9911796707
TMI Blog2011 (12) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of seized documents, recovered during search, relating to purchase of land as also the sworn statement recorded under Section 132(4), the assessing officer computed the undisclosed income. The addition made with respect to the purchase of lands was on the strength of the admission made by the assessee regarding the actual amount paid as disclosed voluntarily in his sworn statement and the amounts disclosed in the cash flow statement corroborated by the recovery and seizure of title deeds. Personal expenses was estimated on the basis of the admissions made, again in the statement under Section 132(4) and the attendant circumstances. The adoption of the statement made under Section 132(4) as evidence for the purpose of assessment was substantially confirmed in first appeal. The Tribunal however finding the materials and the statement under Section 132(4) as being devoid of evidentiary value deleted three of the additions. 3. The Revenue in the present appeal before this Court challenges the findings of the Tribunal based on which additions are deleted. Questions raised are on the evidentiary value of the statement recorded from the assessee under Section 132(4) and also the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to show that any materials were seized in the course of search. 5. The Revenue has raised five questions of law for being considered, which we re-frame as under: (i) Whether the Tribunal was correct in holding that no addition can be made based on the statement of the assessee under Section 132(4) of the Income Tax Act without further material having evidentiary value and whether on the assessee making a mere retraction statement the evidentiary value of the statement under Section 132(4) is completely extinguished? (ii) On the above findings, whether the Tribunal was right in deleting the addition made with respect to property transactions and with respect to estimated personal expenses? (iii) Whether the Tribunal was correct in finding that the addition of Rs. 3,00,000/- claimed by the assessee to be a loan, was not based on any evidence found at the time of search? 6. The additions made by the assessing officer was on the basis of clear admission made by the assessee in the statement recorded under Section 132(4) of the Act. The Tribunal has proceeded to deal with the issues on the premise that no evidentiary value can be attributed to the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oving undisclosed income in search is not established by the department. 8. It cannot be doubted for a moment that the burden of proving the undisclosed income is squarely on the shoulders of the department. Acquisition of properties by the assessee are proved with the documents seized in search. Since under statement of consideration in documents is the usual practise the officer questioned the assessee on payments made over and above the amounts stated in the documents. Assessee gave sworn statement honestly disclosing the actual amounts paid. The question now to be considered is whether the sworn statement constitutes evidence of undisclosed income and if so whether it is evidence collected by the department. In our view the burden of proof is discharged by the department when they persuaded the assessee to state details of undisclosed income, which the assessee disclosed in his sworn statement on being confronted with the title deeds seized in search. 9. Section 132 of the Income Tax Act deals with search and seizure and sub-section (4) of Section 132 empowers the authorised officer during the course of the search and seizure to examine on oath any person who is found to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deeds seized in search absolves the department from discharging any burden regarding the additions made on the strength of such admission. Admission as has been often held is the best evidence on a point in issue and though not conclusive is decisive of the matter unless successfully withdrawn or proved erroneous. Any retraction of a clear admission made has to be on the ground of it being either erroneous or factually incorrect or one made under threat or coercion. In the instant case, the first appellate authority has clearly found that the plea of the assessee that the admissions were made under threat and coercion is clearly unfounded. The Tribunal also has categorically refused to consider the issue of threat and coercion. In such circumstances, the Tribunal ought to have seen if the assessee has established that the admissions made were erroneous and factually incorrect. It was well within the capacity of the assessee to have shown before the fact finding authorities either at the original or at the appellate stage that the assessee had only paid amounts as disclosed in the documents for the various property transactions entered into by him. The assessee having not proved an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. There is no reason why the said doctrine is not applicable to income-tax proceedings. While the Income-tax authorities have to gather the relevant material to establish that the compensation given for the loss of agency was a taxable income, adverse inference could be drawn against the assessee if he had suppressed documents and evidence, which were exclusively within his knowledge and keeping." In the instant case on the clear admission of the assessee corroborated by the documents the burden on the department ceases to exist. On the retraction being filed by the assessee, there is a burden cast on the assessee to prove the detraction or rather disprove the admissions made. It is not a shifting of the onus but a new burden cast on the assessee to disprove the earlier admissions having evidentiary value. As noticed earlier, retraction made by the assessee can only be considered as a self serving afterthought and no reliance can be placed on the same to disbelieve the clear admissions made in the statement recorded under Section 132(4). Deletion of the additions vis-a-vis the property transactions on the reasoning that the department cannot do so on the basis of the admission ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances and in view of our findings regarding question No. 1, we answer the second question in favour of the revenue and against the assessee holding that the deletion made by the Tribunal was not on a proper appreciation of law and the admitted facts and circumstances in the case. 15. The last question is with reference to the addition made of Rs.3 lakhs in the year 1993-94. The cash flow statement furnished by the assessee shows credit of Rs.3 lakhs termed to be NRI loans and on notice for showing cause, the assessee by a written reply dated 12/10/2000 states that the said amount was a loan obtained from Sri Muhammadali, the assessee's elder brother. On a further examination on 16/10/2000, the assessee reiterated his contention regarding the loan, which was recorded by the officer. The assessee offered absolutely no evidence to prove the transaction and the contradictions regarding the disclosure in the cash flow statement as a NRI loan and the later explanation as a loan received in cash, hits at the root of the genuineness of the transaction. The assessee having admitted the receipt of the amount onus was on him to prove that the receipt was only by way of loan and wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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