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TMI Blog2020 (10) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... he truth of the matter. It is only a piece of evidence, the weight to be attached to which must depend on the circumstances in which it is made. It can be shown to be erroneous or untrue. Therefore, addition made merely and solely on the basis of confession without any corroborative evidence was not sustainable in law and moreover the said confession made by the assessee was subsequently retracted and since the addition was not supported by any cogent, convincing independent documentary evidence, therefore, the same was correctly found to be not sustainable by the ld. CIT(A). No new facts and circumstances have been brought before us in order to controvert or rebut the findings so recorded by the ld. CIT(A), therefore, we see no reason to interfere or deviate from the findings so recorded by the ld. CIT(A). Therefore, we uphold the order passed by the ld. CIT(A) qua this issue. - Decided in favour of assessee. - ITA No. 324/JP/2017, 323/JP/2017 (Assessment Year :2014-15) - - - Dated:- 9-9-2020 - SHRI RAMESH C SHARMA, AM AND SHRI SANDEEP GOSAIN, JM Revenue by: Shri B.K. Gupta (Addl.CIT) Assessee by: Shri S.L. Poddar (Adv.) ORDER PER: SANDEEP GOSAIN, J.M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad deleted the additions made by the A.O. 6. Aggrieved by the order of the ld. CIT(A), the revenue is in further appeal before the ITAT on the grounds mentioned hereinabove. 7. Ground No. 1 of the present appeal raised by the revenue relates to deletion of addition of ₹ 25,86,60,550/- by the ld. CIT(A). In this regard, the ld Addl.CIT-DR Shri B.K. Gupta appearing on behalf of the Revenue has relied upon the order passed by the A.O. and also submitted that the ld. CIT(A) had erred in deleting the additions thereby ignoring the fact that the assessee himself stated in his statements recorded U/s 132(4) of the Act during the course of search as well as post search proceedings that he has received on-money in cash from the buyers of various flats and subsequently he failed to show the same in the return of income. The ld DR also relied upon the written submissions dated 22/02/2020 filed by him before the ITAT: 1 The brief facts of the case are that a search and seizure action was conducted in the case of the assessee on 04.09.2013. During the course of search, in the statement recorded on oath u/s 132(4), Shri Vijay Jain, Director of the assessee company made disclosure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of incorrect facts. However, it is to seen that the retraction was made after more than 9 months of the search. In fact, the director of the assessee company also affirmed the same in statement recorded u/s 131 and in the affidavit and thus the retraction was nothing but an afterthought. It is humbly submitted that the Ld. CIT(A) has ignored the statement recorded u/s 131 as well as the affidavit of the director of the assessee company. It is to be noted that till the filing of the retraction letter, no complaint was made to the senior authorities of the department about the alleged threat or coercion exercised by the departmental officers for making the surrender. Further, it is evident from the statement of Shri Vijay Jain recorded u/s 132(4) that he has not only admitted that the seized documents belonged to the assesee company but also has explained them in detail thereof. Further, these documents contained the details of areas of the flats, total consideration, accounted consideration and on-money receipts for the sale/booking of the flats. It may be mentioned that the rates per square feet (for recorded payments) as stated on the seized documents tallied with the ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there are small differences as usually, minor difference occurred as the flats are booked on the basis of drawings whereas, the area in sale deeds is stated on the basis of actual measurement. Further, variation of area in respect of JKD Pearl Styome was on account of car parking. Area of flat no. 701 702 in JKD Landmark as per seized document and sale deed were 2856.25 sq feet and 2865.92 sq feet respectively, i.e. almost tallied (AO page 26 point (b)) 3.3 Thus, in view of the above, it is humbly submitted that the finding no. 1 and 2 of the Ld. CIT(A) are not based on the correct appreciation of facts as neither the seized documents were dumb documents nor the additions were made solely on the basis of statement recorded u/s 132(4). Further, the retraction was nothing but an afterthought and no cognizance could be given to it. It may be mentioned that this is not a simple case of relying upon some scribbling and noting, but a case where the entries, which were clear and legible, were taken into consideration by the AO, which were duly explained by the director of the assessee company in its recorded on oath u/s 132(4). Finding No. 3 4 The finding of the Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made at the time of search or immediately thereafter as with the lapse of time, evidences can be fabricated, witnesses can be influenced etc. Further, after execution of the sale deeds, no buyer would state the truth. It is again reiterated that the statements recorded u/s 132(4), 131 and affidavit as discussed earlier are sufficient evidences to make the impugned addition. It is pertinent to mention that the assessee has retracted from its statement recoded u/s 132(4) of the Act but has not stated anything about the statement recorded u/s 131 during the post search assessment and affidavit filed before ADIT(inv.) in the month of September, 2013. It is an established principle that the contents of an affidavit are correct and true unless and until proved otherwise, which the assessee failed miserably in the instant case under consideration. Finding No. (vi) 6 This finding of the AO are correct as the on money payments were obviously not recorded in the regular books of accounts of the assessee, but it is also a fact that the on-money amount was recorded in the seized documents, which were maintained on the computers used by the assessee company for maintaining its books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer has failed to establish the contrary. Following the same principle other addition was also made of ₹ 2.5 Crore without carrying out any enquiry or placing any corroborative evidence in support of his contention is hereby deleted. The submission made before the Learned CIT(A) is quoted as under: - 1. Facts of the case: - It is submitted that in this case during the course of search statement of one of the directors of Shri Vijay Kumar Jain was recorded. During the course of statement Shri Vijay Kumar Jain was examined with reference to certain rough papers found during the course of search. These papers are page no. 1 to 4 of annexure A-2. Copies of these are scanned below. It is simply on the basis of this statement of Shri Vijay Kumar Jain that additions have been made to the tune of ₹ 25,86,60550/-. The additions have been made on the alleged on money received by the assessee reportedly found noted on these pages on sale of flats. It is relevant to submit that in the department there is a rampant practice of obtaining surrender during search by exerting pressure and coercion. It is so widespread that the CBDT had to issue circulars quoted below t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoking the provisions of section 68 of the Income Tax Act, 1961 which are not applicable even distantly. In view of this the addition made by the Learned Assessing Officer deserves to be deleted. The addition made by the Learned Assessing Officer is assailed as under: - 2. Papers found are rough and dump papers: - It is submitted that the addition has been made exclusively on the pages 1 to 4 of annexure A-2. Copies of these are scanned below. During the course of assessment proceedings it was submitted before the Learned Assessing Officer that the papers were rough and dump because : - (a) These papers do not have signatures of the assessee/directors. (b) The originator/writer of these papers is not known. (c) These papers are undated. (d) The papers do not contain the name of any buyer. (e) These papers could not be related with the regular books of accounts. (f) The contents of these papers in respect of sale of flats are at variance with contents of sale deeds executed in respect of these flats. (g) Certain flats shown as sold in these papers were actually sold subsequent to the search. The Learned Assessing Officer in the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 402 2937.50 6850.00 20121875.00 10281250.00 9840625.00 7 501 2937.50 6850.00 20121875.00 10281250.00 9840625.00 8 502 2937.50 6850.00 9500000.0 9 601 2937.50 6850.00 20121875.00 10281250.00 9840625.00 10 602 2937.50 6850.00 20121875.00 10281250.00 9840625.00 11 701 2865.25 6850.00 19626962.50 10028375.00 9598587.50 12 702 2865.25 6850.00 19626962.50 10028375.00 9598587.50 13 801 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44703000.00 Page No. 3 of annexure A-2 JKD Pearl Stylome (Mahaveer Nagar, Jaipur) Sr. no. Flat No Flat Area in Sq.ft Rate/Sq.ft Amount A @2500 Per sq.ft B 1 101 5500.00 7,000,000.00 2 102 5500.00 7,000,000.00 3 201 5500.00 7,000,000.00 4 202 5500.00 7,000,000.00 5 301 2491.25 5500.00 13701875.00 6228125.00 7,473,750.00 6 302 2491.25 5500.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut computer printouts. It is not known as to who is the originator/writer of these papers. The surrender was made on the allegation that the amounts noted in column 'B' was received in cash against sale of various flats in the aforesaid multi storied buildings located at various places in Jaipur and Alwar. However it is submitted that no effort was made by the authorized officer regarding the genuineness of the transactions noted in these papers. The minimum thing which was expected from the authorized officer was that he should have ascertained the date and the year of transaction and then he should have verified whether the accounted amount shown in column 'A' was verifiable or not from the regular books of accounts. This minimum exercise was not done. It appears that the investigation team was in haste in getting the surrender from the assessee by pressing him and by threatening him with dire consequences. It is settled position of law that if the seized papers and narration thereon do not carry any date then such papers are to be treated as rough papers. It is submitted that in all the transactions on all these four pages dates are nowhere available, hence th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of post search enquiries. In fact the Learned Assessing Officer has not conducted any post search enquiry. The only and the only action the Learned Assessing Officer is taking is sticking to the statement of the assessee recorded u/s 132(4) of the Income Tax Act, 1961. (iii) Flats sold subsequent to search - We are furnishing a chart in the following paras which discloses that certain flats were not sold upto the date of search as such there was no question of receiving any amount from them. The flat no. 201, 202, 301, 602 of JKD Pearl Landmark and flat no. 101, 102, 302 of JKD Pearl Stylome i.e. Mahaver Nagar Jaipur and flat no. 102, 604 of JKD Pearl Aura, Alwar were sold much later i.e. in the year 2014 whereas the search was conducted on 05.09.2013. It is the submission of the assessee that mentioning of receipt of amount against these flats in the seized papers is therefore fake as these have been sold at a later date. In these circumstances the sale amount mentioned against these flats and shown to be have been received by the assessee is not verifiable with reference to the books of accounts. It is strongly submitted that not a single payment (A) which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 701 2865.25 2865.9 702 2865.25 2865.9 801 2571.25 2660.3 JKD Pearl Stylome FLAT NO. AREA AS PER SEIZED PAPERS (Sq. ft) AREA AS PER SALE DEED (Sq. ft) 101 * 2615.6 102 * 2615.6 201 * 201 5231.1 301 2491.25 2615.6 302 * 2491.25 2615.6 401 2491.25 2615.6 501 2491.25 2586.3 502 2491.25 2586.3 801 2491.25 2586.3 802 2491.25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10030720 801 8999375 9310980 JKD Pearl Stylome FLAT NO. SALE PRICE AS PER SEIZED PAPERS SALE PRICE AS PER SALE DEED 101 * 6538925 102 * 9572985 201 * 201 13077850 301 6228125 6538925 302 * 6228125 6538925 401 6228125 6538925 501 6228125 6465675 502 6228125 6465675 801 6228125 6465675 802 6228125 6465675 JKD Pearl Aura FLAT NO. SALE PRICE A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Learned CIT(A). However the Learned Assessing Officer has not furnished the information. Your honour is humbly requested to call for the records of the Learned Assessing Officer and peruse the statement recorded u/s 131 and also the information collected u/s 133(6). A copy of the letter dated 02.11.2016 submitted to the Learned Assessing Officer is scanned below: - The buyers have stated that whatever has been paid for purchase of flat has been paid by cheque which is fully verifiable from the records. The position being so there was no case with the Learned Assessing Officer for making any addition on the basis of alleged on money receipts on sale of flats. The Learned Assessing Officer has not been able to bring any material on record either to controvert the affidavits of these persons or otherwise. The addition therefore deserves to be deleted. The aforesaid facts established that these pages are rough and dump. No addition is warranted on the basis of these papers. The following case laws are quoted in support: - (i) DCIT Vs. Rajendra Kumar Sancheti (ITAT Jaipur) 42 Taxworld 152 dated 27.03.2009 (ii) Mahaan Foods Ltd. Vs. DCIT (ITAT Delhi) (2009) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contents of these papers is far from truth and has no relevance with the business of the assessee. There is no evidence or material regarding receipt of money by the assessee as per these papers so as to consider the same for purposes of surrender. Amount either mentioned in column 'A' or in column 'B' is not all verifiable from the regular books of accounts of the assessee even in the case of a single flat. This is enough to establish that these papers are rough and deserve no consideration. Therefore the surrender made on the basis of these papers is retracted. Therefore the surrender was illegal and unlawful. Hence the assessee retracted from the surrender vide letter dated 29.02.2016 addressed to DGIT(Inv) Jaipur copy of which is available on paper book cited supra. It is submitted that the Learned Assessing Officer has failed to take into consideration the retraction made by the assessee. No reasons have been given for the same. It is settled position of law that if there is evidence then assessee has a right to retract. During the course of search amidst a number of officers, the poor assessee is brow-beaten and on account of undue pressure exerted there r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gree with the authorities so as to escape further harassment. In the normal course if the surrender was genuine the revenue authorities should have and would have crossed checked the details and facts of amount mentioned in these pages. They should have verified at least a few entries of the accounted amount mentioned in these pages. No such exercise was done neither during the search nor during the course of assessment proceedings The post search enquiries do not reveal anything against the assessee. Merely harping on the rough pages and on the statement of the assessee u/s 132(4) wont help in making additions. Further during the course of assessment proceedings parties have been called u/s 131 who have purchased the flats and they have stated that no on money was paid by them. The Learned Assessing Officer also called for information u/s 133(6). Despite a written request the Learned Assessing Officer has not furnished copies of statement recorded u/s 131 and information collected u/s 133(6) as these go in favour of the assessee. The assessee humbly requests that the records of the Learned Assessing Officer may be called for the purpose and verified. Further a number of affidavits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of such confessional statement deserves to be deleted. Board circulars dated 10.03.2003 and 18.12.2014 are quoted below- (i) F. No. 286/2/2003-IT (Inv) dated 10.03.2003 No confessional statement in the course of search, seizure and survey. March 10th, 2003 Confession of additional Income during the course of search seizure and survey operation GOVERNMENT OF INDIA MINISTRY OF FINANCE COMPANY AFFAIRS DEPARTMENT OF Revenue CENTRAL BOARD OF DIRECT TAXES Room No. 254/North Block, New Delhi, the 10th March, 2003 To All Chief Commissioners of Income Tax, (Cadre Contra) All Directors General of Income Tax Inv. Sir Subject : Confession of additional Income during the course of search seizure and survey operation -regarding Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search seizure and 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, on confessions during the course of search seizure a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence. 3. In view of the above, while reiterating the aforesaid guidelines of the Board, I am directed to convey that any instance of undue influence/coercion in the recording of the statement during Search/Survey/Other proceeding under the I.T.Act,1961 and/or recording a disclosure of undisclosed income under undue pressure/ coercion shall be viewed by the Board adversely. 4. These guidelines may be brought to the notice of all concerned in your Region for strict compliance. 5. I have been further directed to request you to closely observe/oversee the actions of the officers functioning under you in this regard. 6. This issues with approval of the Chairperson, CBDT (K. Ravi Ramchandran) Director (Inv.)-II, CBDT It is submitted that the action of the i.t. authorities in obtaining surrender of income that too under duress is against the circulars of the CBDT which are binding upon them. Hence the surrender obtained from the assessee was illegal and addition made on the basis of such surrender is unlawful and deserves to be deleted. 5. Pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of examination u/s 131 of certain parties have confirmed the contents of the affidavits. Nothing adverse was found. In the circumstances when the contents of the affidavits remained uncontroverted there was no case with the Learned Assessing Officer for making addition on account of alleged on money on sale of facts. The following case laws are quoted in support: - (i) Mehta Parikh Co. Vs. CIT (1956) 30 ITR 181 (Supreme Court) (ii) Rajshree Synthetics (P) Ltd. Vs. CIT (2002) 256 ITR 331 (Raj) (iii) Dilip Kumar Roy Vs CIT (1974) 94 ITR 1 (Bom) (iv) L. SohanLal Gupta Vs. CIT (1958) 33 ITR 786 (All) 7. Addition made u/s 68 is invalid The Learned Assessing Officer has made the addition by giving the following finding in para 9(a) on page 28 of the assessment order that- Therefore, amount of ₹ 25,86,60,550/- received as unaccounted on money for three projects is treated as assessee s undisclosed/untaxed income and added to total income u/s 68 of the Income Tax Act, 1961 for the year under consideration The perusal of the aforesaid para reveals that the Learned Assessing Officer has made the additions u/s 68 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not justified in invoking the provisions of section 68. The addition therefore deserves to be deleted. The following case laws are further quoted in support: - (i) Damodar Hans raj v/s C.I.T.118 ITR 999 (cal) (ii) Laxminarain Gupta 124 ITR 94 (pat) 3 (iv) Shanta Devi vs. CIT 171 ITR 532 (P H) (v) Anand Ram RAITani v/s CIT (1997) 223 ITR 544 (gau) (vi) CIT vs. Bhai Chand S. Gaudhi 141 ITR 67 (Mum) In view of these facts the addition deserves to be deleted on this ground also. 8. Crux of the matter: - In view of the aforesaid submission it is clear that the addition made by the Learned Assessing Officer deserves to be deleted:- (i) Because the addition has been made with reference to page no. 1 to 4 which are dump papers. (ii) Because the addition has been made simply and simply on the basis of statement u/s 132(4) which stands retracted by the assessee with supporting evidences. (iii) Because the addition has been made on the basis of presumption u/s 292C which has been rebutted by the assesssee. (iv) Because the addition has been made on the basis of confessional statement recorded in violation of board circulars cited a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven. Hence there was no sale of flats. There was Only booking of flats in advance. The person who made the advance payment against purchase of property deduct TDS as per provision of section 192(lA) of the Act. So the amount received on which TDS was deducted is shown in advance received and not in the sales of the assessee Company. Therefore the sale consideration of property in ITR is less than consideration. The fiats are fully prepared in A Y 2015-16 and then they are sold. On perusal of assessment record, it is seen that AO has not carried out any investigation / enquiry to prove his contention with regard to receipt of on- money as mentioned in the seized documents (Supra). AO has simply relied upon the admission based on the recorded sworn statement u/s 132(4) of the Act of Sh Vijay Kr Jain added the receipt of on-money of ₹ 25,86,60,550/= from the three projects. The Hon'ble Bombay High Court in the case of Surendra M. Khandhar Vs ACIT 321 ITR 254 held as under: 'The language of section 132(4A) of the Income- tax Act, J 961. is similar to the language used in section 292C. The provisions raise a presumption that the contents of a document f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng evidence. Here I would also like to quote decision in case of ACIT vs. VATIKA GREENFIELD (P) LTD (Del) 121 TTJ 20B (2009), wherein Hon'ble Delhi High Court has held that unless some evidence or material is brought on record by the assessee to show that what is stated in the seized document is not correct state of affairs and the state of affairs stated in the seized document has to be presumed to be true as mandated by Sec.292C of the Act. In this regard, AO has also not brought out any further corroborative evidence to support his contention. However, appellant submits that even there are other corroborative evidences to suggest and confirm its contention. Therefore, in view of the facts and circumstances of the case itself would be sufficient to rebut the presumption u/s 292C of the Act. When no independent material or evidence had been brought on record by the AO to establish that the noting as appearing in the computer prints out (Reference Seized Documents Annexure-A-2 Pg 1 to 4) which according to him, represented an unaccounted transaction; then AO has no option but to accept the explanation of the assessee. The legal provision relating to presumption J/s 132(4A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der was not corroborated by independent evidence - Assessing officer teas duty bound to collect more evidence in respect of undisclosed income of to justify the addition . Now. facts of the case are that during the post search investigation and also during assessment proceeding, no effort was made to investigate from buyers of the flats about alleged on-money payment made to the assessee. During the search no other evidence including money trail evidencing on- money payment by the buyers of the flats to assessee has been found. Even during the appellate proceeding, the AO vide letter dt 07.12.2016 has been asked to carry out necessary enquiry u/s 250(4) of the Act to substantiate his contention. Copies of the affidavits of 28 buyers as submitted by the assessee has also been provided to the AO. However, AO has reiterated the same facts as mentioned in the assessment order. It is also a fact that on the day of search flats were not sold and on y booking amounts were received from the customers. Meaning thereby facts (contention of the assessee as well as those buyers who filed affidavits has not been controverted by the AO. Therefore. ultimate addition to be made in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f buyers, copies of ledger account to buyers from the books of assessee copy of retraction letter filed before the DGIT(Inv), Jaipur, copy of acknowledgement of return and computation of total income and the copy of submissions made before the ld. CIT(A). 11. We have heard the rival contentions of both the parties and have perused the material placed on record. We have also deliberated upon the judicial pronouncements referred by the lower authorities in their respective orders as well as before us with reference to factual matrix of the instant case, the judgments cited by both the parties, as well as the orders passed by the revenue authorities. Before we decide merits of this ground, it is necessary and imperative to evaluate the orders passed by the ld. CIT(A) while disposing of this ground. The ld. CIT(A) has discussed the ground raised by the revenue in detail in para Nos. 2 to 4 of its order. The operative portion of the order is contained in para 4.1.2 and the same is reproduced below: 4.1.2 I have duly considered assessee's submission and carefully cone through assessment order passed by the AO. I have also. taken a note of factual matrix of the case as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion letter dt 27.06.2014 (received in the office of AO on01/07/201. In the said letter, assessee has also requested the AO for conducting enquiries regarding alleged on-money receipts, scanned copy of the relevant portion of the said letter is reproduced here as under: The assessee's contention with regard to the retraction as reiterated vide letters (Dt 27.06.2014, 30.03.2015, 22.01.2016 13.02.2016) submitted during assessment proceeding can be summarized as under: a) The voluntary surrender made by Sh Vijay Kr Jain was on the basis of seized documents which is computer printout taken from assessee's hard disc found during the search operation from his premises located at 401, Pearl Survanshi, A-5, Sardar Patel Marg, Jaipur. b) No money trail or cash seizure evidencing receipt of on-money was found during the search operation. c) The area as per seized documents (in sq. ft.) does not match with the area mentioned in the Sale Deed. The Sale Deed in respect of flats mentioned had not been executed by the date of search; accordingly, the amount mentioned in these papers is not verifiable vis-a-vis total sales consideration. d) The seize paper a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held as under: The crux of these decisions is that a document found during the course of search must be a speaking one and without any second interpretation, must reflect all the details about the transactions of the assessee in the relevant assessment year. Any gap in the various components as mentioned in section 4 of the income tax Act must be filled up by the assessing officer through Investigations and correlations with the other material found either during the course of the search or on investigation............ From above decision of Hon'ble ITAT Jabalpur Bench it is pertinent to note that a charge can be levied on the basis of document only when the document is a speaking one. The document should speak either out of itself or the company of other material found on investigation and /or in the search. The document should be clear and unambiguous in respect of all four components of charge of tax. If it is not so, the document is only a dumb document and no charge of tax can be levied on the assessee on the basis of a dumb document. The search action at the appellant's premises has yielded materials which justify such inference. It is so, in my o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive evidence. In case of Straptex India P Ltd. v DCIT [2003] 84 ITO 320 (Mum), Hon'ble ITAT Mumbai Bench has held inter alia as under: .It follows that, if a statement was taken merely confessing to some income without any information to support same, it will have no validity even according to Board Circular apart from general law... It is an established principle of law that a party is entitled to show and prove that the statement made by it is in fact not correct and true. in Pullangode Rubber Produce Co. Ltd. V. State of Kerala (1973) 91 ITR 18 (SC), Hon'ble Apex Court has been held that an 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 the admission to show that it is incorrect. The Hon'ble Apex Court again in Nagubai Armal v. B. Sharma Rao AIR 1956 SC 100, has laid down that an admission is not conclusive as to the truth of the matters stated therein. It is only a piece of evidence, the weight to be attached to which must depend on the circumstances under which it is made. It can be shown to be erroneous or untrue. According to Govindram M. Oberoi v. ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/= made u/s 68 of the Act, on plain is seen that where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by his is not, in the opinion of the AO, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. The perusal of the aforesaid provision reveals that the first and foremost condition of making addition under this section is that the sum is required to be credited in the books of the assessee maintained for the previous year. in the instant case admittedly the on-money amount was not credited in the books maintained by the assessee. Therefore, the provisions could not be ignored and no addition could be made under this section. From the aforementioned judgments, it is seen that an admission is not conclusive as to the truth of the matters stated therein. It is only a piece of evidence, the weight to be attached to which must depend on the circumstances in which it is made. It can be shown to be erroneous or untrue. Therefore, addition made on the basis of confessional made befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale as per registered sale deeds. This fact has also been brought before us that the sale deeds in respect of some of the flats have already been got executed but no such enquiry has been carried out by the A.O. in respect of those registered sale deeds. The assessee had also placed on record the detailed affidavits of the buyers which specifically contains the name and addresses of the purchases wherein the buyers have categorically mentioned that the amount paid by them to the assessee and it was also admitted in their affidavits that no on-money amount was ever paid by them to the assessee. But all those affidavits which contains relevant details have been ignored and disregarded by the A.O. without examining the deponents of the said affidavits. Therefore, the contents of those affidavits remained uncontroverted. As per the assessee, the papers i.e. page No. 1 to 4 of Annexure-A2 are rough and dump papers because these papers do not have any signature of the assessee/directors, even the originator/writer of these papers are not found and these papers are undated. On the analysis of page Nos. 1 to 4 of Annexure-A2, we also found that the allegations levelled by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ascertain the date and year of transaction and thereafter should have verified whether the accounted amount shown in the Column-A was verifiable or not from the regular books of account but even this exercise was not carried out by the A.O.. It is a settled proposition of law that if the seized papers mentioned do not carry any date and particulars then such papers are to be treated as rough papers. Admittedly in the present case, all those four pages do not contain any date, signature, person from whom received etc. We have also gone through the decision of the Coordinate Bench of ITAT Jaipur in the case of Moolchand Kumawat Sons Vs DCIT 42 Taxworld 241 wherein it was held that if a document does not contain any date and name and only contains numerical figures then such document is vague and dump document and no addition can be made on the basis of such document. Similarly, in the case of ACIT Vs Satyapal Wassan, it was also held by the Coordinate Bench of the ITAT, Jabalpur 295 ITR 352 wherein it was held that the document found during search must be a speaking one. Document must reflect all the details about the transaction of the assessee in the relevant Assessment Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and whatever is noted on these pages such as the area of the flat is also at variance with the actual area of the flat. In this respect, the ld AR also invited our attention to a chart submitted before the lower authorities reflecting the area as per the seized paper as well as the area as per the sale deed executed by the assessee and the same is reproduced below: JKD Pearl Landmark FLAT NO. AREA AS PER SEIZED PAPERS (Sq. ft) AREA AS PER SALE DEED (Sq. ft) 101 493.75 792.3 301 * 3033.4 302 3033.4 401 2937.50 2952.5 402 2937.50 2952.5 501 502 5875.00 5906.4 601 102 2937.50 3033.4+792.3 602 * 2937.50 3033.4 70 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FLAT NO. SALE PRICE AS PER SEIZED PAPERS SALE PRICE AS PER SALE DEED 101 1728125 2242209 301 * 10616900 10616900 302 10616900 10616900 401 10281250 10333820 402 10281250 10333820 501 502 20562500 20672190 601 102 10281250 12201500 602 * 10281250 10616900 701 10028375 10030720 702 10028375 10030720 801 8999375 9310980 JKD Pearl Stylome FLAT NO. SALE PRICE AS PER SEIZED PAPERS SA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng so there was no case with the A.O. for making any addition on the basis of alleged on-money receipts on sale of flats. We have also gone through the judgments relied upon by the assessee wherein it has specifically held that no addition is warranted on the basis of incomplete information and thus those pages are liable to be declared as rough and dump. In this respect, we relied on the following judicial pronouncements: (i) DCIT Vs. Rajendra Kumar Sancheti (ITAT Jaipur) 42 Taxworld 152 dated 27.03.2009 Addition cannot be made on the basis of seized paper which is not prepared by the assessee and which appears to be a deaf and dumb document. (ii) Mahaan Foods Ltd. Vs. DCIT (ITAT Delhi) (2009) 27 DTR 185 In the absence of any other evidence found during the course of search or brought on record by the Assessing Officer to show that the expenditure found noted on seized documents was actually incurred by the assessee, the same cannot be added to the undisclosed income of the assessee. No inference could be drawn against the assessee much less any inference of unexplained expenses on the basis of a dumb document found at the residence of its director as there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT-DR that the retraction in the present case made by the assessee is an afterthought. The ld CIT-DR has drawn our attention to the following judicial pronouncements: I In the case of Video Master Vs JCIT [2016] 66 taxmann.com 361 (SC), it has been held by the Hon'ble Apex Court that: 3. In the second round, the assessment order dated March 29, 2000, gave detailed reasons for arriving at the conclusion that the figures stated in the statement recorded were corroborated, in particular, by various loose sheets found at the premises of the assessee as well as vouchers, some of which related to the two films in question. In an appeal filed to the Tribunal, the Tribunal framed three issues, two of which were unnecessary for the reason that the statement recorded on August 25, 1995, was said to be relevant but not conclusive. Therefore, whether the statement was made under duress and whether it was retracted lawfully would have no relevance at this stage. However, the Tribunal went into these issues as well and ultimately, found that the statement could be used as evidence. Further, it examined other corroborative evidence referred to in the assessment order and arrived at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n got an opportunity wherein he was called and his statement was recorded under section 131 on 4-12-2014 and therein, as well, he maintained his earlier stand and didn't retract from the statement so recorded during the course of search. This also proves that the contention of the assessee company that the earlier surrender during the course of search was under pressure is totally unfounded. 23. Here, we refer to the decision of the Hon'ble Rajasthan High Court in case of Ravi Mathur Others (D.B Appeal No. 67/2002 others) vide its order dated 13-5-2016 where Hon'ble High Court has laid down the following proposition in law in respect of retraction of statement recorded under section 132 (4) of the Act: 14. Having noticed the arguments of the learned counsel for the parties, we deem it proper at the outset to take into consideration the finding of the Tribunal about retraction/resiling of the statements recorded under Section 132 (4) as the Tribunal has primarily come to a finding that retraction is proper. We would also deal with the judgments relied on by the learned counsel which has a bearing on the issues and would then give our own view on questions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 132 (4) was not correct and these amounts are in thousands, not lakhs i.e. it is now attempted to retract from the statements made at the time of S S operations. Therefore, what we gather from the Assessment Order and on perusal of the above finding that the retraction was at the stage when the assessment proceedings were being finalized i.e. almost after a gap of more than a year. Such a so-called retraction in our view is no retraction in law and is simply a self-serving statement without any material. 15.1 Thus, in our view, the Tribunal in a summary manner has held that retraction is proper, without going in detail and manner, time of retraction, the addition deleted, is wholly on a perverse finding. 15.2 This Court in Raj kumar Sodhani v. The CIT (D.B ITA No. 15/2015 decided on 28-4-2016) has taken this very view that retraction after a sufficient long gap loses its sanctity. 24. In light of legal proposition laid down by the Hon'ble Rajasthan High Court, there is clearly an inordinate delay in retraction and no justifiable explanation has been given by the assessee company for such delay. It is clearly an afterthought and loses its sign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the proprietary concern or to the assessee company. Subsequently, when the statement under Section 132(4) of the IT Act was recorded on 10.10.2014, which was concluded at his residence, Shri Bannalal Jat categorically admitted that the cash amount of ₹ 1,21,43,210/- belonged to his company M/s. Bannalal Jat Construction Private Limited and the same was its undisclosed income. Thereafter another statement under Section 132(4) of the IT Act was recorded at his business premises on 11.10.2014. In reply to question No. 8, he was asked to explain the source of cash amounting to ₹ 3,380/- found at his office and ₹ 1,21,43,210/- found at his residence, he submitted regarding the amount of ₹ 1,21,43,210/- found at his residence that he was unable to give any explanation and admitted that he was in the business of civil construction and in such business, various expenses have been inflated and shown in the books of accounts, and that the income so generated on account of such inflation in expenses is represented in the form of cash was found at his residence. This undisclosed income belonged to his company M/s Bannalal Jat Construction Pvt. Ltd. In response to que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion made by him in the statement earlier at the time of survey was wrong. Such retraction, however, should be supported by a strong evidence stating that the earlier statement was recorded under duress and coercion, and this has to have certain definite evidence to come to the conclusion that indicating that there was an element of compulsion for assessee to make such statement. However, a bald assertion to this effect at much belated stage cannot be accepted. The assessee indulged in maintaining transaction on diaries and loose papers which was not permissible in any of the method of accounting. The assessee, while filing the return of income, has not disclosed any undisclosed income and hence, retracted from the admission made by him during the course of search. Subsequent retraction from the surrender without having evidence or proof of retraction is not permissible in the eyes of law. The statement recorded during the course of search action which was in presence of independent witnesses has overriding effect over the subsequent retraction. In view of the above discussion, the question formulated vide order dated 09.05.2018 is answered in favour of the revenue and again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of search and seizure u/s 132 of the said Act. Furthermore, in the present case no material has been produced by the appellant/assessee to show that the admission made by him was incorrect in any way. On the other hand, it is the assessee who is insisting that it is for the department to corroborate the statement of admission made by him and until and unless the department corroborates the same, the statement cannot be relied upon. We are afraid that is not the correct position of law. The admission once made can certainly be retracted, if the circumstances permit, and it can also be shown to have been made under some mistake or to be otherwise incorrect. But, the onus would be on the maker of that admission. In this case it is the appellant/assessee who has admitted and surrendered a sum of ₹ 1.75 crore as his undisclosed income. It was incumbent upon him to show that he had made a mistake in making that admission and that the said admission was incorrect. He had access to all the documents which has been seized inasmuch as the copies had been supplied to him. However, he did not produce anything to establish that the admission was incorrect in any way. That being the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee corroborated by the documents the burden on the department ceases to exist. On the retraction being filed by the assessee, there is a burden cast on the assessee to prove the detraction or rather disprove the admissions made. It is not a shifting of the onus but a new burden cast on the assessee to disprove the earlier admissions having evidentiary value. As noticed earlier, retraction made by the assessee can only be considered as a self serving afterthought and no reliance can be placed on the same to disbelieve the clear admissions made in the statement recorded under Section 132(4). Deletion of the additions vis-a-vis the property transactions on the reasoning that the department cannot do so on the basis of the admission made under Section 132(4) and on the premise that the Department ought to have proved retraction to be untrue cannot be countenanced in view of the specific words employed in Section 132(4). VI In the case of CIT Vs Lekh Raj Dhunna [2012] 20 taxmann.com 554 (Punjab Haryana), it has been held by the Hon'ble High court that: 17. Thus, in view of sub-ss. (4) and (4A) of s. 132 of the Act, the AO was justified in drawing presumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion. The retraction is vague and a clear afterthought. Therefore, the Commissioner of Income Tax (Appeals) rightly considered the effect of the notings as well as the statement given by the assessee, wherein he had accepted the on-money payment. Once again before the Tribunal, the attempt of the assessee was to wriggle out of the entries in the slips by stating that they have no corroboration with that of the purchase of the immovable property. 8. The argument of the learned Counsel for the assessee is that there should be corroborative evidence to sustain the entries to link the same and treat it as an un-explained investment to bring the case under Section 69 of the Act. In our considered view nothing more is required than the facts, which were considered by the Assessing Officer as well as the Commissioner of Income Tax (Appeals) and the Tribunal. The notings are clear and it is not any scribbling, which shows the figures and also shows whether the payments were in cash or in cheque. The retraction made by the assessee, after a period of two years, was rightly rejected as an afterthought. 18. Whereas on the contrary, the assessee has relied upon the following decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Karve V/s I.T.O. (2009) 311 ITR (AT) 66 (Puna) Assistant Commissioner of Income Tax Branch That merely because an offer was made having no cogent basis or approval of law that should not stop a taxpayer from correcting his mistake. It was the duly of the A.O. to tax only the legitimate amount from a taxpayer. The following facts further established that the exercise of surrender by the Revenue Authority was under duress. No effort was made at the time search and seizure to verify the genuineness of these rough papers. The revenue authorities just got hold of these papers and pressed the assessee for surrender. The assessee at that stage of search had no option but to agree with the authorities so as to escape further harassment. In the normal course if the surrender was genuine the revenue authorities should have and would have crossed checked the details and facts of amount mentioned in these pages. They should have verified at least a few entries of the accounted amount mentioned in these pages. No such exercise was done neither during the search nor during the course of assessment proceedings the post search enquiries do not reveal anything against the assessee. Merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken out from the computer are nothing but a part of the business strategy of the assessee. The revenue has not been able to link the transactions of these papers either with the material seized during the course of search or by way of post search enquiries. Since, all the controversy is revolving around these seized papers and admittedly these papers do not contain name of the buyers and also do not contain the date of transactions. It is an admitted fact that the assessee has executed certain sale deeds post search and in this respect, details have also been placed on record. The buyers have also filed their respective affidavits with the revenue authorities. The paper of surrender made do not contain requisite minimum details of transactions and it is a settled proposition of law that if a document does not contain any date and name and only contains numerical figures then such document is vague and dump document and no addition can be made on the basis of such document. In order to avoid any repetition, we would like to confine ourselves to the glaring errors in the investigation/verifications carried out by the revenue authorities. The ld. CIT(A) has already mentioned in deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of search, seizure and survey. March 10th, 2003 Confession of additional Income during the course of search seizure and survey operation GOVERNMENT OF INDIA MINISTRY OF FINANCE COMPANY AFFAIRS DEPARTMENT OF Revenue CENTRAL BOARD OF DIRECT TAXES Room No. 254/North Block, New Delhi, the 10th March, 2003 To All Chief Commissioners of Income Tax, (Cadre Contra) All Directors General of Income Tax Inv. Sir Subject : Confession of additional Income during the course of search seizure and survey operation -regarding Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search seizure and 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, on 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am directed to convey that any instance of undue influence/coercion in the recording of the statement during Search/Survey/Other proceeding under the I.T.Act,1961 and/or recording a disclosure of undisclosed income under undue pressure/ coercion shall be viewed by the Board adversely. 4. These guidelines may be brought to the notice of all concerned in your Region for strict compliance. 5. I have been further directed to request you to closely observe/oversee the actions of the officers functioning under you in this regard. 6. This issues with approval of the Chairperson, CBDT (K. Ravi Ramchandran) Director (Inv.)-II, CBDT 21. The CBDT had issued instructions wherein it has been instructed that no surrender should be obtained and assessment should be completed not on the basis of such surrender but on the basis of material gathered during search. However, in the present case, the A.O. had made additions solely on the basis of solitary statement made by the Director of the assessee. Even the Hon ble Jurisdictional High Court of Rajasthan in the case of CWT vs. Sanwarmal Shivkumar 171 ITR 337 has held that the officers of the Department are bound by the circulars of the board. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new facts and circumstances have been brought before us in order to controvert or rebut the findings so recorded by the ld. CIT(A), therefore, we see no reason to interfere or deviate from the findings so recorded by the ld. CIT(A). Therefore, we uphold the order passed by the ld. CIT(A) qua this issue. 25. Ground No.2 of the appeal is regarding deletion of addition of ₹ 2,50,00,000/- by the ld CIT(A). The ld. CIT-DR has relied on the order of the A.O. 26. Ld. DR relied upon the ordes passed by the AO and ld AR of the assessee has reiterated the same argument as were raised before the ld. CIT(A) and also filed written submissions in order to controvert the ground of appeal raised by the revenue, the same is reproduced below: The assessee made following submission before the Learned CIT(A) and who has deleted the entire addition made by the Learned Assessing Officer after considering the submission of the assessee and has given the finding that Assessing Officer has simply relied upon the sworn statement of Shri Vijay Kumar Jain Director of the appellant company without placing any further corroborative evidence to prove his contention. Therefore, Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport the contention that the surrender was totally conditional. The perusal of the statement reveals that the assessee has stated that in case any discrepancy is found in the papers seized with reference to books of accounts in that case the surrender of ₹ 2,50,00,000/- shall be valid. Now the Learned Assessing Officer has not pointed out any such discrepancy, hence the addition made is totally misplaced. Provisions of section 69C have been invoked by the Learned Assessing Officer while making the aforesaid addition. These provisions are not applicable at all. The same are quoted below: - Unexplained expenditure, etc. 69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year: Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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