TMI Blog2011 (12) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in search absolves the department from discharging any burden regarding the additions made on the strength of such admission - In the instant case on the clear admission of the assessee corroborated by the documents the burden on the department ceases to exist. Regarding personal expenditure - The only explanation offered by the assessee for the years 1989-90 to 1992-93 was that his personal expenses in the said years were met by his parents - the approach of the Tribunal is perverse in so far as the additions made for purchase of items is distinct and different from the additions for personal expenses - Decided against the assessee. Regarding addition made of Rs.3 lakhs in the year 1993-94 - 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 - When the assessee had voluntarily disclosed the same in the cash flow statement and had failed to explain the genuineness of the transaction, we are at a loss to understand why the Tribunal insisted on "search materials" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deletion by the Tribunal with respect to three additions made by the assessing officer and confirmed by the first appellate authority. The first of these is the addition made with regard to the actual money paid by the assessee for purchase of three properties respectively at Thirurangadi, Thenhipalam and Francis Road in the years 1993-94, 94-95 and 95-96 as also the actual money paid for the purchase and subsequent development of another property at Thiruranngadi for the assessment year 1996-97. The total addition made with respect to these four transactions came to Rs. 35,37,227/-. The said additions were made by the assessing officer placing reliance on the title deed seized corroborated by the statement recorded under Section 132 (4) on 22/10/1998 both in the course of search made at the assessee's residence. The second addition was with respect to the personal expenses of the assessee estimated by the assessing officer, again on the strength of the statement made under Section 132(4) of the Income Tax Act, as also the attendant circumstances at Rs. 5,11,000/-. Last of the additions disputed by the assessee and allowed by the Tribunal was an amount of Rs. 3,00,000/-, which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing additions, the assessing officer should necessarily unearth materials during the search. 7. The statement on oath given by the assessee is produced by the Revenue as Annexure-A. From a reading of the statement, it is evident that the assessee had voluntarily submitted before the Income Tax Officer that the amount shown in the document with respect to purchase of four properties were not the actual amounts and that he had paid more than that shown in the document. The assessee has also categorically stated the amounts actually paid with reference to the total extent of each of the properties. In fact it is the case of the assessee as is revealed from page 25 of the order of the Tribunal that the documents recovered during the search were put across to the assessee and it was looking into these documents that the assessee had stated the details of the various transactions. The statement given under oath has to be considered in the context of the long prevalent practise of not stating the actual consideration with respect to transactions of immovable properties, for the purpose of evading stamp duty. True, the assessee has a case in his retraction statement, as also before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs etc. and record a statement made by such person which can be used in evidence in any proceedings under the Income Tax Act. The explanation appended to clause (4) also makes it clear that such examination can be in respect of any matters relevant for the purpose of any investigation and need not be confined to matters pertaining to the material found as a result of the search. A plain reading of Section 132(4) would clearly show that what was intended by empowering an officer conducting the search to take a statement on oath was to record evidence as contemplated in any adjudication especially since Section 131 confers on all officers empowered therein with the same powers as vested in a court under the Code of Criminal Procedure, for the purpose of the Income Tax Act. 10. A Division Bench of this Court in CIT v. Hotel Meriya [2011] 332 ITR 537/[2010] 195 Taxman 459 (Ker.) considered the scope of a statement recorded under Section 132(4) and found that such statement recorded by the officer as well as the documents seized would come within the purview of evidence under Section 158(BB) of the Income-tax Act read with Section 3 of the Evidence Act and Section 131 of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents were the only payments made, the Tribunal was not right in casting a burden on the department. The assessee in the instant case has failed to successfully disprove the admissions made by him and admissions made in a statement under Section 132(4), by the clear provisions in the statute has to be considered to have evidentiary value. In the circumstances, we proceed to answer the first question of law in favour of the revenue and against the assessee. 12. The sustainability of the additions made by the Assessing Officer with respect to undisclosed income vis-a-vis the property transactions as also that made on account of personal expenditure has to be decided with reference to the answer in the first question, since both additions are on account of admissions made in Section 132(4) statement corroborated by documents recovered in search and the attendant circumstances. The Tribunal placed much reliance on the retraction and even went to the extent of stating that it was the Department's burden to prove the retraction to be untrue by bringing in any corroborative evidence. The Hon'ble Supreme Court has considered the question of burden of proof in the decision re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to have proved retraction to be untrue cannot be countenanced in view of the specific words employed in Section 132(4). 13. The next addition deleted on the ground that the estimation vis-a-vis the personal expenses was based on mere assumptions and presumptions also has to be examined in the context of the admissions made under Section 132(4). The assessee himself had admitted to having monthly personal expenses of Rs. 7,000/- but confined the disclosure to the years 1993-94 to 1999-2000. The only explanation offered by the assessee for the years 1989-90 to 1992-93 was that his personal expenses in the said years were met by his parents. The Assessing Officer disbelieved the same and estimated the monthly expenses at Rs. 7,000/- for the years 1989-90 to 1992-93 and for 1993-94 to 1995-96 increased it to Rs.84,000/- from the amount of Rs.42,000/- disclosed in the cash flow statement. For the balance years, i.e. from 1996-97 to 1999-2000, the Assessing Officer estimated the personal expenses at the rate of Rs. 1,00,000/- per annum. The said estimate was made by the Assessing Officer based on the clear admission made by the assessee in the statement recorded under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The assessee having failed to prove satisfactorily, the source and nature of the receipt it was open to the assessing officer to draw an inference that the said receipt is an assessable income as has been held in A. Govindarajulu Mudaliar v. CIT [1958] 34 ITR 807 (SC). The Assessing Officer, hence found the credit to be unexplained and unproved and treated the same as undisclosed income, which was confirmed by the first appellate authority. The Tribunal however, found that nothing has been brought on record to show that any materials were seized during the course of search in respect of this particular loan and deleted the addition as not one arising out of the search materials. The assessee having disclosed the receipt explained it as NRI loan in the cash flow statement and subsequently claimed it to be a loan in cash from his brother. But for the claim there was absolutely no material to establish the nature or source of the receipt and the assessing officer rightly disbelieved the explanation. The receipt having been admitted the burden of proving that it was not taxable lies upon the assessee. When the assessee had voluntarily disclosed the same in the cash flow statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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