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TMI Blog2018 (12) TMI 1508X X X X Extracts X X X X X X X X Extracts X X X X ..... upport the case of the Revenue. Keeping in view all as well as the CBDT Instructions vide its Instructions No. F. No. 286/2/2003-IT (Inv.II), dated 10.3.2003 has made it clear that reliance shall not be solely placed on the statements recorded in the search survey - we delete the addition in dispute and allow the grounds raised by the assessee. - ITA No. 15/DEL/2013 And ITA No. 533/DEL/2013 - - - Dated:- 21-12-2018 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER For The Assessee : Dr. Rakesh Gupta, Adv. And Sh. Somil Agarwal, Adv. For The Department : Sh. S.S. Rana, CIT(DR) ORDER PER H.S. SIDHU, JM These are the appeals filed by the Assessee and the Revenue emanate out of the separate impugned Orders of the Ld. Commissioner of Income Tax (Appeals)-III, New Delhi pertaining to assessment year 2009-10. Since the issues involved in these appeals are common and identical, hence, the appeals were heard together and are being consolidated by this common order for the sake of convenience, by first dealing with Assessee s ITA No. 15/Del/2013 (AY 2009-10)- Smt. Sushmita Gupta vs. ACIT. 2. The grounds raised in the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t were recorded which is evident from the copy of statement recorded as there are no signatures of the alleged two witnesses. Thus the presumption made by the Hon'ble Commissioner of Income Tax (Appeals) is not only erroneous but unsustainable in law. v) That the Hon'ble Commissioner of Income Tax (Appeals) while deciding the appeal has given erroneous findings and that too without any material evidence on record holding that by making surrender of ₹ 1,50,00,000/- at the time of search, she got the immunity from further deeper investigation to be conducted by the Department . This fact is absolutely arbitrary. vi) That the Hon'ble Commissioner of Income Tax (Appeals) while sustaining the additions of ₹ 1,36,30,501/- has totally disregarded the Explanation offered by the appellant in writing in respect of gap in stock of jewellery, gap of cash in hands and Explanation for loose papers and slips etc. which were fully substantiated by the direct evidences which were already available on record with the learned Assessing Officer since been filed with him during the course of hearing of the case and the same were also made available with him during the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal before the ITAT, hence, the issue has not yet attained the finality. iii) The order of the CIT(A) is erroneous and is not tenable on facts and in law. iv) The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 4. The brief facts of the case are that a search and seizure operation was carried out on 26.2.2009 in the case of assessee. Assessee filed the return of income at ₹ 16,40,740/- and the AO assessed the income of the assessee at an income of ₹ 1,52,71,241/-, by making an addition of ₹ 1,36,30,501/-. The addition was made on the ground that during the search operations at the assessee premises on 27.3.2009, certain incriminating documents, unexplained cash, jewellery and excess stock was found and to cover up all the discrepancies, the assessee surrendered a sum of ₹ 1,50,00,000/- before the Authorised Officer. However, later after one month on 27.3.2009, the assessee retracted from the surrender of ₹ 1.50 crore, stating that the surrender was made under force, coercion and threat. The assessee stated before the AO that on the basis of reconci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) is totally incorrect because the statement of the assessee was recorded u/sec. 132(4) of the Act at mid night and in abnormal circumstances under coercion and duress, it was too much to give any credit in the statement recorded at such odd hours. Moreover as alleged by the Ld. CIT(A) that the statement recorded u/sec. 132(4) of the Act were in the presence of two individual witnesses - this also appears to be also incorrect because no such individual witnesses were available in the mid night when the statement of appellant were recorded which is evident from the copy of statement recorded as there are no signatures of the alleged two witnesses. Thus the presumption made by the Ld. CIT(A) is not only erroneous but unsustainable in law. It was further submitted that the addition was made and sustained without any material evidence on record holding that by making surrender of ₹ 1,50,00,000/- at the time of search, she got the immunity from further deeper investigation to be conducted by the Department . This fact is absolutely arbitrary. He further submitted that Ld. CIT(A) while sustaining the additions of ₹ 1,36,30,501/- has totally disregarded the Explanation offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dra K.Shah vs. ITO (2016) 140 DTR 0235 High Court of Gujarat. - Kailashben Manharlal Chokshi vs. CIT (2008) 220 CTR 138, High Court of Gujarat. 6. On the contrary, Ld. DR relied upon the orders of the authorities below. He submitted that during the course of search, statement of Smt. Sushmita Gupta was recorded in which she surrendered undisclosed income of ₹ 1.50 crores on account of difference in stock, cash of ₹ 20 lakhs and various investment and expenditure. It was further submitted that the above surrender of ₹ 1.50 crore was confirmed by Sh. Rajiv Gupta H/o Smt. Sushmita Gupta in his statement u/s. 132(4) on the date of search. No retraction was filed within a reasonable time. There is no material on record to establish that any attempt was made on behalf of the assessee to prove the allegation of inducement, threat or coercion through the witnesses. It was further submitted that by making the surrender, the assessee got immunity from further deeper investigation and unaccounted cash, foreign exchange, stock and incriminating documents were found from the assessee during the course of search. In view of above submission, he relied upon the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd considerable cogency in the contention of the assessee s counsel that the said surrender was not voluntary surrender but was extracted under duress and therefore, immediately after the conclusion of search it was withdrawn. It is noted that Assessee then went to explain with evidence the source of various assets found at the time of search and the uncovered amount of ₹ 13,69,499/- which was not supported by the explanation. We note that authorities below did not except the explanation tendered by the assessee with respect to various assets found as a result of search and held that since assessee had already declared a sum of ₹ 1,50,00,000/- during the course of search in the statement made u/s 132(4), the addition of that amount as reduced by the amount declared by the assessee was warranted. Hence, the submission of the assessee has force that the surrender of ₹ 1,50,00,000/- made by the assessee was not free and fair voluntary surrender and it was under tremendous direct and indirect pressure and therefore, such alleged surrender cannot be used for making the addition. It is also noted that various Hon ble Courts in the following cases have held that during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the group as a whole but the retracted statement does not lead to the conclusion that the present assessee had an undisclosed income of ₹ 10 lakhs. The second reason given by the AM is that enhancing the figure of disclosure two months later shows proper application of mind and also absence of any duress while giving the statement. Well, there may not be any evidence of coercion being exercised by the search party, there may not be any duress also, but existence of confusion cannot be ruled out. Duress has to be distinguished from confusion. Duress is a constraint illegally exercised to force a person to perform some act. This, as mentioned earlier, may be absent. But confusion means something thrown into disorder wherein a person may be perplexed or embarrassed or thrown into turmoil. The entire family is likely to be in a state of perdition during and in the aftermath of the search. In fact, the revision of the earlier statement does not reflect application of mind but a state of compounded confusion only. When such are the state of affairs, no sanctity can be attached to the statement and that cannot form the sole basis to determine undisclosed income. It is not the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assessing undisclosed income of assessee, there must be some corroborative evidence to admission-All authorities reached to conclusion merely on basis of assumption resulting into fastening of liability upon assessee-No specific reason had been given for rejection of asses see's contention and why AO did not proceed further to enquire into undisclosed income-This fact was also not taken care of and considered that in a case where there was search operation, no assets or cash was recovered from assessee, in that situation what had prompted assessee to make declaration of undisclosed income- Thus, a wrong inference had been drawn by authorities in holding that there was undisclosed income Jyotichand Bhaichand Saraf Sons Pvt. Ltd. vs. DCIT, (2013) 154 TTJ 0226, ITAT Pune Bench Block assessment-Search and seizure-Undisclosed income-Addition on account of difference in stock- Assessee was engaged in business of dealing in gold ornaments and jewellery-Search and seizure u/s 132 was conducted at business premises of assessee-Differences were found in physical inventory and books of account- Director of assessee company in his statement recorded u/s 132(4) stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s case to get say any extra tax then is due. The reality remains that there is no evidence what-so-ever with the department even in consequence of a serious action like search and seizure followed by detailed security which could support the earning of speculation income of ₹ 10,50,000/- in this year. In other words, there is no evidence to support the very existence of this income except the so called statement u/s 132(4) of the Act. It defies logic that an assessee will or should admit any income which he had not earned and which the department had not found out. I do not find any thing against the arguments that disclosure u/s. 132(4) was subject to variation and once the assessee had access to seized documents and he realised subsequently that there was no occasion to make this disclosure, he was having an inherent right to clarify the situation so that he could be taxed only on real income and not on an income which was not there at all, since there was no evidence to prove otherwise too. In addition, the very important fact that remains that inspite of the search, no material/evidence was found to show that the assessee was having any other undisclosed assets which c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount was unaccounted and concealed would itself indicate that the admission was forcible and not voluntary. ACIT v. Anoop Kumar, (2005) 147 Taxman 26, ITAT Amritsar Bench (SMC) In fact, all the additions made by the Assessing Officer based on the documents and evidence found during the search stood confirmed. It was also a fact that the total income so computed by the Assessing Officer fell below the income disclosed under section 132(4). It was not the case of the department that difference in the income assessed and income disclosed under section 132(4), represented some other concealed income. Therefore, it was clear that there was no material available with the department to justify the addition so far as the difference between the income computed by the Assessing Officer and income disclosed under section 132(4) was concerned. In other words, the so-called disclosure under section 132(4) was bald and had no legs to stand and in such a case retraction was justified. The ultimate addition to be made in a case would depend on the facts and circumstances of the case and not purely on the disclosure made under section 132(4) which also stood retracted subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same were made under mental tension and utter confusion; At page No. 89-90 of the Paper there is a copy of letter dated 20.04.2009 filed by the assessee to Ld. ADIT (Inv.) explaining that surrender made in statements recorded during search was product of coercion, duress, threat and mental tension and thus, the same was retracted by the assessee. At page no. PB 312-316 of the Paper Book there is a copy of letter dated 29.10.2010 filed before the Ld. ACIT stating that amount surrendered by the assessee along with her husband has been retracted vide letter dated 27.03.2009. lt was further emphasized that surrendered amount was illegal, without any basis and was under mental tension, duress, coercion, treat and undue influence. At page no. 370-383 (PB 373) of the Paper Book is the copy of submission filed before the Ld. CIT(A) reiterating that surrender made by assessee and her husband was not voluntary and was under undue pressure from the search officials with assurance to conclude search. However, the assessee explained the source of each and every asset/loose paper found during the course of search and submitted before AO and Ld. CIT(A) that as to why additions cannot be made in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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