9911796707
TMI Blog2005 (11) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... ng an addition of Rs. 2,30,000 based on loose papers 38 to 50 of bundle No. 12 found during the search at the business premises of M/s. S.V. Trading Co. 3. On the facts, in the circumstances of the case and as per law, the learned Assessing Officer erred in making an addition of Rs. 2,70,000 towards interior decoration and household expenses for assessment years 1996-97 and 1997-98. 4. On the facts, in the circumstances of the case and as per law, in making the additions as stated above, the learned Assessing Officer was not justified in holding a view that the declaration given by the appellant could not be retracted by him and the adverse inference could be drawn against the appellant on the basis of such declaration which was retracted later. 5. The appellant submits that the assessment under Chapter XIV-B of the Income-tax Act, 1961, in the case of M/s. MJS Associates is still pending. If this assessment of the appellant, the any repercussions on this assessment of the appellant, the necessary relief may be given to the appellant accordingly. 6. The learned Assessing Officer erred in travelling beyond the scope of Chapter XIV-B of the Income-tax Act, 1961, in making the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 Total Rs. 30,70,450" In the statement under section 132(4) Rs. 5 lakhs were disclosed out of item No. 1 above, and item Nos. 2, 3 and 4 were disclosed at the same figures. 3. However, in the return of block period the assessee declared out of the four items above only one item i.e., unaccounted payment of Rs. 10,00,000 made to Smt. Dolly Ghosh and retracted the disclosure made in respect of remaining three items. When the Assessing Officer sought clarification, in respect of items of concealed income retracted by him, and also in respect of NRI gifts received by his family members, investment in flat at Kasturi Tower, cash payment made to Amber Wood Packing Pvt. Ltd. and to Mr. Poly Ila Nair, the assessee filed a letter dated 29-10-1997 to CIT(A) explaining investment in flats and shops in Tulsi Shyam Building being item No. 1 of disclosure under section 132(4), (ii) house expenditure and interior decoration amounting to Rs. 2,70,000 and (iii) payment to New Suraj Builders amounting Rs. 2,30,000. He also explained investment in flats at Kasturi Towers amounting to Rs. 18,39,000. In addition to this, he filed an affidavit dated 10-9-1997 sworn by him. This affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by me in my statements recorded under section 132(4) and under section 131(1A) of the Income-tax Act, 1961. I therefore withdraw any answer/statement which is contrary to the contents of my above affidavit. 5. I would have made this affidavit earlier, but for the severe health problems suffered by my partner Shri Rajinder Singh Saini. His health suffered a set back during the search proceedings itself and he had to be hospitalized in the middle of search action. This was further complicated by a massiva heart attack which he suffered on 21-11-1996 and for which he had to be admitted first to S.S. Singhania Hospital, Thane and then for further treatment at Jaslok and Hinduja Hospitals, Mumbai. As he was restrained under medical advise from undertaking any activity which would have aggravated his health problems, the matters relating to search proceedings could not be discussed with him. Affirmed on oath at Thane on this the 10th day of September, 1997." 4. In brief, the assessee explained to CIT(A) and Assessing Officer that no on-money was paid in respect of acquisition of flats and shops in Tulsi Shyam Building. The entries, according to assessee, page No. 7, bundle No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, he stated in affidavit that the said investments were incorrectly recorded in his statements under sections 132(4) and 131(1A) and therefore, he is withdrawing any answer given in the statement which is contrary to the contents of the affidavit. 8. It may be mentioned here that the authorized officer recorded the statement of Shri Manmohan Singh on 10-10-1996. In addition to this, another statement was recorded under section 131(1A) on 25-10-1996 in the office of ADIT. In the statement under section 132(4) the assessee had made disclosure of Rs. 20,00,000 for the block assessment period. Subsequently in the statement under section 131(1A) on 25-10-1996, this was revised upward to Rs. 30,70,450 already referred above. The Assessing Officer in the assessment order considered all the four items of addition, which are also discussed separately as under :- (i ) ADDITION OF RS. 15,70,450 The Assessing Officer mentioned that six shops and four flats in Tulsi Shyam Building on Highway Thane were purchased by Shri Manmohan Singh and Rajender Singh, with agreement price of Rs. 20,60,100. They were purchased from M/s. Mehta Enterprises. During the course of statement recorded at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right hand side the total payment of Rs. 30,01,000 on various dates are mentioned. This shows that the 'On money' payment for purchases of six shops and four flats was Rs. 31,40,900. Please explain whether the on-money payment was Rs. 31,40,900 ? Ans. : I cannot recollect whatever is written in the above mentioned page. Q-15 Have you purchased any other properties from Mehta Enterprises than the six shops and four flats in Tulsi Shyam Building ? Ans. No. We have not purchased any other property from Mehta Enterprises. But I regularly buy steel structure, plate material etc. as and when required for my firms M/s. MJS Associates, M/s. Pal Engg. and Services Pvt. Ltd. from their trading company, India Iron Mart, Shivaji Path, Thane (W). Q-16 Give the name of the person you have dealt with the purchases of Tulsi Shyam property ? Ans. : We have issued cheques in favour of Mehta Enterprises. I will submit the name of the person later on. Q-17 Please go through back side of Page 7 on which payment details to Mehta Enterprises is mentioned. Datewise payment are written on right hand side. Please consult with Rajinder Singh Saini for investment in Tulsi Shyam Building and expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f party No. R6, relate to cash payment of Rs. 2,30,000 by Mr. Manmohan Singh to M/s. New Suraj Builders towards cost of flat No. 405 in Audumbar Apartments in Thane. The schedule of payment as reflected from these documents is as under : Date Amount 29-2-1996 Rs. 1,00,000 29-2-1996 Rs. 30,000 4-3-1996 Rs. 1,00,000 The Assessing Officer pointed out that pp. 38 to 47 are the purchase documents in respect of this flat and document Nos. 48 to 50 are stamp receipts issued by M/s. New Suraj Builders in token of having received Rs. 2,30,000 from the assessee. While answering to q.28 on 11-10-1996, he admitted to have made cash payment of Rs. 2,30,000 to M/s. New Suraj Builders and the said money was his unaccounted income. The said sum was not offered for taxation in the block return. Instead it was explained to the Assessing Officer that this receipt was given to him by M/s. Amber Wood Packers Pvt. Ltd. This explanation was not accepted by the Assess-ing Officer because in the search, stamp receipts from M/s. New Suraj Builders were found in token of receipt of on-money. The Assessing Officer pointed out that if payment of Rs. 3,00,000 was made to M/s. Wood Packers Pvt. Ltd., t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. is held by me as a guarantee for the funds provided by me for M/s. Wood Packer Ltd., Nasik. In view of the above statement confirm however now I have considered the situation in totality and I hereby admit that I have made a cash payment of Rs. 2.30 lakhs to M/s. New Suraj Builders, Thane towards purchase of flat in Audumbar Apts. I hereby declare the payment of Rs. 2.30 lakhs out of my unaccounted income for the Block assessment period and I agree to pay taxes on the same. In addition to the above I further declare Rs. 2.70 lakhs being the unaccounted expenditure on renovation and furnishing of the flat inadequate household expenses and small errors of commission and commission in the papers seized in to day's action. Thus my total disclosure stands at Rs. 20 lakhs for the Block assessment period and I agree to pay the taxes on the same. Q.29. Do you have any thing more to State? Ans. No, I do not have anything above is true for the best of my knowledge and belief and is stated without any fear, coercion or pressure brought to bear on me. I have read the above statement and confirm that it is correctly & accurately recorded." The Assessing Officer rejected the expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh to one Shri Dinesh Rajgore for sale of flat No. 401 in Kasturi Tower, that flat was sold in the name of Manmohan Singh Vig's wife for which a sum Rs. 30,39,000 was received by Raj Gore. Out of this, a sum of 12,00,000 was paid by cheques and remaining Rs. 18,39,000 was paid him in cash. Since the transaction did not go through Shri Raj Gore stated that entire sum of Rs. 30.39 lakhs was returned back. The Tribunal deleted the addition from the hands of HUF on the ground that transaction was being done in the name of Smt. Amarjit Kaur Vig and, therefore, the impugned addition could not be made in the hands of HUF. The next argument taken by the learned AR referred to q.15 and its answer recorded on 25-10-1996 wherein Manmohan Singh stated that he has not purchased any other property from Mehta Enterprises but he buys steel structure and plate material etc. for his firms M/s. M.J. Associates, Pal Engg. Services Pvt. Ltd. etc. Regarding alleged payment of Rs. 2,30,000 learned AR relied on answer to q.17 by Mr. Manmohan wherein he denied to have made any payment towards on-money. He referred to question and answer which was as under :- "Q.17. Payment of Rs. 2,30,000 in the month of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Flat (4) 1965 Sq. Ft. Rs. 500 Rs. 1,262 Sir, the market rate of the said premises in 1989 was nowhere near the rate per sq. feet arriving at after including the alleged 'On Money' component. I have got the said premises valued from a registered valuer to determine the market rate as at December 1989 and the said rate as per his report dated 23-10-1997 is Rs. 800 per Sq. feet for the shops and Rs. 500 per Sq. feet for the flats. A copy of the valuation report is enclosed. I therefore humbly to your honour to direct deletion of the addition proposed on this count. 2. Payment to M/s. New Suraj Builders Rs. 2,30,300 As has been already submitted by me on record, I have not made any payment to M/s. New Suraj Builders of Thane. Shri Raut, a partner of M/s. New Suraj Builders is known to me and had requested me for a loan of Rs. 3,00,000 to M/s. Ambad Wood Packers Pvt. Ltd., a company in which he is a Director. Documents and stamped payment receipts in respect of flat No. 405 being developed by M/s. New Suraj Builders. I could arrange for funds only in July 1996 when I gave the loan of Rs. 3,00,000 to M/s. Ambad Wood Packers Pvt. Ltd. Against the already deposited security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on 11-10-1996 and 25-10-1996. According to him, it was not a voluntary statement but was given under the duress and fear of being taxed heavily if he did not disclose some thing at that time. The statement was recorded after 24 hours of the search at 1.45 PM. So there was a long period since the search was started. According to learned counsel for the assessee, there are several officers who surrounded the assessee and the assessee has no option but to make some surrender. In respect of other additions, learned AR repeated the same arguments which were taken before Assessing Officer in particular on his theory that there was pressure and coercion. 11. In support of his arguments learned AR relied on a large number of decisions, which are given hereunder for the sake of natural justice. "Case laws pressed by AR 1. Jaya S. Shetty v. Asstt. CIT [1999] 69 ITD 336 /64 TTJ (Mum.) 551 Undisclosed income under Chapter XIV-B has to be determined on the basis of evidence, documents, material and information found during search and it has to be authentic, reliable and verifiable information and additions based on conjectures and surmises or estimates and presumption not supported by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee - Entire addition deleted. 9. Kasat Paper & Pulp Ltd. v. Asstt. CIT [2000] 74 ITD 455 (Pune) The concept of undisclosed income under Chapter XIV-B is akin to concept of concealed income and, therefore, the Assessing Officer must bring positive material on record to prove falsity of entries in books of account and books of account could not be rejected in a light-hearted manner on mere suspicion and surmises howsoever grave. 10. India Seed House v. Asstt. CIT [2000] 69 TTJ (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. 11. Pranav Construction Co. v. Asstt. CIT [1998] 3 DTC 719 (Mum. - Trib.) : [1998] 61 TTJ (Mum. - Trib.) 145 It was held that the admission cannot be read as an Act of Parliament and that it has to be read in the context fairly and reasonably. The burden of incurring the expenditure can be discharged either by direct evidence or if such evidence is not available the assessee can always point out to circumstancial evidence supporting the claim. Thus, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Moreover, to throw the burden of showing that there is no understatement of consideration, on the assessee would be to cast an impossible burden upon him to establish a negative, namely that he did not receive any consideration beyond that declared by him. In any case, the Assessing Officer cannot step into the shoes of the assessee to decide at what price he should sell his assets, unless the transaction itself is claimed to be collusive or colourable device. 17. CIT, West Bengal v. Anwar Ali 76 ITR 696 It would be perfectly legitimate to say that the mere fact that the explanation of the assessee is false does not necessarily give rise to the inference that the disputed amount represents income. It cannot be said that the finding given in the assessment proceedings for determining or computing the tax is conclusive. However, it is good evidence. Before penalty can be imposed the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars. As no satisfactory evidence had been produced by the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may stamp the contemporary statements so obtained as in voluntary one and the intrinsic value of such statement may be vitiated. 24. Pullangode Rubber Produce Co. v. State of Kerala [l973] 91 ITR 18 (SC) Entries made by the assessee in the account-books treating a portion of the general expenditure as expenses towards immature plants and capitalizing such portion amount to an admission that the amount in question was laid or expended for the cultivation, upkeep or maintenance of immature plants from which no agriculture income was derived during the previous year for the purpose of Explanation (2) to section 5 of the Kerala Agriculture Income-tax Act, 1950. Such admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the assessee who made the admission to show that it is incorrect and the assessee should be given a proper opportunity to show that the books of account do not disclose the correct state of facts." 12. As against this learned DR submitted that there was no pressure or coercion as alleged by the assessee. The search is carried out in a cordial atmosphere in the presence of witnesses. Whenever required, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that sum of Rs. 2,30,000 was paid in cash. According to him, no further evidence was required. 13. We have heard rival submission and considered the material and case laws cited by the parties. We find that the case laws cited by the learned counsel for the assessee were not at all related to the facts of the case in hand. Entire argument of learned counsel for the assessee revolves around pressure and coercion allegedly exercised by the officers of the department compelling the assessee to make disclosure. Let us examine whether such pressure or coercion can be exercised by the authorized officers and his party compelling the assessee to make disclosure in the search. When the search party enters the premises of the assessee they carry with them two independent witnesses. There are often members or officers from different parts of the department accompanying the search party. There are also members from other organizations which are called to support the search parties in discharge of their duty. Warrant is shown to the assessee concerned or to the inmate of the premises. After the search is over, the panchanama is drawn in the presence of the witness and panchanama contains a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there are documents found in search, which showed that additional money was paid over and above the recorded price. 14. It is undisputed that the assessee is head of Vig group with several business concerns. He has been negotiating with M/s. Mehta Enterprises and also other builders for purchase of immovable properties. He has extensive knowledge of business, he enjoys confidence and trust of all other family members as well as Sri Rajender Singh Saini. It is corroborated by the fact that ill health of Sri Rajender Singh Saini has been cited as one of the reasons for delayed retraction. Thus, when Shri Manmohan Singh in the statement recorded under section 132(4) on 11-10-1996 categorically and unequivocally states that a sum of Rs. 5,00,000 each was paid as on-money [which was revised upward subsequently in the statement under section 131(1A) on 25-10-1996 to Rs. 15,70,450 each], that a sum of Rs. 10 lakhs was paid to Dolly Ghosh which was an unaccounted income, that a cash payment of Rs. 2,30,000 was paid to M/s. New Suraj Builders towards purchase of flats in Adumber apartments, that a sum of Rs. 2.70 lakhs was unaccounted expenditure on renovation and furnishing of flat thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid in instalments such as Rs. 12.01 lakhs on 1-5-1989, 4 on 26-5-1989, 4 lakhs on 12-7-1989, 2 on 12-8-1989, 1.50 lakhs on 4-11-1989, .50 lakh date not legible, 1 lakh on 9-12-1989, 1 lakh on 2-1-1990, 2 lakhs on 30-1-1990 and 2 lakhs on 6-4-1990. If sum of Rs. 31,40,900 was the money intended to be paid for purchase of additional flats, there was no need to mention instalments and dates. There is also one mention about Rs. 20,60,100 being the recorded purchase price. This sum is bifurcated in two amounts 10,77,600 and 9,82,500. These are purchase price of 6 shops and 4 flats. That document is written in Urdu. If the assessee wanted to purchase another 8 flats then purchase price thereof would have been maximum Rs. 20,00,000 (double of Rs. 9,82,500, and rounded, as it is the purchase price of 4 flats). The sum of Rs. 31,40,900 is far more and therefore, this cannot be intended purchase price of additional 8 flats. From this, analysis also, the theory of the assessee has to be rejected. More so no documentary evidence has been furnished in support of his intention of purchase of 8 more flats. We believe that document No. 7 referred above, pertains only to the transactions relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now deal with the arguments made by the ld. counsel of the assessee. According to him there is a bias when same officer acting as an ADI acted as Assessing Officer. He would ensure search against the assessee to be successful by making high pitched assessment and ignoring the submissions made by the assessee. We do not agree. We do not think that the officer went at his own to the particular ward/circle where the case of the assessee was assessed. No such material has been placed before us so as to infer that it was this officer who managed his posting to that ward to do the assessment of this assessee. In our view this must have been a sheer coincidence. Even otherwise posting is done by the CIT. We do not believe that he was also biased against the assessee so as to post the same officer to that ward/circle. Further the block assessment is finalized after the approval of the CIT. The assessee has submitted written arguments before him. They have been reproduced above. The CIT has dealt with this letter according to law. We too, do not find any substance in that letter. Further, in Union of India v. Vipan Kumar Jain [2003] 260 ITR 11 Hon'ble Supreme Court held that there is no qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had practically persuaded the ADI not to make any enquiry. The result of such enquiries is authentic only when they are conducted along with the search without loss of time. Passage of time gives opportunities to the concerned parties to create, destroy, manipulate, and arrange evidence to suit them. Reality and Truth are often lost in the delayed action. In the present case the Assessing Officer or the ADI did not investigate further, as the matter had practically come to a close after the admission and disclosure by the assessee. If the Assessing Officer had taken any action even after admission and disclosure, he would have been alleged for harassment. The thought of further investigation would arise only after the retraction. And it is done after 11 months of the search. Investigation in such matter after lapse of so many months is an exercise in futility. We therefore reject this argument also. 19. We now turn to the submission of learned counsel for the assessee with regarding to alleged retraction of admission and declaration made by Shri Manmohan Singh. There are two aspects of the submission. One is whether it is open to the assessee to retract to admission and de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be heard. If the assessee had not made the said declaration, or statement the departmental authorities could have continued and could have investigated the entire matter on the basis of various documents seized during the course of search such as investigating into M/s. Mehta Enterprises, working out the market value of the shops and flats through DVO or recording the statements of other connected persons etc. or sending the documents to the Forensic Experts. By making the disclosure of additional sum of Rs. 31,40,900 being on- money paid over and above the purchase price for purchasing shops and flats in Tulsi Shyam Building, the assessee effectively prevented the department from carrying its further investigation by making them to believe that Rs. 31,40,900 is the unaccounted money paid on purchase of flats and shops, which will be disclosed by the assessee in block return. By seeking to retract, the assessee wants it to be placed at an advantageous position at a point of time when he was before giving statement under section 132(4). However, with passage of time, the evidence which the department could have collected may no longer available; they might be manipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , proved with acceptable facts otherwise. When the statement is given that on- money has been paid, it should be accepted as true because it is in the very personal knowledge of the assessee. What he knows only he can state. Once he states on oath, some thing personal and only known to him, it must be true. About facts and events like this, only he is privy and he also knows the consequences of stating the truth that he has to pay taxes thereon on such disclosure, then the truth becomes an inseparable ingredient of the disclosure. On the other hand, falsity has no legs to stand. When the assessee is compelled to state something, then the assessee knows, and also the officers present and recording the statement, that such statements are withdrawn the next day or immediately at the earliest available opportunity. Here the time is the essence. It is the deciding factor. The delay is the life support to the belief that whatever is stated is true. More delay affirms such belief. Inordinate delay in retraction establishes, that it was a truth and nothing else but truth. This is when there is no evidence found in the search about payment of on-money. And revenue is on a solid wicket to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject, we hold as under : (i) Statements in the nature of declarations covered by the provisions of section 115 of the Evidence Act, are binding on the declarant. They can neither be retracted nor do they require any corroboration. Such declarations can form the sole basis for assessment. The declaration made by Shri Prataprai Sanghvi, partner in the assessee-firm through his statement recorded under section 132(4) of the Income-tax Act, 1961 falls squarely within the ambit of section 115 of the Evidence Act and hence the same was neither open to retraction nor required any further corroboration. The Assessing Officer could therefore base the impugned addition on the said declaration. (ii) Statements which are not in the nature of declarations under section 115 of the Evidence Act are also binding and can form the sole basis for assessment if they are not effectively retracted. Effective retraction is possible in two situations. First situation is where it is not voluntarily made. A statement, however, cannot be said to be involuntarily made merely because it is subsequently sought to be retracted. It is also to be remembered that the law of evidence presumes regularity a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see before us does not fall under this category." In this regard, it may be pointed out that assessee had in the statement under section 132(4) and another disclosure of Rs. 10 lakhs being payment made to one Mrs. Dolly Ghosh under section 131(1A). Mrs. Dolly Ghosh was a partner in M/s. Vig Automobiles. She resigned from 1-3-1993 and received Rs. 10 lakhs from Shri Manmohan Singh for relinquishing her right in the partnership M/s. Vig Automobiles. During the course of search, at the residential premises of Mrs. Dolly Ghosh, a memorandum of understanding dated 25-7-1991 signed by her and Shri Manmohan Singh was found. When Shri Manmohan Singh was confronted with this MOU, he admitted to have paid Rs. 10 lakhs in cash to her for resigning from the partnership. The payment was admitted to be unaccounted. Shri Manmohan Singh thus disclosed a sum of Rs. 10 lakhs for block period. This sum was offered in block return also. From this it is clear that whatever he has stated under section 132(4) and admitted as his concealed income was based on documentary evidence confronted to him. There was no disclosure or admission which was not found supported with evidence. The disclosure of Rs. 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission of Rs. 62,000 for arranging these gifts. Accordingly, he erred in making an addition of Rs. 5 lakhs as undiscovered income of the appellant for assessment years 1994-95 and 1995-96. 2. On the facts, in the circumstances of the case and as per law, the learned Assessing Officer erred in making an addition of Rs. 4 lakhs merely on a presumption that the appellant had paid the above sum as 'On Money' for purchasing the flat No. 13, Mahavir Shikar, Mulund. He was further not justified in basing this addition on the declaration made by the appellant, which was later retracted. 3. On the facts, in the circumstances of the case and as per law, the learned Assessing Officer erred in making an addition of Rs. 15,70,450 towards the alleged 'on money' paid for acquiring flats and shops in Tulsi Shyam Building for assessment year 1990-91 on the basis of a declaration submitted by the appellant which although was retracted later. 4. On the facts, in the circumstances of the case and as per law, the learned Assessing Officer erred in making an addition of Rs. 18,50,000 towards the alleged on-money which is presumed to be paid by the appellant to Shri Mahesh, towards purchase of a fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of arguments taken by him in Manmohan Singh (HUF)'s case (supra). We, therefore, proceed accordingly. 27. The facts of the case are elaborated in the case of Mr. Manmohan Singh Vig [IT SS Appeal No. 276 (Mum.) of 1997]. Briefly, a search and seizure operation was carried out at the premises of Saini/Narang/Vig group of cases on 10-10-1996. The assessee Shri Rajender Singh Saini is one of them. Notice under section 158BC was issued to the assessee on 26-2-1997 and served on 27-2-1997. Notices under section 143(2)/142(c) were issued on 13-6-1997 and 3-10-1997 and were duly served on the assessee. A detailed questionnaire was also issued to the assessee on 16-7-1997. The return for block was filed on 12-9-1997 disclosing following undisclosed income : "1 Gold jewellery of approx. 6102.600 grams Rs. 30,80,255 2 Cash found at residence and in bank locker Rs. 18,50,000 3 Plot purchased at New Panvel, being plot Nos. 5 & 7 Rs. 2,40,000 4 Investment in deposit with Suman Motels Rs. 20,000 5 Amount spent on interior decoration of residential flats at Mahavir Shikhar, Mulund Rs. 37,500 Total Rs. 52,27,760" 28. The assessee furnished detailed information on 2-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, coercion and undue influence exercised on the assessee. (ii) If the assessee felt that his statement was recorded by pressurising and undue influence or coercion, he should have informed Higher Authorities including Chief Commissioner of Income-tax, Commissioner of Income-tax, Director of Income-tax (Inv.), Deputy Director of Income-tax (Inv.) and Assessing Officer without further loss of time, which has not been done by the assessee. The affidavit indicating retractions has been filed first time only along with the return of income filed on 12-9-1997 i.e., after laps of around 11 months from the date of search action. The reason for the delay in intimating retraction is stated to be on account of his severe health problem. Even if accepted the fact that Shri Rajinder Singh Saini was not keeping good health after the search action and also suffered heart attack, on 21-11-1996, still the delay of 11 months in submitting the affidavit is not justifiable. (iii) The total and bold denial of what has been stated in the previous statement cannot be said to be statement of retraction and it will be merely plea of denial." 31. Regarding addition of Rs. 4 lakhs being payment of 'on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the above properties and the cash payment has not been recorded in any of the group concerns or individual accounts. I am showing you copy of statement of Shri Manmohan Singh Vig, particularly Q. Nos. 10 to 17 of statement dated 25-10-1996. Please go through the same and explain whether the facts regarding payment of 'on money' of Rs. 31,40,900 for purchase of the properties in Tulsi Shyam Building are correct or not ? Ans. I have gone through the statement of Shri Manmohan Singh Vig, particularly question Nos. 10 to 17 and answers thereto recorded on 25-10-1996 and also the entries made on page No. 7 of bundle No. 14/R-6 and I confirm that we have paid 'on money' of Rs. 31,40,900 for purchase of properties in Tulsi Shyam Building. The 'on money' was paid in cash and datewise payments in lakhs are also mentioned on page No. 7 (Backside). I confirm that I have paid my share of unaccounted income i.e., 50 per cent and I am ready to pay tax on this unaccounted cash payment. The 'on money' was paid out of unaccounted income." 33. But, no disclosure of this sum was made by the assessee in the block return of income merely on the ground that there was pressure/coercion exercised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de out of my unaccounted income generated in business and not recorded in books of account and on which no taxes were paid. Q. No. 71 : Do you want to clarify anything related to statement recorded on 10-10-1996 & 11-10-1996 ? Ans. I have made the statement after going through documents, papers, diary etc., found from my residence. I have made admission of unaccounted income earned by me and my business concerns without any pressure, coercion or threats. I have made this admission of unaccounted income after consultation with my advocate Shri T.K. Suchdev, I have read the statements and understood properly and then signed in the presence of my advocate. Q. No. 2 of statement dated 26-10-1996 : I am showing you copy of your statements dated 10-1-1996 & 11-10-1996 in general and particularly question answer Nos. 46 to 62 please again go through your statement and clarify whether you have any other explanations for the entries made in diary namely FAG red spiral diary seized as per bundle 2/R-1 on 11-10-1996 on page Nos. 1, 3, 5, 6, 7, 8, 9, 40 & 42? Ans. I have gone through the Red FAG Spiral diary seized as bundle on 2/R-1 on 11-10-1996 on the pages mentioned in the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his to the higher authorities including Chief Commissioner of Income-tax, Commissioner of Income-tax, Dy. Director of Income-tax (Inv.) and the Assessing Officer without further lapse of time, which has not been done by the assessee. The Affidavit indicating retraction has been filed only along with the return of income filed on 12th September, 1997, i.e., after the lapse of around 11 months from the date of search action. The reason for delay in intimating retraction is stated to be on account of severe health problem faced by the assessee and he suffered heart attack also on 21-11-1996. Even accepting these facts to be correct, still the delay of 11 months in submitting the Affidavit of retraction is not justifiable, in any way. (iii) The total and bold denial of what has been stated in the previous statement cannot be said to be a statement of retraction and it will be merely a plea of denial. (iv) The assessee's statement that he was pressurised to sign the statement wherein it is stated that he has made investment in LOK GROUP cannot be accepted by any stretch of imagination, because the authorised officers were absolutely having no knowledge about the LOK GROUP investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at order, we hold that : 1.What was retracted subsequently was only a denial. No material evidence was furnished so as to discharge onus cast on the assessee by virtue of statement recorded under sections 132(4) and 131(1A). 2.Presumption raised under section 132(4A) is not rebutted by the assessee by submitting cogent evidence. Hence, the statement given under sections 132(4) and 131(1A) hold their evidentiary value. 3.No material has been submitted to show that there was any pressure or coercion was exercised while recording the statements under sections 132(4) and 131(1A). No complaint was filed immediately after search or recording of statement under section 131(1A) to show that there was any pressure or coercion. Statement under section 132(4) was recorded before witnesses. Hence, there is a presumption that there was no pressure/coercion unless proved. 4.Disclosure was enhanced during statement under section 131(1A) as compared to be given under section 132(4). Hence, the theory of pressure or coercion applied during recording of statement under section 132(4) is not acceptable. 5.The assessee is silent for about 11 months. No letter/correspondence was sent immediat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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