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TMI Blog2018 (2) TMI 1690X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 292C r.w.s. 132(4A) that it belongs to the assessee and onus is very heavy upon the assessee to show that the income/ expenditure mentioned in such document does not pertain to the assessee. Here in this case there is a clear cut receipt of payment of cash of ₹ 5 lacs which assessee has failed to rebut by adducing any proper evidence and therefore, finding given by the Ld. CIT (A) is confirmed. - Decided against assessee. - ITA No.:- 1762/Del /2012 And ITA No.:- 2726/Del /2012 - - - Dated:- 4-1-2018 - Shri Amit Shukla, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri Vinod Kumar Bindal Mrs. Sweety Rothari, CAs For the Department : Smt. Paramita Tripathy, CIT(DR) ORDER PER AMIT SHUKLA, J.M. The aforesaid cross appeals have been filed by the revenue as well as by the assessee against impugned order dated 7.3.2012, passed by Ld. CIT (Appeals)-I for the quantum of assessment passed u/s 143(3) for assessment year 2007-08. 2. We will first take up revenue s appeal, wherein following grounds has been raised:- On the facts and in the circumstances of the case the Ld. CIT(A) has erred in:- 1. The ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 4. The brief facts qua the issue involved are that, a search and seizure action u/s 132 was conducted at the residence of the assessee and his family members on 22.12.2006. The assessee has filed return of income on 2.9.2008 declaring income of ₹ 3,40,90,628/- which includes; i) undisclosed investment in jewellery amounting to ₹ 20,17,737/-; ii) undisclosed investment in agricultural land of ₹ 2,98,640/- ; and iii) undisclosed cash of ₹ 48 lacs found during the course of search. The AO in the impugned assessment order has observed that during the course of search the assessee had surrendered an amount of ₹ 15 crores towards income from speculative trading in the statement recorded u/s 132 (4) during the course of search on 22.11.2006. Later on, the assessee retracted the said statement on the ground that he was under mental pressure at the time of recording the statement and also no evidence whatsoever was found relating to such surrender. However, the Ld. AO held that assessee has categorically admitted to have carried out speculative trading in agricultural commodity in cash which is evident from question nos. 13 to 19 in the statement, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orated by the Ld. CIT (A) from pages 3 to 17 of the appellate order. On such submissions Ld. CIT (A) had also called for the remand report which too has been incorporated by him from pages 17 to 31 and also the assessee s rejoinder to the said remand report which has been incorporated by him from pages 31 to 40 of the impugned order. After considering the entire material placed on record and the finding of the AO as well as the submissions made by the assessee, Ld. CIT(A) has deleted the said addition in a very detailed manner after relying upon various judgments. The relevant portion of his findings on merits reads as under:- 7.1 It is further seen that the Assessing Officer has nowhere quantified the amount of ₹ 15,00,00,000/- anywhere in the assessment order. Even in the remand report, there is a mention about the huge cash and investments but nowhere has the Assessing Officer quantified any undisclosed income either. 7.2 In the remand report, the Assessing Officer has stated that there was material evidence showing an unaccounted income from Commodity Trading, activities in share and jewellery etc. To this, it is seen that the appellant has himself offered inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffered in the return of income or separate addition has been made by the Assessing Officer. 7.8 Considering the above discussions and the legal position as stated in the various judgments cited supra, the addition of ₹ 15,00,00,000/- cannot be sustained because no incriminating material justifying such an addition has been found during the search from the assessee. Further, the appellant had retracted the statement within a period of six days on 28/11/2006, therefore, If the Investigation wing had any grievance, it was free to carry out further investigation in this regard for the search was carried on till 18/0112007, the date on which the last locker was operated. Neither the Assessing Officer nor the investigation wing could pin point any concealment of this amount, therefore, the addition of ₹ 15,00,00,000/- is hereby deleted. 6. Before us, Ld. CIT(DR) submitted that there was a specific admission by the assessee that he has earned huge income from speculative trading which has been invested in jewellery and properties. Such a statement was neither under coercion nor under any pressure, whereas there was a specific and categorical admission by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment in jewellery, however it has not been found to be corroborated by the actual jewellery found from the premises of the assessee or his family members or his bank lockers; and whatever jewellery which remained unexplained the same has already been offered by the assessee and added by the department. Nowhere the surrendered income has been quantified on the basis of incriminating material found during the course of search or any evidence has been collected even during the course of assessment proceedings so that such surrender is supported by any quantification by way of any seized material. We find that on similar facts and circumstances addition was made in the case of assessee s father Shri Dharam Pal Gulati (Supra), wherein the Tribunal has upheld the similar order of the CIT(A) after observing and holding as under :- 6. We have heard both the sides on the issue. We have also perused the records available. The return was filed by the assessee declaring income of ₹ 5,88,06,735/- which included an amount of ₹ 12,85,777/- on account of undisclosed investment in jewellery and amount of ₹ 24,86,000/- on account of cash found during the search. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d survey operations. Such confessions, if, not based upon credible evidence, are later retracted by the concerned assessees while filing returns of income. In these circumstances, such confessions during the course of search seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income-tax Department. Similarly, while recording statement during the course of search seizure and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, Assessing officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders. In the assessee s case also, this admission of additional income is not based upon any credible evidence and the same has been retracted within 6 days from the search. Non-asking any question regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made out by the Assessing Officer in the assessment. The other assessments u/s 153A of the Act in assessee s case for Assessment Year 2001-02 to 2006-07 have been made without any addition. Thus, in our considered view, no incriminating evidence was found against the assessee which could suggest or show that unexplained investment has been made to the tune of ₹ 15 crores and such income has been utilized or invested as stated by the assessee in the retracted statement. Nothing of such sort borne out of the facts. In our considered view, no addition can be made merely on the basis of surrender without existence of any corroborative evidence found against the assessee. For this propositions, reliance is placed on the following case laws :- a. Kailashben Mangarlal Chokshi Vs CIT (2008) 174 Taxmann 466 (Guj.) / (2008) 14 DTR 257 (Guj.) Merely on the basis admission, the assessee could not have been subjected to additions, unless and until some corroborative evidence was found in support of such admission. Further statement recorded at such odd hours (at midnight) could not be considered to be voluntary statement, it was subsequently retracted and necessary evidence was led ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the material itself which was seized at the time of search. b. Pranav Construction Co. Vs Asstt. CIT (1998) 3 DTC 719 (Mum-Trib) (1998) 61 TTJ (Mum.-Trib) 145 It was held that the admission cannot be read as an Act of Parliament and that it has to be read in the context fairly and reasonably. The burden of incurring the expenditure can be discharged either by direct evidence or if such evidence is not available the assessee can always point out to circumstantial evidence supporting the claim. Thus, statement recorded under section 132(4) cannot be made use for purpose of precluding assessee from claiming expenditure for earning income which assessee forgot to claim while making statement disclosing income. c. Ganga Saran Sons (P) Ltd. Vs ITO (1981) 130 ITR 1 (SC) : ITO Vs Nawab Mir Barkat AU Khan Bahadur (1974) 97 ITR 239 (SC) Belief should not be arbitrary or irrational but based on relevant and material reasons. d. S. Narayanappa Vs CIT (1967) 63 ITR 219 (SC) Belief must be in good faith, and cannot merely be a pretence. e. Madhya Pradesh Industries Ltd. Vs ITO (1970) 77 ITR 268 (SC) Absence of evidence to prove existence of ITO's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. while rejecting the plea that otherwise also the said amount becomes part of the cash found that stood offered as income because the same had to be taken as returned to the assessee as the said property was not purchased. Thus, the addition so made must be deleted. 10. So far as the first issue is concerned the brief facts are that the AO observed that during the course of search, jewellery of ₹ 38,45,840/- was found from the residence and ₹ 26,40,331/- was found from the locker. The assessee submitted a reconciliation of jewellery found with respect to the wealth tax return of himself and his wife aggregating to ₹ 47,58,469/-, and pointed out that out of the said amount, sum of ₹ 27,40,732/- is explainable from the sources already declared and the balance of ₹ 20,17,737/- was admitted as undisclosed income in the return of income filed. As regards the explanation about jewellery already declared at ₹ 27,40,732/- the assessee has claimed that he has purchased certain items of jewellery from M/s. R.R. Gems (P) Ltd. for sums aggregating to ₹ 9,89,350/-, whereas the departmental valuation officer has valued it at ₹ 23,23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 pc. Diamond bangles (18K) 46.300 40.700 30.525 Dia.-28 Ct. 616,000 646,525 11. 3 pcs. Diamond 140.000 134.400 100,800 Dia.-28 Ct. 368,000 468,800 17. 1 pr. Tops of single diamond 5.200 4.000 3,000 2 pc. Dia.-6 Ct. 1,205,000 1,208,000 Total 191.500 179.100 2,323,325 As per the Assessee (Purchase Bills) Bill No. 1269 dated 30/8/2006 of RR Gems (P) Ltd. ₹ 5,09,600/- 1. 1 pair diamond 46.355 41.261 26.159 Dia.-25.01 Ct. 233,843 260,002 Bangles set in gold 139.545 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not find assessee s submission as satisfactory and thus, had added the same as unexplained cash credit. Before the Ld. CIT(A) the assessee had stated as under :- 9.2 The appellant has stated that as per the facts of the issue, a receipt for payment of ₹ 5,00,000/- towards purchase of a property was found from the factory premises of M/s Mahashian Di Hatti Ltd. at 139, Udyog Vihar Phase-I, Gurgaon (Party 0-3) during the course of search proceedings. The same was seized at page no. 18 of Annexure A-I, photocopy of which was furnished in the paper book. During the course of the assessment proceedings, it was explained to the assessing authority that the appellant received a proposal from some Mr. Rajeev Sethi c/o Graph Associates, C-889A, Sushant Lok-I, Gurgaon, who was a property dealer, to purchase Plot No. B-525 at Sushant Lok-I, Gurgaon. In order to prove his genuineness, as is a standard practice of the property brokers in Gurgaon, the said broker brought a copy of the title deed of the said property from the seller and also a presigned receipt dated 14/11/06 for ₹ 5,00,000/- in cash by the purchaser. The appellant did not like the location of the said property ..... X X X X Extracts X X X X X X X X Extracts X X X X
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