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TMI Blog2024 (12) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... 153A 2014-15 624/JPR/2024 30.03.2024 22.12.2019 143(3) r.w.s. 153A 2015-16 625/JPR/2024 30.03.2024 22.12.2019 143(3) r.w.s. 153A 2016-17 626/JPR/2024 30.03.2024 22.12.2019 143(3) r.w.s. 153A 2. All these appeals of the assessee were listed for hearing on 16.10.2024 on that date Appeal no. 389/JP/2024 & 626/JP/2024 were argued and heard. Appeals in ITA no. 624/JP/2024 & 625/JP/2024 argued on 17.10.2024. Since the issues raised by the assessee are interconnected on the grounds and on facts, therefore, were heard together all these four appeals with the agreement of the parties and are being disposed of by this common order. 3. First, we take up the appeal of the assessee in ITA no. 389/JPR/2024 for assessment year 2012-13 wherein the assessee has raised following grounds: - "1. The impugned additions and disallowances made in the order u/s 143(3) r.w.s 153A of the Act dated 22.12.2019 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted. 2. Rs. 55,00,000/-: The Id. CIT(A) erred in law as well as on the facts of the case in confirming the impugned addition of Rs. 55,00,000/- made by the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under search proceedings. The search action was carried out on the assessee on 07.09.2017. Consequent to search action, the case of the assessee was centralized to Central Circle-Kota by the Principal Commissioner of Income-tax, Kota on 12.10.2017. Assessee is an individual and derives income from salary, house property and other sources etc. Pursuant to the search action notice u/s 153A of the Act was issued to the assessee on 05.07.2018 which was duly served. In response to notice issued u/s 153A, the assessee furnished his return of income on 18.07.2018, declaring total income of Rs. 15,67,000/-. Earlier the assessee had filed his return of income u/s 139 of the Act on 30.03.2013 at the total income of Rs. 14,91,460/-. Notice u/s 143(2) of Act was issued on 11.09.2018 which was duly served. Further, notice under sub section (1) of Section 142 of the Act was issued on 30.11.2018 along with questionnaire / Annexure-A requiring certain details/information, which was served upon the assessee. In response to that he furnished the desired details / information / documents / which were examined with respect to claims made in the return of income. Upon examination of search records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission filed before AO. Further, the assessee submitted that the agreement is not related to him and the acceptance / surrender of Rs. 55 lacs made by the assessee was under pressure and therefore not to be added to his total income. Ld. AO considered the reply but not found convincing as the assessee is Chief Finance Officer in Resonance group, Kota and it is assumed that he knows very well the rules and various sections of the Act and proceeding of search and surveys. Therefore, the contention of the assessee that the statements recorded during the search were under pressure/ threat is not found convincing. Further, the assessee retracted from his statements vide his submission dated 11.12.2019 when the assessment proceeding is at its ending period. The assessee has not filed any application for retraction after search nor submitted any supporting evidence during post search enquiry and not submitted anything in this regard till 11.12.2019. The retraction made by the assessee was considered as an afterthought to escape from taxation. Therefore, the retraction of the assessee was not considered. The immovable property in question was purchased by his wife Smt. Prabha Jain theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50 lacs since the same property was purchased by him for a purchase consideration Rs. 90 lacs. In response to that Shri Harish Jain admitted in his statement in Question No. 17 that actually, Smt. Prabha Jain has purchased this property for Rs. 95 lakh. Vide reply of question No. 18 in his statement recorded during the search action, Shri Harish Jain admitted that an amount of Rs. 40 lacs was paid by cheque which was out of loan taken by Smt. Prabha Jain and her savings and remaining amount of Rs. 55 lacs was paid by cash. It has also been admitted by Shri Harish Jain that the amount of Rs. 55 lacs was paid by him out of undisclosed sources and had never been offered for taxation. Shri Harish Jain admitted Rs. 55 lacs as his undisclosed income for F.Y. 2011-12 i.e. A.Y. 2012-13. In the light of above fact and admission of un-accounted income it is crystal clear that an un-accounted sum of Rs. 55 lacs was paid in cash by Shri Harish Jain for purchasing of plot at 2-PA-8, Vigyan Nagar, Kota during the financial year 2011- 12. In response the assessee replied on 11.12.2019 stating that the statement recorded u/s 132(4) during the search action was given under pressure, threat, ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty The appellant stated that originally this property was sold by Smt. Pushpa Devi w/o Sh. Nand Kumar (seller), sometime in the year 2008. for Rs. 90 lakhs as appears from the unregistered agreement found and seized during the course of Search conducted on 16.09.2008 being marked as Annexure AS, Exhibit 8 Pg-21 to 25. However thereafter, the assessee purchased the same property in year 2011 at the declared purchase consideration of Rs. 40 lakhs but since this unregistered agreement entered between those third parties was found from the possession of Sh Hanish Jain(the appellant) during search, merely based there on the impugned additions has been made. No doubt Sh. Harish Jain was asked and he stated having purchased by the wife the property for Rs. 95 lakhs and also allegedly agreed for the undisclosed income of Rs. 55 lakhs however, the totality of facts and circumstances creates a lot of doubts and strongly indicates, that it was a case of tufored statement recorded under pressure, lension and confusion as emerges from the various facts discussed herein after. The claim of the appellant with regard to statement recorded under pressure, tension and confusion is not found to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be drawn on the basis of the circumstances available on the record. The AO has clearly brought out these facts in the assessment order. The appellant has failed to prove that the transaction as per the sworn in statement are not true with evidence. In the absence of not furnishing any credible evidence in support of the argument the arguments are not found to be acceptable. In view of the above discussion, the argument of the appellant are not found to be acceptable. 5.3.2 The incriminating Document is directly connected with the transaction of Property. "It is argued that the so called "agreement" was entered into by the totally unconnected & unrelated third parties, viz. Smt. Pushpa Devi w/o Sh. Nand Kumar (first seller) and the Aswani Couple (first buyer) The agreement nowhere shows any connection or signature or handwriting of the appellant thereon even remotely. nor is it so claimed by the department." The relevance of the document is evident from the fact that the document was found from the possession of the assessee during the search proceedings. The property is purchased wife of the applicant. The document is as such chain document of the previous owner of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... witnesses. The Id. AO also alleges that why Sh. Lal Chand Aswani would have sold the property at Rs. 40 lakhs only by bearing a huge loss of Rs. 50 lakhs Firstly, it was a mere suspicion unless, Shri Aswani would have confirmed the AO of having sold the property at Rs. 90/95 lakhs, which was not done. The admission made by the appellant and the document seized during the search clearly show that the real value of the plot. The DLC value is not relevant in the case of 'On Money transaction which is paid in cash. The appellant duly accepted payment of cash in the statement recorded u/s 132(4) of the Income Tax Act. The statement was supported by the corroborative documents. The corroborative document established real value of land. The evidence itself proved the real transaction. Hence, there was no requirement of making enquiry from the Aswani Couple as argued by the appellant. Admission of cash transaction is difficult unless clinching evidences are found. In this case, the appellant accepted the cash transaction only because there was evidence found during the search. In these circumstances, the claim of the appellant that the addition is made on mere suspicion is not foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 132 of the IT Act, a sale agreement made between Smt. Prabha Jain and Shri Lal Chand Aswani regarding sale of Plot No. 2-PA- 8. Vigyan Nagar, Kota was found from the premise of the assessee, Shri Harish Jain at 2-PA-8, Vigyan Nagar, Kota, and the same was seized as page No. 16 to 19 of Annexure - AS, Exhibit-8, in which total sale consideration was mentioned of Rs. 40 lacs. Another agreement was also found and annexurised as page No. 21 to 25 of Annexure- AS, Exhibit-8, for the same property which had been purchased by Shri Lal Chand Aswani in F.Y. 2008. In this agreement total sale consideration (at page No. 21 to 25 of Annexure - AS, Exhibit-8) is mentioned as Rs. 90 lacs." The AO has further noted that in the statement recorded u/s 132(4) Shri Harish Jain admitted that an amount of Rs. 40 lacs was paid by cheque which was out of loan taken by Smt. Prabha Jain and her savings and remaining amount of Rs. 55 lacs was paid by cash. The findings of the AO are reproduced as under- "In response to that Shri Harish Jain admitted in his statement in Question No. 17 that actually. Smt. Prabha Jain has purchased this property for Rs. 95 lakh. Vide reply of question No. 18 in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before AD on 11.12.2019 (PB 14-19) to this effect The statement recorded during search and survey under oath is an important piece of evidence and it is an incriminating material. The Kerala High Court on this issue held in the case of Commissioner of Income-tax, Thichur Vs St. Francis Clay Decor Tiles [2016] 70 taxmann.com 234 (Kerala)/[2016] 240 Taxman 168 (Kerala)/[2016] 385 ITR 624 (Kerala)/[2016] 287 CTR 187 (Kerala)[22-03-2016] as under- "Neither under section 132 or under section 153A, is the phraseology "Incriminating" used by the Parliament Therefore, any material which was unearthed during search operations or any statement made during the course of search by the assessee is a valuable piece of evidence in order to invoke section 153A of the Income Tax Act, 1961." In this case also, statement recorded under oath of the assessee in which he admitted payment of cash for purchasing of land are incriminating material and these are valuable piece of evidence in order to invoke section 153A of the Income Tax Act, 1961. In view of these facts, it is concluded that there was incriminating material available with the AO and therefore, the provisions of section 153A are righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 132(4). On the issue of retraction of statement recorded during search Hon'ble High Court Of Madras in the case of Thiru. A.J. Ramesh Kumar v. Deputy Commissioner of Income-tax [2022] 139 taxmann.com 190 (Madras) noted as under - "8. Pertinently, the Tribunal after recording the explanationa, affidavit and other documents filed by the appellant in support of his case, found that the same were not acceptable as the retraction was in the form of mere assertion and also belated. It was further pointed out by the Tribunal that there was no material evidence let in by the appellant to retract the statement made under section 132(4) and the affidavits of his mother-in-law were unreliable as they were interested arst self-serving testimonies. We are of the view that any retraction by the appellant should he made at the earliest point of time with sufficient, credible and corroborative evidence to support his claim and not by mere assertion as done in this case. Therefore, we do not find any reason to differ with the findings so rendered by the Tribunal." In this case also, the retraction letter is not found to be acceptable as the retraction was in the form of mere ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 taxmann.com 108 (Ahmedabad) considered the similar issue. The head note of the decision is as under- "Section 132, read with section 69, of the Income-tax Act, 1961- Search and seizure-Block penods 1-4-1985 to 31-3-1995 and 1-4-1995 to 12-12-1995-Whether section 13214) enables an authorized officer to examine a person on path and such a sworn statement made under section 132(4), thus can be used as an evidence under Act-Held, yes-A search operation was carried out at premises of assessee whereby cash, jewellery, books of account and certain documents were found and seized-Assessee on same day had given a statement under section 132(4) whereunder admissions with regard to unaccounted income of Rs. 6.20 lakhs were made-Sad unaccounted income consisted of mariage expenditure, unexplained household expenditure, etc. Assessing Officer, made additions in respect of unaccounted income of Rs 6.20 lakhs admitted under section 132/4)- However, after lapse of about nine months from date of admission, assessee through an affidavit sought to retract from statement made under section 132(4) on ground that (a) when there was no evidence or incriminating material discovered at time of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961 Search and seizure - Block period 1988-89 to 1998-99 Whether any statement recorded under section 132(4), statutorily deemed to have evidentiary value, cannot be retracted at mere will of party Held, yes Whether a statement made under oath deemed and permitted to be used in evidence, by express statutory provision, has to be taken as true unless there is contra evidence to dispel such assumption Held, yes Pursuant to a search conducted at residential premises of assessee, Assessing Officer computed undisclosed income on basis of clear admission made by assessee in sworn statement recorded under section 132(4) First addition was with regard to actual money paid by assessee for purchase of four properties - Assessee had voluntarily submitted before ITO that amount shown in document with regard to purchase of four properties were not actual amounts and he had paid more than that shown in documents - Second addition was with respect to personal expenses - Last additions was of amount of Rs. 3 lakh which assessee claimed as an NRI loan in his cash flow statement and later in a reply stated to be a loan from his elder brother - Later on, assessee retracted fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a clear admission, voluntarily made, by the assessee, that would constitute a good piece of evidence. 5.3.7 The appellant admitted earning of undisclosed income and payment of cash The appellant argued that the appellant not the legally correct assessee. The property was admittedly purchased by Smt. Prabha Jain who is a separate Assessee and a separate person. However, addition was made in the hands of the appellant Sh. Harish Jain (Husband). There is nothing on record which shows that statement of Smt. Prabha Devi (Wife of Shri Harish Jain) who stated that the undisclosed money, if any, belong to her husband Sh. Harish Jain only, nor in the statement of Sh. Harish Jain recorded during Search a specific question was raised that despite the property having being purchased by his wife Smt. Prabha Devi whether Harish Jain was agreeable to own the responsibility and to explain the source. The Search team straight forward got the income surrendered by Sh. Harish Jain. In the statement recorded u/s 132(4) the appellant admitted that though the property is purchased in the name of wife of the assessee, the assessee is joint borrower for arranging the loan as source of the funds. Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded by it. The impugned order of the Tribunal is totally lacking in all quarters. 12. In CCE v. Srikumar Agencies (2008) 232 ELT 577 (SC) the Supreme Court was dealing with a similar case wherein without detailed analysis of the factual position involved, the Customs, Excise and Gold (Control) Appellate Tribunal had merely referred to some judgments and submissions of the learned counsel for the assessees to hold that the assessees were entitled to relief, the court held that courts should not place reliance on the decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. That disposal of appeals by mere reference to decisions was not the proper way to deal with the appeals." In this case also it is noticed that the appellant has merely referred to some judgments and argued that the assessee is entitled to relief, without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Therefore, such decisions relied upon by the appellant are not discussed in detail because the appellant has not explained that on what basis such reliance is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered under Search proceeding. Consequent to Search action, the case of the assessee was centralized to Central Circle-Kota by the Principal Commissioner of Income-tax, Kota vide order dt 12.10.2017. Thereafter, as part of Resonance Group, the case was taken up for block assessment, by issuing notice u/s 153A which is stated to be served upon the assessee on 04.07.2018 (PB 4) and in response to which the assessee furnished return of income on 18.07.2018 (PB 05-08), declaring Total Income of Rs. 15,67,000/- u/s 153A. On examination the AO found difference of Rs. 75,540/- between ITR filed u/s 139 and 153A of the Act. During search a sale agreement of a property Pg 21-25 of Annexure-AS, Exhibit-8 (PB 09-13) was found in which total consideration is mentioned as Rs. 90 Lakhs situated at 2-PA-8, Vigyan Nagar, Kota. Accordingly, notices u/s 143(2) of the Act dated 11.09.2018 and u/s 142(1) of the Act were issued to which responses were filed by the assessee along with necessary details and documents. However, the ld. AO passed impugned Assessment Order u/s143(3) r/w S.153A of the Act dated 22.12.2019 making total impugned addition of Rs. 55,00,000/-. Feeling aggrieved, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the statement recorded u/s 132(4) during the search action was given under pressure, threat, physical fatigue and mental confusion. The assessee retracted from his statement recorded u/s 132(4) vide this submission. Further, the assessee submitted that the agreement is not related to him and the acceptance/surrender of Rs. 55 lacs made by the assessee was under pressure and therefore not to be added to his total income. 'The reply of the assessee is considered but not found convincing as the assessee is Chief Finance Officer in Resonance group, Kota and it is assumed that he knows very well the rules and sections of IT Act and proceeding of search and surveys. Therefore, contention of the assessee that the statements recorded during the search were under pressure/ threat is not found convincing. Further, the assessee retracted from his statements vide his submission dated 11.12.2019 when the assessment proceeding is at its ending period. The assessee has not filed any application for retraction after search nor submitted any supporting evidences during post search enquiry and not submitted anything in this regard till 11.12.2019. The retraction made by the assessee is afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Aswani Couple (first buyer). The agreement nowhere shows any connection or signature or handwriting of the appellant thereon even remotely, nor it is so claimed by the department. The ld. CIT(A) rejected the above contention without appreciating that, such unregistered agreement may be relevant for the purpose of making inquiry from the assessee, as it was found from his possession, but the AO could not consider this as a sole basis for making addition. He rightly accepted that it was a part of chain document and therefore it was found from possession of the appellant. Here the legal presumption u/s 132(4)/S. 292C will fully apply, which provides that the content of a seized documents (viz, the name of the buyer, the amount of consideration) are correct, unless rebutted which, implies that transition had no connection and no adverse inference could have been drawn against the assessee. 1.1.2 Declared Consideration as per stamp duty valuation: Interestingly, the DLC value in F.Y. 2011-12 when the assessee purchased the property, was Rs. 40 lakhs only which is an admitted fact. Such DLC value represents the true and fair market value of property particularly of the land, impl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred or relied upon by AO except "Ikrarnama" dated 16.09.2008between strangers, showing that the appellant (Shri Harish Jain), in fact, purchased the property for Rs. 90 / 95 lakh. The ld. CIT(A) has wrongly stated that statement of the assessee was supported by the corroborative documents,[Para 5.3.3Pg-26 of CIT(A)'s order],in as much as he has failed to bring on record any such corroborative documents (except the said statements). Further, he completely ignored the legal position that through the unregistered agreement, no property, no ownership is transferred and therefore, merely based on unregistered agreement, it cannot be concluded that the parties mentioned therein, really paid/completed the transaction. Hence, no valid inference could be drawn from such agreement. 1.1.6 On the contrary, there is a registered Agreement entered by the Appellant /Buyer which declares sale consideration of Rs. 40 lakhs only through the seized Annexure AS, Exhibit 8 Pg- 16 to 19 (PB 40-43). The transaction was completed before the Sub-Registrar in the presence of the witnesses. No enquiry was made from any of the concerned parties therefore subjected transaction is duly supported by a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fair market value of the capital asset as on the date of the transfer exceeds the full value of the consideration declared by the assessee by not less than 15 per cent of the value so declared, but also that the consideration has been understated and the assessee has actually received more than what is declared by him. There are two distinct conditions which have to be satisfied before subsection (2) can be invoked by the revenue and the burden of showing that these two conditions are satisfied rests on the revenue. This burden may be discharged by the revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has not correctly declared or disclosed the consideration received by him and there is understatement of concealment of the consideration in respect of the transfer. Therefore, section 52(2) had no application to the present case and the ITO could have no reason to believe that any part of the income of the assessee had escaped assessment so as to justify the issue of a notice under section 148." 1.1.8.2 CIT v. K.K. Enterprises [2009] 178 Taxman 187 (Raj.) it was held as under "The assessee sold his plots at an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of search, where (or even if not ) the related assessment stands completed(but not abated and not pending). In the instant case, undisputedly, some of the assessments of the subjected assessments years (i.e. 2012-13 to 2016-17) stands already completed and were not pending on the day of the search. Some of the assessments were completed under u/s 143(1) but the time limit to issue notice u/s 143(2) had already expired in those cases on the date of Search i.e. 07.09.2017 and hence such assessment even though made u/s 143(1) stand completed/attained finality. For better appreciation, kindly refer the following chart: A.Y. ROI Filed u/s 139 on dated: Total Income Declared Assessment Completed Time limit for issuance of notice u/s 143(2) expired on dated: Under Section On Dated 2012-13 31.03.2013 Rs.14,91,460/- 143(1) 24.06.2013 30.09.2013 2013-14 29.07.2013 Rs.16,71,820/- 143(1) 23.11.2013 30.09.2014 2014-15 31.03.2015 Rs.16,60,400/- 143(1) 31.07.2016 30.09.2015 2015-16 30.03.2016 Rs.21,67,260/- 143(1) 12.02.2016 30.09.2016 2016-17 29.07.2016 Rs.29,19,380/- 143(1) 02.10.2016 30.09.2017 Accordingly, these assessments i.e. AY 2012-13 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of assessment against which an appeal has been decided by CIT(A) is not a continuation of the proceedings of assessment. An appeal under the IT Act lies to the Tribunal on a question of law. Even if it is pending on the date of search, no such intention as indicated by the Tribunal arises out of the provisions of second proviso to s. 153A, to abate the proceedings, which have been completed, or concluded, and to restore assessment to the file of the AO. There is no force in the submission that where a notice under s. 153A has been given after the search operations under s. 132, for filing assessment for the block period of six years, and if such period includes any of the assessment years, the abatement of assessment and reassessment proceedings, to give way to reassessment considering the additions in the assessment under s. 153A, will also include the assessment or reassessment, which has been completed. If as a result of search, some undisclosed income is found to have escaped assessment, the AO may initiate steps for reassessment after sanction of competent authority, within the prescribed period of limitation. Circular No. 7 of 2003 dt. 5th Sept., 2003 [(2003) 184 CT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition, in other words, the assessment should (be) connected with something found during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153 A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition' or disallowance can be made only on the basis of material collected during the search or requisition, in case no incriminating material is found." 1.2.4 In the case of Gurinder Singh Bawa [2016] 386 ITR 483 (Bom), the Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this Section only on the basis of seized material." 1.2.8 In case of Pr. CIT v. Mita Gutgutia [2017] 82 taxmann.com 287/248 Taxman 384/395 ITR 526 (Delhi), it was held: "Section 153A of the Act is titled "Assessment in case of search or requisition". It is connected to Section 132 which deals with 'search and seizure'. Both these provisions, therefore, have to be read together. Section 153A is indeed an extremely potent power which enables the Revenue to reopen at least six years of assessments earlier to the year of search. It is not to be exercised lightly. It is only if during the course of search under section132 incriminating material justifying the re-opening of the assessments for six previous years is found that the invocation of section 153A qua each of the AYs would be justified." 1.3. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & seizures 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." 3.3 The AO has mainly emphasized on the statement of the assessee, however, ignored the settled legal position that a person making a statement is legally entitled to retract from, what it had stated earlier. It has been held that an admission, though best evidence against such person, if shown to be out of ambiguity, under tension or was against the facts or misconception of law, can be validly retracted. 3.4 The Coordinate Jaipur Bench of ITAT has already been taking this view in the case of ITO vs. Suresh Chandra Koolwal (2004) 32 TW 23 (Jp). Various Benches of the ITAT have taken similar view such as in the cases of * R. K. synthetics 30 TW 228 (Jd). * Ashok Kumar Soni vs. DCIT (2001) 72 TTJ 323 (Jd), * Karam Chand vs. ACIT (2000) 73 ITD 434 (Chd): (2000) 68 TTJ 789 * Rishab Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a relevant piece of evidence and it has to be considered while making assessment. But, no where it is stated in this provision that a statement recorded under this section becomes a conclusive proof or sanctum sanatorium for making addition of the admitted income. This issue has been churned by numerous courts as this issue has arisen every now and then in similar litigations, and the courts have settled the legal position by holding that on the issue that any admission made de hors any incriminating evidence found during search cannot be made a basis for making any addition in the hands of the assessee. On some of the decisions the ld. A.R. has relied and they have been extracted along with their held portion, in the earlier part of our order. Moreover, the assessee has disproved his [their] admission with the help of proof as discussed above. In this regard, following decisions are relied..." 4.2 When the assessee had already denied in writing regarding having paid any such sum to Ashwani Couple, and no material was found during search which could have prompted the AO to interrogate the assessee, the so-called confession was extracted by the Search team only by coercion and dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission made by him probably is in fact not correct and true..." 4.4.5 The Hon'ble Jaipur Bench of ITAT has already been taking this view in Ashok Kumar Soni vs. DCIT (2001) 72 TTJ 323 (Jd). Also, kindly refer Karam Chand vs. ACIT (2000) 73 ITD 434 (Chd): (2000) 68 TTJ 789 (Chd) & Rishab Kumar Jain vs. ACIT (1999) 63 TTJ 236 (Del). 4.4.6 Control Touch Electronics (Pune) (P) Ltd. VS. Asstt. CIT (2001) 72 TTJ (Pune) 65: (2001) 77 ITD 522 (Pune): At para 9 it was held as under "...... At this stage, it is mentioned that it is a settled legal position that there cannot be any estoppel against the statute. If any income is not taxable by virtue of any provision of the Act, then it cannot be taxed merely because it was offered by the assessee in his return. Therefore, the contention of the learned Departmental Representative in this regard is hereby rejected. Accordingly the order of the AO is set aside on this issue and is hereby deleted from the assessment of undisclosed income......." 4.4.7 Kasat Paper & Pulp Ltd. VS. Asstt. CIT (2000) 69 TTJ (Pune) 924: (2000) 74 ITD 455 (Pune): At p. 465 para 8 "....There cannot be estoppel against the legal principles and therefore, if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and such circumstances which established that the appellant was not in a position to tender his free and fair voluntary statement, more detailed in letter of retraction dt.04.12.2019/11.12.2019(PB14-19). The possibility of existence of the surcharged atmosphere and tensed during the search action cannot be ruled out. Even the Courts and Tribunal have taken judicial notice of this fact time and again. Thus therefore, the retracted statement was otherwise not a valid piece of evidence to be based for an addition. 5.3 The existence of tension and surcharged atmosphere has been recognised even by the courts. Kindly refer Jagdish Narayan Ratan Kumar 22 TW 209 (JP). Such statements, therefore are bound to give a distorted picture and are not fully reliable as such.On this aspect it will be quite relevant to refer to decision of Hon'ble Gujarat High Court Kailashben Manharlal Chokshi vs. CIT(2008) 14 DTR 257/ (2010) 328 ITR 411 (Guj.) wherein, it was held as under: "22. We have heard learned counsel appearing for the respective parties at great length and considered the submissions. We have also gone through the orders passed by the authorities below. It is true that in normal circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice u/s 142((1) 28.11.2019 as to why should not be added the amount of Rs. 55,00,000/- to the returned income for the year on account of unaccounted investment in purchase of house property u/s 69 of the IT Act,1961, but the same is not shown in the ITR. It is humbly submitted that your said proposal is unwarranted in the light of attendant facts and applicable law as explained below:- A. In notice that in all the queries raised by you, a reference and reliance has been made on the statement of the undersigned recorded u/s 132(4) during the course of search and seizure operation at the residence and other premises of the undersigned during 07.09.2017 to 10.09.2017. However, in that regard we would like to point out that the statement under consideration was recorded in absolutely extra ordinary circumstances not only of duress, threat and inducement but also physical fatigue and mental confusion, therefore I hereby rectract the entire statement recorded during the seach. It may be highlighted that the search team entered in my house after disconnecting the close circuit camera and overpowering the watchman of the house. They had not brought any witnesses with them much less i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, it would constitute the basis for the prosecution to frame its case and correspondingly be a material for the defence to ensure that the prosecution sticks to its version. The question of a statement of that nature being treated as the clinching evidence, by itself, leading to any penal action does not arise. Attention is also invited to the observations of the court: 15. The question of discharge of burden, arises in respect of a fact, to be proved. If the contents of the statement recorded from an assessee are to be proved, that very statement cannot be a proof, by itself. Such a course would bring about hypellage logic, which is illustrated by a well known example. Question : who is a doctor ? Answer : The one who administers medicine. Question : What is medicine ? Answer : The one that is administered by a doctor. Such discussion does not lead one, any further. 16. The discharge of burden must be in respect of the plea taken by the Department and the burden can be discharged only through material, which is over and above what was stated in their case. The statement assumes the character of proven fact, only when it is not denied by the assessee. It will be us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention to the circumstances under which the alleged statement of mine was recorded. In the morning of 7th Sept. 2017 itself the Income tax Search team with police force arrived and open the entry gate of residence, after removing the close circuit camera. E. The extracted confession of the undersigned during the course of search without supporting evidences, runs counter to the assurance given by the then Finance Minister to the Parliament while presenting the Annual Budget for the year 2003-04, that hereafter "Second, no confession shall be obtained during search & seizure operations." ([2003] 260 ITR 29(St.). It is matter of regret that inspite of assurance to the Parliament, and issue of binding instructions by CBDT such confessions are extracted by duress and threat, and attempts are made to make additions to the returned income solely on the basis of such confessions, leading avoidable harassment to the assessees. F. In the light of above submissions, we request your goodself to take not only a judicious approach in the matter but also follow the mandatory guidelines of the CBDT as reproduced above, and do justice to the undersigned. G. The assessee' wife purchased hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts are also appearing in books of account of Smt Prabha Jain and explained during the proceedings u/s 153A in her case for AY 2012-13. You may please refer her submission. Apart from such amount, the assessee has not paid any amount in cash to the seller and cash transaction of Rs. 55.00 Lakhs is baseless and without supporting of any evidences/proof of payment. The agreement found is between Smt Pushpa Devi and Shri Lal Chand Aswani Vineeta Aswani and not related to the assessee. The assessee has no concern with such transaction. As already mentioned above that statement under consideration was recorded in absolutely extra ordinary circumstances not only of duress, threat and inducement but also physical fatigue and mental confusion as search was conducted continuously for three days. (Annexure-I)" Therefore, such an addition in the hands of an altogether third person is absolutely without jurisdiction and deserves a complete deletion here itself. 7.3 The ld. AO however rejected the contention at Pg. 5 Para 5 of order merely saying that it was a purchase made by the wife of the assessee. However, he completely ignored the legal provision by which he was bound to comply with. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same are accordingly dismissed. - CIT vs. Smt. P.K. Noorjehan (1980) 15 CTR (Ker) 138: (1980) 123 ITR 3 (Ker) :42R.1622, affirmed." However, the ld. AO failed to controvert/disprove the factual assertions made before him. Thus, considering all the facts and judicial precedents the entire addition of Rs. 55,00,000/- deserves to be deleted. 10. Common Submission: For All GOA 10.1 Benefit of telescoping/set-off deserves to be allowed:Alternatively, and without prejudice to our contentions that no addition can be made on account of the undisclosed income or unexplained expenditure yet however, if any addition of income as also on account of expenditure is sustained, the benefit of the availability of the income/funds towards the unexplained expenditure (as sustained) deserves to be allowed, based on the law which is well settled, as under: 10.2 Commissioner of Income-tax v. Tyaryamal Balchand [1987] 165 ITR 453 (Rajasthan) "9....It is clear from the law discussed above, that the ITO was within his right to tax the amount of Rs. 16,950 as income from undisclosed source, even though he had added the amount of Rs. 18,117 in addition to the profit shown by the respondent-fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he burden to prove resting on the revenue, to ascertain whether a particular amount is a revenue receipt. No doubt, the fact that the assessment order contains a finding that the disputed amount represents income constitutes good evidence in the penalty proceeding but the finding in the assessment proceeding cannot be regarded as conclusive for the purposes of the penalty proceeding. In the instant case, the Tribunal had relied entirely on the basis that an intangible addition of Rs. 2,00,000 had been made to the book profits of the assessee for the assessment year 1957-58 and it inferred that an amount of Rs. 90,000 was available for being put to use in the relevant assessment year. Now it can hardly be denied that when an 'intangible' addition is made to the book profits during an assessment proceeding, it is on the basis that the amount represented by that addition constitutes the undisclosed income of the assessee. That income, although commonly described as 'intangible', is as much a part of his real income as that disclosed by his account books. It has the same concrete existence. It could be available to the assessee as the book profits could be. There ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication of section 271(1)(c) the High Court, had erred in entering into the facts of the case and determining in point of fact that the assessee earned income during the relevant previous year and that he was guilty of concealing such income or furnishing inaccurate particulars of it. Having found that the legal basis underlying the order of the Tribunal was not sustainable, the High Court should have limited itself to answering the question raised by the reference in the negative, leaving it to the Tribunal to take up the appeal again and redetermine it in the light of the law laid down by the High Court. It was the Tribunal which has been entrusted with the authority to find facts. A High Court is confined to deciding the question of law referred to it on facts found by the Tribunal. Because the finding of the Tribunal that no penalty was leviable rests on an erroneous legal basis, the opinion of the High Court was to be endorsed. But as the High Court should not have rendered findings of fact, the findings of fact reached by the High Court was to be vacated, without expressing any opinion on their correctness, leaving it to the Tribunal in exercise of its duty under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement of the law. 2.2 Moreover, it is contented that the provisions contained in S. 153D as enacted by the parliament cannot be treated as an empty formality. The provision has certain purpose. It is apparent that the purpose behind the enactment of the above provision in the statute by the parliament are two folds. Firstly, the approval of the senior authority will ensure that the assessee is not prejudiced by the undue or irrelevant addition or assessment. Secondly, the approval by senior authority will also ensure that proper enquiry or investigation are carried out by the assessing authority. Thus, the above provision provides for mental application of a senior officer of the Department, which in turn, provides safeguard to both i.e., Revenue as well as the assessee. Therefore, this important provision laid down by the legislature cannot be treated as a mere empty formality. Thus, the legislative intent behind getting prior approval u/s 153D is that the work done by the junior officer is properly check & analyzed and thereafter, approved by a superior officer before the AO finally pass the assessment order. 3. Supporting Case Laws: 3.1 In the case of ACIT vs. Seraj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the aforementioned reasons, the Court finds that the Tribunal has correctly set out the legal position while holding that the requirement of prior approval of the superior officer before an order of assessment or reassessment is passed pursuant to a search operation is a mandatory requirement of s. 153D and that such approval is not meant to be given mechanically. The Court also concurs with the finding of the Tribunal that in the present cases such approval was granted mechanically without application of mind by the Addl. CIT resulting in vitiating the assessment orders themselves The initial assessment order as also the impugned assessment order without jurisdiction is void-ab-initio being a nullity and hence the same deserves to be quashed and set aside.". Pertinently, the Dept. assailed this order of the Hon'ble High Court before the Hon'ble Supreme court in ACIT vs Serajuddin& Co. [SLP (Civil) Diary No(s). 44989/2023], wherein the Hon'ble court after hearing the Dept. dismissed the said petition. 3.2 Kindly refer Veena Singh vs. ACIT (2024) 38 NYPTTJ 519 (Del) "Search and seizure-Assessment under s. 153A-Approval under s. 153D vis-a-vis non-application of mind-A comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has supplied only the draft assessment order and no other record has been supplied. 4.2.1 Alternatively, for once assuming that the AO did sent the draft assessment order along with all the records to the Addl. CIT. In that regard, the said approval (PB II for A.Y. 2012-13 - Pg. 47) states that the approval was sought by the AO vide his letter dated 19.12.2019. Interestingly, the same reached the ld. Addl. CIT on 19thof December itself. Thereafter, on the very same day he went through the entire record, all the statements and the draft assessment orders for all the 6 years. 4.2.2 It is surely not humanely possible, rather impossible since assuming that the courier company almost instant supplied the record from Kota to Ajmer, which itself takes 10 hours by road, then a person i.e the Addl. CIT went through more than 500 pages (approx.) within no time and prepared his approval report. 4.2.3 Further, the recently the assessee filed an RIT application seeking the details regarding the approval granted u/s 153D. In response (PB II for A.Y. 2012-13 - Pg. 44-45), the Addl. CIT stated that on the every same day, he granted approval to 88 other cases. With barely anytime to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Copy of ROI e-filed along with Computation of Total Income u/s 153A for A.Y. 2012-13 5-8 4. Seized Annexure of sale agreement dt-16.09.2008 w.r.t. PA-8, Vigyan Nagar, Kota seized during the course of search being marked as Annexure AS, Exhibit 8 Pg- 21 to 25 by Shri Lal Chand Aswani. 9-13 5. Copy of reply dt. 04.12.2019 filed before the AO on 11.12.2019. 14-19 6. Copy of statement of the assessee recorded on 08.09.2017 u/s 132. 20-39 7. Seized Annexure of sale agreement dt. 05.10.2011 w.r.t. PA-8, Vigyan Nagar, Kota seized during the course of search being marked as Annexure AS, Exhibit 8 Pg- 16 to 19 between Smt. Prabha Jain and Shri Lal Chand Aswani 40-43 8. Copy of order dated 07.10.2024 under RTI Act, 2005 containing information regarding approval u/s 153D 44-45 9. Copy of letter for approval by ACIT(A) dated 19.12.2019 to Addl. CIT, Udaipur 46 10. Copy of approval u/s 153 by Addl. CIT dated 24.12.2019 47-48 11. Copy of purchase deed dated 30.01.2012 between pushpa Devi and lal Chand Ashwani 49-55 12. Copy of sale dee dated 1609-2008 between purshpa Devi and Lal Chand Ashwani 56-75 * Case laws relied upon: Sr. No. particular Page No. 1. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition can be made in the hands of the assessee. The ld. AR of the assessee also submitted that the addition is made only on the agreement to sale and not the sale deed. The assessee also filed a retraction statement vide submission dated 11.12.2019 and on that retracted statement no addition can be made. Even the ld. CIT(A) vide para 5.3 has merely confirmed the addition merely based on the statement of the assessee and no corroborative evidence to prove the averments in the statement was placed on record. Therefore, ld. AR submitted that no addition of property acquired by wife can be made in the hands of the assessee in the absence of the proof not placed on record. Ld. AO has not examined the parties involved so as to bring the correct fact on record. When the property is not purchased by the assessee how can the addition of undisclosed income be added without any corresponding assets in the name of the assessee. The legal presumption to evidence be read as per provision of section 292C of the Act. The ld. AO has neither examined the wife of the assessee or that of Shri Lal Chand Aswani who sold the property to the wife of the assessee. Thus, without examining those interested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee was centralized to Central Circle-Kota by the Principal Commissioner of Income-tax, Kota on 12.10.2017. Assessee is an individual and derives income from salary, house property and other sources etc. Pursuant to the search action notice u/s 153A of the Act was issued to the assessee on 05.07.2018 which was duly served. In response to notice issued u/s 153A, the assessee furnished his return of income on 18.07.2018, declaring total income of Rs. 15,67,000/-. Earlier the assessee had filed his return of income u/s 139 of the Act on 30.03.2013 at the total income of Rs. 14,91,460/-. Notices as required under the law were issued to the assessee. In the assessment proceedings on examination of search records ld. AO noted that during the search action a sale agreement made between Smt. Prabha Jain and Shri Lal Chand Aswani regarding sale of Plot No. 2-PA-8, Vigyan Nagar, Kota was found from the premise of the assessee, Shri Harish Jain at 2-PA-8, Vigyan Nagar, Kota, and the same was seized as page No. 16 to 19 of Annexure AS, Exhibit-8, in which total sale consideration was mentioned of Rs. 40 lacs. Another agreement was also found and annexed as page No. 21 to 25 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re/ threat is not found convincing. Further, the assessee retracted from his statements vide his submission dated 11.12.2019 when the assessment proceeding is at its ending period. The assessee has not filed any application for retraction after search nor submitted any supporting evidence during post search enquiry and not submitted anything in this regard till 11.12.2019. The retraction made by the assessee was considered as an afterthought to escape from taxation. Therefore, the retraction of the assessee was not considered. The immovable property in question was purchased by his wife Smt. Prabha Jain therefore the contention that he has nothing to do with the agreement was also baseless. Thus, ld. AO relying on the decision of apex court in the case of ABCAUS 2871 (2019) (04) SC, dismissed the SLP of the assessee against the order of the High Court in dismissing his appeal holding that the statement recorded during search action which was in presence of independent witnesses has overriding effect over the subsequent retraction. The assessee during search proceeding accepted that the immovable property was purchased by her wife Smt Prabha Jain at consideration of Rs. 95 Lac and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greed to that property to Smt. Prabha Jain wife of Harish Jain for an amount of Rs. 40,00,000/-. Out of that 40 lac 35,00,000 demand draft drawn from Central Bank is drawn favouring the ICICI Bank account of Shri Lalchand Aswani. What we observed is that first deed executed by Shri Lalchand Aswani for an amount of Rs. 95,00,000/- was also mentioned in the second agreement second para of the first page. Thereafter wife of the assessee has agreed to purchase that property as the same was having banking mortgaged to the ICICI Bank. There is no material that the assessee or that of his wife has paid any amount to Smt. Pushpa Devi or that to Shri Lalchand Aswani. Both the deeds are and independent deeds having been referred in the second agreement and as it emerges that the same forced sale is being made by Shri Lalachand Aswani on account of bank loan for which he tried to sale in 2008 for Rs. 95,00,000 for which he could not, and he has ultimately agreed to sell to the wife of the assessee for an amount of Rs. 40,00,000/-, out of that Rs. 35,00,000 is directly paid to the bank loan account and Rs. 5,00,000 to Shri Aswani. So, there is no finding of the search team after search procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nn.com 722 (Rajasthan) ] stating that the merely based on the retracted statement no addition can be made. The relevant finding of binding judicial precedent is reproduced herein below: 11. Now it is a matter of record that Shirish Chandrakant Shah had retracted his statements given before the Assessing Officer. Even otherwise, an admission by the assessee cannot be said to be a conclusive piece of evidence. The admission of the assessee in absence of any corroborative evidence to strengthen the case of the Revenue cannot be made the basis for any addition. Therefore, the substantial questions of law framed by the appellant pertained to an open issue which stands concluded by the decision of the Hon'ble Supreme Court; one such decision was rendered in "M/s Pullangode Rubber Produce Co. Ltd. v. State of Kerala And Another" (1973) 19ITR18. 12. Therefore, we hold that no substantial question of law arises between the parties and while so, the present Income Tax Appeal is not maintainable. Respectfully following the finding of apex court in the case of Abhisar Buildwell P. Ltd (Supra) and jurisdictional High Court judgment in the case of M/s. Esspal International P. Ltd. (Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be possible. Because the assessee has already offered in the income to the extent chargeable to tax and therefore, we direct to delete that addition of Rs. 3,00,000/- made in the hands of the assessee. In the light of the discussion so recorded ground no. 2 raised by the assessee is allowed. Ground no. 1 & 4 being general or technical does not require our adjudication and ground no. 3 being consequential in nature does not require to be adjudicated. In terms of this observation appeal of the assessee in ITA no. 624/JP/2024 stands allowed. 14. In ITA no. 625/JP/2024 the assessee has taken following grounds of appeal:- "1. The impugned additions made in the order u/s 143(3) r.w.s.153A of the Act dated 22.12.2019 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted. 2. Rs. 10,00,000/-: The Id. CIT(A) erred in law as well as on the facts of the case in confirming impugned addition of Rs. 10,00,000/- on account of alleged rental income received from Shri Umesh Kumar for residential hostel at House No. 175, Rajeev Gandhi Nagar, Kota as per rent agreement found and seized and marked as Annexure- AS, Exhibit-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the assessee already offered the income of Rs. 10,40,000/- in the preceding year and Rs. 9,50,000/- is offered in the year under consideration though the agreement was terminated in September. Therefore, the assessee has already offered the more income then what is recorded on the back side of the document. Ld. AO though ld. DR did not controvert this factual aspect of the matter and therefore, we found force in the argument made by the ld. AR of the assessee and accept the fact that when the assessee offer the income more than what is recorded in the seized record in that situation no more addition is required to be made. In the light of the discussion so recorded ground no. 2 raised by the assessee is allowed. Ground no. 1 & 4 being general or technical does not require our adjudication and ground no. 3 being consequential in nature does not require to be adjudicated. In terms of this observation appeal of the assessee in ITA no. 625/JP/2024 stands allowed. 15. In this appeal the assessee has raised following grounds of appeal:- "1. The impugned additions made in the order u/s 143(3) r.w.s. 153A of the Act dated 25.12.2019 are bad in law and on facts of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) did not considered the submission so made by the assessee and confirmed the addition by observing as under : "There was no need to make reference to DVO when the assessee himself admitted the correct value of investment in construction of House. The assessee has not furnished any valuation report in search proceedings which could establish that the admission made by him was not based on correct facts milestone the appellant on the basis of his exclusive knowledge admitted undisclosed investment which is not disproved by any other material brought on record. In these facts, there was no need to make reference to the DVO. The assessee already accepted Rs 35,00,000/- investment out of undisclosed sources in the return of income filed in response to notice issued under section 153A out of the admitted amount of Rs. 50,00,000. Hence the argument of the appellant in this regard are not found to be acceptable." 15.4 The bench noted that in this case the addition so made for an amount of Rs. 15,00,000/- is purely based on the statement of the assessee recorded at the time of search. No supporting evidence or documents of having made the unaccounted investment was found by the search ..... X X X X Extracts X X X X X X X X Extracts X X X X
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