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TMI Blog2011 (1) TMI 1544X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract and vehicle hiring. A search and seizure action under section 132(1) of the Act was conducted on 28-09-2006 on Luthra group of cases, of which assessee is also a member. Accordingly, assessee was also subjected to an action under section 132(1) of the Act. In the course of search, certain incriminating material was found and seized. A notice under section 153A of the Act was issued on 12/02/07, requiring the assessee to file a return of income for the captioned assessment year. In response, assessee filed a return of income declaring total income of ₹ 9,11,860/- as against an income of ₹ 8,10,224/- declared in the return originally filed under section 139(1) of the Act on 25/11/02. In the assessment subsequently finalized under section 153A of the Act on 31/12/08, the total income has been determined at ₹ 70,76,860/- after making an addition of ₹ 61,65,000/-, which is the subject matter of dispute before us. 4. In the course of search proceedings, a bundle of loose papers marked as A-34 was found and seized from the residential premises of the assessee. The seized material reflected purchase of land by the assessee along with three other co-owner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the replies of the assessee and, held that the retraction by the assessee from his original statement dated 13/10/06 was not valid and that the same has been done to avoid payment of taxes. Accordingly, a sum of ₹ 61.65 lakhs has been added as undisclosed income in the hands of the assessee in line with the surrender made in the statement recorded under section 132(4) of the Act on 13/10/2006. 7. The aforesaid addition was carried in appeal before the CIT(A). In appeal before the Commissioner of Income-tax (Appeals) assessee raised various objections challenging the addition on facts and in law. Commissioner of Incometax (Appeals) called for a remand report from the Assessing Officer also. After considering the submissions of the assessee and the remand report of the Assessing Officer, Commissioner of Income-tax (Appeals) has upheld the addition of ₹ 61.65 lakhs made by the Assessing Officer as undisclosed income. Against the aforesaid, assessee is in appeal before us. 8. Before us, first and foremost submission made by the learned Counsel for the appellant is that subsequent to the admission made at the time of search, the assessee could prove the availability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income furnished on 14/05/08, which is after a prolonged delay and cannot be said to be bonafide. According to the learned Departmental representative, the lower authorities have rightly ignored the retraction made by the assessee at the time of filing of return as the same was without any basis. In the course of her submissions, reliance has been placed on the following decisions:- 1. Pullangode Rubber Produce Co. Ltd., Vs. State of Kerala Another, 91 ITR 18 (SC) 2. Dr. S.C. Gupta Vs. CIT, 248 ITR 782 (All.) 3. Hotel Kiran Vs. ACIT, 82 ITD 453 (Pune) 4. Greenview Restaurant Vs. ACIT, 263 ITR 169 (Gauhati) 10. We have carefully considered the rival submissions and perused the orders of the lower authorities as well as the material to which our attention has been drawn during the course of hearing. In this case, the crux of the dispute emanates from the admission made by the assessee at the time of search to surrender an income of ₹ 61.65 lakhs as undisclosed income represented by the investment in acquisition of a property at Phalke Smarak, Nashik. It is not in dispute that in terms of documents seized during the course of search, assessee was found to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the firm were stated to have been discontinued thereafter and all the assets and liabilities were not cleared till date and the firm was not dissolved. It was stated that there was a cash balance of ₹ 38,75,208/- as on 31.3.2000. The cheques-on-hand at ₹ 33,09,232/- were cleared during the AY 2001-02 i.e. as on 27.4.2000 as per the bank statement. As the appellant being the managing partner of the said firm, the funds available with the said firm were utilized to the extent of ₹ 47,25,838/- for the payment towards investment in Phalke Smarak property as on 9.4.2002. The appellant s explanation regarding the sources is not accepted y the AO in his report on the ground that there was no need to make unaccounted investment if the appellant was having sufficient cash balance out of the accounted sources. The AO rejected the appellant s explanation as an after thought and relied on the statement u/s 132(4) for justifying the addition. A perusal of the transactions of the firm clearly shows that there is a long gap between the availability of the funds with the said firm and the cash payments made by the appellant as per the seized document A-34 for investment in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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