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TMI Blog2015 (11) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of search had no basis even though the retraction was an afterthought? [B] Whether the ITAT has erred in law and on facts in deleting the addition of Rs. 2,87,75,583/- made on account of suppression of profits by the assessee company by way of client code modification by the broker (which is a group concern) in a large number of commodity transaction? [C] Whether the ITAT has erred in law in holding that the AO was not justified in invoking provisions of section 145(3) of the I. T. Act?" 2. As regards the proposed Question-A, during the course of search, the main person of the group Shri Nayan Thakkar had voluntarily admitted unaccounted income of Rs. 12,00,00,000/- vide his letter dated 10.04.2008, in which he gave a break up o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration of all relevant facts, he found that when the statement of Shri Nayan Thakkar was being recorded during the course of search, no specific incriminating papers or documents were available and were confronted to him. As a matter of fact, voluminous records in the form of loose papers, documents, books of account and digital record were found and seized, the contents of which were never ascertained at the time of search, nor the assessee of the group were specifically informed about such contents. At the time of recording the statement under section 132(4) of the Act, the departmental authorities referred to Annexure-I, which was made the basis of disclosure. However, there seemed to be lack of clarity and uncertainty with respect t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect or discrepancy in any of the seized documents from the business premises of the assessee. The addition made by the Assessing Officer is an account of Client Code Modification, which has also been computed on the basis of the information collected from the Commodity Exchange in post search inquiry. Thus, both the Tribunal and the Commissioner (Appeals) have found that except for the statement made by Shri Nayan Thakkar, which came to be subsequently retracted, there is no material on record to establish unaccounted income of Rs. 12,00,00,000/-. 5. Mr. M. R. Bhatt, Senior Advocate, learned counsel for the appellant, submitted that the statement of Mr. Nayan Thakkar was a voluntary statement which was followed by a letter showing bifurca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decisions of this court in the case of Deputy Commissioner of Income Tax v. Ratan Corporation, (2005) 145 Taxman 503 (Gujarat), in the case of Commissioner of Income Tax- IV v. Radhe Associates, (2013) 37 taxmann.com 336 (Gujarat) as well as in the case of Commissioner of Income Tax v. Chandrakumar Jethmal Kochar, (2015) 55 taxmann.com 292 (Gujarat). 7. Thus, while it is true that on behalf of the assessee Mr. Nayan Thakkar had admitted unaccounted income of Rs. 12,00,00,000/- which was subsequently reiterated by a letter dated 10.04.2008. However, the facts reveal that the statement had been recorded under circumstances which clearly disclose that the admission could not have been recorded voluntarily. The subsequent letter and the retr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, does not give rise to any question of law. The ground of appeal raised vide question [A] is, therefore, rejected. 8. As regards proposed Question-B, having heard the learned counsel for the respective parties, the court is of the view that the same requires consideration, hence, Admit. The following substantial question of law arises for consideration: "Whether the Income Tax Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 2,87,75,583/- made by the Assessing Officer on account of suppression of profits by the assessee company by way of client code modification by the broker (which is a group concern) in a large number of commodity transactions? It is clarified that Question-C stands included in Que ..... X X X X Extracts X X X X X X X X Extracts X X X X
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