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TMI Blog2014 (10) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... lacs (47.58-20 lacs disclosed) on adhoc basis by ignoring the fact that it was proved before him that in loose papers Annexures A-6 and 16 totaling to Rs. 47.58 lacs no nature of payment and relation with appellant was mentioned. 3. That on the facts and circumstances of the case, the ld.CIT(Appeals) had erred in law as well as on facts by upholding the addition of Rs. 27.58 lacs by ignoring the facts that it was proved before him that the dates of payments mentioned in loose papers of Annexures 6 and 16 were 13.5.2005, 12.5.2005, 10.5.2005 and 14.5.2005 which pertained to A.Y. 2006-07. Hence, the ld.CIT(Appeals) decision for upholding the addition of Rs. 27.58 lacs based on such loose papers in A.Y. 2007- 08 is totally illegal. 4. The assessee prays leave to add, alter, amend, modify or delete all or any of the grounds of appeal on or before the date of hearing of appeal." 3. In the Revenue's appeal, i.e. ITA No.5375/Del/2010, following grounds have been raised:- "1. On the facts and in the circumstances of the case, the ld.CIT(A) has erred in deleting the addition of Rs. 3,07,00,000/- on account of undisclosed income admitted by Shri Pawan Kumar Bansal in his statement record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s given by the assessee for non-disclosure of the income as per surrender made. Therefore, the Assessing Officer made an addition of Rs. 3,35,00,000/-(Rs.3,55,00,000 disclosed as per statement dated 12th September, 2006 minus Rs. 20,00,000/- disclosed in the return of income). The Assessing Officer also added Rs. 3,45,00,000/- on protective basis in the hands of the assessee for the income of Rs. 3,45,00,000/- disclosed by the assessee in the statement dated 12th September, 2006 in the name of Shri Mahesh Kumar Gupta. In the assessment of Shri Mahesh Kumar Gupta, the sum of Rs. 3,45,00,000/- was added on substantive basis. He submitted that the CIT(A), without properly considering the facts of the case and the legal position, sustained the addition at Rs. 27.58 lakhs being the income as per Annexure A-6 to A-16 found and seized at the time of search. Accordingly, he allowed the relief of Rs. 3,07,42,000/- to the assessee. He also deleted the addition of Rs. 3,45,00,000/- made in the hands of the assessee on protective basis. The addition made in the case of Shri Mahesh Kumar Gupta on substantive basis was also deleted by the CIT(A). 5. It is submitted by the learned CIT-DR that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or pressure for disclosure of income but the fact that the initial search took place on 26th July, 2006 and the same was not concluded till the assessee made the surrender of the income, it gives sufficient circumstantial evidence that there was pressure on the assessee to disclose the income. He further submitted that when the assessee consulted his counsel while filing the return of income, it came to the knowledge of the assessee that the surrender made by him on behalf of the company is not binding on him because it was neither a voluntary surrender of income by the assessee nor it was during the course of statement recorded under Section 132(4). Moreover, since the assessee was not carrying on any business in his individual capacity, there was no income belonging to the assessee. He, therefore, did not disclose any additional income in his return of income except the sum of Rs. 20 lakhs which was on account of cash found at the residence of Vikram Bansal amounting to Rs. 20 lakhs. He, therefore, submitted that the addition made by the Assessing Officer on the basis of statement dated 12th September, 2006 was rightly deleted by the CIT(A). To that extent, the order of learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the letter, it is mentioned "we Capital Power Systems Limited hereby agree to voluntarily surrender additional income of Rs. 7,00,00,000/-". The letter is signed by Shri Pawan Kumar Bansal as CEO of Capital Power Systems Ltd. Thus, the disclosure of Rs. 7 crores was by Capital Power Systems Ltd. and not by Shri Pawan Kumar Bansal in his individual capacity. That on 8th September, 2006, the statement of Shri Pawan Kumar Bansal was recorded. The entire statement is related to the disclosure of Rs. 7 crores, therefore, the same is reproduced below:- "Q-1: Please identify yourself? Ans. I Pawan Kumar Bansal S/o Sh. Nihal Chand Kejriwal R/o A-156, New Friends Colony, New Delhi. Q-2: During the course of search proceedings in the Capital Group of cases on 26-7-2006, a number of incriminating documents/diaries/papers have been found and seized, which indicate that you have undisclosed income, which is not recorded in the regular book of a/cs. Do you want to offer any explanation regarding these documents and the transactions enumerated therein? Ans. I have already filed a letter dated 1-9-06 vide, which I on behalf of the Capital Group of companies has voluntarily offered an additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal was recorded on 12th September, 2006. This statement is also reproduced below for ready reference:- "Q-1: Please identify yourself? Ans: I Pawan Kumar Bansal S/o Sh. Nihal Chand Kejriwal aged about 45 years and r/o A-156, New Friends Colony, New Delhi. Q-2: During the course of search action u/s 132(1) of the I.T. Act 1961, on 26-7-2006, at your business as well as residential premises, a number of documents/loose papers etc. have been seized. These documents are being duly perused by you. You are hereby given an opportunity to describe and explain the contents pertaining to the undisclosed income of the group? Ans: Yes, I have gone through very carefully all the seized papers and documents. I reiterate my earlier submission stated vide letter dated 1.9.2006 and the statement subsequently given u/s 132(4) on 8.9.06 and voluntarily after an additional income of Rs. 7,00,00,000/- (Rs. Seven crores). Q-3: Give the details of these additional income of Rs. 7,00,00,000/- (Rs. Seven crores), i.e. the details of the source of this money and the details of its investment? Ans: This additional income of Rs. 7 crores was generated in different years during the block period from und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- is the income of AY 2007-08 but says that it is the additional income of different years during the block period. Further, in paragraph 2, he had stated that he reiterated his earlier statement stated vide letter dated 1st September, 2006 and statement given on 8th September, 2006. Therefore, the cumulative effect of the letter dated 1.9.2006 and statements dated 8.9.2006 and 12.9.2006 is to be seen and whether as per the cumulative effect of all the above three documents can it be said that the undisclosed income of Rs. 7 crores is required to be assessed in the hands of the assessee i.e. Shri Pawan Kumar Bansal for AY 2007-08. As we have already stated that the original disclosure of income was by letter dated 1st September, 2006. From a perusal of the above letter, the only inference that can be drawn is that the income of Rs. 7 crores was disclosed by Capital Power Systems Ltd. In the first statement dated 8th September, 2006, Shri Pawan Kumar Bansal affirmed his letter dated 1st September, 2006 with the little modification that instead of declaring the entire income of Rs. 7 crores in the hands of Capital Power Systems Ltd., he stated that the disclosure of Rs. 7 crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Capital Group of companies. However, in reply to another question in his statement dated 12th September, 2006, he disclosed the income of Rs. 3,55,00,000/- in his individual capacity and the income of Rs. 3,45,00,000/- in the name of Shri Mahesh Kumar Gupta. The Revenue authorities who recorded the statement did not bother to point out the contradiction between the reply to question No.2 and question No.4. In reply to question No.2, he reiterated his letter dated 1st September, 2006 and statement dated 8th September, 2006 wherein no income was disclosed in the individual names of Shri Pawan Kumar Bansal and Shri Mahesh Kumar Gupta. But, in reply to question No.3, the income was disclosed in the individual names. It is a settled law that the statement has to be considered as a whole and Revenue cannot chose to rely upon only one part of the statement ignoring the other statements. Moreover, statement dated 12th September, 2006 is not the only statement but it is only one part of the series of letter/statements. In the statement dated 8th September, 2006, Shri Pawan Kumar Bansal has stated that the details of the disclosure would be given after going through the seized material. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of the assessee's paper book from which we find that various names are written, amount is written and no date is given on any of the transactions. The total of such transactions was Rs. 7,90,000/-. No explanation relating to nature of those transactions is given by the assessee's counsel at the time of hearing before us. Therefore, in our opinion, the addition of Rs. 7,90,000/- in the hands of assessee due to various transactions recorded at page 77 of Annexure A-6 is required to be made. 16. Page 143 of Annexure A-16 is given at page 52 of the assessee's paper book. The relevant portion of the page where the sum of Rs. 8,78,000/- is mentioned reads as under:- "I Jabalpur (EZ) (1) PO No :- CMD/EZ/P-II/39 dtd 24/12/03 PO completed Rs. 8,78,000 = Recd. towards security deposit in cash - Release of this amount to be pursued." 17. From the above, it is evident that the above entry relates to some transaction dated 24th December, 2003. Therefore, this transaction cannot be said to be pertaining to the accounting year relevant to the assessment year under consideration. In view of the above, in our opinion, the only addition which can be sustained on the basis of loose papers found ..... X X X X Extracts X X X X X X X X Extracts X X X X
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