TMI Blog2011 (7) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... ANDREN, JJ. C.V. Rajan for the Appellant. J. Naresh Kumar for the Respondent. JUDGMENT Mrs. Chitra Venkataraman, J. The assessee is on appeal as against the order of the Tribunal, raising the following substantial questions of law: "1. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the addition made by the Assessing Officer is justified when the additional income of Rs. 4 lakhs offered in the second statement on 11-5-1993 was a clear mistake? 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in setting aside the order of the Commissioner of Income-tax (Appeals) and upholding the order of the Assessing Officer in respect of addition of Rs. 4 lakhs under "other sources"?" 2. The assessee herein had his income from pawn broking business as well as from commission earned on dealing with coconut seedling. The Department conducted search in the assessee's premises on 10-5-1993 and 11-5-1993, where cash of Rs. 60,000 and gold jewellery of 1,746 grams taken on pledge in pawn broking business were seized. Apart from that, Kisan Vikas Patra for Rs. 45,000, Fixed Deposits o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 989-90 to 1992-93. Hence, the same could not be considered as income in the year 1994-95. 5. The Commissioner of Income-tax (Appeals) considered the said fact and pointed out that the family members, from whom the assessee had taken loan, had filed their returns from 1989-90 onwards offering the loan taken by the assessee as income in their returns. Their statements were accepted and based on the statements, the assessments were completed under section 143(3) of the Income-tax Act. They were also subject-matter of appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) further pointed out that in respect of loans obtained from Sabitha Devi, there were documentary evidence in the form of Fixed Deposits in her name in Syndicate Bank. Quite apart, it was also pointed out that the credits in the names of Lakshmi Ammal and Usha Rani alone were not supported by satisfactory explanation. However, since the assessments were completed at their respective hands, the question of again adding it in the hands of the assessee did not arise. On the alternative plea taken that the said amount offered by the assessee would relate to the pawn broking busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidentiary value, that the assessment could not rest solely on the basis of the statement given by one of the partners of the assessee firm. In the light of the above-said decisions, particularly the circular of the Central Board of Direct Taxes in the circular No. F. No. 286/2/2003-IT (Inv.) dated 10-3-2003, learned counsel appearing for the assessee pleaded that the order of the Tribunal merits to be set aside and the detailed findings by the Commissioner of Income-tax (Appeals) merits to be accepted. 8. Per contra, learned standing counsel appearing for the revenue placed reliance on the decisions in Bachittar Singh v. CIT [2010] 328 ITR 400 (Punj. Har.) and P.R. Metrani v. CIT [2006] 287 ITR 209/157 Taxman 325 (SC) only to contend that when the assessee had volunteered to come before the Officer to make a statement admitting an income of Rs. 4 lakhs, it stands to reason that the same would be binding on the assessee. The retraction came long after the date of statement given by the assessee and only in the course of the assessment proceedings, the assessee chose to contend otherwise. In the circumstances, no credence could be given to the explanation given by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression "such other materials or information as are available with the Assessing Officer" contained in section 158BB of the Income-tax Act, 1961, would include the materials gathered during the survey operation under section 133A, vide CIT v. G.K. Senniappan [2006] 284 ITR 220 (Mad.); (iv) The material or information found in the course of survey proceeding could not be a basis for making any addition in the block assessment, vide decision of this Court in T.C.(A) No. 2620 of 2006 between CIT v. S. Ajit Kumar; (v) Finally, the word "may" used in section 133A(3)(iii) of the Act, viz., "record the statement of any person which may be useful for, or relevant to, any proceeding under this Act, as already extracted above, makes it clear that the materials collected and the statement recorded during the survey under section 133A are not conclusive piece of evidence by itself." 12. In the decision P.R. Metrani's case (supra), dealing with the scope of section 132(4A), the Supreme Court considered the conclusive character of the statement made in a search operation. The Apex Court held that section 132 is a complete code by itself. Under section 132(4), in the case of search, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Rs. 4 lakhs. Thus when the assessee had explained his statement as not correct in the context of the materials produced, as held by the Apex Court in the decision in Pullangode Rubber Produce Co. Ltd.'s case (supra), we do not think that the Tribunal would be justified in its conclusion that the statement made would clothe the assessment with legality. Quite apart from that, the case of the assessee also stands supported by the Circular dated 10-3-2003 of the Central Board of Direct Taxes, which has given categorical directions to the officers, who are entrusted with the job of assessment that undue emphasis should not be placed on the statements recorded. In fact, it had given a mandate not to obtain confession as to the undisclosed income. Thus applying the Circular dated 10-3-2003 to the facts of the case, which is binding on the revenue, we have no hesitation in setting aside the order of the Tribunal. As already pointed out that except for the statements referred to by the Tribunal, it had not adverted its attention to the materials produced by the assessee before the Commissioner of Income-tax (Appeals) explaining the claim that the said amount could not be included in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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