2009 (1) TMI 453 - HC - Income Tax

Search and seizure - Addition - Coercive statement - Tribunal observed that the documentary evidence was produced by the assessee before the Assessing Officer. However the Assessing Officer did not make any attempt to verify the claim of the assessee and it concluded that the assessee had established that the statement given at the time of survey was incorrect. The Tribunal deleted all the additions made in the assessment years. On appeal the revenue contended that the Tribunal had not considered the subsequent statement of the assessee and that it could not have accepted the evidence without examining the genuineness of the documents and entries made therein. Held that- the order of the Tribunal could not be sustained because in the first instance apart from the retracted statement the subsequent statement made by the assessee had not been considered. The Assessing Officer while considering whether the retraction was under duress had to considered the genuineness of the documents which were produced as documents evidence. The matter was remanded for fresh consideration of the Assessing officer.

Summary

Issues:
Appeal against additions made by Assessing Officer based on statements recorded during search; Contention of statements being under duress or coercion; Tribunal's reversal of Commissioner of Income-tax (Appeals) judgment; Consideration of documentary evidence; Remand back to Assessing Officer for fresh consideration.

Analysis:
The High Court of Bombay heard multiple appeals, including those related to one individual, where the Tribunal reversed the judgment of the Commissioner of Income-tax (Appeals) regarding additions made by the Assessing Officer based on statements recorded during a search. The Tribunal found that the assessee's statements were made under duress or coercion, which led to the additions being deleted for the assessment years 2001-02 to 2004-05. The Tribunal emphasized that the Assessing Officer had not verified the claims made by the assessee despite the documentary evidence provided. The Court noted that the Tribunal's decision was based on the genuine documentary evidence prevailing over oral statements, leading to the remand of matters for fresh consideration by the Assessing Officer.

In other appeals, the Tribunal issued directions for cases where details had been filed before the Assessing Officer and where no such details were previously submitted. The Court observed that the Tribunal's directions left no discretion with the Assessing Officer and set aside these directions, allowing the Assessing Officer to pass appropriate orders based on the evidence presented. The Court emphasized that general directions for producing additional documents should be subject to the Assessing Officer's consideration according to the law.

During the hearing, the Court considered the arguments presented by both parties. The Revenue contended that subsequent statements made by the assessee were not adequately considered, and the genuineness of documentary evidence was not examined by the Tribunal. On the other hand, the assessee's counsel argued that the Tribunal's decision to delete additions based on documentary evidence was justified. Ultimately, the Court found that the Tribunal's order could not be sustained due to the lack of consideration for subsequent statements and the genuineness of documentary evidence, leading to the remand of matters for fresh assessment by the Assessing Officer.

In conclusion, the High Court allowed the appeals, setting aside the Tribunal and Commissioner of Income-tax (Appeals) orders, and remanded the cases back to the Assessing Officer for reconsideration of the issues, emphasizing the importance of considering both oral and documentary evidence in such matters.