TMI Blog2014 (7) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... d been held to be voluntary and without any undue influence, both by the AO and the CIT (A) – thus, the Tribunal erred in holding that the DVO’s report did not corroborate the statement made by the assessee before the Income Tax Authorities – The order of the CIT (A) made in penalty proceedings had given effect to the Tribunal’s order in the substantive proceedings - The rights and contentions of the parties in respect of the penalty shall be gone into independently in accordance with law by the CIT (A) - Decided in favour of Revenue. - ITA 1095/2011, ITA 444/2012 - - - Dated:- 1-7-2014 - S. Ravindra Bhat And Vibhu Bakhru,JJ. For the Appellant : Mr. Roy Chaudhuri For the Respondent : Dr. Rakesh Gupta, Mr. Rishabh Kapoor, Mr. Sohil Agarwal and Mr. Khushbu Upadhayay JUDGMENT Vibhu Bakhru, J (Oral) 1. The present appeals have been filed on behalf of the Revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act ). In ITA 1095/2011, the Revenue has impugned a common order dated 11.03.2011 passed by the ITAT (hereinafter referred to as the Tribunal ) in ITA No. 1409/Del/2009 and ITA No. 2112/Del/2009. By way of ITA No. 444 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove-mentioned amount of ₹ 55,00,000/- (Rupees fifty lakhs only) has been given by me from my Undisclosed income, which I have not shown in my Income tax Return. 3.2. Subsequently, the assessee wrote a letter dated 24.11.2005 seeking to resile from the statement made before the Income Tax Authorities on 18.11.2005. The assessee stated that: I was goaded to state in response to Question of the statement that I had purchased a property bearing no. FD- 22, Pitampura for ₹ 75 lacs whereas the registered value was ₹ 20 lacs . The reason provided by the assessee for signing the statement was that he was suffering from high grade fever at the material time and might have signed the paper without properly applying my mind or appreciating the contents on the issue. The drugs being administered at that point of time may have led to mental confusion. 3.3. The Assessing Officer received information regarding the statement made by the assessee, from the Income Tax Authorities and the return filed by the assessee was taken up for scrutiny. Apparently, the Assessing Officer was not satisfied that the purchase consideration for the property in question was ₹ 20 lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 11.03.2011, the Tribunal held that an admission being a voluntary declaration contrary to the interest of the assessee was good evidence but was not conclusive as in certain circumstances it was open for the declarant to withdraw the same. The Tribunal held that as a general rule of practice it would be unsafe to rely upon a retracted confession without any corroborative evidence. The Tribunal also noted the assessee s contention that he was not keeping good health and was under influence of sedative drugs. The Tribunal also reasoned that the ADI is a senior IRS Officer. His intellectual compatibility is on high pedestal than the assessee and the assessee not being professionally qualified could come under the influence of the authority , and concluded that an addition of income could not be made solely on the basis of the statement made by the assessee. The valuation report provided by the DVO was also rejected by the Tribunal principally on the ground that it had based the valuation taking into consideration a solitary instance of sale of a plot of land situated at Prashant Vihar (an adjoining locality), which was auctioned by DDA on 16.01.2004 - much prior to the acquisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT v Kalyansundaram: 294 ITR 49 whereby the aforementioned judgement of the Madras High court was affirmed. It was further contended on behalf of the assessee that the sale and purchase of the property in question was evidenced by a duly registered written deed and the same could not be disbelieved on the basis of any oral statement made by the assessee or any other person. He referred to Sections 91 92 of the Indian Evidence Act, 1872, to support his contention that the Assessing Officer could not accept an oral evidence which was contrary to a written document. He also cited a decision of a Division Bench of the Punjab Haryana High Court in the case of Paramjit Singh v Income Tax Officer: 323 ITR 588 in support of this contention. 6. In our view, the CIT (Appeals) had correctly appreciated the facts and the applicable law. The statement made by the assessee on 18.11.2005 in pursuance of the summons under Section 131 of the Act was apparently voluntary and there was no allegation that any undue influence or coercion had been used by the Income Tax Authorities. Even in the letter dated 24.11.2005 whereby the assessee sought to resile from his statement, the onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is undoubtedly one of the most reliable indicators of the market value of an asset and the same could not be ignored. The difference in the disclosed consideration and the value as estimated by the DVO is so large that even if the valuation was not considered accurate, it nonetheless indicated that the recorded consideration was understated and the DVO s report could be relied upon to corroborate the statement of the assessee, that he had paid an additional sum of ₹ 55 lacs in cash. 8. In the case of P.V. Kalyanasundaram (supra) a Division Bench of Madras High Court had upheld the decision of the Tribunal dismissing the appeal preferred by the Revenue against an order of CIT (Appeals) holding that an addition of income based only on a statement made by a seller could not be made by the Assessing Officer. In that case, a search was conducted in the premises of the assessee on 08.12.1998 and the Assessing Officer had made an assessment under Section 158BC of the Act for a block period from 01.04.1988 to 08.12.1998. The assessee therein had purchased certain lands at Salem on 26.10.1998 which was registered for ₹ 4.10 lacs. The vendor of the said land recorded his state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court was upheld by the Supreme Court. In our view, the decision in the case of P.V. Kalyanasundaram (supra), thus, does not support the assessee in the present matter. First of all, in the present case, the Assessing Officer has referred the matter to a Valuation Officer since there was material before him to indicate that the value at which the transaction for purchase and sale of property was recorded was understated. In this case, unlike in the case of P.V. Kalyanasundaram (supra), the Assessing Officer had obtained a valuation report which would, at the minimum, corroborate that the values of property in the vicinity were more than the consideration at which the salepurchase transaction had been recorded by the assessee. Secondly, it is relevant to note that in the present case the statement had been made by the assessee and not by any third party. And thirdly, the statement made by the assessee had been held to be voluntary and without any undue influence, both by the Assessing Officer and the CIT (Appeals). It is also not the case of the assessee that the Income Tax Authorities had unduly influenced or coerced the assessee to make the statement in question. 10. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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