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TMI Blog2016 (11) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... e law relied by the other side, yet the Bench accepted the request of the ld. DR and adjourned the matter for 1.8.2016 as per the convenience of both the sides. It was made clear that the adjourned date of hearing was only for distinguishing the cases relied by the ld. AR or citing some new cases in the favour of the Revenue. Today on 1.8.2016, an adjournment application has been moved by the ld. DR stating that the records of the case, being very old, are not readily available with the AO and hence the appeals may be adjourned. This was strongly opposed by the ld. AR, who submitted that the effective hearing of the appeals got concluded on 28.7.2016 and hence the Revenue's request for adjournment be turned down. Here, it is pertinent to mention that these appeals are on board since 2010. Since the effective hearing got concluded from both the sides on 28.7.2016 except for giving an opportunity to the ld. DR for distinguishing the cases relied by the ld. AR, inter alia, of the Hon'ble jurisdictional High Court as referred to in the later part of this order or citing some new case, we cannot accept the request of the ld. DR at this stage for adjournment of the case. The Bench convey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 3.10.2006. The AO did not accept the assessee's contention as, in his view, the statements recorded u/s 132(4) were relevant and had evidentiary value. He, therefore, made an addition for a sum of Rs. 10 lac. The ld. CIT(A) confirmed the addition of Rs. 10 lac by relying on the order passed by him in the case of group concern, namely, M/s Balaji Perfumes for the assessment year 2006-07. In doing so, the ld. first appellate authority held that surrender was made by the assessee and not by a third party, namely, Shri Abhay Gupta and, secondly, the statement of Shri Abhay Gupta was not validly retracted. The assessee is aggrieved against the confirmation of addition. 4. We have heard the rival submissions and perused the relevant material on record. It is noticed that the only basis for the addition of Rs. 10 lac is surrender made by Shri Abhay Kumar Gupta, the elder brother of the assessee, through two statements recorded on 18.4.2006 and 3.5.2006. Whereas the case of the assessee is that the surrender of Rs. 10.00 lac on account of commission income was extracted by the search officers under coercion and, hence, the addition be deleted, the Revenue is harping on the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upta on behalf of the assessee was in respect of commission income for which, admittedly, no incriminating material was found during the course of search. The entire discussion in the earlier parts of the statement recorded on 18.4.2006 and whole of the statement recorded on 3.5.2006 is about the extent and magnitude of the business carried on outside the books of account by the two concerns, namely, M/s Assam Supari Traders and M/s Balaji Perfumes etc. In so far as the surrender of commission income is concerned, there is no reference to any incriminating material either in the statement of Shri Abhay Gupta or in the assessment order of the assessee. This shows that the surrender made by Shri Abhay Gupta on behalf of the assessee on account of commission income was not backed by any material/evidence indicating the involvement of the assessee in the agency business. On a specific query, it was submitted by the ld. AR that the assessee never indulged in commission business and never offered any commission income in the past or in the future. This statement of the ld. AR was not controverted by the ld. DR with any contrary evidence. This shows that in so far as the surrender of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded'. Similar view has been taken by the Hon'ble Delhi High Court in an earlier judgment in the case of CIT vs. Sunil Aggarwal (2015) 379 ITR367 (Del). To the similar effect is an earlier decision of the Hon'ble Andhra Pradesh High Court in CIT VS. Shri Ramdas Motor Transport (1999) 238 ITR 177(AP), in which the Hon'ble High Court refused to give any evidentiary value to the statement made by the assessee u/s 132(4) as the Department could not find any unaccounted money, article or thing or incriminating document either at the premises of the company or at the residence of managing director or other directors. In such circumstances, the finding of the Tribunal that the statement of managing director recorded patently under s. 132(4) did not have any evidentiary value, was upheld. The above discussion makes it patent that the surrendered income must be correlated with some incriminating material found during the search so as to justify the addition. As admittedly no incriminating material was found during the course of search showing the involvement of the assessee in any sort of agency business, for which the surrender was made or obtained, we cannot sustain such an addition. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered but not declared. However, the concerned CIT(A) deleted such additions. The appeals filed by the Revenue against such deletions have been dismissed by the tribunal due to low tax effect. 10. Before parting with this issue, we want to make it clear that the addition made on account of surrender of commission income made by the assessee is entirely different from the additions made in the case of two group concerns, namely, M/s Assam Supari Traders and M/s Balaji Perfumes, which are, inter alia, also based on the statements of Sh. Abhay Gupta. We want to clarify beyond doubt that the validity or otherwise of the retraction of statements made by Sh. Abhay Gupta has neither been considered nor decided by us in this order, as the same is not relevant in so far as the instant addition of Rs. 10.00 lac, made in the hands of the assessee, is concerned. No finding given in this order in respect of the deletion of the addition has any significance or relevance with the additions made in the case of the above referred two concerns, whose appeals are pending before the tribunal. 11. The only other ground which survives in the instant appeal is against the income arising from the est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely preceding year, the estimate of household expenses has been sustained at Rs. 22,000 p.m. Considering the totality of the facts and circumstances of the instant case, we are satisfied that it would be in the fitness of things, if the estimation of household expenses for the instant year is restricted to Rs. 24,000/- per month as against Rs. 25,000/- made by the AO. The consequential addition is sustained pro tanto. This ground is partly allowed. 17. In the result, the appeal is partly allowed. Penalty appeals - A.Ys. 2005-6 and 6-07 18. The AO imposed penalty u/s 271(1)(c) in respect of the assessment years 2005-06 and 2006-07 at the rate of 200% of the amount of tax sought to be evaded qua the income of Rs. 10 lac and Rs. 15 lac, respectively surrendered by the assessee, but, not offered in the returns of income and the additions made on the basis of estimate of household expenses. The ld. CIT(A) confirmed the penalty but directed that the same be restricted to 100% of the amount of tax sought to be evaded. The assessee is aggrieved against the sustenance of penalty for both the years. 19. We have heard the rival submission and perused the relevant material on record. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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