TMI Blog2005 (11) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not contain any new evidence, fact or material. There is nothing in this affidavit to rebut the contents of the seized documents as shown on page 7 bundle No. 14 of party R6. Thus, such affidavit or even the letter written to the CIT can neither negate the declaration of disclosure given on oath by the assessee nor can it become the basis of retraction of the declaration made u/s 132(4). When we compare the fact situations in two cases, one when the statement u/s 132(4) was recorded and the other when the retraction was tendered, we find that, in the former, there is very little time and scope of artificiality, or stating falsity, the assessee is not in a frame of mind where he could create some explanation which is not true. Only possibility is that he may, state something or some facts of which he may not be aware. Whatever spontaneous answers come they are mostly true unless, proved with acceptable facts otherwise. When the statement is given that on- money has been paid, it should be accepted as true because it is in the very personal knowledge of the assessee. What he knows only he can state. Once he states on oath, some thing personal and only known to him, it must be tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explained business expenditure - NRI gift - Payment of on-money towards purchase of flat - After considering the material and also the case laws cited in the case of Shri Manmohan Singh, we are of the view that issue simply boils down to the point that whether statement given u/s 132(4) has to be used against the assessee or retraction is given weightage and additions be deleted. The issue has been considered in detail in the case of Shri Manmohan Singh Vig (HUF) by this Tribunal. Following the decision of Tribunal in Manmohan Singh Vig (HUF) s case (supra), we hold that the retraction or rather denial is not established by any material/evidence and hence the same cannot be substituted for admission made by the assessee under sections 132(4) and 131(1A) and supported by documentary evidence found in the search. This is the position in respect of all the impugned additions made by the Assessing Officer. Hence, the additions made are confirmed. No evidence has been furnished to show as to how the case of the assessee does not fall under Chapter XIV-B. We reject this contention. We reject all the grounds raised by the assessee in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose against whom search operation was carried out. During the course of the search at his residential premises, cash of Rs. 4,07,510 was found out of which Rs. 3,50,000 was seized and jewellery valued at Rs. 7,99,097 was found but nothing was seized. In addition to this, there was also a seizure of registers and loose papers contained in four bundles of Annexure-A of panchanama dated 11-10-1996. There was also seizure of loose papers and diaries concerning to business of Sri Manmohan Singh from the business pre-mises of SV Trading Co. and M/s. Vig Automobiles. After the search notice under section 158BC was issued on 26-2-1997 and served on 27-2-1997. Then notice under section 143(2) was issued on 13-6-1997 and again on 3-10-1997. This is claimed to have been served on the assessee. The return of undisclosed income was filed on 12-9-1997 declaring undisclosed income of Rs. 16,79,270 as under : 1 Undisclosed payment made to Smt. Dolly Ghosh, a retiring partner of M/s. Vig Automobiles during the accounting period relevant to the assessment year 1992-93 Rs. 10,00,000 2 Unrecorded contributions for chit fund during the accounting period relevant to assessment years 1995-96, 1996-97 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat during the course of search action against me under section 132 of the Income-tax Act, 1961, which commenced from 10th October, 1996 and during the course of subsequent Income-tax Act proceedings, my statements were recorded under section 132(4) and under section 131( a ) of the Income-tax Act, 1961, from time to time. 2. That during the course of recording of the said statement my considerable resistance, I was pressurised and to make certain statements, which were incorrect and not true. In the said statements, I was forced to won up certain amounts as unaccounted investments. I give below the details of such alleged unaccounted investments which were recorded in my above mentioned statements as being made by and the said statements being incorrect I hereby withdraw the same Particulars Amount A. Unaccounted cash payments made to M/s. New Suraj Builders, Thane towards purchase of flat in Audumbar Apartments Rs. 2,30,000 [The documents relating to above premises were kept with me as security for payment made by me to M/s. Woodpackers Pvt. Ltd., Nasik a Company belonging to the same group as New Suraj Builders. I repeatedly tried in explain the true facts vide my various answer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It was further submitted before the Assessing Officer that if rate per sq.ft. is worked out after including alleged on-money then, it would come to Rs. 1,933 per sq.ft. for shops and Rs. 1,262 for flats. The said premises were also got valued from registered valuer to determine the market rate as at December 1999 and according to which market rate was Rs. 800 for shops and Rs. 500 per sq.ft. for flats, which is nearly the same as per declared purchase cost. 5. Regarding second issue about payment to New Suraj Builders, assessee submitted that no payment of Rs. 2,30,000 has been made to New Suraj Builders. A partner of that concern had required a loan of Rs. 3,00,000 and this request was made to M/s. Amber Wood Packers Pvt. Ltd. in which he is a director. Against that loan, title documents of flat No. 405 were submitted. The said loan was given in 1996 to M/s. Amber Wood Packers. So no payment was made to New Suraj Builders directly. Regarding household expenditure and interior decoration of Rs. 2,70,000 it was submitted by the assessee that he is an extremely middle class family and their withdrawals including that of the wife are sufficient to cover the household expenditure. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eafter he admitted to have paid unaccounted on-money of Rs. 31,40,900 in total, in respect of aforesaid six shops and four flats. The half share of two Manmohan Singh and Rajender Singh each comes to Rs. 15,70,450. For this the Assessing Officer relied on the statement of Shri Manmohan recorded on 25-10-1996 : Q-10. Please go through Page 7, back side, bundle 14 or R-6 dated 11-10-1996 and clarify the entries of Rs. 10,60,100 and the name mentioned in Urdu ? Ans.: The name in Urdu is Mehta Enterprises. The amount on left hand side on the Page is Rs. 10,77,600 for 6 shops and Rs. 9,82,500 for 4 flats Rs. 20,60,100 This amount is the price of 6 shops and 4 flats booked in Tulsi Shyam Building, Highway Jn. Eastern Express Highway, Thane (W). These properties were booked with Mehta Enterprises. Q-11. Six shops and Six flats were booked in 1989. Please give the details payments made by cheques to Mehta Enterprises. Ans. : Payments made through cheques have been reflected in books of account. Q-12. As per working, the cheque amount of 6 shops and 4 flats comes to Rs. 10,76,000 and Rs. 9,82,000. Total payments comes to Rs. 20,58,000. The price of shops and flats is mentioned at Rs. 20,60, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 which comes to Rs. 30,00,000 was paid in cash to M/s. Mehta Enterprises for purchases of 6 shops and 4 flats in Tulsi Shyam Building. Total purchase price was Rs. 52,01,000 out of which cheque payment was Rs. 20,60,100 and the remaining amount Rs. 31,40,900 was cash payment has not been recorded in regular books of account of the group concerns or individual accounts. This amount was unaccounted income of our groups and I am ready to pay tax as per the provision of the Income-tax Act, 1961 for the block period. Uncounted cash payment was made by me on flats. We have already offered Rs. 10,00,000 as unaccounted income on 11-10-1996 during the search at our residence. This Rs. 31.40 Lakhs is inclusive of Rs. 10,00,000. Regarding the theory of coercion and pressure on the basis of which the admission made under sections 132(4) and 131(1A) was retracted, the Assessing Officer reasoned that ( i ) the statement given under sections 132(4) and 131(1A) were based on seized papers, ( ii ) he did not inform the alleged coercion to higher authorities including CCIT without loss of time. This retraction was done after lapse of 11 months from the date of search action. The delay in retraction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RE According to the Assessing Officer, Shri Manmohan Singh in answer to q.28, in the statement recorded under section ( sic ) voluntarily disclosed Rs. 2,70,000 as undisclosed income being expenditure/investment in interior decoration and household matters. The said disclosure was later retracted vide affidavit dated 10-9-1997. The reason for retraction was again the same - pressure and coercion while recording statement under section 132(4). It is useful to reproduce qs.28 29 and their answers recorded on 11-10-1996. Q.28 Looking at the cash payment made by you to Mrs. Dolly Ghosh of Rs. 10 lakhs the NRE Gifts received by you your family members the payment of Rs. 2.30 lakhs paid by you in cash to M/s. New Suraj Builders, Thane and the on-moeny payment of Rs. 5 lakhs made by you for acquiring immovable properties at Tulsi Shyam Bldg. you are requested to offer your comments on the same. Ans.-1 As regards the on-money payment for purchase of immovable properties at Tulsi-Shyam Bldg. I admit that I have paid Rs. 5 lakhs as on- money out of my unaccounted income declare the same for the Block period and agree to pay taxes on the same. As regards the NRE Gifts received by me my family ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... success because it was search case and there was a desire in him to make a successful assessment. On this ground, he submitted that assessment be set aside. Secondly, learned AR submitted that the flats and shops and Tulsi Shyam Building were valued by approved valuer during the course of assessment proceedings and their report indicates that market rate of the flats and shops at that time was in the vicinity of recorded rate at which shops and flats were purchased. In order to highlight his point, he referred to page 62 of the APB, which shows the rates adopted by approved valuer in the vicinity of date of purchases of flats and shops in Tulsi Shyam Building. Thirdly, learned AR also submitted that Municipal authorities had carried out their own valuation for the purposes of stamp duty and they found the value of one shop at Rs. 2,20,000 as against 1,88,000 shown by the assessee in the purchase documents. This shows that market value was near about the same and not the one which would have come after taking into account on-money allegedly paid by the assessee to the owner of said building for purchases of shops/flats. The next argument of learned AR was the Assessing Officer did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uivalent to that sum and the total of the two came to Rs. 52,01,000. Thus according to learned AR, as explained in this letter, sum of Rs. 52,01,000 consisted of additional sum for purchase of 8 flats, which did not materialize. He referred to that letter extensively. We, therefore, for the sake of convenience reproduce the same as under : Date 29th October, 1997 To The Hon. Comm. of I tax, Thane In the matter of Shri Manmohan Singh Vig Objections in respect of draft assessment Order for the block period Respected Sir, I thank you for the opportunity granted to me by your honour, to put forth my objections in respect of the draft assessment order for the block period. I submit the same as under : 1. Investment in flat shops - Tulsi Shyam Rs. 15,70,450 Sir, as the matter has already been discussed at length in the draft assessment Order, I restrict myself to only certain salient points to substantiate my claims. A. No On Money was paid in respect of the acquisition of the said promises. The entries referred to on page No. 7 bundle No. 14/R-6 pertain to our groups original proposal for acquiring 6 shops and 12 flats in the said building for a sum of Rs. 52,01,000. Later on only 6 sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase except for certain repairs from time to time. As far household expenses are concerned, I alongwith my family adhere to extremely middle class standards of living and my wife s withdrawals for household expenses are sufficient to cover my family s expenses for household purposes. My and my wife s withdrawals for the block period have been submitted on record yearwise and the same total Rs. 5,48,084 for the entire block period. I humbly submit that the same are adequate for the purpose. I hereby humbly pray to your honour to direct deletion of the addition proposed on this count also. Regarding retraction learned AR explained that his partner was ill. He was to be hospitalized, he drew our attention to this communication in this regard to the Assessing Officer as under : 5. Delayed Retraction : Sir, as far as the fact of my retraction at a late stage is concerned, I submit that the same is on account of severe health problems suffered by my partner Shri Rajinder Singh Saini. His health suffered a set back during the search proceedings itself and he had to be hospitalized in the middle of search action. This was further complicated by a massive heart attack for which he was fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT [1999] 71 ITD 128 (Indore) No addition could be made in any of the assessment year of the block period regarding which no material or information was available with the Assessing Officer. 5. Pankaj Dahyabhai Patel (HUF) v. Asstt. CIT [1999] 63 TTJ (Ahd.) 790 Merely because the block assessment is required to be framed under Chapter XIV-B, relating to undisclosed income, no right is given to the Assessing Officer to make assessment arbitrarily or contrary to the information available on record. 6. Harakchand N. Jain v. Asstt. CIT [1998] 61 TTJ (Mum.) 223 No addition can be made in any of the assessment year of the block period regarding which no material or information is available with the Assessing Officer at the time of block assessment. 7. Nilesh R. Shah v. Asstt. CIT [2002] 253 ITR 34 (Chennai - Trib.) Addition on account of cash credit can be undisclosed income on the basis of evidence found as a result of search or requisition of books of account or documents and such other materials or information as are available with the Assessing Officer. Where there was no information, material or document with the Assessing Officer to show that cash credit was not genuine, the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO s belief that income has escaped assessment, will invalidate reassessment. 15. Maynak Poddar (HUF) v. WTO [2003] 181 CTR (Cal.) 362 If in law an item is not taxable, no amount of admission or misapprehension can make it taxable. The taxability or the authority to impose tax is independent of admission. Neither there can be any waiver of the right by the assessee. The Department cannot rely upon any such admission or misapprehension if it is not otherwise taxable. This question was dealt with by this Court in Bhaskar Mitter s case [1994] 73 Taxman 437, at paragraph 8 at page 442. In this decision, this Court observed: An assessee is liable to pay tax only upon such income as can be in law included in his total income and which can be lawfully assessed under the Act. The law empowers the Income-tax Officer to assess the income of an assessee according to law and determine the tax payable thereon. In doing so, he cannot assess an assessee on an amount, which is not taxable in law, even if the same is shown by an assessee. There is no estoppel by conduct against law nor is there any waiver of the legal right as much as the legal liability to be assessed otherwise than according to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m any effect, the person is entitled to go back on the statement already made by making correct statement. Any statement made in the ignorance of law, the legal rights or under duress cannot bind the maker of the admission. (Evidence Act, 1872, Section 3 - Fraud - Proof) Where a person on whom fraud is committed is in a position to discover the truth by due diligence, fraud is not proved. It is neither a case of suggestion falsi, or suppression. 20. Deepchand Co. v. Asstt. CIT [1995] 51 TTJ (Bom.) 421 Income - Addition - No supporting evidence to confirm the addition except statements of two partners recorded at the time of search - Statements recorded during search continuing for more than two days and two nights cannot be considered to be free, fearless and voluntary - There is considerable force in assessee s contention that statements were recorded under pressure and force - Retraction of statements supported by proper evidence - Additions cannot be sustained on merits. 21. K. Moidu v. Asstt. CIT [2002] 81 ITD 242 (Cochin) (TM) There is no scope for general estimations in a block assessment in the absence of specific and speaking materials. In a block assessment, generally esti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities about alleged coercion or pressure. The alleged retraction was after a gap of 11 months. In fact it is a denial of original statements given on 11-10-1996 and 25-10-1996. No material has been submitted by the assessee as to how the original statements admitting payment of on money was incorrect. The learned DR relied on- decisions in Asstt. CIT v. Laxmanbhai J. Patel [2001] 77 ITD 166 (Rajkot), 170 Taxman 174 ( sic ), Ramesh T. Salve v. Asstt. CIT [2000] 75 ITD 75 (Mum.), Greenview Restaurant v. Asstt. CIT [2003] 263 ITR 169 (Gauhati). The learned DR also denied that there was any bias. He also submitted that valuation reports obtained by the assessee from approved valuer are only self serving documents. It does not lead to the conclusion that no on- money was paid on the face of seized documents and admission by the assessee. He also sought to invoke provisions of section 132(4A) wherein presumption is raised about truthfulness of contents of documents seized in the search. Since it was a rebuttable presumption and assessee has not discharged the onus to rebut the presumption, it will hold good and payment of on-money on purchase of shops and flats have to be believed. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this sort in the present case. Further, we find that, after the end of the search, after 14 to 15 days, the assessee attends the proceedings before ADI and enhances the disclosure of on-money payment from 20,00,000 to 31,40,900. This is the strong evidence against the theory of pressure or coercion if there was any, assessee would not have come forward to enhance the disclosure. Further the fact that assessee has practically kept quite for 11 months and did not respond to the letters/notices issued by the Assessing Officer to him on 26-2-1997 and 13-6-1997 shows that factors of pressure or coercion were not present even after the search. There was nothing which would have prevented the assessee to report to the Assessing Officer or to the higher authorities. He not only did not act at his own but also did not respond to the notices till September 1997, when he wrote the affidavit. Thus, the conduct of the assessee clearly shows that the theory of pressure or coercion is only an after- thought just to support the retraction. We are in agreement with Assessing Officer and learned DR that what was retracted subsequently was only a denial. No material was produced before the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement advised him to consult Shri Rajender Singh Saini regarding investment in Tulsi Shyam Building and then state as to whether they are recorded in the books of account or not, Shri Manmohan Singh could not withhold the truth for long and stated in response to q. 17 that out of Rs. 52,01,000 remaining amount that is Rs. 31,40,900 was the cash payment not recorded in the regular books. He clearly said that a sum of Rs. 31,40,900 was unaccounted income of his group and he is ready to pay tax as per provisions of IT Act. Regarding the contention in retraction that sum of Rs. 31,40,900 was in respect of intended purchase of additional 8 flats in Tulsi Shyam Building. We are of the view that it is liable to reject out right because there is no support for this claim and it is coming too late. Had it been a fact nothing prevented Shri Manmohan Singh to state so when his statement is being recorded on 11-10-1996 and 25-10-1996. Nothing also prevented the assessee to respond to the notice issued by the Assessing Officer under section 158BC immediately after receipt thereof on 27-2-1997 and disclose the true facts. The fact that he kept quite for another 7 months demolishes theory of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmission of the assessee under section 132(4). We find no infirmity in the action of Assessing Officer and therefore, these case laws are out of the point. Citation No. 8 is for the proposition that what falls in the regular assessment cannot be brought to tax in block assessment. No dispute. But this is not the case here. Citation No. 9 is for estimating income in block assessment. Not applicable. Citation No. 10 is also not applicable because assessee could not prove with material evidence that admission made by him of undisclosed income was incorrect. Citation No. 11 would be applicable when expenditure etc. is claimed from the undisclosed income in block assessment. Citation Nos. 12 to 14 are in relation to reopening of assessment. Citation No. 15 is for the proposition that if an item is not taxable in law, it cannot be taxed. This is also not applicable. Citation No. 16 is about estimation of sale price. In the present case, admission by the assessee is supported by the seized documents. Citation Nos. 17 and 18 are on imposition of penalty. Citation No. 19 relates to when a person discovers the truth after statement is made. As already held, there is no discovery of truth/fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact biased in the sense that he was involved or interested in his personal capacity in the outcome of the assessment or in the procedure of the assessment no doubt it would be a good ground for setting aside the assessment. We therefore reject this contention. 17. Next argument of ld. counsel of the assessee is that his approved valuer and also the valuer of the local authorities for stamp duty purposes had found out the market rates of the properties and they were in the vicinity of the rates in which he had purchased the shops and the flats. Therefore, his recorded price is correct and therefore, it should be believed that he has not paid any on-money. We have no option but to reject this argument. No such document was found in the search. Approved Valuer s report is obtained in October, 1997. It is not contemporary. It is only a self-serving exercise. The working if any done by the Municipal Authorities was for the purposes of levying stamp duty. They had no occasion to look into the statements of the assessee and seized documents. The purpose and procedure of Income-tax and stamp duty are different. Their valuation cannot undo the inference drawn on the basis of seized documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. This is based on maxim, allegans contria non est audiendus (a person alleging contradictory facts should not be heard). In Pickard v. Sears (1837) 6 Ad El 469, 474. It has been held that where a person by his words or conduct wilfully causes another to believe the existence of a certain state of things and induces him to act on that belief, so as to alter his own previous position, the former is concluded from averring against the latter qua different state of things as existing at the same . In the celebrated book titled Administrative Law by Sir William Wade (eighth edition by Wade and Forsyth Oxford University Press), the legal position has been explained at p. 242 as under : The basic principle of estoppel is that a person who by some statement or representation of fact causes another to act to his detriment in reliance on the truth of it is not allowed to deny it later, even though it is wrong. Justice here prevails over truth. Estoppel is often described as a rule of evidence, but more correctly it is a principle of law. As a principle of common law it applies only to representations about past or present facts. In Evidence Act also, it is clearly laid down in section 115 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of illness of partner Shri Rajender Singh Saini. On this, we are of view that this explanation has no force because even though Shri Rajender Singh Saini may be in hospital but nothing prevented the assessee from clarifying the facts immediately after search, if what was stated before the officers was factually incorrect. The affidavit so filed by the assessee after 11 months does not contain anything spectacular, some thing which could have been discovered after lapse of time. There were no such contents in the affidavit which could have only been obtained at a later date or could not have been obtained just immediately after the search. In fact to our understanding, the affidavit of Shri Manmohan Singh is only a bald denial and nothing else. It does not contain any new evidence, fact or material. There is nothing in this affidavit to rebut the contents of the seized documents as shown on page 7 bundle No. 14 of party R6. Thus, such affidavit or even the letter written to the CIT can neither negate the declaration of disclosure given on oath by the assessee nor can it become the basis of retraction of the declaration made under section 132(4). When we compare the fact situations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pronoucements. In Surjit Singh Chhabra v. Union of India [1997] 1 SCC 508/509, it was held that custom officers are not police officer and the confession made before them, though retracted, binds the petitioner. Similarly in T.S. Kumarasamy v. Asstt. CIT [1998] 65 ITD 188 (Mad.), it was held that ITOs are not police officers, they do not use unfair means or third degree methods in recording statement on oath. Therefore such statements and oaths cannot be retracted unless it is proved by legally acceptable evidence that such admission/confession or oath was not voluntarily tendered or was under coercion or duress. In the present case no such evidence has been produced or even shown to have existed. In V. Kunhambu Sons v. CIT [1996] 219 ITR 235, the Hon ble Kerala High Court held that where assessment has been on the statement of the assessee and no case has been made out that such statement was made under a mistaken belief of facts or law, statement being a voluntary one, then there is no scope for the assessee to challenge the correctness of the assessment made on the basis of such statements. In Hotel Kiran v. Asstt. CIT [2002] 82 ITD 453 , the Pune Bench of the Tribunal held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. Mere allegation will not suffice. Second situation is where the person seeking to retract proves, by leading cogent and reliable evidence, the erroneous or incorrect nature of the facts stated or confessed at the earliest possible opportunity. In the case before us, it has been held above that, the assessee has squarely failed to satisfactorily discharge the burden that the confessional statement made by Shri Prataprai Sanghvi under section 132(4) was involuntarily made or made under coercion or undue influence or was made under mistaken belief or obtained by fraud or misrepresentation. Rather, the evidence available on record shows that it was voluntarily made by Shri Sanghvi with due care and caution and after necessary consultations with all concerned. Besides, there has been inordinate delay, which has not been substantiated, on the part of the assessee to retract from the confessional statement. Retraction is also not supported by any independent or reliable evidence to prove the incorrect nature of the facts confessed in the statement. The confessional statement of Shri Prataprai Sanghvi is also corroborated by other evidence. For these reasons also, the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 132(4) and further enhanced under section 131(1A). As a result, addition of Rs. 15,70,450 being on-money paid for acquiring flats and shops in Tulsi Shyam Building, sum of Rs. 2,30,000 based on loose paper Nos. 48 to 50 being stamped receipts and Rs. 2,70,000 being unaccounted expenditure on renovation and interior decoration covered in ground Nos. 1, 2, 3 in assessee s appeal are confirmed. 22. Ground No. 4 is also rejected as we have already held that the declaration and admission made by the assessee are valid. It cannot be undone by retraction. 23. Ground No. 5. It is not explained as to how the case of M/s. MJS Associates would be relevant for the disposal of this appeal. No rational nexus or connection between the two has been shown. Addition in the present case has been made on the basis of seized documents and admission of the assessee under sections 132(4) and 131(1A). The payment of unaccounted money was made by the assessee and therefore those were rightly taxed. This ground is therefore rejected. 24. Ground No. 6 is that Assessing Officer travelled beyond the scope of Chapter XIV-B. It is not explained how. Since it is a general allegation without support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Assessing Officer was not justified in holding a view that the declaration given by the appellant could not be retracted by him and the adverse inference could be drawn against the appellant on the basis of such declaration which was retracted later. 7. The learned Assessing Officer erred in travelling beyond the scope of Chapter XIV-B of the Income-tax Act, 1961 in making the above additions. 26. The case was fixed on several occasions. Vide his letter dated 21-1-2004, the assessee sought adjournment on the ground that certain documents relating to appeal are not traceable. Vide his letter dated 15-10-2004, the assessee further sought adjournment on the same grounds. The assessee sought another adjournment on the same grounds vide his letter dated 23-9-2004. However, vide his letter dated 23-11-2004, there was another request for adjournment on the ground that his appeal and the appeal of Mr. Manmohan Singh Vig be heard together as facts of the matter are similar. Now, on 12th September, 2005, another adjournment is sought on the ground that the assessee is in the process of engaging a counsel. On all other occasions, adjournments were granted. This appeal was also consolida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and answers recorded under section 132(4) from the statement of the assessee is as under : I have already gone on record and I once again confirm that the gifts which have been claimed to have been received from NRE a/c. of one, Mr. H.D. Shah are actually my own unaccounted income. I have purchased these gifts by paying 15 per cent commission to the broker. Cash was paid to the broker who gave me draft in exchange of cash. I am ready to pay tax on unaccounted amount of Rs. 4,38,000 + Rs. 62,000 commission given of Rs. 5,00,000. In his statement Shri Rajinder Singh Saini has also stated that he does not know the business address and residential address of Mr. H.D. Shah. He also stated that he does not know the nature of business activity of Mr. H.D. Shah and even he does not know full name of Shri H.D. Shah. 30. Vide his letter dated 2-10-1997, the assessee stated that he was pressurized and compelled to give statement under section 132(4) and under section 131(1A). As the gift is genuine, it was not disclosed as his income in the block return. An affidavit dated 10-9-1997 was also filed. The Assessing Officer considered the affidavit of the assessee, his letters dated 2-10-1997 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .K. Suchdev. I have read the statement and understood properly and then signed in the presence of advocate. 32. Thereafter the impugned addition of Rs. 4 lakhs was made. Regarding addition of Rs. 15,70,450 being payment of on-money in respect of 6 shops and 4 flats in Tulsiyan Building, Thane (ground No. 3), in response to question Nos. 37 and 66, the assessee admitted to have paid on-money of Rs. 5 lakhs on purchase of shops/flats. In the statement, the assessee also admitted to have paid, jointly on-money on purchase of 6 shops and 4 flats in Tulsi Shyam Building, Thane to the extent of Rs. 31,40,900. It was divided equally and half of it was added in the case of Shri Manmohan Singh Vig and half being Rs. 15,70,450 is added in the case of Shri Rajendra Singh. This issue was elaborately discussed by the Assessing Officer in the case of Shri Manmohan Singh, whose appeal is decided simultaneously along with this appeal. The statement of Shri Rajender Singh was also recorded under section 131(1A) on 26-10-1996. Relevant question and answer are as under : Q. No. 3 : On 10-10-1996 and 11-10-1996 you and Shri Manmohan Singh Vig have admitted that Rs. 10 lakhs were paid as on money for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age No. 1 of the same diary marked as bundle No. 2 in which date wise payments to Mahesh is mentioned and explain the nature, purpose and source of payment with a specified amount on each date ? Ans. I have made payment to Shri Mahesh in cash on the following dates for purchase of flats from Shri Mahesh : 11-2-1995 1,00,000 13-2-1995 1,50,000 27-2-1995 2,50,000 15-3-1995 1,00,000 16-3-1995 1,00,000 18-3-1995 50,000 20-3-1995 1,00,000 25-3-1995 1,00,000 25-3-1995 1,50,000 5-4-1995 5,50,000 19-5-1996 2,00,000 Total Payment 18,50,000 The payment of Rs. 18,50,000 were made out of my unaccounted income earned from our business concern. Q.No. 55 : Please give the complete details of flats for which payments were made to Mr. Mahesh ? Ans. Shri Mahesh is a broker to whom payments have been for flats to be built by LOK Group of builders. I have received money back from Mr. Mahesh. Q. No. 62 : Please summarise the unaccounted payments/investments mentioned in your own handwriting which is marked at bundle 3 No. 2 ? Ans. I confirm that diary seized at bundle No. 2 I written in my own handwriting and summary of unaccounted payment/investment is as under : Page No. Total amount Nature 1. 18,50, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosure was made. It was explained to the Assessing Officer that ( i ) there was a pressure/coercion from the authorised officers, ( ii ) all the entries in the diary pertained to either sister concern M/s. Raj Engg. Co. or to M/s. S.V. Fabricators. There was no personal investment, ( iii ) It is not possible to have transaction of on-money in real estate spread off such a long period of time, ( iv ) the figures are in thousands and not in lakhs in the documents also, hence the figure will work out to Rs. 1,85,000 and not Rs. 18,50,000, ( v ) He was hospitalized due to heart ailment and hence could not remember. The Assessing Officer rejected all the submissions of the assessee and also his affidavit by observing as under : On perusal of the statements of Mr. Rajinder Singh Saini on various occasions it is noticed that the authorised officers never pressurised and compelled to make a particular statement. His statement was totally voluntary and spontaneous and based on a particular seized paper, on the basis of which the assessee has categorically admitted unaccounted payment of Rs. 18,50,000 during the statement under section 132(4). There does not appear to be a single word in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payments as under : Page No. Particulars Amount 3. Payment to Bank staff people 9,000 7. Commission to Mr. A. Sen 55,000 8. Commission to Mr. C.K. Chaudhry 20,000 40. Fees to Mr. Sejpal 25,000 Total 1,09,000 38. According to the Assessing Officer, the assessee stated that the above payments are out of books of account and out of unaccounted income and he offered to disclose the same for the block period. This amount was not disclosed in the return on the ground that it pertained to M/s. Raj Engg. Co. The Assessing Officer was not satisfied and made the impugned addition. 39. We have heard the rival submissions and considered the facts and materials on record including the statements, replies of assessee and reasonings of the Assessing Officer for making the additions. We have also considered the submissions of learned counsel for the assessee of Shri Manmohan Singh given in that appeal before us and who submitted to adopt his arguments in the present case also. After considering the material and also the case laws cited in the case of Shri Manmohan Singh, we are of the view that issue simply boils down to the point that whether statement given under section 132(4) has to be used ..... 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