TMI Blog2010 (7) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 (hereinafter referred to as the Act ) vide his order dated 24-02-2003 for the assessment year 2000-01. 2. The only common issue in these appeals of assessees are against the order of CIT(A) in confirming the addition on account of undisclosed income of discounting of cheques.. For this, assessee has raised the following ground No.1, 2 3 which are exactly identical in both the assessee s appeals, hence, we will take the grounds from ITA No.32/Ahd/2004:- 1. The learned CIT(A) has erred in law and on facts in confirming the action of AO in taxing the alleged undisclosed discounting income of ₹ 6,66,667/- while as a matter of fact the appellant has earned no such undisclosed discounting income. Under the facts and circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication regarding the sources of earning ₹ 20 Lacs in the current year from my firm Mangaldas Shambhudas right now because my books of accounts and other details are not ready yet, but I will give clarification regarding the source on the day after tomorrow by remaining present before you but with regard to this income the tax that has arise towards that I am giving hereby two cheques each of ₹ 5 Lacs towards the advance tax, all such facts ands stated by me are true, proper and correct and the same are abiding to me. As per the Assessing Officer, the assessee agreed to have derived discounting income out of the activities of cheques discounting of the parties along with other concerns of different parties and therefore t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that he could not explain the source of ₹ 20,00,k000/- earned during the year and he requested for a day s time to explain the source and quantification of the same. The assessee further stated that as a result of this income he was giving two cheques as an advance tax for the current year. Such clear and unequivocal statement of the assessee was definitely a voluntary statement and it was not obtained by the Assessing Officer under duress as alleged now. From a perusal of the loose papers found at the time of survey it emerged that the business of three concerns namely M/s. Pari Mangaldas Shambhudas, M/s. Sharadha Corporation and M/s. Vikas Finance was being run from the same premises. The Assessing Officer, therefore, allocated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences on record i.e. detained vouchers, cheques collection register local, rojme and bank statement and books of account, where all the transactions were duly recorded in regular manner. The Assessing Officer verified the books of account and he has accepted the books of account and confirmed that income is shown in return except the addition as above, which was made hypothetically without consider the record/evidence available. Ld. counsel for assessee further stated that just on the basis of statement u/s.133A of the Act the addition cannot be made and this view is supported by the decision of Hon ble Kerala High Court in the case of Paual Mathews and Sons v. CIT (2003) 263 ITR 101 (Ker) and in the case of CIT v. S. Khader Khan Son (2008) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affairs of the business by giving instructions like investments, loan and transaction and was also stated that government dues are also decided and cleared by the assessee, Shri Mangaldas S Patel at his discretion. According to Ld. SR-DR it is hard to accept that a person who was managing all the concerns and giving instructions for various transactions of the concerns, including the government payments, will falter in giving a statement regarding the unaccounted income with respect to capital receipt or taxable receipt particularly when he knows what is income on which, tax is payable and accordingly gave cheques for relevant tax on the admitted income on the date of survey itself and sought time only for giving source/break up of income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reproduced above. We find from the assessment order that the AO has made the addition only on the basis of statement of the assessee and the vouchers found during the course of survey was not the basis of addition. As relied on by the Ld. counsel of assessee the decision of Hon ble Kerala High Court in the case of Paual Mathews and Sons (supra), wherein the Hon ble High Court held that the statement elicited during the survey operation had no evidentiary value and power to examined a person on oath is specifically conferred on authorized officer only u/s.132(4) of the Act in the course of search or seizure. The Income-tax Act, whenever it thought fit and necessary to confer such power to examine a person on oath has expressly provided f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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