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TMI Blog2017 (11) TMI 1594X X X X Extracts X X X X X X X X Extracts X X X X ..... are filed against the order dated 19/1/2012 13/12/2012 by CIT(A)-V, New Delhi in Assessment Year 2009-10 respectively. 2. The facts of these two appeals are similar. Therefore, these two appeals are taken up together. 3. The grounds of appeal are as under:- (ITA No. 1206/Del/2013) 1. Whether the Ld.CIT(A) has erred on facts and in law in deleting the addition made by the A.O on account of unexplained money amounting to ₹ 10,00,00,000/- ignoring the fact that during the survey carried out on 20/11/2008 at the premises of the assessee company, a large number of documents were impounded, cleanly establishing that the assessee was receiving major portion of the booking amount in cash and as such was not declaring the correct income in the tax return. ( ITA No. 1222/Del/2013) 1. Whether the Ld.CIT(A) has erred on facts and in law in deleting the addition made by the A.O on account of unexplained money amounting to ₹ 10,00,00,000/- ignoring the fact that during the survey carried out on 20/11/2008 at the premises of the assessee company, a large number of documents were impounded, cleanly establishing that the assessee was receiving major p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counted cash payments received. This income has been declared voluntarily without any pressure, coercion and is subject to no penalty u/s 271(1)(c) of the I.T. Act, 1961. Advance-tax will be paid as per law. I have read over the above statement and found it correctly recorded. The statement has been given by me without any fear and pressure/coercion. Statement of other director of the assessee company Sh R.C. Soni was also recorded on the day of survey and Sh. Soni had also stated that as the company was ready to voluntarily disclosure of ₹ 10 crore, it was requested not to start any penalty proceedings or prosecutions. Besides the statements of these directors recorded u/s 133A, a specific letter dated 21.11.2008 duly signed by Sh Krishan Kumar's was also submitted the contents of which are reproduced as under: During the course of survey; certain loose papers and documents as per Annexure-A were impounded which were shown to me. I have seen the documents impounded as per annexure A-l to A-13 and A-15 from the Office premises of the company. These have also been discussed with Sh. R.C. Soni', the other director. I am not in a position to explain th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsion of the appellant. ( b) From the final accounts submitted during appeal proceedings, it has been seen that the total advance booking receipts received till the previous year ending 31.3.2008 were t 1,54,14,97,991.76 which have been shown under the head current liabilities in Schedule-J of the Balance Sheet as at 31.3.2008; in the previous year ending 31.3.2007 such receipts were ₹ 95,43,64,480.12 and were given similar treatment in the accounts i.e. these were also shown as current liability. In the Profit Loss a/c the only income shown for the year ending 31.3.2008 is other income of ₹ 1,62,35,604.88 which has been shown in Schedule-K as bank interest on FDR including profit on sale of car at ₹ 83,643/-; it shows that there has been no income shown from the business activity of the appellant; same is the position with regard to year ending 31.3.2007. As regards, the previous year ending 31.3.2009 relevant for the AY 2009- 10, there is no change in the method being followed i.e. amounts received on account of advance booking were shown as liability in Schedule-I at ₹ 2,15,07,28,058.83 and the only income shown in Schedule-J is bank intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfactory explanation regarding surrender amount being not bona fide and it was not borne out in any contentions raised before lower authorities, additions so made after adjusting expenditure were justified. The Ld. DR further relied upon the judgment of Smt. Dayawanti Vs. CIT 390 ITR 496 wherein it is held that where inferences drawn in respect of undeclared income of the assessee were premised on materials found as well as statements recorded by assessee s son in course of search operations and assessee had not been able to show as to how estimation made by AO was arbitrary or unreasonable, additions so made by Assessing Officer by rejecting books of account was justified. 7. The Ld. AR relied upon the order of the CIT(A) and submitted that the survey had taken place at the premises of assessee and its selling agent namely M/s. Real Gain Estate Pvt. Ltd. Statement of one of the directors namely Sh. Krishen Kumar (in AMR Infrastructure Ltd.) and Sh. Nitin Rekhan (in ARN Infrastructure Ltd.) was recorded u/s 133A wherein he declared additional income of ₹ 10 crores with a view to buy peace of mind. However, in the return filed by the assessee company, this income was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the judgement of Hon'ble High Court of Madras in the case of CIT v/s S Kader Khan Sons 300 ITR 157 in which the Hon'ble High Court, after discussing Sec.l33A 132(4). . .. In view of the above legal position, the AO's blindly following the statement recorded during survey and making the addition on the basis of surrender is not in order. ii) The appellant has submitted that the statement of Shri Shri Krishan Kumar was recorded under duress-the survey started on 20.11.2008 and ended on 21.11.2008(page-24 32 of the paper book). Attention has been drawn to the judgement in the case of Kailashben Manoharlal Choksi v/s CIT(2008) 174 Taxman 466 wherein the Hon'ble Gujrat High Court has held that statement recorded u/s 132(4) at midnight during search operation is not voluntary statement, it may not be enumerated at the time of assessment after search . As per the appellant the position is worse u/s 133A which is not having any evidentiary value as such therefore, the statement recorded under duress/stress/exhaustion is not a voluntary statement. The A.O s version is that it is not material because in the absence of cooperation by the party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation provided by the appellant is neither complete nor conclusive, is ill founded rather it is contradictory. The AO has not pointed out any information asked by it, but not provided by the appellant. The AO's brushing aside the information collected/record impounded during survey is not in order. The AO has blindly followed the survey report and the surrender made by the appellant. ( vi) There is no dispute as to the fact that the survey report was not confronted to the appellant before this being used against the appellant. The AO has himself accepted in the remand report that it is internal arrangement between two officials regarding confidential correspondence and the assessee is not supposed to know everything regarding the correspondence between two officials being informative and confidential. The version of the AO is pulpably wrong; a quasi judicial authority is duty bound to follow the cardinal principles of natural justice i.e. no document can be used against any person unless that person is given reasonable opportunity to submit his version thereon. Correspondence between officers of the Directorate of Investigation and an AOis not a 'privileged corres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not only be done but should manifestly be seen to be done . Even if grant of an opportunity is not specifically provided for it has to be read into the unoccupied interstices and unless specifically excluded the principles of natural justice have to be applied. Even if a statute is silent and there are no positive words in the Act or Rules spelling out the need to hear the party whose rights and interests are likely to be affected, the requirement to follow fair procedure before taking a decision must be read into the statute, unless the statute provides otherwise . Since the survey report was not confronted to the appellant, but was used by the AO, the asst, order framed on that basis is bad in law. 9. In view of the above discussion, the addition of ₹ 10 crores made by the A.O is deleted and the grounds of appeal are allowed. Thus, the CIT(A) has in detail considered not only assessee s grounds but also the comments offered by the Assessing Officer while dealing the remand report before him in details. There is no need to interefere with the order of the CIT(A). Thus, the appeals of Revenue in both the cases which are identical in nature are dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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