2019 (9) TMI 1348 - HC - Income Tax

Addition made in the course of search assessments u/s 153(A) - addition u/s 68 - HELD THAT - As stated that the assessee too was not the owner of the mine nor had he invested any amount and the inference drawn by the ITAT was therefore perverse and contrary to the facts. This Court is of the opinion that the A.O s decision endorsed by the lower appellate authorities is based upon appreciation of the facts and documents. Assessee s premises were searched; they yielded the document. In the course of the search the assessee made certain admissions especially with respect to the amounts invested. The later retraction made more than a year and three months later when this return was filed on 15.01.2013 i.e. stating Jagdish Panjwani was not the owner of the mines was not conclusive. The Court is also of the view that the initial burden of showing that the transaction had not taken place and statement made earlier was wholly incorrect or that the documents recovered did not support the findings was not dislodged. The concurrent findings of fact are therefore warranted. Concurrent findings of the ITAT are those of fact.

Summary

Issues:
Concurrent findings of fact endorsing addition under Section 153(A) of the Income Tax Act, 1961 based on search assessments.

Analysis:

1. The appellant challenged the concurrent findings of fact by Lower Appellate Authorities endorsing the A.O.'s addition under Section 153(A) of the Income Tax Act. The A.O. brought to tax an amount of Rs. 20 lakhs in the hands of the assessee under Section 68 of the Act based on incriminating documents seized during a search on the assessee's premises and the statement made by the assessee during the search proceedings. The appellant contended that the document did not clearly show any investment by him and that the alleged owner of the mine, Mr. Jagdish Panjwani, was not the actual owner. Both the CIT(A) and ITAT rejected these submissions.

2. The appellant's counsel argued that the statements made during the search proceedings and the ownership of the mines by Jagdish Panjwani were crucial factors. It was emphasized that neither the assessee nor Jagdish Panjwani were the actual owners of the mine, and the ITAT's inference was erroneous and against the facts presented.

3. The High Court opined that the A.O.'s decision, supported by the lower appellate authorities, was based on a thorough examination of facts and documents. The documents seized during the search, along with the assessee's admissions regarding the investments, were crucial. The Court noted that the subsequent retraction made by the assessee after more than a year and three months, claiming Jagdish Panjwani was not the mine owner, was not conclusive. The burden of proving that the transaction did not occur or that the earlier statement was incorrect was not met by the appellant. Therefore, the concurrent findings of fact by the ITAT were deemed justified.

4. The High Court concluded that no question of law arose from the case and subsequently dismissed the appeal. The judgment emphasized the importance of the initial burden of proof in challenging the findings of fact and reiterated the significance of the documents and statements made during the search proceedings in determining the tax liability under Section 153(A) of the Income Tax Act.