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TMI Blog2025 (1) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... o mention of the value of transactions for which the assessee earned brokerage income. It is seen that the entire basis of making addition of Rs. 14 crores to the income of the assessee is on the basis of statement recorded u/s 131A of the Act, during the course of survey proceedings. It is a well settled law that no additions can be made only on the basis of statement of the assessee unless supported by incriminating evidence against the assessee. The present additions are not liable to be sustained in the hands of the assessee. Appeal of the assessee is allowed. - Smt. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : Shri Manish J. Shah, Shri Jimi Patel Shri Rushin Patel, A.Rs. For the Respondent : Shri Kamlesh Makwana, CIT DR ORDER PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-2, (in short Ld. CIT(A) ), Vadodara, vide order dated 29.08.2016 passed for A.Y. 2012- 13. 2. The Assessee has taken the following grounds of appeal:- 1. The order passed by the learned CIT(A) is based on incorrect understanding of facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT(A) erred in referring and relying on certain questions and answers recorded in the statement to confirm the conclusion that the statement was not recorded under pressure. 7. The learned CIT(A) ought to have appreciate that various averments made in writ petition filed before the High Court, a copy of which was made available to the Department in the course of proceedings before the Court tantamount to retracting and therefore the appellant s retraction cannot be termed as delayed retraction. Your appellant prays for leave to add, alter and/or amend all or any of the grounds before the final hearing of appeal. 3. The brief facts of the case are that a survey under section 133A was conducted on 1st June 2011 in the case of the assessee, during which the assessee made a disclosure of an undisclosed income of Rs. 14 crores for the assessment year (A.Y.) 2012-13. The assessee, during the course of survey, admitted to generating this income from unaccounted cash in land dealings acting in the capacity as a land broker. The original return of income for A.Y. 2011-12 was filed by the assessee on 30th September 2011, declaring an income of Rs. 22,19,48,963/-, which was accepted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating his position from the writ petition and challenging the absence of supporting documentation. However, the AO, relied on various judicial precedents, including the decision of the Bombay High Court in Dr. Dinesh Jain v. Income Tax Officer, in which the addition based on the statement made during the survey was upheld, despite the retraction. Accordingly, the AO was of the view that the assessee s retraction of his statement was not reliable and that the undisclosed income of Rs. 14 crores, admitted during the survey, was included in the return for A.Y. 2012-13. 4. In appeal before Ld. CIT(Appeals), the assessee contended that the statement was made under coercion and without the opportunity to review it, and that no supporting documentary evidence was provided by the survey team to demonstrate that the assessee was engaged in land broking. The assessee relied on a decision by the Gujarat High Court in the case of Ramanbhai B. Patel (Tax Appeal No. 207 of 2008), which held that additions made solely on the basis of statements recorded during a survey, without supporting material, are unsustainable. The assessee argued that the AO's addition lacked evidentiary support, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, Ld. CIT(Appeals) confirmed the addition. The retraction of the disclosure was deemed an afterthought to evade tax liability. The appeal was, therefore, dismissed, with the addition of Rs. 14 crores for undisclosed income from land brokerage being upheld by Ld. CIT(Appeals). 5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). 6. Before us, the Counsel for the assessee reiterated that there was no incriminating material which could substantiate that the assessee was engaged in land dealing / broking during the impugned year under consideration. Further, the Counsel for the assessee submitted that as per directions of the High Court, on the perusal / analysis of documents furnished by the Department, the assessee had observed that the entire additions proposed to be made were not on the bssis of any documentary evidence / incriminating material which could substantiate that the assessee was engaged in land dealing / land broking. The Counsel for the assessee submitted that it is a well settled law that additions cannot be sustained only on the basis of statement made by the assessee during the course of survey proceedings. Further, even the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capacity of a land broker and has earned unaccounted money to the tune of Rs. 14 crores approximately during F.Y. 2011-12, relevant to A.Y. 2012-13. Secondly, there was substantial delay in retraction of statement by the assessee, after delay of 16 months and such retraction was only an afterthought by the assessee, only with a view to evade taxes. Thirdly, the Ld. D.R. submitted that the facts of both the years should be taken into consideration together, since for immediately preceding year, the assessee had declared income of Rs. 22 crores mainly out of land brokerage deals and therefore, in light of the statement made by the assessee voluntarily in which he declared land broking for this year as well, the additions are liable to be sustained. 8. We have heard the rival contentions and perused the material on record. 9. In our considered view, from the facts placed on record we observe that the additions have been made in the hands of the assessee primarily on the basis of statement of the assessee recorded during the course of survey proceedings. It is observed that while making the additions in the hands of the assessee on account of undisclosed income earned from land brokin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid additions. Under the circumstances, the proposed question of law are answered against the Revenue. Consequently, both the appeals deserve to be dismissed and are accordingly dismissed. 12. In the case of Kailashben Manharlal Chokshi vs. CIT 174 taxman 466 (Gujarat), has made the following observations in this regard: Therefore, the explanation offered by the assessee had not been duly considered by the authorities below and additions were made and/or confirmed merely on the basis of statement recorded under section 132(4). Despite the fact that the said statement was later on retracted, no evidence had been furnished by the revenue authority. Therefore, merely on the basis of admission, the assessee could not have been subjected to such additions, unless and until some corroborative evidence was found in support of such admission. Further, the statement recorded at such odd hours could not be considered to be a voluntary statement, if it was subsequently retracted and necessary evidence was led contrary to such admission. Hence, there was no reason to disbelieve the retraction made by the assessee and his explanation duly supported by the evidence. 13. Further, we would a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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