9911796707
TMI Blog2021 (5) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... and quantities etc. during the course of search and seizure operation, which forms the basis for making addition. From the statements of the assessee as quoted above, there is no real income accrued in the hands of the assessee. Therefore, we set aside the order of the CIT(A) and allow the grounds raised by the assessee on this issue. Unexplained cash deposits u/s 68 - HELD THAT:- As observed that while examining the books of account produced before us i.e. copy of ledger and the cash book, we find that the assessee has sufficient cash balances, which has not been rejected by the lower authorities and also on the date of deposit of the cash into bank, there was sufficient cash balance available, therefore the explanation of the assessee was accepted on this issue. Accordingly, we uphold the order of the CIT(A) in deleting the addition made by the AO towards unexplained cash deposits u/s 68 of the Act and dismiss the Cross objections raised by the revenue on this issue. - ITA No. 786/H/2020 & CO No. 03/H/2021 - - - Dated:- 29-4-2021 - Shri Satbeer Singh Godara, Judicial Member And Laxmi Prasad Sahu, Accountant Member For the Assessee : Shri P. Murali Mohana Rao Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red the affidavit filed by the appellant, withdrawing the admission made u] s 132(4) of Act., and decided the appeal by not following principles of natural justice and not following the latest judicial pronouncements on the issue. 6. On the facts and in the circumstances of the case, the ld. CIT (A) has grossly erred by not taking into account the revised computation of income filed in the course of assessment proceedings, not following the principles of natural justice and erred in not giving a fair decision. 7. On the facts and in the circumstances of the case, the Ld. CIT (A) ought to have followed the principles of natural justice and admitted the ! revised computation and given fair decision on the appeal. 8. The Ld. CIT (A) erred in not deleting the additional income of ₹ 26,00,00,000 without appreciating the facts of the case. I ₹ 17,99,61 ,600/- 9. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have well appreciated that the additional income admitted of ₹ 26,00,00,000/ - u/s 132(4) in the course of search and seizure operation is in-correct and that after reconciling the accounts, the appellant has filed a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. He filed return of income for the impugned AY on 06/02/2018 by admitting total income of ₹ 31,52,080/-, which was processed u/s 14391) of the Act on 21/02/2018. 3.1 A search and seizure operation was conducted in his case and his related concerns on 04/07/2017. Consequent upon search and seizure operation, a notice was issued to the assessee for AY 2017-18 on 19/02/2018, in response to which the assessee his return of income on 25/09/2018 by admitting a total income of ₹ 26,31,52,080/-, Thereafter other statutory notices were issued to the assessee by the Assessing Officer for calling certain information/ documents etc. 3.2 As per the assessment order, during the course of search and seizure operation, assessee filed an affidavit admitting additional income of ₹ 26 crores without filing any details of head of income/assessment year or whose hands the additional income is admitted. However, the return of income filed in response to notice issued u/s 153A for AY 2017-18, the assessee had admitted the same as income from other sources in his individual return of income. During the course of assessment proceedings, the assessee was asked to furnish the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above observations, the AO rejected the cash book submitted by the AO and held that the assessee failed in explaining the source of the cash deposit found in his bank account and the cash deposited in to his bank account during the demonetization period, hence, treated the deposited amount of ₹ 2.39 crores during the demonetization period as unexplained cash credits u/s 68 of the Act and assessed the total income of the assessee at ₹ 28,70,52,080/-. 4. When the assessee filed an appeal against the order of AO before the CIT(A), the CIT(A) deleted the addition of ₹ 2.39 crores made in the hands of the assessee as unexplained cash credits u/s 68 of the Act and confirmed the amount of ₹ 26 crores which was admitted by the assessee in the return filed in response to the notice u/s 153A rejecting the additional ground filed seeking withdrawal of the declaration made of ₹ 26 crores. For the sake of clarity, the findings of the CIT(A) in his order as extracted below: 6.2 I have considered the assessment order and submissions of the appellant. It is seen that the appellant has admitted ₹ 26 crores as additional income during the course of Searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said income in the return of income filed in response to the notice u/s 153A issued by the AO. 5.1 The revenue raised cross objections against the action of CIT(A) in deleting the addition of ₹ 2.39 crores made by the AO as unexplained cash credits u/s 68 of the Act. 6. Before us, the ld. AR of the assessee relying on the order of the CIT(A) in deleting the addition of ₹ 2.39 crores made by the AO towards unexplained cash credits and opposing the action of the CIT(A) in confirming the amount of ₹ 26 crores declared by the assessee in search and seizure operation, filed written submissions in support of assessee s case, which are as under: 3. The Assessing Officer and the CIT(A) erred in not considering the Affidavit filed withdrawing the declaration made u/s 132(4) of the Act . After due verification of Books of Account, the appellant has admitted the total income of only ₹ 31,25,080/- in the original return of income filed on 06.02.2018, which date is also after the search date i.e., 04.07.2017 and declaration made on 01.09.2017. This fact also makes it clear that the income admitted of ₹ 26,31,52,080/ - in the subsequent return file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 26 crores while finalizing the assessment which is erroneous. The admission made by assessee is not a conclusive evidence to make addition. Mere statement of assessee is not the assessment of evidentiary value of the evidence when such statement is self-incriminating. Reliance is placed on HIGH COURT OF TELANGANA AND ANDHRA PRADESH in the case of Gajjam Chinna Yellappa in 59 taxmann.com 69 13....... We find that the appellate authority and the Tribunal did not apply the correct parameters, while adjudicating the appeals filed before them. On the undisputed facts of the case, there was absolutely no basis for the Assessing Officer to fasten the liability upon the appellants. Our conclusion find support from the Circular dated March 10,2003, issued by the Central Board of Direct Taxes, which took exception to the initiation of the proceedings on the basis of retracted statements. High Court of Andhra Pradesh in case of Naresh Kumar Agarwal in 53 taxmann.com 306 24 ..... Therefore, the statement of the managing director of the assessee, recorded patently under Section 132(4) of the Act, does not have any evidentiary value. This provision embedded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnover in order to declare the additional income and the same was withdrawn subsequently. Assessee should have modified the turnover and filed the return of income, but, assessee chose to keep the turnover intact as per P L and tried to reduce the profit by showing this additional turnover as other deduction. In our considered view, it is not additional or real income and also not a deduction in real sense. Hence, the same is deleted. Accordingly ground raised y the assessee is allowed. 6. Not Considering the revised computation of income Further, during the assessment proceedings, the assessee has submitted that, it is under immense pressure that the assessee has agreed the admission of income of ₹ 26 crores by way of affidavit. Subsequently, assessee has also submitted the revised computation of income declaring the correct income of the assessee at ₹ 31,62,080, copy of which is enclosed in Page 21-24 of Paper book. The Ld. CIT (A) ought to have considered the revised computation of income and allowed the grounds of appeal. In support of this claim, the appellant relies on the following case laws: High Court of Bombay in case of Pruthvi Brokers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstructed that: 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, such 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 not likely to be disclosed before the Income-tax Department. Similarly, while recording statement during the course of search seizure and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, Assessing Officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's case, the addition of ₹ 2.39 crores had been made towards unexplained cash deposits u/s 68/69A of the Act. It is not out of place to submit here that the Assessing Officer himself is not clear as to the correct section under which the addition has been made, because he has mentioned both the sections of 68 and 69A of the Act for the single addition in para 7.0 of the assessment order. Further, in the case of Kermix Micro Systems (India) Limited (Supra), there was no retraction from the admission made, where as in the appellant's case, there is a retraction-affidavit filed. Thus the revenue's reliance on the above said case cannot come to their rescue. 10. Prayer: On the above facts and in the circumstances of the case, as also on the basis of settled position of law on the contentions issues, it is humbly prayed to quash the assessment order as null and Void and also to delete the addition made for the assessment year under consideration. 6.1 The ld. AR of the assessee filed two paper books containing pages 1 to 445 consisting of following case law in support of assessee s case: 1. All Cargo Global Logistics Ltd., [2012] 23 taxmann.com 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: 2. It is humbly submitted that the AR argued at length on the point that the assessee was forced to file a return of income, pay the taxes and then only attachment was lifted. It is humbly submitted that the argument does not emanate from the grounds of appeal filed by the assessee before the Hon'ble ITAT or Ld. CIT(A). Therefore, these arguments being extraneous to the case and in the nature of wild allegations, may kindly be not taken on record. The following facts will also indicate that the return of income was filed by the assessee on his own volition and there is incriminating material, which the assessee was not in a position to substantiate with regard to unaccounted cash transactions discovered during the search. 3. A search action u/s 132 was conducted on 4.7.2017 on the assessee. The assessee filed ~ return of income on 6.2.2018 wherein any unaccounted income was not disclosed. The alleged affidavit of retraction which was dated 10.4.2018 which is at page 20 of paper book dated 18.2.2021 filed by the assessee before the Hon'ble ITAT was not filed before the AO and not brought to the notice of the AO. Also, there is no basis for such retraction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that the assessee indulged in large scale unaccounted transactions on his own and also by directing Sri Amit Bansal and Sri Jayant Kumar Dutta. Such unaccounted transactions are in the nature of bringing in huge cash into the firms and companies managed by the assessee and his associates. Following are some of the specific details: - At Question No.9, the assessee was asked to explain the details of ₹ 13.21 Cr credited on 2.12.2016 5.12.2016 into account of M/ s Zainab Investments Pvt Ltd. These transactions pertain to FY 2016-07 relevant to Asst Year 2017-18. The assessee could not provide satisfactory answer. - At Question Nos.10 11, details of ten shell companies were shown to assessee through which money was brought into M/s Zainab Investments Pvt Ltd. The assessee could not provide satisfactory answer. - At Question No.16, details of ₹ 34 Cr brought into another company managed by the assessee by name M/s Zara Investments Pvt Ltd on 3.10.2016, 5.10.2016, 7.10.2016 10.10.2016 were shown to the assessee. The assessee could not give any satisfactory explanation. - At Question No.18, it was specifically shown to the assessee that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y satisfactory explanation. - At Question No.69, cash deposit of ₹ 2.3567 Cr made during the period from 8.11.2016 to 31.12.2016 in Mis Ace Constructions was shown and the assessee could not give any satisfactory explanation. - At Question No.71, cash deposit of ₹ 2.2311 Cr in the Ale of Mis Royal Engineering during the period from 8.11.2016 to 31.12.2016 was shown to the assessee. The assessee could not give any satisfactory explanation except stating that Sri Amit Bansal will explain the transaction. It is submitted that Sri Amit Bansal stated that he acted only on the direction of the assessee. - At Question No.74, the statement of Sri Amit Bansal was shown to the assessee regarding cash deposits in M/s Ankaa Realtors, MI s Orbit Venture, M/s GVK Enterprises and Mis Royal Engineering wherein it was stated by Sri Amit Bansal that the cash deposits were as per directions of assessee and the source is known only to the assessee. The assessee could not give any satisfactory explanation. - At Question No.75, the statement of Sri Jayat Kumar Dutta was shown to the assessee regarding cash deposits in M/s Ankaa Realtors, Mis Orbit Venture, Mis GVK Enterpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m above mounting evidence in the form of incriminating material, it is humbly submitted that the so called retraction letters (which were never filed before the AO) do not stand. Even at the first appeal stage, the issue was raised as additional ground. On one hand, the assessee prevented further investigation by Department by disclosing unaccounted income and filing return of income with payment of taxes. Now he wants to gain undue advantage by filing mere computation without any basis. It is submitted that this is a clear cut case of afterthought. In the case of Mis Kermex Micro Systems Ltd [(2014) 47 taxmann.com 375 (Andhra Pradesh)] the jurisdictional High Court held that an admission cannot be retracted as Revenue was prevented in causing further enquiry. The present case is not only of admission but filing of returns on two occasions and paying taxes. 12. As the appeal of the assessee has no merit, the same may kindly be dismissed. 13. With regard to addition of ₹ 2.39 Cr made by the AO in the assessment, a cross objection is filed by the Revenue on deletion of the said addition by the CIT(A). It is humbly submitted that the return of income admitting ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of I.T Act by way of affidavit. The appellant now raised the ground for accepting Revised Computation of Income' allegedly filed during the course of assessment proceedings. The appellant has not adduced any reasons for 'Revising the Computation'. He therefore held that the conduct of the appellant has been 'inconsistent' throughout. As the appellant has not come out with any reason for filing alleged 'Revised Computation', the grounds raised by the appellant are not acceptable and the same are rejected. 8.4 On the other hand, the submission of the ld. AR of the assessee is that the assessee has only admitted an amount of ₹ 31,62,080/- and has not disclosed an amount of ₹ 26 crores. It was submitted that if any confession of income made during the search and seizure operation under the influence of officers, without any corroborative and credible evidence and later withdrawn by the assessee in his return of income filed then such confession made is not of any use. Without placing any reliance on the material evidence gathered during the search and only relying on the confession is not sufficient to make an addition as Undisclosed income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proof shall not be used in evidence against the person who made such statement. The finding of the Tribunal was based on the above well settled principle. 8.9 The Hon'ble Supreme Court of India in case of Pullangode Rubber Produce Co. Ltd in [1973] 91 ITR 18 (SC), wherein it has held that An admission is an extremely important piece of evidence but it cannot be said that it is conclusive. 8.10 The High Court of Jharkhand in case of Shree Ganesh Trading Co. In [2013] 30 taxmann.com 170 (Jharkhand), wherein it has held that Statement on oath of an assessee under section 132(4) is a piece of evidence and when there is incriminating admission against himself, then it is required to be examined with due care and caution. 8.11 In the case of CIT vs S Khader Khan Son[2012] 25 taxmann.com 413 (SC), wherein Supreme Court Held as under: Section 133A of the Income Act, 1961 - Survey - Whether Section 133A does not empower any ITO to examine any person on oath; so statement recorded under section 133A has no evidentiary value and any admission made during such statement cannot be made basis of addition - Held, yes [In favour of assessee) 8.12 We are of the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head-wise, group concern-wise and quantities etc. during the course of search and seizure operation, which forms the basis for making addition. From the statements of the assessee as quoted above, there is no real income accrued in the hands of the assessee. Therefore, we set aside the order of the CIT(A) and allow the grounds raised by the assessee on this issue. 9. As regards ground No. 12 13 regarding ₹ 2,39,00,000/-, since the CIT(A) has deleted the addition made by the AO, these grounds become infructuous and dismissed as infructuous. And more so, in view of our foregoing detailed discussion as real income principle. 10. As regards the cross objections filed by the Revenue against the action of CIT(A) in deleting the addition of ₹ 2.39 crores, it is observed that while examining the books of account produced before us i.e. copy of ledger and the cash book, we find that the assessee has sufficient cash balances, which has not been rejected by the lower authorities and also on the date of deposit of the cash into bank, there was sufficient cash balance available, therefore the explanation of the assessee was accepted on this issue. Accordingly, we uphold the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
