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TMI Blog2016 (7) TMI 1585X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstance of the case in spite of the fact that the A. O. has admitted that appellant has maintained proper books of accounts, Tribunal was right in holding that addition of Rs. 4 lacs on account of inflation of labour charges? (c) Whether on the facts and in the circumstance of the case, the Tribunal was justified in holding that the addition of Rs. 6 lacs on account of wrong billing was proper?" Re Question (a): 3 The appeals relating to Assessment Years 1991-92, 1992-93 and 1993-94 being Income Tax appeal Nos. 1376, 1378 and 1379 of 2000 were also admitted by this Court. However, in the above appeals, only one substantial question of law reproduced herein above as Question No.(a) was urged and admitted. This Court by an order dated 4th May, 2016 has dismissed the appellant's appeal for the Assessment Years 1991-92, 1992-93 and 1993-94 on 4th May, 2016. 4 In the above view, it is an agreed position between the parties that Question No.(a) as framed herein above, stands concluded against appellant and in favour of the revenue. 5 In view of the above, Question No.(a) as framed for our consideration is answered in affirmative i.e. against the appellant-ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 132 (4) of the Act by Shri T. V. Goshar on 15th September, 1989. The relevant extract of the communication dated 19th October, 1989 reads as under: " Shri Talakshibhai Goshar offered income of Rs. 4,00,000/without any idea and knowledge of business. Even his son who was present did not have idea of monsoon shed business. In fact there is no inflation of expenses and the offer of income of Rs. 4,00,000/on account of inflation of expenses of monsoon shed business is hereby withdrawn. Similarly, Talakshibhai Goshar has offered income of Rs. 6,00,000/on account of discrepancy which might have accrued through oversight. The admission by itself is self explanation. Income cannot be offered on probabilities. This shows how statement has been recorded in hurried manner. This offer of income of Rs. 6,00,000/on account of probable discrepancy is also hereby withdrawn. Shri Talakshibhai Goshar had offered income of Rs. 12,40,000/including seized cash of Rs. 2,40,000/. The seized cash of Rs. 2,40,000/includes rent of Rs. 63,000/. The concerned parties were called and they also confirm these facts. In short, our offer of income of Rs. 12,40,000/is reduced to Rs. 2,40,000/u/ s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e balance. (g) Being aggrieved, the revenue filed an appeal to the Tribunal. The Tribunal by the impugned order dated 31st January, 2000 allowed the revenue's appeal on two issues which arise for consideration before us. It held that the statement dated 15th September, 1999 was correctly relied upon by Assessing Officer and that the subsequent retraction on 19th October, 1989 of the statement made by the senior partner was an after thought. Thus, the retraction dated 19th October, 1989 could not be accepted. In the result, the addition of Rs. 10,00,000/made on account of labour charges and wrong billing by the Assessing Officer, was restored. 7 Being aggrieved by the order of the Tribunal, the appellant is in appeal before us. 8 Mr. Nitesh Joshi, learned Counsel appearing for the appellant submits as under: (a) The statement of Mr. T. V. Goshar dated 15th September, 1988 made under Section 132(4) of the Act cannot be relied upon to make any addition as the same stood retracted by communication dated 19th October, 1988; (b) The statement of Mr. T. V. Goshar made on 15th September, 1988 is not supported by any corroborative evidence. Thus, the addition made on account of lab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and loose papers found during the search. These loose papers found during search, were explained as record of payments made out side the books ofaccount and so far as blank signed vouchers are concerned, it was stated that the figures are filled in later so as to enable inflating the expenses actually incurred. The above details in the statement is indicative of a person in the knowledge of the manner in which the business activities of the firm is being conducted. Besides, when the statement was made, another partner of the firm - one Mr. C. T. Goshar endorsed the statement made by Shri T. V. Goshar. Thus, approving the same. In case the aforesaid statement was not correct, the other partner would have certainly protested and not endorsed the statement made by Shri T. V. Goshar. In the above view, the finding by the Tribunal that the statement recorded on 15th September, 1988 is not effectively retracted on 19th October, 1988, cannot be said to be perverse and/or arbitrary. It is a possible view on the facts. (iii) It was next submitted by the appellant that in the absence of any corroborative evidence found during the course of search or otherwise to support the statement made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... midnight. In the present case, it is not the appellant's case nor the case of Mr. T. V. Goshar that any pressure was put upon him to make statement which does not reflect the truth. Thus, the above decision also does not assist the appellant. (d) The decision of the Jharkhand High Court in Shree Ganesh Trading Co., v/s. CIT 214 Taxman262 - wherein the Court held that reliance upon a statement made under Section 132(4) of the Act without any corroborative evidence is not acceptable particularly when the same had been retracted. In the aforesaid case, none of the authorities under the Act had considered and /or given reason for rejecting the retraction made by assessee of the statement made under Section 132(4) of the Act. In the present facts, we find that the authorities have examined the statement made under Section 132(4) of the Act as well as the retraction dated 19th October, 1989. It is after consideration of the retraction that the Tribunal concluded that the alleged retraction does not make the statement made on oath unbelievable. In this view, the above decision will not apply as it itself observes that the acceptance/ withdrawal of the statement made under Section 132 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Accounts were found. Therefore, no basis to make any addition on account of labour charges. We notice that in the statement dated 15th September, 1988, Mr. T. V. Goshar has stated that labour expenses are inflated. It is pertinent to note that the order of the CIT(A) which partly deleted additions made on account of labour charges and restricted it up to 10% of Rs. 10.97 lakh, had itself rendered a finding that there was a shortcoming in the accounts of the labour charges till the date of search. In the above context, reliance by the Tribunal upon the statement made under Section 132(4) of the Act after considering the retracted statement, could not be faulted with. The view taken by the impugned order of the Tribunal is a possible view in the facts and circumstance of the present case. Thus, substantial question (b) as framed is answered in the affirmative i.e. in favour of the revenue and against the appellant-assessee. 12 So far as the additional submissions in respect of question (c) viz: wrong billing is concerned, Mr. Joshi submitted that in the absence of any error/ discrepancy being noted in the accounts, no amount could be added on account of nonbilling. It is pertinent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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