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TMI Blog2022 (4) TMI 1646X X X X Extracts X X X X X X X X Extracts X X X X ..... fession made by the assessee was subsequently retracted and since the addition was not supported by any cogent, convincing independent documentary evidence, therefore, considering the totality of facts and circumstances, judicial precedents referred above as well as following the decision of JKD Pearl India Developers Pvt. Ltd.[2020 (10) TMI 976 - ITAT JAIPUR] wherein the present Author of this order was also the Author of that order, therefore, we direct the A.O. to delete the addition so made and confirmed qua this issue. Addition for various expenses - HELD THAT:- As observed from the above that JDA Expenses were incurred by assessee, which are evident in the copy of registered deed furnished before AO as well as CIT(A) and after including incidental Misc. expenses comes to Rs.6776/- and Rs.5421/-. So far as brokerage expenses are concerned, the same are approximately 3% of the gross sale consideration, which is in accordance with market rates. Further, expenses of Rs.30,000/- were paid to mediator / broker Sh. Sunil Gajaria and assessee had submitted complete address as well as PAN details of the mediator / broker. Accordingly, identity of the payee and genuineness of payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this case, original return of income was e-filed on 03/10/2016 for the year under consideration declaring total income of Rs. 4,28,580/-. Various statutory notices were issued and served upon the alongwith questionnaire requiring details/information. Finally the assessment was completed by the A.O. U/s 143(3) r.w.s. 153B(1)(b) of the Act on 28/12/2016 determining total income of Rs. 1,55,93,930/- by making addition of Rs. 1,50,00,000/- on account of undisclosed income detected during the course of search and added the same in the total income of the assessee and also made additions with regard to various expenditure incurred by the assessee. 4. Being aggrieved by the order of the A.O., the assessee carried the matter before the ld. CIT(A), who after considering the submissions of both the parties and the material placed on record, upheld the action taken by the A.O. by dismissing the appeal of the assessee. Against the order passed by the ld. CIT(A), the assessee has preferred the present appeal before the ITAT on the grounds mentioned above. 5. Grounds No. 1 and 2 of the appeal raised by the assessee are interrelated and interconnected and the same are being adjudicated by thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisclosed income earned from property transactions. So far as facts of the case are concerned, assessee had neither made any such advances nor had any undisclosed income from any such property transactions. Accordingly, in the retraction affidavit filed by assessee on 24.12.2014 (APB 34-35), assessee has elaborated that during the interaction with Income Tax officials at the time of search, queries were raised regarding modus operandi of M/s Shri Siddhi Vinayak Inductions Pvt. Ltd. such as process of purchase of raw material, conversion of raw material into finished goods viz. billets, their sales and future purchases as well for converting them in long steel products on job work basis. However, such general explanation about the company was molded by departmental officials in such a manner as if assessee had made advances in cash to Siddhi Vinayak Inductions Pvt. Ltd. for purchase of material. A summary of scribbling found noted on slip is as under (APB 40): SVIPL for purchases of material 15.12.2014 …07.2014 Rs. 25,00,000/- …07.2014 Rs.35,00,000/- 19.08.2014 Rs. 25,00,000/- 14.10.2014 Rs.20,00,000/- 15.11.2014 Rs. 40,00,000/- 24.11.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of AO is not fair - As no advance was made by assessee to SSVIPL nor was slip prepared by him as per his sweet will, assessee has clearly mentioned in affidavit that assessee was compelled to sign the paper on which some dates and amounts were written mentioning them as advances to Siddhi Vinayak Inductions Pvt. Ltd. by assessee whereas assessee had not traded in any purchase / sale transactions in land and did not have any undisclosed income out of which alleged advances were stated to be given (APB 34-35). However retraction affidavit filed by assessee was not considered and addition was made. Not a single enquiry was made by ld. AO when the assessee made retraction from the alleged surrender to find out as to whom the advance was given or form whom the goods is to be received. It is further submitted that in the case of Shri Ashok Kumar Jain 369 ITR 145 the Jurisdictional High Court of Rajasthan has held that if the assessee does not adhere to the surrender made then it is for the Learned Assessing Officer to bring on record cogent material and other evidences to support the addition rather than simply rely on the statement. In this case the position is exactly the same. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36- 38), wherein no new queries were made and rather assessee was forced to state that the slip marked as page 7 of Annexure II was documentary evidence in support of surrender made and undisclosed income of assessee was earned from property transactions ( Q. No. 4 to statements APB 37). Also, assessee was forced to re-affirm statements recorded during search (however there was no mention of statements recorded on 14.04.2015). Thus, basically re affirmation of statements was nothing but another attempt by the department not to accept the retraction, which is further evident from the fact that the very next day, i.e. on 15.04.2015 assessee again filed letter before ld.AO (APB-39), wherein he again retracted from the confirmatory statements obtained from him on 14.4.2015 duly explaining the circumstances under which such reaffirmation statements were recorded. The statements of assessee were not recorded as per his own version, is further fortified from the content of statement dated 17/18.12.2014 which started at 9.00 AM on 17.12.2014 and concluded at 8.00 PM on 18.12.2014 (APB 20-33), it was mentioned that the impugned amount was cash advance given by assessee to his company M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Ashok Kumar Jain 369 ITR 145 (case law paper book pages 260-265) the Jurisdictional High Court of Rajasthan has held that if the assessee does not adhere to the surrender made then it is for the Learned Assessing Officer to bring on record cogent material and other evidences to support the addition rather than simply rely on the statement. In this case the position is exactly the same. The following case laws are cited in support: - (a) Contech Transport Service (P) ltd Ors V/s ACIT 19 DTR 191 (Mumbai) (b) Chitra Devi V/s ACIT (Jodhpur Branch) (2002) 77 TTJ (Jd) 640 (c) Kailashhen Manharlal ChokshiVs CIT (2008) 14 DTR 257 (Guj) (d) Pullanguegode Rubber & Produce Co. Ltd. Vs. State of Kerala 91 ITR 18 (SC) (e) Kailash Ben MohanlalChoksi v/s CIT (2008) 14 DTR (Guj) 257 ITA 324/JP/2017 & 1 Anr (f) Hukum Chand Jain Vs. Income Tax Officer (2011) 334 ITR 197 (Rajasthan High Court) (g) Ajit Chintaman Karve V/s I.T.O. (2009) 311 ITR (AT) 66 (Puna) Assistant Commissioner of Income Tax The following facts further established that the exercise of surrender by the Revenue Authority was under duress. No effort was made at the time search and seizure to verify the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd coerced to take back his retraction and confess that the so called statements recorded by the Income Tax Officials on 17/18.12.2014 were correct and that he had made some declaration for un-disclosed income of Rs. 1.50 crores. Such action of departmental authorities clearly establishes that DDIT (Investigation) -III was well aware of the retraction made by the assessee and thus had called him again to file another affidavit accepting the earlier statements. Such conduct of the Income tax department officials clearly establishes that as there was no incriminating documents or any other corroborative evidence found as a result of search or gathered in post search enquiry in support of surrender obtained, they simply went ahead in forcing the assessee to re-affirm the retracted statement that too with new set of alleged recipients. Your honours would appreciate that the assessee is a businessman and not an expert in taxation laws to have detailed knowledge on the jurisdiction and acted in bonafide belief and to the best of his knowledge and understanding in respect of filing of retraction affidavit and letter. Further, ld.AO has alleged that retraction letters filed by assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale transactions was only Rs. 44.00 lacs. In this scenario, it is beyond understanding as to how these can generate undisclosed income of Rs. 150.00 lacs. The Learned AO has also given the details of other properties purchased by the Assessee and his family members in past 6-7 years. The returns of income of the assessee and his family members have been filed in the paper book Volume-2, pages 57-104 wherein no any income from the dealing in properties/ capital gains except in the case of assessee for AY 2014-15 and 2015-16 was declared. This further proves that the addition is made on mere conjecture and surmises without any corroborative material. It is a settled law that the presumption whosoever strong may be but it cannot take place of proof and thus the A.O. has acted more on suspicion and doubt than on evidence. It is settled principle of law that suspicion however strong cannot take the place of evidence. In following cases it has been time and again held that suspicion howsoever cannot take place of evidence: (i) Uma Charan Shaw & Brothers 37 ITR 271 (ii) CIT vs. Anupam Kapoor 299 ITR 179 (P&H) (iii) CIT vs. Dhiraj Lal Girdhari Lal 26 OTR 736 (iv) State Vs. Gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to explain and give clarification on different issues. The department officials recorded his statements in their own handwriting during the period from 17.12.2014 to 18.12.2014 which are at page No. 20- 31 of the paper book. After conclusion of the search proceedings, the assessee filed an affidavit on 24.12.2014 which are at page No. 34-35 of the paper book retracting from the statements recorded during search as the assessee had signed them in haste without reading completely for the main reason that statements were recorded at odd hours and as assessee was not in normal state of mind due to lack of sleep and changed atmosphere. At this juncture, it was submitted by the ld.AR that surrender during the course of search was obtained from assessee on the basis of an alleged loose slip marked as page 7 of Exhibit 2 which is at page No. 40 of the paper book, which was stated to have been found from the possession of assessee and as per statements recorded, said slip contained some entries of cash advances made to various persons for supply of goods from M/s Shri Siddhi Vinayak Induction Pvt. Ltd. It was further recorded that such advance was made by assessee out of his undisclosed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reate evidence for alleged declaration of undisclosed income of Rs. 1.50 crores which was obtained from the assessee on the dotted lines. It is settled law that the paper should be read as a whole. In the instant case the department has read the paper in the manner which suits to it and not considered the same in its entirety. In this regard we draw strength from the decisions, as relied by the ld. AR in the case of Glass Lines Equipments Co. Ltd. V/s CIT 253 ITR 454 (Guj.) wherein it was held that "Interpretation of documents - Documents must be read as a whole. It is a well settled canon of interpretation that a document has to be read as a whole" it is not permissible to accept a part and ignore the rest of the document." Hissaria Brothers V/s ACIT (Jpr.) 22 TW 684 wherein it was held that "the seized document has to be read in its entirety and the parties are not allowed to read only that part which is suitable to it". Lal Chand Agarwal V/s ACIT (Jpr) 21 Tax World 213 wherein it was held that "in no case AO can be allowed to consider a part of a particular document as true being favourable revenue and other part of the very document as false since that is favourable to ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the search & seizure operations but such operations must be carried out keeping in view the basic human rights of the individual. They have no right to cause physical and mental torture to him. If the officer in-charge of the interrogation/recording of statements wanted to continue with the process he should have stopped the same at the proper time and resumed it next morning. But continuing the process without any break or interval at odd hours up to 3:30 AM, forcing the applicant and/or his family members to remain awake when it is time to sleep was torturous act which and cannot be countenanced in a civilised society. It was violative of their rights relating to dignity of the individual and therefore violative of human rights. Even die-hard criminal offenders have certain human rights which cannot be taken away. The applicant's position was not worse than that. In the opinion of the Commission, the Income Tax Department should ensure that the search & seizure operations at large in future are carried out without violating one's basic human rights. To conclude the Commission is prima facie satisfied that there has been violation of the applicant's human rights by the concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s obtained from him on 14.4.2015 duly explaining the circumstances under which such reaffirmation statements were recorded. Thus, the statements of assessee were not recorded as per his own version, is further fortified from the content of statement dated 17/18.12.2014 which started at 9.00 AM on 17.12.2014 and concluded at 8.00 PM on 18.12.2014 which are at page Nos. 20-33 of the paper book, it was mentioned that the impugned amount was cash advance given by assessee to his company M/s Shri Siddhi Vinayak Induction Pvt. Ltd. on different dates as mentioned in the loose papers. However, in the restatement dated 14.04.2015 which are at page Nos. 36-38 of the paper book, completely different version was got recorded that these advances were given to different parties (not to company M/s Shri Siddhi Vinayak Pvt. Ltd.) for purchase of material. Moreover, as per statement dated 18.12.2014, material was to be delivered by the company to assessee individual, however in the statement dated 14.04.2015 entirely different story has been got mentioned that material was to be delivered by different parties to the assessee [and not by the company to the assessee]. For the sake of ready reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 197 (Rajasthan High Court) (g) Ajit Chintaman Karve V/s I.T.O. (2009) 311 ITR (AT) 66 (Puna) Assistant Commissioner of Income Tax 11. From the above facts and circumstances, we are of the view that the exercise of surrender by the Revenue Authority was under duress. No effort was made at the time of search and seizure to verify the genuineness of these rough papers. The revenue authorities just got hold of these papers and pressed the assessee for surrender. The assessee at that stage of search had no option but to agree with the authorities so as to escape from further harassment. In the normal course, if the surrender was genuine, the revenue authorities should have and would have crossed checked the details and facts of amount mentioned in these pages. They should have verified at least a few entries of the accounted amount mentioned in the said paper. No such exercise was done neither during the search nor during the course of assessment proceedings and the post search enquiries do not reveal anything against the assessee. Merely harping on the rough paper and on the statement of the assessee u/s 132(4) won't help in making additions. Under identical circumstances where surr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain director of M/s JKD Pearl India Developers Pvt. Ltd. dated 04/09/2013 Shri Vijay Kumar Jain has also furnished affidavit dated 18/09/2013 for confirming the admission of on-money of Rs. 27,50,31,216/- and for other discrepancies of Rs. 2.5 crore. On perusal of assessment record, it is also seen that the assessee vide letter dt 27.06.2014 has filed retraction letter with the AO. Scanned copies of the relevant pages of the letter are reproduced as under: However, in the return income filed pursuant to notice issued u/s 153A of the assessee has not offered the surrendered amount of on-money in its return. Instead assessee declared total income at a loss of Rs. 1,47,63,169/= on 29/11/2014 in view of these, the AO vide letter dt 26.03.2015 relying on following decisions has asked the assessee why an addition of Rs. 30,00,31,216/= should not be made to the total income of the assessee. Vide letter dt 30.03.2015 (received on 31.03.2015 in the office of AO) assessee has reiterated its earlier stand taken in the retraction letter dt 27.06.2014 (received in the office of AO on01/07/201. In the said letter, assessee has also requested the AO for conducting enquiries regarding alle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen they are sold. On perusal of assessment record, it is seen that AO has not carried out any investigation/enquiry to prove his contention with regard to receipt of on-money as mentioned in the seized documents (Supra). AO has simply relied upon the admission based on the recorded sworn statement u/s 132(2) of Act of Sh Vijay Kr Jain & added the receipt of on-money of Rs. 25,86,60,550/- from the three projects. The Hon'ble Bombay High Court in the case of Surendra M. Khandhar Vs ACIT 321 ITR 254 held as under: "The language of section 132(4A) of the Income- tax Act, 1961, is similar to the language used in section 292C. The provisions raise a presumption that the contents of a document found during search proceedings are true. The presumption can be rebutted." Here I would like to quote the decision of Hon'ble ITAT Jabalpur in the case of ACIT Vs Satyapal Wassan[(2007) 295 ITR (AT) 352 ITAT Jabalpur] wherein elucidating with respect to the same issue, the Hon'ble the Tribunal has held as under: From above decision of Hon'ble ITAT Jabalpur Bench it is pertinent to note that a charge can be levied on the basis of document only when the document i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-A-2 Pg 1 to 4) which according to him, represented an unaccounted transaction; then AO has no option but to accept the explanation of the assessee. The legal provision relating to presumption u/s 132(4A) is applicable to the person from whose possession or control the incriminating material is found & seized. It is further held that the presumption is rebuttable and not conclusive and various courts including the Hon'ble Apex Court have held that it cannot be applied in t- e absence of corroborative evidence. In case of Straptex India P Ltd. v DCIT [2003] 84 ITO 320 (Mum), Hon'ble ITAT Mumbai Bench has held inter alia as under: "…….It follows that, if a statement was taken merely confessing to some income without any information to support same, it will have no validity even according to Board Circular apart from general law..." It is an established principle of law that a party is entitled to show and prove that the statement made by it is in fact not correct and true. in Pullangode Rubber Produce Co. Ltd. V. State of Kerala (1973) 91 ITR 18 (SC), Hon'ble Apex Court has been held that an admission is an extremely important piece of evidence b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he day of search flats were not sold and only booking amounts were received from the customers. Meaning thereby facts/contention of the assessee as well as those buyers who filed affidavits has not been controverted by the AO. Therefore, ultimate addition to be made in a case would depend on facts and circumstances of case and not purely on the disclosure made under section 132(4) which also stood retracted subsequently, and also when there was no material or evidence to justify such addition. Now coming to the of addition of Rs. 25,86,60,550/= made u/s 68 of the Act, on plain is seen that where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by his is not, in the opinion of the AO, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. The perusal of the aforesaid provision reveals that the first and foremost condition of making addition under this section is that the sum is required to be credited in the books of the assessee maintained for the previous year. in the instant case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial has been brought on record that the assessee company received any on-money on sale of flats. It is an admitted fact that during the course of search no receipt of on money containing signatures of the assessee which was ever issued by the assesse to buyers. The A.O. also admitted in the assessment order at page 24 & 25 that the pages 1 to 4 of Annexure-A2 are undated and do not contain the name of the buyers, signatures of the assessee or the buyers and even the amount noted in those pages do not exactly tally with the amount of sale as per registered sale deeds. This fact has also been brought before us that the sale deeds in respect of some of the flats have already been got executed but no such enquiry has been carried out by the A.O. in respect of those registered sale deeds. The assessee had also placed on record the detailed affidavits of the buyers which specifically contains the name and addresses of the purchases wherein the buyers have categorically mentioned that the amount paid by them to the assessee and it was also admitted in their affidavits that no on- money amount was ever paid by them to the assessee. But all those affidavits which contains relevant detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve noticed that those papers which are now in dispute i.e. page Nos. 1 to 4 of Annexure-A2 are computer printouts having no dates. As per the A.O. surrender was made by the assessee by admitting that the amounts noted in column B was received in cash against the sale of various flats in the multi storied buildings located at various places in Jaipur and Alwar. However, no effort was made by the A.O. to prove the genuineness of transactions noted in these papers. The A.O. was expected during the course of verifications to find out and ascertain the "date and year of transaction" and thereafter should have verified whether the accounted amount shown in the Column-A was verifiable or not from the regular books of account but even this exercise was not carried out by the A.O.. It is a settled proposition of law that if the seized papers mentioned do not carry any date and particulars then such papers are to be treated as rough papers. Admittedly in the present case, all those four pages do not contain any date, signature, person from whom received etc. We have also gone through the decision of the Coordinate Bench of ITAT Jaipur in the case of Moolchand Kumawat & Sons Vs DCIT 42 Taxwor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed even in respect of fact that buyers have already submitted their respective affidavits which are at page No. 1 to 28 of the paper book, but still the A.O. has not carried out any post search verifications and have not confronted with such buyers. The A.O. was not expected to make any addition merely on the basis of suspicion, conjecture and guess, which is not admissible in law. While drawing our attention towards the pages found during the search, the assessee had pointed out that these pages also do not contain date of payments and whatever is noted on these pages such as the area of the flat is also at variance with the actual area of the flat. In this respect, the ld AR also invited our attention to a chart submitted before the lower authorities reflecting the area as per the seized paper as well as the area as per the sale deed executed by the assessee and the same is reproduced below: JKD Pearl Landmark FLAT NO. AREA AS PER SEIZED PAPERS (Sq. ft) AREA AS PER SALE DEED (Sq. ft) 101 493.75 792.3 301 * 3033.4 302 3033.4 401 2937.50 2952.5 402 2937.50 2952.5 501 & 502 5875.00 5906.4 601 & 102 2937.50 3033.4+792.3 602 * 2937.50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deeds were executed post search by the assessee. The ld AR has also submitted before us that although no detail of buyers was drawn in these papers but even then the buyers had submitted respective affidavits and the assessee had sought information from the A.O. with regard to statement if any recorded on the said buyers U/s 131 of the Act or U/s 133(6) of the Act but the A.O. has not supplied any such statement to the assessee in this respect. Our attention was also drawn to the letter dated 28/10/2016 filed by the assessee with the DCIT, central Circle-2, Jaipur, it was specifically stated before us that the buyers have specifically stated in their affidavits that whatever has been paid for purchase of flat has been paid by them through cheque which is fully verifiable from the records and the position being so there was no case with the A.O. for making any addition on the basis of alleged on-money receipts on sale of flats. We have also gone through the judgments relied upon by the assessee wherein it has specifically held that no addition is warranted on the basis of incomplete information and thus those pages are liable to be declared as rough and dump. In this respect, we rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Del) (8) CIT Vs. Girish Choudhary (2008) 296 ITR 619 (Del) (9) JayantiLal Patel Vs. ACIT (1998) 233 ITR 588 (Raj) (10) RakeshGoyal Vs. ACIT (2004) 87 TTJ 151 (Del) (11) ITO Vs. Manna LalJhalani 22 TW 551 (ITAT Jaipur) (12) Hissaria Brother Vs. ACIT 22 TW 684 (ITAT Jaipur) (13) DCIT Vs. Countrywide Buildestate Pvt Ltd. (2012) 48 TW 50 (Jaipur ITAT) order dated 29.06.2012 ITA No. 961/JP/2011 17. The ld DR has specifically pointed out that the retraction made by the Director of the assessee company is of no consequence as the statement was made U/s 132(4) of the Act. He has also submitted that once the admission has been made by the assessee, the same cannot be retracted unless and until establishes the reasons for retraction and it was also submitted by the ld CITDR that the retraction in the present case made by the assessee is an afterthought. The ld CIT-DR has drawn our attention to the following judicial pronouncements: "I In the case of Video Master Vs JCIT [2016] 66 taxmann.com 361 (SC), it has been held by the Hon'ble Apex Court that: "3. In the second round, the assessment order dated March 29, 2000, gave detailed reasons for arriving at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dentiary value. 21. Thereafter, the assessee company filed its return of income on 30-9- 2015 wherein such surrender was not honoured by the assessee company and the undisclosed income in form of cash found at the residence was not offered to tax, effectively retracting from the statement recorded on oath under section 132 (4) of the Act. It is relevant to note that during the intervening period i.e., the day the statement was recorded under section 132 (4) on 10-10-2014 and day the return of income was filed on 30-9-2015, almost a period of 11 months, there is no communication from the assessee company to the Revenue authorities retracting from the statement so made and recorded during the course of search proceedings. In fact, during the post search proceedings, the assessee again got an opportunity wherein he was called and his statement was recorded under section 131 on 4-12-2014 and therein, as well, he maintained his earlier stand and didn't retract from the statement so recorded during the course of search. This also proves that the contention of the assessee company that the earlier surrender during the course of search was under pressure is totally unfounded. 23. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uenced by external agencies. Thus, whenever an assessee pleads that the statements have been obtained forcefully/by coercion/undue influence without material/contrary to the material, then it should be supported by strong evidence which we have observed hereinbefore. Once a statement is recorded under Section 132 (4), such a statement can be used as a strong evidence against the assessee in assessing the income, the burden lies on the assessee to establish that the admission made in the statements are incorrect/wrong and that burden has to be discharged by an assessee at the earliest point of time and in the instant case we notice that the assessing officer in the Assessment Order observes:- "Regarding the amount of Rs. 44.285 lakhs, it is now contended that the statement under section 132 (4) was not correct and these amounts are in thousands, not lakhs i.e. it is now attempted to retract from the statements made at the time of S & S operations." Therefore, what we gather from the Assessment Order and on perusal of the above finding that the retraction was at the stage when the assessment proceedings were being finalized i.e. almost after a gap of more than a year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was recorded under pressure, coercion or compulsion. We deem it appropriate to reproduce para 15 of the said judgment, which reads thus, ...." It may be mentioned that the Hon'ble High Court has discussed a number of judicial pronouncements in the above referred judgement and after discussing them, it has been held by the Hon'ble High Court in the case of Banna Lal Jat that: "Reverting back to the present case, the ITAT, on the basis of such statement of Shri Bannalal Jat, concluded that he was managing his business affairs of both his proprietary concern as well as appellantITA company from his residence and that in the absence of individual cashbook of respective concerns and other details maintained by him, it is not possible to identify whether the cash so found belongs to the proprietary concern or to the assessee company. Subsequently, when the statement under Section 132(4) of the IT Act was recorded on 10.10.2014, which was concluded at his residence, Shri Bannalal Jat categorically admitted that the cash amount of Rs.1,21,43,210/- belonged to his company M/s. Bannalal Jat Construction Private Limited and the same was its undisclosed income. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that admission is an extremely important piece of evidence but it can't be said that it is conclusive. It is open to the person, who made admission to show that it is incorrect. The assessee should be given proper opportunity to show the correct state of affairs. The law with regard to this has developed much thereafter. There is no gainsay the fact that admission made during the search can be disputed by the assessee and at the same time however it is equally well settled that the statement made voluntarily by the assessee could form the basis of assessment. Mere fact that the assessee retracted the statement at later point of time could not make the statement unacceptable. The burden lay on the assessee to show that the admission made by him in the statement earlier at the time of survey was wrong. Such retraction, however, should be supported by a strong evidence stating that the earlier statement was recorded under duress and coercion, and this has to have certain definite evidence to come to the conclusion that indicating that there was an element of compulsion for assessee to make such statement. However, a bald assertion to this effect at much belated stage c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial question of law formulated by this Court vide order dated 10.04.2018 is answered in favour of the revenue and against the assessee in the aforesaid terms." IV In the case of Bhagirath Aggarwal Vs CIT [2013] 31 taxmann.com 274 (Delhi), it has been held by the Hon'ble High court of Delhi that: "11. Before us the learned counsel for the appellant contended that the statement made by an assess could always be subsequently retracted. He further submitted that it was open to the person who made an admission to show that the admission was incorrect. For this proposition he placed reliance on a Division Bench decision of this Court titled Ester Industries Ltd. v. CIT [2009] 316 ITR 260/185 Taxman 266 (Delhi). However, that case was not one of search and seizure u/s 132 of the said Act. Furthermore, in the present case no material has been produced by the appellant/assessee to show that the admission made by him was incorrect in any way. On the other hand, it is the assessee who is insisting that it is for the department to corroborate the statement of admission made by him and until and unless the department corroborates the same, the statement cannot be relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain confessions as to undisclosed income and that any action to the contrary would be viewed adversely. 14. We do not see how this circular would, in anyway, come to the aid and assistance of the appellant. All that it shows is that the Incometax Officers should not try to force a confession from an assessee. However, if an assessee voluntarily makes a surrender, the officials of the income tax department are bound to record that statement u/s 132(4) and such a statement, voluntarily made, is relevant and admissible and is liable to be used as evidence." V. In the case of CIT Vs 0. Abdul Razak [2012] 20 taxmann.com 48 (Ker.), it has been held by the Hon'ble High Court of Kerala that: "In the instant case on the clear admission of the assessee corroborated by the documents the burden on the department ceases to exist. On the retraction being filed by the assessee, there is a burden cast on the assessee to prove the detraction or rather disprove the admissions made. It is not a shifting of the onus but a new burden cast on the assessee to disprove the earlier admissions having evidentiary value. As noticed earlier, retraction made by the assessee can only be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto the books of account. Before the assessing Officer, the assessee has given more than one statement accepting the on-money payment. For the first time, before the Commissioner of Income Tax (Appeals), the assessee took a stand that the slips are only dumb sheets and there was no connection with the purchasing of residential property and further, the assessee sought to explain the notings to mean as monthly instalments and arranging of funds and not for payment. The Commissioner of Income Tax (Appeals), after considering the said statement, has given reasons as to why the statements of the assessee are not tenable. In fact, the assessee in no uncertain terms has accepted in his statement that the slip represents payment made for the purchase of property in question. The retraction is vague and a clear afterthought. Therefore, the Commissioner of Income Tax (Appeals) rightly considered the effect of the notings as well as the statement given by the assessee, wherein he had accepted the on-money payment. Once again before the Tribunal, the attempt of the assessee was to wriggle out of the entries in the slips by stating that they have no corroboration with that of the purchase of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (e) Kailash Ben MohanlalChoksi v/s CIT (2008) 14 DTR (Guj) 257 It is too much to give credit to a statement recorded at midnight where a person may not be in a position to make any correct and conscious discloses" Disclosure statement recorded at odd hours cannot be considered to be a voluntary statement. (f) Hukum Chand Jain Vs. Income Tax Officer (2011) 334 ITR 197 (Rajasthan High Court) Admission despite being an important piece of evidence was not conclusive and it was open to the assessee to show that it was not correct. (g) Ajit Chintaman Karve V/s I.T.O. (2009) 311 ITR (AT) 66 (Puna) Assistant Commissioner of Income Tax Branch That merely because an offer was made having no cogent basis or approval of law that should not stop a taxpayer from correcting his mistake. It was the duly of the A.O. to tax only the legitimate amount from a taxpayer. The following facts further established that the exercise of surrender by the Revenue Authority was under duress. No effort was mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the A.O. to find out the genuineness of the transactions noted in these papers. The minimum thing which was expected from the authorized officer was that he should have ascertained the date and the year of transaction and then he should have verified whether the accounted amount should in column 'A' was verifiable or not from the regular books of account. Even, this minimum exercise was not done by the A.O. If the accounted money on alleged sale of flats as shown in these papers is not verifiable from the books of account then the natural conclusion which can be drawn by the prudent persons is that these papers are rough papers only. The papers contained only projections of imaginary sale value of the flats. Thus, these papers taken out from the computer are nothing but a part of the business strategy of the assessee. The revenue has not been able to link the transactions of these papers either with the material seized during the course of search or by way of post search enquiries. Since, all the controversy is revolving around these seized papers and admittedly these papers do not contain name of the buyers and also do not contain the date of transactions. It is an admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court of Rajasthan has categorically held that if the assessee does not adhere to the surrender made then it is for the Assessing Officer to bring on record cogent material and other evidences to support the addition rather than simply rely on the statement. 20. The CBDT is an apex authority of the revenue and in this regard, the CBDT it had issued instructions/circulars dated 10/03/2003 and 18/12/2014, wherein it has categorically been directed that focus and concentration should be on collection of evidence of income instead of merely rely upon the statements made during search, for ready reference the same are reproduced below: (i) F. No. 286/2/2003-IT (Inv) dated 10.03.2003 No confessional statement in the course of search, seizure and survey. March 10th, 2003 Confession of additional Income during the course of search &seizure and survey operation GOVERNMENT OF INDIA MINISTRY OF FINANCE &COMPANY AFFAIRS DEPARTMENT OF Revenue CENTRAL BOARD OF DIRECT TAXES Room No. 254/North Block, New Delhi, the 10th March, 2003 To All Chief Commissioners of Income Tax, (Cadre Contra) & All Directors General of Income Tax Inv. Sir Subject : Confession of ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole and officers concerned in poor light. 2. I am further directed to invite your attention to the Instructions/Guidelines issued by CBDT from time to time, as referred above, through which the Board has emphasized upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence. 3. In view of the above, while reiterating the aforesaid guidelines of the Board, I am directed to convey that any instance of undue influence/coercion in the recording of the statement during Search/Survey/Other proceeding under the I.T.Act,1961 and/or recording a disclosure of undisclosed income under undue pressure/ coercion shall be viewed by the Board adversely. 4. These guidelines may be brought to the notice of all concerned in your Region for strict compliance. 5. I have been further directed to request you to closely observe/oversee the actions of the of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case as narrated and discussed, we are of the considered view that the mere admission is not conclusive as to the truth of the matter. It is only a piece of evidence, the weight to be attached to which must depend on the circumstances in which it is made. It can be shown to be erroneous or untrue. Therefore, addition made merely and solely on the basis of confession without any corroborative evidence was not sustainable in law and moreover the said confession made by the assessee was subsequently retracted and since the addition was not supported by any cogent, convincing independent documentary evidence, therefore, the same was correctly found to be not sustainable by the ld. CIT(A). 24. No new facts and circumstances have been brought before us in order to controvert or rebut the findings so recorded by the ld. CIT(A), therefore, we see no reason to interfere or deviate from the findings so recorded by the ld. CIT(A). Therefore, we uphold the order passed by the ld. CIT(A) qua this issue." 12. As per the ld. AR, the AO has disregarded the retraction affidavit on the allegation that the assessee has not filed retraction with his jurisdictional Income Tax officer [ITO Ward 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly followed by the department and thus did not ask for any other evidence like receipt number along with the stamped copy. It is only on receipt of this show cause notice that the assessee has learned about the system of Dak Receipt serial numbers on perusal of the certified copies of the dak register provided. Thus, no adverse inference may be drawn against assessee for non recording the retraction affidavit/ letter filed in subject Dak Receipt register. In view of the above, we are of the considered view that the assessee had not offered Rs. 1.50 crores in statements and rather forced surrender was obtained by the department and therefore he retracted such statements at the earliest opportunity i.e. on 24.12.2014, which was again confirmed on 15.04.2015. However these evidences were not considered by the AO and additions were made without corroborating such statements with any material on record. So far as slip on the basis of which is department has tried to substantiate the addition of Rs.1.50 crores is concerned, it was submitted by the ld. AR that the slip did not bear any signature of third party nor were the figures mentioned therein proved to be undisclosed income of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, judicial precedents referred above as well as following the decision of the Coordinate Bench of this Tribunal in the case of DCIT Vs. JKD Pearl India Developers Pvt. Ltd.(supra) wherein the present Author of this order was also the Author of that order, therefore, we direct the A.O. to delete the addition so made and confirmed qua this issue. 13. Ground No.3 raised by the assessee in this appeal relates to challenging the order of the ld. CIT(A) in confirming the addition of Rs.1,39,581/- made by AO. 14. Having considered the rival contentions and carefully perused the material placed on record. From perusal of the record, we observed that during the year under consideration, assessee had sold one plot of land at Suncity, Sikar Road Jaipur during the FY 2014-15 for Rs. 23,15,000/- to Mrs. Usha Rani and had paid brokerage of @ 3% on sales amounting to Rs. 69,450/- to the broker Mr. Sunil Gajeria. In support of such claim complete address of broker as well as PAN were furnished before the AO. At this juncture, details of expenses so disallowed is furnished as under: - Brokerage Expenses Rs.69,450/- - JDA Expenses Rs.6,776/- Indexed Cost Rs.12,593/- - JDA E ..... X X X X Extracts X X X X X X X X Extracts X X X X
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