TMI Blog2009 (2) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... und Nos. 3 and 4 were not pressed. Rejected as not pressed. 3. Ground No. 1 is general. 4. Apropos ground No. 2, the facts are that the assessee is a civil contractor doing construction work of Government as well as of private parties. Return of income was filed for the year, declaring a total income of ₹ 16,07,709. The return was accompanied by audit report, audited copies of trading account, P L a/c and balance sheet. Books of account consisting of cash book, ledger etc. with supporting vouchers were produced before the AO and they were on test check basis. During the year, a survey under s. 133A was conducted on the assessee on 6th March, 2002. The assessee surrendered a sum of ₹ 25 lakhs and paid taxes as per the prevailing rates. Adjustment was made against refund for asst. yrs. 2001-02. During the assessment proceedings, the assessee denied the surrendered amount of ₹ 25 lakhs, stating that the surrender had been made by the assessee under pressure and since the assessee was mentally disturbed at that time that the assessee surrendered the sum of ₹ 25 lakhs without looking into the facts, considering his income, under a wrong impression; that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the effect that books were maintained on computer in tally 5.4 and there being some error, the computer had been sent for repair only on 5th March, 2002, i.e., one day before the survey took place; that it was thus clear that the assessee had surrendered the amount of ₹ 25 lakhs after due consideration of the fact that the books of account including stock register were not maintained/produced at the time of survey; that the assessee had specifically stated that the surrender made was without any fear/stress from anybody and voluntarily; that the assessee had also stated that he would not back out of the surrender and the surrendered amount would be an additional income over and above the normal profits; had the surrender not been made, it would have remained open to the Department to investigate the things in the way the Department would have considered computer (sic) to bring the truth on record, and that as such, the surrender made could not be retracted in any circumstances. 6. The learned CIT(A) having confirmed the assessment order in this regard by virtue of the impugned order, the assessee has raised this issue before us. 7. The learned counsel for the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed in Abhi Developers vs. ITO (2007) 12 SOT 444(Ahd) (copy placed on record); that besides, the CBDT, vide Instruction F.No. 286/2/2003/IT (Inv.), dt. 10th March, 2003, has instructed, inter alia, that while recording statement in the course of search and seizure and survey operations, no attempt should be made to obtain confessions as to the undisclosed income; that any action to the contrary would be viewed adversely; and that in respect of pending assessment proceedings also, AOs should rely upon the evidence/materials gathered in the course of search/seizure operations while framing the relevant assessment orders; that this CBDT circular came up for consideration in Asstt. CIT vs. L.A. Pandya, in ITA Nos. 4417 to 4420/Mum/1997 and other connected cases; that in the said case, Mumbai Bench of the Tribunal, vide order dt. 31st May, 2004 (copy placed on record) the addition made was deleted on the basis of the said CBDT instructions; that in Jain Trading Co. vs. ITO in ITA No. 5935/Mum/2002 for the asst. yr. 1999-2000 vide order dt. 30th Oct., 2006 (copy placed on record), Mumbai Bench of the Tribunal has, under similar circumstances, deleted the addition made; that the case law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rifiable. No purchases or sales were found to have been made by the assessee out of the books of account. The sole basis of the addition is the surrender. 10. Coming to the retraction of the surrender per se, undisputedly, in the CBDT Instruction dt. 10th March, 2003 (supra), the Board has instructed as follows : To All Chief CITs (Cadre Centre) and All Directors General of IT Inc. Sir, Sub : Confession of additional income during the course of search and seizure and survey operation regarding. Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search and seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessees while filing returns of income. In these circumstances, on confessions during the course of search and seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , a sum of ₹ 25,00,000 was surrendered on account of excess stock. This amount was surrendered under coercion and threat without taking any stock of inventory. The firm has retracted from the surrender made at the time of survey. 2. Refund for ₹ 8,87,451 claimed during asst. yr. 2001-02 along with interest which was adjusted against tax for the asst. yr. 2002-03 has been treated as advance tax for the asst. yr. 2002-03. 12. In the facts and circumstances of the present case, we do not find anything wrong with the retraction made by the assessee. In Paul Mathews Sons (supra), it has been held that a statement recorded at the time of survey does not carry any evidentiary value whatsoever. Apropos the case laws relied on by the learned CIT(A) to uphold the addition made by the AO, none of them are applicable in the facts of the present case since as noted hereinabove, no material/evidence whatsoever was relied on by the assessee (sic-AO) and the addition made was based only on the statement of the assessee recorded at the time of survey, which, in our opinion, stands successfully retracted in the facts and circumstances discussed hereinabove. 13. So far as rega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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