TMI Blog2013 (6) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... f such sort borne out of the facts. In our considered view, no addition can be made merely on the basis of surrender without existence of any corroborative evidence found against the assessee - Decided in favour of assessee - ITA No.671/Del/2012 - - - Dated:- 20-6-2013 - SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER For the Petitioner : Shri Vinod Bindal Sanjeev Bindal, CAs For the Respondent : Dr. Sudha Kumari, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : This appeal filed by the revenue emanates from the order of CIT (Appeals)-I, New Delhi dated 01.11.2011. 2. A search and seizure operation was carried out at the premises of the assessee on 22.11.2006. Assessee is an individual filed the return of income at ₹ 5,88,06,735/- on 02.09.2008. This amount included undisclosed investment in jewellery of ₹ 12,85,777/- and undisclosed cash found during search of ₹ 24,86,000/-. The Assessing Officer made an addition of ₹ 15 crores on the basis of statement recorded u/s 132(4) of the Income-tax Act, 1961 during the search operation. The CIT (A) has deleted the addition by holding as under :- 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee but nowhere has the Assessing Officer quantified any undisclosed income either. 3.8 In para 4.4 of the remand report, the Assessing Officer has stated that there was material evidence showing an unaccounted income from Commodity Trading, activities in share and jewellery etc. To this, it is seen that the appellant has himself offered income on account of unexplained jewellery as well as the cash generated from Commodity Trading. The contention of the appellant that had the assessee generated an income of ₹ 15,00,00,000/-during the last eight months than the same would have been reflected somewhere in the assets found from the assessee is acceptable. Apart from the reliance placed by the appellant on the Board Instruction, he has also given a reasonable justification regarding the improbability of earning such a huge amount within a calendar year. 3.9 The various Court decision are also in favour of the assessee. In the case of CIT, Ranchi Vs. Ravindra Kr. Jain [2011] 12 taxmann.com 257 it has been held that Whether when amount, which assessee stated to have been deposited in bank, was not found in any bank and, thus, part of alleged admission of assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention of the Revenue that assessee had not retracted the surrender of ₹ 5 crore, we may like to mention here that assessee by not disclosing income of ₹ 5 crore in returns of income filed in response notice u/s 153A has retracted from the statement given u/s 132(4) and Assessing Officer has accepted such retraction as he has chosen not to make any addition based on statement recorded u/s 132(4) but on the basis of seized material. Moreover, the statement recorded does not give any indication of any concealment found during the course of search which was surrendered nor the question put to assessee suggest that the authorized officer has quantified any specific concealment based on seized material in respect of which the assessee made surrender of ₹ 5 crore. Such a statement is rebuttable presumption which can be rebutted with evidence. Since no undisclosed was worked out by the authorized officer during the course of search the surrender made is neither supported by concealed income nor by investment or by undisclosed expenditure. Hence, no adverse inference can be drawn on the basis of statement given u/s 132(4) particularly when assessee had offered und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... six days on 28/11/2006, therefore, if the investigation wing had any grievance, it was free to carry out further investigation in this regard for the search was carried on till 18/01/2007, the date on which the last locker was operated. Neither the Assessing Officer nor the investigation wing could pin point any concealment of this amount, therefore, the addition of ₹ 15,00,00,000/- is hereby deleted. 3. Now, the revenue is in appeal before us by taking the following grounds :- On the facts and in the circumstances of the case the Ld. CIT(A) has erred in:- 1. The order of the CIT(A) is not correct in law and facts. 2. On the facts and circumstances of the case, the Id. CIT(A) has erred in law as well as in facts in deleting the addition of ₹ 15 crores made by the Assessing Officer in respect of surrendered amount at the time of search. Reliance is placed on the decision of the Hon'ble Supreme Court of India dated 25/10/1996 in Special Leave Petition (e) NO.14028 of 1996 in the case of Surjeet Singh Chhabra Vs. Union of India and Others wherein the Apex Court has held that the Revenue officials are not Police officers and the confession, thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) and submitted that the assessee was a more than 83 years old at the time of the search. The search was started at 8.00 AM on 22.11.2006 and it carried on up to 11.57 AM of 23.11.2006. The statement of the assessee continued to be recorded till 23.11.2006 which is evidenced from the statement recorded itself. Assessee s house is a two storied in an area of 425 sq.yds. and 9 search party officials continued to search the premises for 28 hours. The assessee was tired and frustrated when the statement was recorded and under this intimidating tactics, coercive or by force, assessee surrendered the amount which was not at all representing the income on the basis of any seized valuable or incriminating documents. The assessee earned some profit in the earlier year, financial year 2003-04, by trading in Vaida commodity trading which had been duly declared in books of accounts. In the year under consideration, without any evidence how the existence of the speculation and commodity trading by the assessee can be presumed or assumed by the Assessing Officer. There was no incriminating document found and seized with regard to any such trading by the assessee. Ld. AR further submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e merely as per admission of the assessee. In the assessee s case, no corroborative evidence was found and seized, therefore, the CIT (A) was justified in deleting the addition which was merely based on the statement recorded when the assessee was tired and frustrated on account of continuing search for 28 hours and being at the age of 83 years during the relevant time. The ld. AR also relied on the decision of Shree Chand Soni vs. DCIT [2006] 101 TTJ (JD) 1028 wherein it was held that statement recorded u/s 132(4) of Income-tax Act, 1961 does not tantamount to unearthing any incriminating evidence during the course of search, therefore, no addition can be made only on the basis of such statement. Ld. AR also relied on the decision of Delhi Bench, ITAT in the case of Rajesh Jain vs. DCIT [2006] 100 TTJ (Del.) 929 wherein also addition made solely on the basis of confessional statement of the assessee wherein statement was retracted and addition made on that account was held to be illegal. He also relied on the decision of ITAT in the case of Group Company, M/s. Mahashian Di Hatti Ltd. in ITA No.4576, 4577 4578/Del/2010 wherein also, the addition made on account of confession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of some papers/documents as per panchnama, annexure A-1 to A-11, however, no question was asked pertaining to these papers or documents. This fact shows that the disclosure was not based on any calculation of undisclosed income on the basis of seized papers/documents. The disclosure so made was also not based on any unaccounted assets/valuables. The assessee was 83 years old person and the long duration of the search might have tired out and frustrated him and the revenue was able to extract the surrender which has been retracted within 6 days where two holidays were in between. The CBDT has issued instructions with regard to the confession of additional income during the course of search and seizure and survey operations. Instruction No.F.No.286/2/2003-IT (Inv.II) dated 10.03.2003 give some reflections about such confession of additional income without any credible evidence during the course of search and seizure which is quoted as under :- Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search seizure and survey operations. Such confessions, if, not based upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n about the assessee on such presumption. The Assessing Officer s reliance that assessee has also narrated about the investment of the undisclosed speculative income in the purchase of gold and jarau jewellery, investment in shares and investment in vaida bazaar and advances given to the parties trading in agricultural field is also not supported by any document. Nothing has been found during the search and no such assets had been recovered. Therefore, such additions made only on the basis of a statement which has been retracted immediately thereafter are not sustainable. The pattern of the questions put to the assessee during the search of the premises shows that whatever recorded in these statements is not true. Only on the basis of presumption that large scale construction was going on at the school building of the trust and hospital of the trust cannot be made a basis for addition. The Assessing Officer should have ascertained the investment by way of referring the case to the DVO if he has any doubt in this regard. No evidence regarding any anonymous donation by the trust was found and seized and nothing has been made out by the Assessing Officer in the assessment. The other a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oborated with some material to show that assessment made is just and fair - Conduct of affairs by the revenue authorities shows that good amount of psychological pressure was built on the assessee to make the said statement, which was retracted - Further, the addition was illegal as while the assessee spoke of earning the said income over a period of 10 years, total addition was made in two asst. yrs. 1999-2000 and 2000-2001 - All material found during search was duly explained by assessee on which no adverse comment was made by AO - Assessee to be assessed on the income returned by him for the block period. Further reliance is also placed whether no addition can be made simply on the basis of surrender without any cogent and valid reasons and which the assessee has subsequently retracted. For this proposition, the reliance is placed on the following case laws :- a. India Seed House V s Asstt. CIT (2000) 69 TT J (Delhi) (TM) 241 In case of block assessment no addition can be made merely on the basis of statement recorded at the time of search which stands fully proved to be incorrect in view of the material itself which was seized at the time of search. b. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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