TMI Blog2001 (8) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 139(2) of the Act. While completing the assessment, the Assessing Officer noted that in the course of certain enquiries, the assessee had given a statement under section 131 of the Act confessing that during the accounting period ended 31-3-1987, he had earned extra income of ₹ 1,70,000. This extra income was not found to have been declared in the return filed by the assessee. When asked to explain, the assessee submitted that the statement had been given by him before the ADI on 10-8-1987. In response to summons, that due to ignorance and the insistence of the ADI and because of lack of legal assistance he had accepted that he had earned the extra income. It was pleaded that the assessment of the aforesaid amount of income would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear by way of brokerage. It was submitted that having regard to the fact that the money belonged to various persons and not to the assessee, the assessment of the entire amount of the loans as the assessee s income from brokerage was not just and proper. It was contended that the police complaints, registration of the case in the court, the subsequent recovery of the money, all these would point to the conclusion that the monies did not belong to the assessee. It was therefore pleaded that the addition should be cancelled. 5. A detailed paperbook was also filed by the assessee before the CIT(A) which included the statements of some of the parties recorded by the Police and affidavits of persons from whom the assessee claimed to have borr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) ought to have admitted them for adjudication. The affidavits are nothing but the reiteration of the statements made before the police authorities by 5 out of the 6 persons from whom the assessee allegedly took monies, and his mother and wife. Since there was no occasion to furnish the evidence in the course of the assessment proceedings, the CIT(A) ought to have admitted the same exercising his discretion properly under section 250(4) of the Act. The additional evidence ought to have been admitted on the principles laid down by the Hon ble Bombay High Court in Smt. Prabhavati S. Shah v. CIT [1998] 231 ITR 1. 7. The contention of the learned counsel for the assessee before us is that on the basis of the police complaint, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding thereon, as already stated, at the time when the court made the order on 24-2-1987, no proceedings for income-tax were pending against the assessee. Therefore, he could not have mentioned those names in order to build up a case in any income-tax proceedings to the effect that the money does not belong to him. The police complaint is placed at page 9 of the paperbook and the order of the court directing return of the monies, on recovery, is placed at pages 5 to 8. The following persons had also given statements before the police authorities affirming that they paid the money to the assessee for getting gold at cheap rates : Kantaben Dhakan, Jhanak Jethwa, Ramesh Vasant Jaganade, Mahesh Devidas Sampat, Ashok Harishchandra Shinde. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ADI that the monies did not belong to him and before all these authorities he has given the names of the creditors. There is no discrepancy in them. When a consistent stand has been taken by the assessee right from the date of police complaint upto the statement given before the ADI, due weight and credence should have been attached to the same by the Income-tax authorities. They were in error in not accepting the assessee s claim consistently made. In the light of the assessee s consistent stand, as above, his claim that it was only because of the insistence of the ADI, while recording the statement under section 131, that he accepted that he would offer the amount as his income and also pay taxes thereon and that this was done only to avo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asonably refused to accept the evidence and explanation tendered by the assessee which overwhelmingly supported his stand. 10. The learned counsel for the assessee took up a legal contention to the effect that no addition can be made on the basis of the statement made before the ADI since on the date on which the statement was recorded, no proceedings under the Income-tax Act were pending against the assessee. This contention is well founded and is clearly supported by the language of section 131. Since the statement itself has no standing then as held by the Andhra Pradesh High Court in CIT v. Shri Ramdas Motor Transport [1999] 238 ITR 177, it cannot be looked into at all and has no evidentiary value. In the case of G.M. Breweries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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