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TMI Blog2021 (12) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... 32,970/- (approx.). In my view it would be just and appropriate and fair to assess the total income of the assessee at a sum of ₹ 18.77 lacs + ₹ 8,32,970, i.e., at a sum of ₹ 27,09,970 ₹ 1,13,347 being Chapter VI A deduction, i.e., a sum of ₹ 25,96,623/- as against the total income returned of ₹ 14,22,180/-. - Decided partly in favour of assessee. - ITA No. 890/Bang/2017 - - - Dated:- 6-12-2021 - N. V. VASUDEVAN , VICE-PRESIDENT Assessee by : Shri. Mukesh Kumar Jain, CA Revenue by : Shri. Ganesh R. Ghale, Standing Counsel for the Department ORDER Per N.V. Vasudevan, Vice-President: This is an appeal by the assessee against the order dated 19.01.2017 of CIT(A)- 2, Bengaluru, relating to Assessment Year 2012-13. 2. The revised grounds of appeal raised by the assessee before the Tribunal reads as follows: 1. The order of learned Commissioner of Income Tax (Appeals) is against law and facts of the case. 1.1 The learned Commissioner of Income Tax (Appeals) has erred in stating that appellant would be in a position to estimate his correct income for the year after passing of 4 months in the previous year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 234B be deleted 5.3 Any other relief as justified in the facts and circumstances of the case. 3. The only issue that arises for consideration in this appeal is as to whether the Revenue authorities were justified in determining the total income of the assessee at a sum of ₹ 50 lakhs as against the sum of ₹ 14,22,180/- declared by the assessee in his return of income filed for Assessment Year 2012-13. 4. The facts and circumstances under which the aforesaid issue arises for consideration are that the assessee who is an individual is a music director in Kannada movie industry. There was a survey under section 133A of the Income Tax Act, 1961 (hereinafter called the Act ) conducted in the case of the assessee on 17.08.2021. The statement recorded at the time of survey is given as annexure to this order. 5. It can be seen from the statement of the annexed to this order that the assessee did not maintain any books of accounts for Assessment Year 2012-13 (answer to question No.5). Another question which is relevant for the present appeal is question No.10 and answer to the said question in which assessee submitted that for the financial year 2011-12 (Assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .12.2014. In these circulars, the CBDT has emphasized the need for the officers conducting survey / search to collect credible evidence rather than obtaining confessions which are generally retracted in subsequent proceedings. It was also submitted that the admission made by the assessee was not conclusive and that assessee was not afforded an opportunity of showing that the statements made by him is not true and correct. 8. The CIT(A) confirmed the order of the AO by observing that the assessee was not in a position to show that the sum declared at the time of survey was erroneous. The CIT(A) also observed that the survey was conducted on 19.08.2011 and a period of 4 months of the previous year relevant to Assessment Year 2012-13 had elapsed at the time of survey. The assessee was in a position to reasonably estimate his income for Assessment Year 2012-13 at the time of survey and he had adduced no valid reasons as to why the declaration at the time of survey turned out to be incorrect subsequently. The CIT(A) also found that there was substantial investments in house construction and furnishing and the income declared by the assessee was not sufficient to explain the source. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of any material to substantiate the declaration made at the time of the survey, the addition cannot be made purely on the basis of the statement recorded at the time of survey. The decision cited in this regard among other decisions are the following decisions: Pullangode Rubber Produce Co.Ltd. vs. State of Kerala. (1973) 91 ITR 18 An admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect. CIT v Dhingra Metal Woks (2010) 328 ITR 384/ 48 DTR 230/ 236 CTR 621/ (2011) 196 Taxman 488 No addition can be made to the total income or an adverse inference drawn merely on the basis of admission at the time of survey. Paul Mathews and Sons V CIT (2003) 129 Taxman 416/ 263 ITR 101/ 181 CTR 207 The statement elicited during the survey operation has no evidentiary value. The Court has held that Section 133A permits recording of statement, but does not authorise the person, taking the statement, to administer oath before recording the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case are very material and have to be noticed. There was a survey conducted in the case of the assessee on 17.08.2011. In the course of survey, the assessee admitted receiving receipts from producers in cash which are not recorded in the books of accounts. The evidence found in the course of survey also show that the assessee had made cash payments for construction of house which are not appearing in the books of accounts. The assessee admitted that he earned income which was not disclosed in the books of accounts and agreed to offer a sum of ₹ 50 lakhs for each of Assessment Years 2011-12 and 2012-13. The assessee declared a sum of ₹ 50 lakhs as per the statement given at the time of survey in the return of income for Assessment Year 2011-12 but did not declare ₹ 50 lakhs offered at the time of survey in the return of income filed for Assessment Year 2012-13. The plea of the assessee that the statement recorded at the time of survey was obtained under undue influence or coercion cannot be accepted because the very same statement was the basis on which the assessee filed return of income for Assessment Year 2011-12. The assessee s explanation before the tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submit that the addition should be deleted because it was not made on the basis of evidence found in the course of survey. As we have already observed, the statement alone without substantiating material cannot be the basis to make any addition but in the present case, the circumstances under which the statement was made and declaration of income at the time of survey have also to be seen viz., the assessee admitted receiving receipts from producers in cash which are not recorded in the books of accounts, evidence found in the course of survey showing that the assessee had made cash payments for construction of house which are not appearing in the books of account and admission of the assessee that he earned income which was not disclosed in the books of accounts. In so far as the period after 17.8.2011 is concerned, the proportionate income declared by the assessee would be 198 days/ 365 days x 15,35,527/-, which would be a sum of ₹ 8,32,970/- (approx.). In my view it would be just and appropriate and fair to assess the total income of the assessee at a sum of ₹ 18.77 lacs + ₹ 8,32,970, i.e., at a sum of ₹ 27,09,970 ₹ 1,13,347 being Chapter VI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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