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TMI Blog2017 (2) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is again a statutory disallowance and cannot form part of disclosure. In any case, the issue of disallowance of the claim u/s. 80IA(4) of the Act is subject-matter of Departmental appeal before us.By following the order of Tribunal in assessee s own case, we have deleted the disallowance of deduction claimed u/s.80IA(4). Thus, the ad hoc addition of ₹ 3 crores (and for that matter the adhoc addition of ₹ 1 crore) cannot be supported by any figures mentioned in Annexure A-2 or Annexure A-3. As Board itself is of the view that in the absence of credible evidence the confessional statement would not serve any useful purpose. In fact going further i.e. from 10.03.2003 onwards, the Board mandatorily directed the officers that while recording statement, no attempt should be made to obtain confession as to the undisclosed income. Therefore, in the present case not only the recording of confessional statement but making the addition solely on the basis of the statement is against the binding instructions of the CBDT. In view of the above discussion, we confirm the addition of ₹ 1,99,850/- ₹ 5,17,000/-, ₹ 23,42,900/- and ₹ 3,88,377/- out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. The work done by the assessee is not owned by it, it does not satisfy sub clause (a) of section 80IA(4)(i). The infrastructure facility should be owned by the assessee is not correct interpretation. It is evident from section itself as clarified by the jurisdictional High Court in ABG Heavy Industries inter alia held that the assessee has shouldered out investment technical risk in respect of the work executed and it is liable for liquidated damages if failed to fulfill the obligation laid down in the agreement. The liability which has been assumed by the assessee under terms of the contract are obligations involving the development of an infrastructure facility. The assessee has also in its employment technically and administratively qualified team of persons and therefore it is not correct to say that assessee is merely a contractor not a developer. The assessee is eligible for benefit u/s. 80IA even if part of the Infrastructural Project work is executed. 9. It was found by the erstwhile Judicial Member that assessee fulfilled the conditions of being a developer as subsequently interpreted by the Hon'ble Bombay High Court. With regard to clarificatory amendme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant for workers claim. The appellant also provided information relating to the technical and managerial capabilities of the teams involved. 7.4 The appellant also cited the relevant clause of the tender document to show that after the completion and handing over of the project to Northern Frontier Railway it is also the responsibility of the appellant to maintain all the works except earth work for further period of 6 months. In the case of Indira Sagar Project (Package-65), the appellant is required to maintain the project for 2 years after commissioning of the project. These indicate that the appellant is not only responsible for the development of the project but also to maintain the same for a specified period of time as mentioned in the tender document. Considering the fact that the appellant has shouldered the investment and technical risk by employing team of technically and administratively qualified persons and it is liable for liquidated damages if failed to fulfill the obligation laid down in the agreement, respectfully following the decision of the jurisdictional High court in the case of ABG Heavy Industries Limited and also the jurisdictional ITAT i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above the additional income disclosed of ₹ 3 Cr. The appellant prays that the said disallowance may please be deleted. Ground No. 2'- On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the double addition made in the assessment order of ₹ 99, 79, 733/-, over and above the additional income disclosed of ₹ 1 Cr. The appellant prays that the said disallowance may please be deleted 10. Rival contentions have been heard and record perused. Facts in brief are that a search was carried out at the premises of Unity group on 23.11.2007. During the course of search, a letter was addressed by Shri Abhijit K. Avarsekar to the investigation wing dated 12.12.2007 wherein an income of ₹ 9.5 crores was offered on behalf of various group entities. In the above said letter, there was no break-up given as to which entity of the group and to which assessment year the disclosure of ₹ 9.5 crores pertains. Even before Tribunal to clarify the above position further, an affidavit of the director has been filed to state that no break-up was given in the above referred letter. 11. Subsequently, Shri Abhijit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain expenditure outside the books of account as per various seized annexures. The break-up given during the course of assessment proceedings have been reproduced by the Assessing Officer on page No. 5 of his order, the same is as under: Particulars A.Y. Amount On account of disallowance u/s.14A 2008-09 25,98,406 On account of disallowance u/s.36(1)(va) 2008-09 17,476 On account of A-08 1,99,850 On account of A-11 5,17,500 On account of A-12 23,42,900 On account of A-22 3,88,377 On account of disallowance of claim u/s.80IA 2008-09 2,39,35,991 Total 3,00,00,000 14. However, the Assessing Officer has rejected the above break-up by observing in para 5.4 of his order that the technical disallowance cannot be part of the additional disclosure. The Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 19.The AR read the grounds of appeal and gave a brief background of the case. The AR gave reference of that letter dated 12.12.2007 which was sought from the A.D. The AR referred to page 3 of the paperbook (Assessee Appeal) filed on 09.11.2015 wherein the oath of Mr. Abhijit Avarsekar, MD of Unity Group is reproduced. The reason for which the letter dated 12.12.2007 was sought in earlier hearings leading to adjournments, was misconceived by the DR. It was brought to the Hon'ble Members attention that the letter dated 12.12.2007 did not provide the break-up of additional income of ₹ 9.5 cr offered. Attention was invited to Page 6 of the paper book (assessee appeal) wherein a certified copy of typed statement of Abhijit Avarsekar was provided. The relevant part was read out by the AR whereby it was pointed out that the letter dated 12.12.2007 did not provide a break-up of the additional income but via the said letter additional income was only disclosed. 20. The AR then proceeded to read page 3 of the assessment order whereby the break-up of the additional income of ₹ 9.5 Cr is provided by Abhijit Avarsekar in the statement recorded under section 132(4). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure of ₹ 3 crores was given by the assessee. The break up provided by the appellant stated that ₹ 3 crores included disallowances under section 14A , 36(l)(va) and disallowance of claim under section 80lA. The balance amount remaining of ₹ 3 crores was disclosed on account of A-OS, A-ll, A-12 and A- 22 being seized material. The AR said that the claim u/s.80IA is a legal ground and it is to be considered separately. As such it cannot be part of the disclosure of ₹ 3 crores. The AR argued that there is no evident break up of ₹ 3 crores but since the appellant was hard pressed to provide a break-up of the ₹ 3 crores, he submitted the table as reflecting on page 5 of the assessment order taking into consideration the technical disallowances. AR said that we are in agreement with the Assessing Officer that the disclosure includes technical disallowances which need to be assessed on legal grounds. 22. The AR then referred page 3 of the assessment order wherein it was evident that there is no evidence on record and addition is made only on the basis of statement of Mr. Abhijit Avarsekar under section 132(4). The AR then referred to page 5 of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r even though the same is not offered by UIL in its Return of Income. The DR referred to Annexure-A on page 13 of the assessment order which gives details of the seized material. An amount of ₹ 1,21,23,601/- and ₹ 51,16,757 is on account of A-2 and A-3 respectively of the seized material. Annexure-A further reflects amounts of ₹ 1,99,850/-, ₹ 5,17,000/-, ₹ 23,42,900/- and ₹ 3,88,377/- on account of Annexure A-8, A-11, A-12 and A-22 being part of sized material. The DR further states that the aggregate of Annexures amount to ₹ 2,06,88,485/-. The DR also states that thus the appellant has disclosed an income of ₹ 3 crores to cover up all the discrepancies. 25. We have considered rival contentions and carefully gone through the orders of the authorities below and the documents filed before us which have already been filed before lower authorities. From the record we found that the declaration made during the search was of adhoc amount. No incriminating material supporting the addition has been found during the course of search. Since, there was no corroborative evidence and, hence, the addition cannot be sustained being without any ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 5,17,000/-, ₹ 23,42,900/- and ₹ 3,88,377/- the addition has to be confirmed in the year under consideration. We direct accordingly. 30. Now coming to the break-up of ₹ 3,00,00,000/- given by the assessee during the course of assessment proceedings which has been reproduced by the Assessing Officer on page No.5 of the assessment order, we found that the first two items of the table i.e. ₹ 25,98,406/- and ₹ 17,476/- have been added by the Assessing Officer to the total income of the assessee separately and, hence, no such addition could be made as a part of additional income declared. Further, the Assessing Officer himself has stated that the statutory disallowance cannot form part of the declaration and, hence, he has rejected such break-up. Here, we are in agreement with the view of the Assessing Officer that statutory disallowance cannot form part of adhoc declaration. However, the correctness of the addition on account of adhoc declaration has to be examined on the strength of its own merit, accordingly we confirm the addition of ₹ 1,99,850/-, ₹ 5,17,000/-, ₹ 23,42,900/- and ₹ 3,88,377/-. The last amount of the table ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that the admission by them was final and binding on them,' The co-ordinate Jaipur Bench of the Tribunal, after overall appreciation of the fact and evidences before it observed that the assessee's surrender was not based on any incriminating material and that the discloser being not voluntary and extracted by the department in creating a coercive situation cannot be relied solely to be basis of addition as undisclosed income. The co-ordinate bench of the Tribunal while relying upon various case laws of the higher authorities observed that 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 basis for sustaining such ad-hoc addition. The co-ordinate Jaipur Bench of the Tribunal (supra) further observed that the issue of existence of pressure, threat coercion during search proceedings is to be judged by reference to the existing facts and circumstances, human conduct and preponderance of possibilities. During the search proceedings, record relating thereto being in exclusive custody of the searching officers, it is their wish and will which prevails during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling return of income do not serve any useful purpose. (iii) The Board has advised that focus should be on collection of evidence of income. (iv) The Board has further directed that no attempt should be made to obtain the confession. (v) Ultimately the Board has warned officers that any contrary action shall be viewed adversely. 36. In view of the above submission, we observe that the Board itself is of the view that in the absence of credible evidence the confessional statement would not serve any useful purpose. In fact going further i.e. from 10.03.2003 onwards, the Board mandatorily directed the officers that while recording statement, no attempt should be made to obtain confession as to the undisclosed income. Therefore, in the present case not only the recording of confessional statement but making the addition solely on the basis of the statement is against the binding instructions of the CBDT. 37. In view of the above discussion, we confirm the addition of ₹ 1,99,850/- ₹ 5,17,000/-, ₹ 23,42,900/- and ₹ 3,88,377/- out of the total addition made by AO. 38. In the result, appeal of the assessee is allowed in part in terms indicated her ..... X X X X Extracts X X X X X X X X Extracts X X X X
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