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2016 (9) TMI 1062 - AT - Income TaxAddition to additional income offered during the survey action - dumb document - relevance / validity of statement made u/s 133A - threat undue influence or coercion - Held that:- The ld. CIT(A) thus disbelieved the part of the document which the AO had treated as depicting the unexplained investments of the assessee. Hence, out of the three parts of the document, one part has been ignored by the AO, the second part has been disbelieved by the CIT(A). However, the ld. CIT(A) has confirmed the additions only in respect of heading ‘profit’. However, the point which gains importance at this stage is that when the source of funds/ investments have been disbelieved by the CIT(A) , there left no reason for him to assume the alleged profits from such non existing source/investments. The ld. CIT(A), thus, made the impugned additions only because the assessee had made a declaration/offer of income of ₹ 4 crores during the survey action. Presumption u/s 292C - Held that:- - the section uses the word ‘may presume’ and not ‘shall presume’, hence the presumption of facts under section 292C is not a mandatory or compulsory presumption, but, a discretionary presumption; secondly, such a presumption is not a conclusive presumption but is a rebuttable presumption because it is a presumption of fact not a presumption of law. - No corroborative, correlating or circumstantial evidence has been found either during the survey action or during post survey investigations - Hence the nature of document seized does not point any strong/reliable or stanalone presumption under section 292C of the Act against the assessee. The fact that the assessee has not introduced any cash in his books of accounts on account of additional income, for which he had already paid tax also, together constitute good rebuttal to the initial presumption u/s 292C in this case. Relevance / validity of statement made u/s 133A - Held that:- Even if , for the sake of arguments, we assume it so, it is to be noticed that the assessee had paid taxes on the income disclosed and if the AO would have accepted his returned income as per the disclosure, the assessee would have got no chance or opportunity to claim that the disclosure made by him was under force, coercion or duress. - Once the assessee was forced into the litigation, then only he gathered courage to fight for his rights and to show that neither the alleged loose paper belongs to him nor he had any undisclosed income or profits and further that even the declaration taken from him during his statement was under threat and pressure. Power of tribunal to consider question of law - Held that:- The Hon’ble Supreme Court in National Thermal Power Co. Ltd. vs. CIT [1996 (12) TMI 7 - SUPREME Court] while answering the said question observed that, Tribunal is not prevented from considering questions of law arising in assessment proceedings although not raised earlier. CIT(A) though, rightly admitted the question of law as to whether the income offered by the assessee in the return of income consequent to offer made in his statement recorded during the survey action can be challenged before the appellate authority, but wrongly decided the same in favour of revenue. In view of our findings given above we have no hesitation to hold that the additional income was returned by the assessee perhaps under force, pressure, threat or coercion and under the mistaken belief. The assessee, in our view, was not liable to pay tax on the said additional income returned. We accordingly direct the Department to refund the taxes, if any, paid by the assessee in respect of additional income offered during the survey action.
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