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2015 (7) TMI 555 - ITAT JAIPUR

2015 (7) TMI 555 - ITAT JAIPUR - TMI - Validity of 153A proceedings - Surrendered income of ₹ 20,00,00,000/- Whether the disclosure was voluntary or given under coercive circumstances? - Held that:- In our considered opinion the contentions raised by ld. Counsel for the assessee lead to a clear inference that the disclosure of the assessee cannot be regarded as voluntary. The pressure of restrained DDs. of 31.48 crs. against a disclosure tax liability of about 7 crs is palpable. It has the .....

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e is placed on Hon'ble Rajasthan High Court in the case of CIT v. Ashok Kumar Soni [2006 (7) TMI 162 - RAJASTHAN High Court ] for the proposition that admission in statement during search proceedings is not conclusive proof. Besides Hon'ble Supreme Court in the case of Pullangode Rubber Produce (1971 (9) TMI 64 - SUPREME Court ) has also held so that such statement can be explained in the light of correct facts.

Whether in the light of CBDT instruction dtd 10-03-2003, search proceedin .....

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unable to uphold the additions solely on the basis of disclosure which doesn't meet the eye and have been hold by us to involuntary.

Whether the additions are based on any incriminating material discovered as a result of search in terms of sec. 153A - Held that:- There is no reference to impugned additions being based on any worthwhile incriminating material or evidence except raising some suspicions. The sole basis of additions in both cases is proposed to be the disclosure. Consequ .....

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on account of agreement to sale his share in ancestral land to G P Realtors not connected to assessees. The transaction came in dispute and was subject matter of litigation, settled by a compromise before court, asessees have been termed as brokers in court proceedings. Raghubir advanced the money by cheque to Ranga Rao for purchase of some property.

Department has again relied on assesses 2nd disclosure letter which also mentions that these transactions are not connected to asseessee .....

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ence or addition can be drawn against assesses in this behalf.

Additions made in a search assessment u/s 153A which is meant for assessment of undisclosed income consequent to search proceedings - Held that:- By detailed observations we have held that neither any worthwhile incriminating material, information, and evidence was discovered as a result of impugned multiple search operations nor the additions sustained are based on any such material. The sole basis of additions is the dis .....

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ders of the ld. CIT(A)-Central Jaipur dated 30-03-2012 and 11-07-2012 respectively for the assessment year 2008-09: assessee being related, facts and grounds of both the assessee's are similar, are being disposed of by a common order for the sake of convenience. Grounds raised are as under:- Shri Basant Bansal (ITA No. 534/JP/2012 - A.Y. 2008-09) "1 That on the facts and in the circumstances of the case and in law, the order dated 30-03-2012 passed by CIT(A)- Central, Jaipur [herein ref .....

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case and in law, the addition of ₹ 20 crores was sustained not on the basis of any cogent material but on presumption and extraneous considerations. 4. That on the facts and in the circumstances of the case, the ld. CIT(A) has erred in not appreciating that in law addition cannot be sustained solely on the basis of statement, there must be independent material, evidence to corroborate the surrender, which was retracted. 5. That on the facts and in the circumstances of the case and in law, .....

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ive, on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in not reducing the amount of ₹ 39 lacs declared in the Income Tax Return filed by the appellant out of the alleged surrender of ₹ 20 crores confirmed by him. 8. Without prejudice and in alternative, on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in making assessment / addition of ₹ 4.99 crores in the hands of Shri Roop Bansal, who was not a party to appea .....

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ase and in the circumstances of law, ld. CIT(A) erred in holding that no coercion, pressure, undue harassment was exerted on the appellant to make surrender of ₹ 4.99 Crores. 3. That on the facts and in the circumstances of the case and in law, the addition of ₹ 4.99 crores was sustained not on the basis of any cogent material but on presumption and extraneous considerations. 4. That on the facts and in the circumstances of the case, the ld. CIT(A) has erred in not appreciating that .....

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, the ld. CIT(A) erred in not reducing the amount of ₹ 39 lacs declared in the Income Tax Return filed by the appellant out of the alleged surrender of ₹ 4.99 crores confirmed by him. 7. Without prejudice and in alternative, on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in upholding the assessment / addition of ₹ 4.99 crores on protective basis in the hands of Shri Basant Bansal, who was not a party to appeal while passing the order of appel .....

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tions were again carried out in the premises of assessee's on 17-09-2008. During the course of these proceedings no worthwhile incriminating material was discovered to indicate any undisclosed income or transactions. According to assessee, DDs of various group concerns amounting to about 31.48 crs drawn on 12.9.2007 were put under restraint order by the department by order dtd. 20-9-07 (these facts will be dealt in detail). This restraint of huge amount created immense pressure on the assess .....

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n a survey also. To justify their action, department any how wanted the said disclosure of ₹ 20 crores. Caught in this difficult situation of financial strangulation and pressure of proceedings which were adversely affecting business, assessee's were not left with any viable alternative but to concede to this demand of. Consequently on 19-11-07 by a summary letter Shri Basant Bansal made a collective disclosure of ₹ 20 crores for and on behalf of self, associated companies, their .....

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me-tax department that no penalty and prosecution proceedings will be initiated against the group entities i.e. companies, their directors and family members. Notices for filing returns u/s 153A of the Act were issued on both assessee's on 28-04-2010. In pursuance thereto both the assessee's filed their respective returns on 28-09-2010. Assessment u/s 153A r/w Section 143(3) of the Act in both cases were framed by AO on 28-9-2010. In furtherance of 1st search and survey inquiries on 14.0 .....

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Ranga Rao out of his said proceeds of share of ancestral land. Since department in the quest of disclosure was not willing to verify any explanation offered by assesses; alternatively Shri Basant Bansal contended that the transaction may be deemed to be part of their overall business operations and may be treated as included in the composite disclosure of ₹ 20 Crores offered in the letter dated 19.11.2007. In sum and substance, assessee claims that in these coercive circumstances S/shri B .....

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ores. Relevant disclosure letters and portion of 131 statement are as under:- Letter dated 19.11.2007 addressed to DDIT (Intelligence-1) Sub: Offer of Income/Investment/Expenditure. Reg.: Roop Kumar Bansal/Basant Bansal, C- 13, Sushant Lok, Phase-1, Gurgaon, Haryana. This is with reference to search and seizure operation under section 132 and survey under section 132 and survey under section 133A of the Income-tax Act, 1961 carried on 12.09.2007 and 11.10.2007 at my residential premises and the .....

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inety Nine Lacs only) offered on 12.09.2007 unconditionally non-retractable as pro tem Income/Investment/Expenses which was earned during the course of business of sale/purchase/construction of properties to purchase peace of mind and to avoid litigation with the understanding with the Income-tax department that no penalty and prosecution proceedings will be initiated against the company, its directors and their family members, my family member and me. Letter dated 15.01.2008 addressed to DDIT ( .....

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he search & seizure/survey operation certain documents, cash, valuables etc. were found and seized/impounded from such business and residential premises and to clarify our previous letter dated 19.11.2007 offering income of 20 Crores and further querries raised by you on 14.01.2008 in respect of property purchased from Ranga Rao and amount of ₹ 62.75 lacs received by Ranga Rao from Raghubir, S/o Kehar. In this regard we would like to submit that the co-owner Raghubir, s/o Kehar has sol .....

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to the assessee, however the assessee Basant Bansal still ready to pay tax on the credit entries of the said bank account of Raghubir, which is included in the income of ₹ 20 Crores offered by the assessee in the previous letter dated 19.11.2007. It is further submitted that the balance Income of ₹ 10 crores offered in the hands of Roop Kumar Bansal is also included in the income of ₹ 20 crores offered in the previous letter 19.11.2007. Hence, the assessee Basant Bansal and Roo .....

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order. If your good self requires any further explanation/clarification, we would be pleased to submit the same. -Part of statement dated 15.01.20008 recorded by Sh. N.R. Pandey, The Deputy Director of Income Tax (Intelligence - 1). Relevant portion thereof ply is also reproduced below: "Q. I am showing your account no. SB/01/024061 of Sh. Raghubir, S/o Sh. Kedar with Corporation Bank, M-Kunj, Grugaon. It is seen that money from this account has been utilized to finance purchase of land by .....

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Y.2008-09. During the course of assessment proceedings ld. AO raised the issue as to why against the surrendered income of ₹ 10 Crores in his hands only ₹ 39 lacs was declared as additional Income. The assessee in his reply dated 06.12.2010 contended that the letters of surrender of undisclosed income before the ld. DDIT (Intelligence-1), New Delhi regarding alleged transaction of Shri Raghubir and some bank accounts the relevant details were not allowed to be reconciled by the asses .....

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e assessee however insisted on his letter dated 6.12.10 to be correct version of related affairs and explanation of alleged transaction and relied upon various judicial pronouncements for the propositions that:- (i) Any adverse material used against assessee needs to be confronted for rebuttal. 67 TTJ (Delhi) 109. (ii) Statement made by any third party after the date of search is of no consequence assessee has a right of its cross examination. This having not been done the additions cannot be ma .....

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hat the 1st surrender was made by assessee after a period of 2 months of search, it certainly was on the basis of some evidence and information, otherwise he would not offer such a substantial sum of money as undisclosed income. Thus the surrender was made as a result of post search inquiries the modus operandi was explained by a letter of admission filed to the DDIT (Intelligence), New Delhi Dtd. 19.11.2007 & 15.01.2008. Thus the assessee's surrender was held as binding piece of evidenc .....

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se to his reply dated 06.12.2010 as per which he required certain documents and cross examination of Sh. Raghubir. In the summon it was specifically mentioned that he was required to personally attend at Room No.23, Aaykar Bhawan, Moti Dungari, Alwar, Rajasthan on 14.12.2010 at 10.00 A.M. Sh. Basant Bansal did not attend on the said date. Therefore, his objection regarding cross examination of Sh. Raghbir or Rang Rao is not justified. In this regard I would like to add that the opportunity for c .....

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ith Corporation Bank, Maruti Kunj, P.O.-Bhondsi, Gurgaon (Copy of account opening form enclosed). 2.3 Moreover, no statement of Sh. Raghubir or Sh. Ranga Rao has been used against the assessee by me. Even the Investigation Wing, Delhi has only showed him the bank statement of account no.SB/01/024061 of Sh. Raghbir with Corporation Bank, Maruti Kunj, Gurgaon as is evident from the statement of Sh. Basant Bansal dated 15.01.2008 a copy of which has been provided to the assessee, receipt of which h .....

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account No.SB/01/024061 of Shri Raghbir with Corporation Bank, Maruti Kunj, Gurgaon was used by Sh. Basant Bansal and the companies in which he and his brother Sh. Roop Bansal had interest, to route their unaccounted income for purchasing land. On coming to know of this account being detected by the department as discussed in the previous para which contained opening deposit of ₹ 9.66 crores he became jittery and filed the letter of surrender dated 15.01.2008 to DDIT (Intelligence), probab .....

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ao is not tenable. 2.6 There is no corroborative evidence with the department in respect of admission of unaccounted income of ₹ 4.99 crores by Sh. Roop Bansal in his statement recorded u/s 132(4) of the Income Tax Act dated 13.09.2007 and no discrepancies have been pointed out till dated i.e. 14.12.2010. AO Comments: There have been number of discrepancies in the case of M/s Misty Meadows Pvt. Ltd. One of the companies of the group in which Sh. Basant Bansal & Sh. Roop Bansal are majo .....

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for it, is not justified. -The department is relying on the statement of Sh. Rang Rao who is not filing his return of income. Amount of ₹ 62,75,000/- claimed to be received by him from Sh. Basant Bansal is not substantiated by any evidence, therefore, statement of Sh. Rang Rao is not reliable. AO Comments: There is no bar in any law that the statement of a person who has not been filing return of income can not be relied upon. Copy of statement of Sh. Rang Rao has been provided to the ass .....

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his reply dated 06.12.2010 that he has been able to lay hands of some legal documents which show that the alleged bank account i.e. SB/01024061 with Corporation Bank, Maruti Kunj, Gurgaon is owned by Sh. Raghbir S/o Sh. Kehar Singh. The assessee has enclosed copy of letter issued by Corporation Bank certifying that the transactions in the said bank account had been conducted by Shri Raghbir. The assessee has also enclosed copy of Compromise Deed between M/s. G.P. Realtors Pvt. Ltd. And Sh. Ragh .....

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j, Gurgaon is not his but on the basis of it he filed letter of surrender of undisclosed income of ₹ 20 Crores before the DDIT (Intellignece-1), New Delhi on 15.01.2008. In this regard I would also like to recall that it is very clear from the account opening form of account no. held by Sh. Raghbir with Corporation Bank, Maruti Kunj, Gurgaon that Sh. Basant Bansal & Sh. Roop Bansal very well knew Sh. Raghbir. And I would also like to add that it is the same bank, certificate issued by .....

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in advertisements on various channels of T.V., are too big shots for Sh. Raghbir to refuse them co-operation. -Discussion on retraction of surrendered income of ₹ 20,00,00,000/-. 2.8 All objections and submission and evidences relied upon by the assessee as discussed above, are with the intention to justify the retraction of surrender. In order to bring out the fallacy of the argument put forth by the assessee to justify retraction of surrender I would further like to mention that the ass .....

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he did not include in his income while filing the return of income. 2.9 Sh. Basant Bansal & Sh. Roop Bansal have surrendered undisclosed/unaccounted income vide letters dated 19.11.2007 and 15.01.2008 before the DDIT (Intelligence-I), New Delhi will after the date of search which 12.09.2007. They had ample time to think and deliberate, consult their counsel and advisers before making the surrender of income of ₹ 20 crores. Therefore, I hold that the surrender made by them is final and .....

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operation before the Income-tax authorities is binding on him despite retraction. In this regard decision of Punjab and Haryana High Court also supports the above view as it has also held in its decision dated 24.09.2007 in the case of Rakesh Mahajan vs. CIT at 642 of 2007 (Taxpert) and 214 CTR 218 that "It is well settled that admissions constitute best piece of evidence because admission are self-harming statements made by the maker believing it to be based on truth. It is well known that .....

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based on the statement of the assessee. Since no case had been made that the statement was made under a mistaken belief of fact or law and the statement being voluntary one there was no scope for the assessee to challenge the correctness of the assessment." 2.10 In the case of Sh. Basant Bansal & Sh. Roop Bansal, there is nothing to indicate that the admission regarding surrender of undisclosed/unaccounted income made by them before the DDIT (Intelligence-I) in the letter dated 19.11.2 .....

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133A of the Act on 10.11.2007, DDIT(Ingelliegence-1), New Delhi conducted enquiries into the source of purchases of various lands made by Sh. Basant Bansal, Sh. Roop Bansal and companies in which they had interest. On coming to know of the same Sh. Basant Bansal and Sh. Roop Bansal filed letter dated 19.11.2007 to the DDIT (Intelligence-1), New Delhi surrendering income of ₹ 20 crores which included amount of ₹ 4.99 crores surrendered by Sh. Roop Bansal in his statement recorded u/s .....

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. Roop Bansal & Sh. Basant Bansal. Enquiries were conducted regarding cheque no.122224 and it was found that the cheque was issued for A/c No.SB/01/024061 of Corporation Bank, Maruti Kunj, Gurgaon held in the name of Sh. Raghuveer S/o Kehar of Village-Badshahpur, Gurgoan. In this account which was opened on 11.12.2006 initial amount of ₹ 9.66 crores was deposited. In order to know the source of this amount further enquiries were conducted by DDIT (Intelligence-1), New Delhi, however be .....

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har has sold his ancestral property and we do not have any relation or interest in the said land/sale proceeds and the bank account no SB-01/024061 maintained with Corporation Bank, Maruthi Kunj, Gurgaon in which the sale proceeds of such land was deposited. The payment made to Sh. Rang Rao was out of the sale proceeds received on sale of such land is separate transaction and we do not have any relation/interest on such payment/transaction. Although, the said property and the bank account were n .....

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t was having enough evidence of unaccounted/undisclosed income of Sh. Basant Bansal, Sh. Roop Bansal, they came forward to make the surrender. Therefore, Sh. Basant Bansal, Sh. Roop Bansal can not claim that the department did not have any evidence of their undisclosed/unaccounted income other than their statements and letters of surrender as mentioned above. 2.12 Amount of ₹ 20 crores which Sh. Basant Bansal & Sh. Roop Bansal have surrendered for taxation as per letter dated 19.11.200 .....

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de any surrender as per the letter dated 19.11.2007 and 15.01.2008 submitted by his brother Sh. Basant Bansal to the DDIT(Intelligence-1), New Delhi for himself and on behalf of Sh. Roop Bansal. But the fact remains that Sh. Basant Bansal made a surrender of ₹ 20 crores as per the letters submitted by him, therefore, amount of ₹ 20 crores is considered to be undisclosed income of Sh. Basant Bansal as Sh. Roop Bansal has denied having anything to do with the letters of surrender filed .....

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cross examoination or verification. (iv) Unsustainable additions being based only on surmises, conjecture and not based on any incriminating material, etc. 2.14 Ld. CIT(A) after considering the same and material available on the record awarded part relief based on following observations and conclusion:- "5.5 I have considered the submission of ld. A.R and have perused the material on record. The facts related to the issue have been discussed elaborately by the A.O. in the assessment order. .....

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. However, it will be appropriate to discuss them in brief. 5.5.1 The A.R. has drawn my attention to the fact that as per A.R the alleged benami account in the name of Sh. Raghubir was shown to the appellant on 15.1.2008, whereas, the appellant has made surrender of ₹ 20 crore vide letter dated 19.11.2007. I do not find any significance of this point of the A.R. AS mentioned by the A.O, the earlier search and seizure action was carried out on 12.9.2007 and subsequently the survey was carri .....

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of C.As and Advocates) to file a letter dated 19.11.2007 under his signature wherein he has admitted ₹ 20 crore as his additional income, obviously no one can be blamed for this surrender letter, much less the department. Rather the appellant should also possibly not blame himself because it is he who must have realized that impending enquires of the Investigation Unit may unfold many things, which may be more damaging to him. 5.5.2 The other argument is that in the statement recorded on .....

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seizure operation, obviously after consulting the team of taxation experts and weighing the pros and cons of the enquires being undertaken by the Intelligence Unit at that point of time. By no stretch of imagination it can even be presumed that the appellant was under threat or coercion while writing this letter of surrender ob obviously sitting in his office and/or in the office of his tax advisors and fully assisted by tax advisors/consultants. 5.5.3 The other argument taken is that it cannot .....

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he appellant that ₹ 9.66 crore deposited in this bank account represent sale proceeds of land sold by Mr. Ranga Rao and Others, as argued by the A.R. 5.5.4 Copy of impugned bank account of Sh.Raghuvir Singh was shown to the appellant during post search investigation conducted by Intelligence Unit, New Delhi, wherein huge deposits to the extent of ₹ 9.66 crore were noticed. Moreover, in his subsequent letter which was filed on 15.1.2008 i.e. after 2 months from earlier letter dated 19 .....

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as ₹ 9.66 crore, obviously, the source of deposit in the bank account has been admitted by the appellant to be belonging to him and since they are undisclosed, the appellant has very rightly offered himself to pay tax on these deposits. Therefore, the aforesaid bank account of Sh. Raghuvir Singh though apparently operated under the signature of Sh. Raghuvir Singh but the money deposited in it belongs to appellant and being utilized by the appellant group as per his own written letter under .....

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, it is seen from the body of the assessment order that copy of the statement of Sh. Ranga Rao was provided by the A.O. In any case, neither the statement of Sh. Raghuvir Singh nor the statement of Sh. Ranga Rao has been used against the appellant. It is only the bank statement of Sh. Raghuvir Singh which has been used against the appellant and it is to mention here that the copy of the bank statement of Sh. Raghuvir Singh was already shown to the appellant by the Intelligence Unit Delhi while r .....

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ng, has issued summon to the appellant for attending personally on 14.12.2010 but the appellant failed to attend. Therefore the A.O. observed that his objection regarding cross examination of Sh. Raghuvir Singh and Mr. Ranga Rao is not justified and is merely a plea taken to delay the filing of details and entangle the assessment proceedings. 5. 6 The A.R. has referred to the various decisions. The decision in the case of Pullangode Rubber Produce Co.vs. State of Kerala 91 ITR 18, rather support .....

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of his admission then immediately afterward he should have retracted the letter dated 19.11.2007 by filing the affidavit and mentioning the reasons and circumstances as to how and why the admission so made earlier is incorrect. Instead of filing any such affidavit retracting the admission of additional income offered for tax, after due consideration and after due application of mind for further two months, he has consciously chosen to again file a letter dated 15.1.2008 not for retracting the c .....

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being the situation, even none of the other decisions cited by the appellant can be of any help to him as facts of the appellant case are quite dis-similar to the facts of these cited cases. None of these cited cases, the admission of additional income has been made after two months of the search and moreover much less in none of the case, the surrendered income has been further reiterated by another letter that too filed further after two months. 5.7 The A.R. has tried to argue that in stateme .....

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swers and what is their implication on the issue under consideration. Without prejudice to above, it is further mentioned that this answer of the appellant given at the early stage of the enquires is of no significance, when the appellant himself in the subsequent letter dated 15.1.2008 has admitted to pay tax on the deposits/credit entries in the impugned bank account apparently in the name of Sh. Raghuvir Singh. 5.8 In view of the facts and circumstances and the legal position on the issue und .....

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8377; 20 crore vide letter dated 15.1.2008, wherein also he included the additional income related to the deposits in the impugned bank account to the extent of ₹ 9.66 crore, is upheld in relation to both the brothers. 5.9 However, during the assessment proceedings in the case of Sh. Roop Bansal, he has claimed that the letter of surrender of undisclosed income submitted by his brother Sh. Basant Bansal was neither made by him nor confirmed by him and he has not accepted/shown additional i .....

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99 crore in the hands of Sh. Roop Bansal, accordingly addition to the extent of ₹ 4.99 crore, out of ₹ 20 crore so made in the hands of Sh. Basant Bansal is hereby deleted on substantive basis. However, as Sh. Roop Bansal is still disputing the addition of ₹ 4.99 crore so made in his hand in the appellate proceedings, it will be appropriate and reasonable to keep this amount of ₹ 4.99 crore in the hands of Sh. Basant Bansal on protective basis. Accordingly, addition to th .....

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rvey proceedings on 17.10.2007 - 2nd search by Investigation Wing, Jaipur on 17.9.2008. These operations didn't result in discovery of any incriminating material which is evident from the fact that ld. AO/ CIT(A) in the entire order have not relied on any matrial. The edifice of additions is only disclosure which was by and large extracted out from the assessee by creating hostile and difficult conditions, some assumptions and presumptions. This makes it prima facie clear that search assessm .....

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ad propensity to stop their business operations and bring bad repute for the stake holders including banks, the amount of about ₹ 31.48 crores lying in these accounts was converted into demand drafts 12-9-07 i.e. one day after the search. Unfortunately the department came to know about the DDs and seized the demand drafts on 29-9-07. This again lead to a peculiar situation as the entire business was crippled and an amount of ₹ 31.48 crores was lying idle, locked up in unproductive DD .....

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l not be released unless assesse makes disclosure of undisclosed income of ₹ 20 crores and pays advances taxes thereon. It is only after extracting the alleged disclosure and payment of advance tax, the DDs were released after hectic efforts and considerable delay in Feb. 2008. It is contended that the pressure of the department can be exerted in many ways which are not confined to only time of search; physical threat; not leaving the premises or on the spot harassment. The harassment cont .....

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is is exactly what has happened in this case and there is no justification in the repetitive findings that the disclosure was made after 2 months of search and again reconfirmed in statement u/s 131. The authorities below have conveniently omitted the crucial fact that all the while ₹ 31.48 crores of group funds were held by the department to mentally force the assessee for disclosure and its ratification. 2.17 Apropos the issue of disclosure, ld. Counsel contends that no incriminating doc .....

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benami account handled by Sh. Basant Bansal & Sh. Roop Bansal, which was opened with an initial deposit of ₹ 9.66 Cr. 12.12.2006. Out of it, except for ₹ 5000/-, whole amount was withdrawn with in a period of 1 month upto 12.1 2007. The account was finally closed on 1.3.2007. On being confronted by the DDIT (Intelligence-1), New Delhi, Sh. Basant Bansal made a surrender of ₹ 20 Cr as per letter dated 19.11.2007 and letter dated15.1.2008". 2.18 From a bare reading of le .....

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ducting the obstructed business. 2.19 On 11.10.2007, again a survey under section 133A of the Act was carried out and hard pressed by repeated onslaught of proceedings, for release of DDs the fateful letter dated 19.11.2007 surrendering ₹ 20Cr, was filed post survey proceedings. The questions asked during the statement of Mr. Basant Bansal are referred to, Ld. Counsel contends that none of them indicate that any incriminating was found whose reply could not be given and which on human cond .....

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r: Question Nature of question No.1 to 3 General information was sought as to the Appellant, companies / concerns in which he is a director or has financial interest. No.4 to 7 Where the companies are assessed to tax, their returns, books of account and where the books are kept. No.8 Information as to the nature of business. No.9 Where the land was purchased during last 3 to 4 years and licenses applied for. No.10 & 12 Source of purchase of land. Why no interest was paid on loans taken from .....

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hing materially adverse in the statement of Basant Bansal recorded on 11.10.2007. 2.20 On 20.11.2007, another statement of Mr. Basant Bansal was recorded by DDIT. The queries raised related to number of issues, which included inter-alia (i) cheques found during the course of search, (ii) purpose of payment of ₹ 16 Cr. by Emaar MGF Land Pvt. Ltd. source of 13 demand draft referred to in letter dated 27.9.2007, (iii) explanation as to sale deeds found during the course of search on 12.9.2007 .....

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the statement recorded on 20.11.2007, the Appellant stated that he had purchased the land from Mr. Ranga Rao at ₹ 30 lacs in total and that he had not paid any other amount either in cash or cheque and that he is not aware of transaction between Sh. Raghubir and Mr. Ranga Rao. 2.22 On 15.1.2008, statement of Mr. Basant Bansal was again recorded by DDIT, in which only one question was put as under: "I am showing you A/c No. SB/01/024061 of Sh. Raghbir, S/o Shri Kahar, with Corporation .....

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e to explain the payment of ₹ 62.75 lacs from the A/c No. SB/01/024061 with Corporation Bank 15.1.2008. Assessee submitted that Sh. Raghubir has sold his ancestoral property and that the Appellant has no relation or interest in the said land and the aforesaid bank account in which sale proceeds of land sold by Sh. Raghubir was deposited. Notwithstanding the categorical denial of any relation / interest with saving A/c No. SB/01/024061 of Sh. Raghubir, as the assessee's DDs worth ₹ .....

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e Assessing Officer by letter dated 7.12.2010 provided copies of statement of Mr. Basant Bansal, Mr. Roop Bansal, Mr. Ranga Rao and copy of bank statement of Mr. Raghubir with Corporation Bank, however copy of statement of Mr. Raghubir was not provided. By the letter dated 14.12.2010, the Appellant made following submissions:- Placing the copy of sale deed dated 15.12.2006, executed by Mr. Ranga Rao son of Shriram in favour of Benchmark Infotech Private Limited, it was submitted that Mr. Ranga R .....

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d appellant had nothing to do with the A/c. the cause title mentions the assessee's capacity as Broker which is evident from paper book page no. 63 to 68. Thus the deal was between G P Realtors and Raghubir; as the it fell into dispute Raghubir instituted legal proceedings in lower court against G P Realtors their directors as main respondents and assessee's as broker. The sale proceeds and Corporation bank a/c were connected with this deal. Since the deal did not materialize assessee .....

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onsideration of ₹ 22.81 Cr., there was dispute regarding non distribution of ₹ 9,67,40,000/-. The dispute led to filing of FIR's and suit and writ petition before Punjab & Haryana High Court. All the disputes were settled by compromise deed dated 12.9.2009, whereby, Sh. Raghubir and other members who had sold their land acknowledged that they have received their respective shares from the consideration of ₹ 9,67,40,000/-. Pursuant to the compromise, the FIR's / suit .....

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2.24 From the aforesaid documentary evidence, it is clear & beyond doubt that the amount of ₹ 9.66 Cr. credited in the A/c No. SB/01/024061 with Corporation Bank, Gurgaon represented part part of sale proceed of Sh. Raghubir and his family members. Therefore, there is no basis whatsoever for suspecting much less holding that A/c No. SB/01/024061 was the benami account of the Appellants. On such flimsy ground the finding of BENAMI against assessee's is grossly fallacious and bereft .....

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ade by letter dated 19.11.2007 was two months after the search, after evaluation of the material and post search enquiries, which revealed that bank accounts were opened in the name of some persons and part consideration of sale of land was deposited in these accounts, which were finally brought into various companies of the Appellant. (ii) To enable the Appellant to cross examine the witness, summons dated 7.12.2010 was sent to his address at Tauru Distt. Gurgaon. However, the Appellant did not .....

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hat the Investigation Wing examined SB/01/024061 of Mr. Raghubir maintained with Corporation Bank, Maruti Kunj, Gurgaon and came to conclusion that the same was used to purchase land. (v) Mr. Ranga Rao in his statement (dated 26.10.2007) had admitted that he had received ₹ 30 lacs and ₹ 62.75 lacs from Bansals of village Tauru, which is the village of the Appellant. The cheque for ₹ 62,75,000/- was issued from SB/01/024061. To know the source further enquiries were started, how .....

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d. and Mr. Raghubir etc. filed to show that SB/01/024061 with Corporation Bank was owned by Mr. Raghubir and not the assessee do not assist the assessee because if the bank account and the transactions did not relate to the assessee then how the assessee get these documents. (viii) Self assessment tax of ₹ 3 Cr. was paid on 28.2.2007 for the assessment year 2007-08, instead of assessment year 2008-09. If there was no unaccounted/unexplained income, then, why the assessee deposited ₹ .....

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companies in which they have interest. The enquires revealed that source of payment made towards purchase of land was SB/01/024061. The emphasis of the ld. Assessing Officer reasons as stated in para 31 under the head basis of addition'024061 are to the effect that bank a/c- SB/01/ was benami of the Appellant, wherein, unaccounted sale proceed was deposited and was subsequently utilized for the purpose of business. The burden to prove Benami is squarely on the department, surprisingly nothi .....

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the Appellant on 7.12.2010. - In the statement recorded on 11.10.2007, there is nothing adverse which meets the eyes. If the search conducted on 12.9.2007 and subsequent survey carried out on 11.10.2007 discovered any adverse material or incriminating document, the Appellant would have been confronted before recording his statement on 11.10.2007. The survey Dtd 11.10.2007 was off shoot of post search enquiries; with two massive actions there is no justifiable reason for not confronting such incr .....

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.66 Cr. deposited in this bank account represented sale proceeds of land sold by Mr. Ranga Rao and others. It is not the stand of the revenue that the land sold was owned by the Appellant or his brother. Therefore, it can not be said that the bank account is benami account of the Appellant, opened to deposit the unaccounted sale proceeds of the alleged land. - The reason that statements of Sh. Raghubir and Mr. Ranga Rao has not been used against the Appellant is without any substance, inasmuch a .....

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- The averment of the Assessing officer that the Appellant did not avail the opportunity to cross examine Sh. Raghubir and Mr. Ranga Rao is make believe because it is not understood why the summons dated 7.12.2010 were sent to village Tauru, Distt. Gurgaon, when all other notices / communications were being addressed / sent to C-13, Sushant Lok, Phase-I, which was the residence of the Appellant. Obliviously, the purpose of sending such a crucial notice to the village of the Appellant, where the .....

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ight. - Statement of Mr. Raghubir was not provided to the Appellant, despite requests. Therefore, in any case opportunity to cross examine Mr. Raghubir was held by AO to be only a formality. - Apropos the Assessing Officer's observation that how the documents (comprise deed / order, affidavit etc) filed with letter dated 14.12.2010 came into possession of the Appellant, when he was not owner of the property. This amounts to a frivolous assumption. The Appellant requested the concerned partie .....

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corded by the Assessing Officer have no merit and the surrender has no objective basis except the letters and statements dtd. 19.11.2007 and 15.1.2008 which were given in very peculiar circumstances. Except the letters and statement, there is no evidence on record to justify addition of ₹ 20 Crores as undisclosed income of the Appellant. Reference was made to Instruction F.No.286/2/2003-IT (Inv.II) dated 10.3.2003, whereby, the Central Board of Direct Taxes has advised that in search proce .....

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s surrender was not based on any incriminating material but the only way out of avoiding the pressure, coercion enacted by the department due to restraint of its 31.48 crs. The disclosure being not voluntary and extracted by department in creating a coercive situation cannot be relied solely to be basis of additions as undisclosed income. More so when the regular books of accounts have not been found fault with and are not rejected. The settled legal position about admissions and retraction is e .....

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UOI (2008) 16 Scale 31 has observed that retracted confession can be relied upon only there is independent and cogent evidence to corroborate the surrender made. 3 In Saveetha Institute of Medical and Technical Sciences v. ACIT (2011) 012 ITR (Trib) 376 (Chen), wherein, addition towards capitation fee allegedly collected by the institute was made solely on the basis of statements of students and staff recorded under section 132(4) was made. Except for a note giving the breakup of number of stude .....

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10 lacs each for the assessment years 1993-94 & 1994-95. Since tax was not deposited, therefore, benefit of VDIS was not admissible to him. In regular assessment, the assessee could not satisfactorily explain the source of deposit in his bank account. In appeal, the CIT(A) confirmed the addition to the extent of amount found deposited in the bank account and granted the benefit of telescoping. On further appeal, ITAT deleted the addition on the ground that VDIS declaration not accepted by th .....

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such additions. The department has grossly failed to prove or demonstrate existence of any such relevant or cogent material. Assessee has demonstrated the background under which assessee was compelled to make a surrender due to seizure of 30 crores of DDs; these facts make the surrender a piece of evidence obtained by the department without any cogent material and only using subtle arm-twisting. The disclosure thus is not binding on assesse a proposition which is supported by catena of judicial .....

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its there wish and will which prevails during the fateful period. It is almost impossible for the assessee to adduce demonstrative evidence of exerting such pressure. Therefore, the higher courts has ordained the appellate authorities to carefully examine whether such pressure was built due to extract such surrender. Reliance is placed on: In DCIT v. Pramukh Buildings (2008) 112 ITR 179 (Ahd), it was held that even in the absence of proof of coercion or pressure, the statement by itself cannot .....

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losed income or (ii) having undertaken such transactions been in the possession of the Appellant, the department would have confronted the same to the Appellant while recording his statement on 11.10.2007. (iii) The basis of addition that A/c No. SB/01/024061 with Corporation Bank, Maruti Kunj, Gurgaon was benami account handled by the Appellant and his brother Mr. Roop Bansal stands negated for the reason that the amount of ₹ 9.66 Cr. deposited in the said A/c No. SB/01/024061 represented .....

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its land for ₹ 22.81 Cr., out of which ₹ 9.66 Cr. was deposited in A/c No. SB/01/024061 in the name of Sh. Raghubir. (iv) The aforesaid conclusion is further substantiated by the documents relating to resolution of dispute between Raghubir Singh & others (the sellers) and G.P. Realtors Pvt. Ltd. (the buyer). There is nothing to discredit the veracity of the said documents which were filed before the Assessing Officer. The Manager of Corporation Bank, Maruti Kunj, Gurgaon also ce .....

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anga Rao is concerned, the same in view of corroborative material that A/c No. SB/01/024061 actually belonged to Sh. Raghubir has lost its worth whatever little it had. It is for Sh. Raghubir to explain as to what purpose and reason he made payment of ₹ 62,75,000/- to Mr. Ranga Rao from his A/c No. SB/01/024061. The said payment by itself is no reason to come to conclusion that A/c No. SB/01/024061 was benami account of the Appellant. It may be stated here that notice providing opportunity .....

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asis of aforesaid factual position, it was submitted that the surrender made on 19.11.2007 & 15.1.2008 was not because the Appellant was cornered on account of material in possession of the department, rather, the "Pro-tem" surrender was made to avoid harassment. It may be noted here that on the second day of the search on 12.9.2007, the group companies of the Appellant had withdrawn the amounts laying in their respective bank accounts by way of demand drafts in their favour. The a .....

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group was placed was enough to break any businessman and the Appellant was no exception. It was this reason that compelled the Appellant to agree to make surrender of ₹ 20 Cr. (viii). It is contended that neither during search and seizure operation on 12.9.2007 nor during survey operation on 11.10.2007, any surrender was made because nothing incriminating was found. By passing restraint order on 20.9.2007, the pressure was built on the Appellant to make surrender to show that search and se .....

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was no reason for the Appellant to make surrender of more than ₹ 9.66 Cr. However, the Appellant was made to surrender more than double the amount of ₹ 9.66 Cr. which indicates that primarily, the surrender did not have nexus with A/c No. SB/01/024061. In Instruction F.No.286/2/2003-IT (Inv.II) dated 10.3.2003, referred to in paragraph 47, the CBDT has acknowledged that instances of forced surrender have come to their knowledge. As such, it is a fact of which judicial notice can be t .....

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lay upon it. The onus thereafter shifted, however, the Assessing Officer did not do any further independent enquiry that may be said to have shifted the onus back on the Appellant. The retraction from the surrender is to be seen in the light of aforesaid facts. It cannot be said that the retraction was not bonafide. It is well settled that complete surrounding circumstances should be kept in view to decide whether subsequent retraction was merely for the sake of retraction or the same was based .....

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of the department that both these transactions were part of the same transaction. (x). Without prejudice, the surrender of ₹ 20 Cr. included addition on account of surrender of ₹ 4.99 Cr. made by Mr. Roop Bansal on 12.9.2007, which has separately been added in his hands for the assessment year 2008-09. Therefore, in case your honour is inclined to reject our submissions and a fair and personal opportunity may be given to the Appellant. Reliance is placed on following case laws (case .....

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P) Ltd. vs. Union of India, 123 Taxman 737 (Raj.) 9. Basant Singh vs. Janki Singh (Appeal No.1967/341 dated 02-08- 1966 (SC) 10. Shri Kishori Lal 1959 AIR 504 dated 01-12-1958. 11.R.R. Gavit vs. Sherbanoo Hasan Daya, 28 Taxman 349 (Bom.) 12. Vadilal Panchal vs. Dattatraya Dulaji Ghadigaonker 1960 AIR 1113 dated 6-05-1960 (SC) 13. Devendra Prasad Tiwari vs. State of U.P. AIR 1978 SC 1544 14. Babubhai Udesingh Parmar vs. State of Gujarat (Appeal No.1635of 2005 date of 24-1-2006 (SC) 15. CIT - II v .....

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arily admitting ₹ 20 crore as his additional income. Being a voluntary disclosure, department cannot be blamed for this surrender. (ii) Affidavit of Sh. Raghuvir Singh filed by the appellant which inter-alia mentioned something related to aforesaid account no., is nothing but an afterthought attempt made in order to try to cover up and retract the disclosure of admission of unaccounted income. (iii) Assessee did not avail the cross examination of Sh. Raghuvir Sing. Therefore the A.O. right .....

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vide letter dated 19.11.2007. If the appellant had any then immediately afterward retraction should have been filed. Rather assessee reconfirmed it by a letter dated 15.1.2008. (vi) Firstly assesee disclosed ₹ 20 crs. Thereafter included the surrender of ₹ 4.99 crore made by his brother Sh. Roop Bansal on 12.9.2007 and subsequently as a result of enquiries, reiterated the offer of additional income of ₹ 20 crore vide letter dated 15.1.2008, including the additional income rela .....

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Whether the disclosure was voluntary or given under coercive circumstances. The relevant facts and contentions about restraint orders for DDs. on 20-9-07, belonging to assessee group amounting to ₹ 31.48 crs dtd 12- 9-07 & there release in first week of February have not been controverted by the department. Relevant restraint orders are placed on record. Department contends that the disclosure was voluntary and reconfirmed by a letter and statement u/s 131. Per contra assessee contends .....

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hed not once but twice and to add to his miseries survey proceedings were also taken. With multitude of enforcement action if there was any incriminating material it would have surfaced and the AO would have made the additions on the basis thereof as ordained by sec. 153A and CBDT circulars. Since in first search dtd.12-9-07 department could not lay hands on any incriminating material but coincidently could restrain assessee DDs. worth ₹ 31.48 crs, pressure was built on assessee for disclo .....

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issue as nothing had surfaced in this behalf. c. It does not refer to any undisclosed income and speaks of only income. d. Letter claims to be a disclosure of pro tem investment or income. Pro tem means tentative disclosure and implies it is subject to correction on reconciliation. Department did not put any question about any incriminating material which assessee could not reply. The disclosure part from pro tem is claimed to be for avoiding litigation and buying peace with the department. e. A .....

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s narrated clear make the underlying elements of pressure, coercion and harassment manifest in extracting the disclosure. Conclusion: In our considered opinion the contentions raised by ld. Counsel for the assessee lead to a clear inference that the disclosure of the assessee cannot be regarded as voluntary. The pressure of restrained DDs. of 31.48 crs. against a disclosure tax liability of about 7 crs is palpable. It has the propensity to derail the business and creating enough pressure for bus .....

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shok Kumar Soni 291 ITR 172 for the proposition that admission in statement during search proceedings is not conclusive proof. Besides Hon'ble Supreme Court in the case of Pullangode Rubber Produce (supra) has also held so that such statement can be explained in the light of correct facts. ii. Whether in the light of CBDT instruction dtd 10-03-2003, search proceedings and assessment can be based incriminating material and not on such disclosures. Conclusion: A perusal of the CBDT instruction .....

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luntary. iii. Whether the additions are based on any incriminating material discovered as a result of search in terms of sc. 153A. Conclusion: There is no reference to impugned additions being based on any worthwhile incriminating material or evidence except raising some suspicions. The sole basis of additions in both cases is proposed to be the disclosure. Consequently the additions made are not as a result of any material found during the course of search, in view thereof impugned additions ca .....

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