any threat. The relevant part of the statement reads as under : Not only that when the assessee retracted from his statements given during search, the ITO has given the specific finding that during the course of search, the search party has given opportunity to submit any documentary evidence whether he has genuine income from M/s Shree Products. He expressed his inability to submit any documentary evidence in support of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Products, a firm which is not genuine. 20. It is also brought to our notice that the returns of M/s Shree Products are filed on 18th Sept., 1996, when the search was conducted at the premises of the assessee and income shown from the firm M/s Shree Products was assessed. We agree with Mr. Jhanwar that one income cannot be taxed twice in two hands but as assessee-firm itself has filed the returns, the ITO can assess such type of income on protective basis. In the case in hand though the income from M/s Shree Products has been shown and that has been shown as income from export and claimed the total exemption of that income under Section 80HHC. That can be a planning to evade the tax which is not permissible under the provisions of the Act. 21. When the assessee-firm has filed the appeal before the CIT(A), it has been claimed that the income which has been shown in the name of firm M/s Shree Products that has already been taxed in the hands of Ram Jas Nawal and his two sons. Therefore, that has become final. That cannot be taxed again in the case of the firm M/s Shree Products. That was accepted by the CIT(A) and CIT(A) set aside the assessment order whereby the income in question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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