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TMI Blog2018 (11) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... almost eight months to be precise, 237 days. We are persuaded to allow the appeal of the revenue which is accordingly allowed. - Decided against assessee. - D. B. Income Tax Appeal No. 47/2018 - - - Dated:- 30-10-2018 - Mr. Justice Mohammad Rafiq And Mr. Justice Goverdhan Bardhar For the Appellant(s) : Mr. Siddharth Bapna on behalf of Mr. Anil Mehta. For the Respondent(s) : Mr. Prakul Khurana on behalf of Mr. Sanjay Jhanwar. JUDGMENT ( Per Hon ble Mr. Justice Mohammad Rafiq ) This income tax appeal pertaining to assessment year 2013-14 under Section 260A of the Income Tax Act, 1961 has been filed by the appellant-revenue assailing judgment dated 15.09.2017 passed by the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur (for short the Tribunal ) whereby the appeal filed by the respondent-assessee was allowed and appeal filed by the appellant was dismissed. This appeal was admitted by this Court vide order dated 10.04.2018 on the following substantial question of law: (1) Whether on the facts and circumstances of the case of in law the Hon ble ITAT was correct in upholding the decision of the CIT(A) and further deleting the addition of surren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at Luv Garden and investment and construction thereof were deleted on the basis that the actual cost incurred were duly debited in the books of accounts and no discrepancies were found except surrender made by the assessee. Addition of ₹ 1,37,725/- in respect of plot at Mahendra SEZ were also deleted on the ground of retractions which could not be rebutted by the Assessing Officer. Additions of ₹ 36,56,632/- in respect of land in Mahapragya Nagar, Asind, Bhilwara were also similarly deleted. Additions of ₹ 78,35,000/- in respect of investment in Anand City, Arjia, Ajmer Road, Bhilwara in Shop No. 12 were also deleted. Additions of ₹ 88 lacs as advance since purchase of land were deleted to the extent of ₹ 73 lacs. The third ground of appeal in respect of addition of ₹ 20 lacs on account of unexplained advances were deleted considering to be known. The fourth ground of appeal in respect of addition of ₹ 15,90,350/- was deleted. The fifth ground of appeal in respect of addition of ₹ 33,12,000/- on the basis of page-73 of Annexure-AS-2 relating to some constructions of plots, was deleted. However, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at he made disclosure during search proceedings or post search proceedings. Subsequently, he procured affidavits of Shri Suresh, Shri Ashok Jat and Shri Padam Kumar Jain, which were of no help in the absence of any documentary evidence. Learned counsel argued that the statement recorded under Section 132 of the Act in the presence of the witnesses would have overriding effect over any subsequent retraction. Learned counsel referred to Para 5 to 9 of the retraction affidavit dated 20.05.2013 to argue that the assessee has therein also admitted having made the surrender and given the statements. Learned counsel in support of his arguments relied upon the judgments in M/s. Bannalal Jat Constructions Pvt. Ltd. Vs. ACIT, Central Circle-2, Ajmer (D.B. Income Tax Appeal No. 140/2018 decided on 31.08.2018) and CIT, Bikaner Vs. Ravi Mathur, 2017 (1) WLC (Raj.) 387; Rameshchandra and Company Vs. Commissioner of Income-Tax 1987 SCC OnLine Bom 596 of High Court of Bombay at Nagpur, Dr. S.C. Gupta Vs. Commissioner of Income-Tax (2001) 248 ITR 782 of the Allahabad High Court, Bachittar Singh Vs. Commissioner of Income-Tax and Another (2010) 328 ITR 400 of the Punjab and Haryan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department have also denied any amount having been received by them from the assessee as advance against the sale of the properties/land. Learned counsel argued that the Assessing Officer has not given any reason in the assessment order as to why the explanation given by the assessee in the affidavit was not acceptable. Learned CIT(A) has given detailed reasons in respect of each deletion of the addition made by the Assessing Officer. Learned counsel in support of his arguments relied upon the judgment of the Supreme Court in Pullangode Rubber Produce Company Ltd. Vs. State of Kerala Another, (1973) 91 ITR 0018 (SC) and submitted that the Supreme Court therein held that the admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the assessee who made admission to show that it is incorrect and the assessee should be given proper opportunity to show the correct state of affairs. Reliance is also placed on the judgment of Madras High Court in M. Narayan and Bros. Vs. Assistant Commissioner of Income Tax, Special Investigation Circle, Salem, (2011) 13 Taxmann.com 49 (Madras) wherein retraction made during the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,44,545/- were written on these papers. Therefore, statement of the assessee about these papers was recorded on 27.09.2012, wherein he surrendered the aforesaid amount. This statement was again reconfirmed by the assessee in his statement recorded under Section 131 of the Act on 15.10.2012 and 17.12.2012 before the ADIT. In this statement, the assessee confirmed the entries made on the papers seized as AS-1 and AS-2. In fact, the assessee in his statement dated 25.10.2012 acknowledged further surrender of ₹ 10,00,000/- which he again confirmed in subsequent statement dated 17.12.2012. The affidavit of retraction was filed by the assessee with inordinate delay of 237 days on 20.05.2013. The said affidavit runs into four pages. In para 5 of the affidavit, the assessee admitted that the representative of the department prepared list of 28 exhibits, which were mostly original sale deeds etc. and pressurised him to make surrender of ₹ 5 crores. It was stated that if the original documents were to be taken away by the department, it would have created a difficulty for the assessee to depose them of, therefore, he under pressure had to agree for the surrender. In para 6 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or statement supported by convincing evidence, stating that the earlier statement was recorded under pressure, coercion or compulsion. We deem it appropriate to reproduce para 15 of the said judgment, which reads thus, 15. In our view, the statements recorded under Section 132(4) have great evidentiary value and it cannot be discarded as in the instant case ITA No.720/JP/2017 M/s Bannalal Jat Construction Pvt. Ltd., Bhilwara vs. ACIT, Central Circle-Ajmer by the Tribunal in a summary or in a cryptic manner. Statements recorded under Section 132(4) cannot be discarded by simply observing that the assessee retracted the statements. One has to come to a definite finding as to the manner in which retraction takes place. On perusal of the facts noticed hereinbefore, we have noticed that while the statements were recorded at the time of search on 9.11.1995 and onwards but retraction, is almost after an year and that too when the assessment proceedings were being taken up in November 1996. We may observe that retraction should be made as soon as possible and immediately after such a statement has been recorded, either by filing a complaint to the higher officials or otherwise broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogent material to rebut the presumption that stood attracted in view of the statement made under Section 132(4) of the IT Act with reference to the entries in the books of accounts of the sales made during the year and the stock position. Similar was the position in Kailashben Manharlal Chokshi Vs. Commissioner of Income-tax (2008) 174 Taxman 466 (Gujarat), wherein the High Court of Gujarat found that the assessee gave proper evidence in support of his retraction. The High Court of Madras in M. Narayanan and Bros. Vs. Assistant Commissioner of Income-tax, supra, held that when assessee had explained his statement as not correct in context of materials produced, no amount could be added to his income on the basis of his statement. Similarly, what has been held by the High Court of Bombay in Commissioner of Incometax, Central-II, Mumbai Vs. Omprakash K. Jain (2009) 178 Taxman 179 (Bombay) was that the assessing officer, while considering whether retraction was under duress or coercion, had also to consider genuineness of documents produced before him. The Punjab and Haryana High Court in Commissioner of Income-Tax Vs. Lekh Raj Dhunna, taking note of the fact that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contemporaneous evidence of agricultural income. In the circumstances, the statement of the assessee could certainly be acted upon. The High Court of Kerala in The Commissioner of Income Tax Vs. O. Abdul Razak, supra, in para nos.8, 9 and 10 of the report, held as under:- 8. It cannot be doubted for a moment that the burden of proving the undisclosed income is squarely on the shoulders of the department. Acquisition of properties by the assessee are proved with the documents seized in search. Since under statement of consideration in documents is the usual practise the officer questioned the assessee on payments made over and above the amounts stated in the documents. Assessee gave sworn statement honestly disclosing the actual amounts paid. The question now to be considered is whether the sworn statement constitutes evidence of undisclosed income and if so whether it is evidence collected by the department. In our view the burden of proof is discharged by the department when they persuaded the assessee to state details of undisclosed income, which the assessee disclosed in his sworn statement, on being confronted with the title deeds seized in search. 9. Section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 973) 91 ITR 18 an admission is an extremely important piece of evidence though it is not conclusive. Therefore, a statement made voluntarily by the assessee could form the basis of assessment. The mere fact that the assessee retracted the statement could not make the statement unacceptable. The burden lay on the assessee to establish that the admission made in the statement at the time of survey was wrong and in fact there was no additional income. This burden does not even seem to have been attempted to be discharged. Similarly, P.K. Palwankar v. CGT, [1979] 117 ITR 768 (MP) and CIT v. Mrs. Doris S. Luiz, [1974] 96 ITR 646 (Ker) on which also learned counsel for the assessee placed reliance are of no help to the assessee. The Tribunal s order is concluded by findings of fact and in our view no question of law arises. The applications are, accordingly, rejected. All the aforementioned judgments were considered by this Court in M/s. Bannalal Jat Constructions Pvt. Ltd. (supra) wherein also the assessee retracted from his statement initially given under Section 132(4) of the Act on 10.10.12014 followed by confirmation statement under Section 131 on 04.12.2014 and made t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) of the Act and later confirmed in statement recorded under Section 131 of the Act, cannot be discarded simply by observing that the assessee has retracted the same because such retraction ought to have been generally made within reasonable time or by filing complaint to superior authorities or otherwise brought to notice of the higher officials by filing duly sworn affidavit or statement supported by convincing evidence. Such a statement when recorded at two stages cannot be discarded summarily in cryptic manner by observing that the assessee in a belatedly filed affidavit has retracted from his statement. Such retraction is required to be made as soon as possible or immediately after the statement of the assessee was recorded. Duration of time when such retraction is made assumes significance and in the present case retraction has been made by the assessee after almost eight months to be precise, 237 days. In view of above discussion, we are persuaded to allow the appeal of the revenue which is accordingly allowed. The substantial question of law formulated by this Court vide order dated 10.04.2018 is answered in favour of the revenue and against the assessee in the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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