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2006 (5) TMI 111 - AT - Income TaxBlock Assessment in search case - Search and seizure u/s 132 - undisclosed income - cash payments not accounted - statements recorded u/s 132(4) - retraction of statement - HELD THAT:- The Managing Director of the company vide letter dated 22-1-1999 and addressed to DDI (Inv.) offered a sum of Rs. 1.07 crores as undisclosed income. Such letter has been filed during the post-search enquiries conducted by the Investigation Wing of the department. Such letter is voluntary and there is no plea that such letter was obtained under threat or coercion. In view of such letter, the onus was on the assessee to establish that offer was under any misconception of facts. In the letter itself, it has been mentioned that the assessee is not in a position to provide material evidence for the actual amount spent by the clients either through them or themselves. It is also mentioned that margin of profit in executing additional work is generally 8 to 10 per cent. The Managing Director of the company was fully aware of the facts at the time of filing declaration. It cannot be said that declaration was under any misconception of facts. The appellant-company has failed to discharge the onus that declaration was under any misconception of facts. In the instant case declaration is vide letter dated 22-1-1999 i.e., it is not on the day when search was commenced. The only reason given for not showing such undisclosed income is that for additional civil work, margin of profit is only 8 to 10 per cent. Such fact was known to the appellant and is mentioned in the letter. Hence, no valid reason is given for retraction of statement. During the course of proceedings, the learned AR pointed out that revenue has not been able to establish that assets or expenses corresponding to undisclosed income have been found during search. The appellant has shown undisclosed income to the extent of around Rs. 68 lakhs and has not explained as to where such amounts stood invested. It is not the case of the appellant that undisclosed income has been returned on the basis of assets or expenses not recorded in the books of account. The appellant himself filed the declaration of undisclosed income of Rs. 1.07 crores. Hence, there was no onus on the revenue to establish that such undisclosed income is in the form of assets etc., section 158B(b) defines undisclosed income and such income can be based on entries found in the seized records. Thus, it is held that learned CIT(A) was justified in determining the undisclosed income to the extent of Rs. 1,07,06,088. In the result the appeal of the assessee is dismissed.
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