TMI Blog2016 (8) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 (7) TMI 539 - GUJARAT HIGH COURT ), this Court has held that as the materials admittedly related to a brief period between 01.4.1998 till 29.7.1998, in absence of any documents found during search to even link the assessee’s activities for the entire period, to project by way of extrapolation the facts found during the brief period of about four months would not be permissible and rightly so held by the Tribunal.In view of the above, we are of the opinion that the Tribunal has erred in coming to the conclusion that the assessee had received salary of ₹ 8000/- p.m. for the relevant block years in each year without evidence. The impugned order passed by the Tribunal is therefore required to be set aside. - Decided in favour of assessee - TAX APPEAL NO. 1152 of 2007 - - - Dated:- 3-8-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR TUSHAR P HEMANI, ADVOCATE, MS VAIBHAVI K PARIKH, ADVOCATE FOR THE OPPONENT : MRS MAUNA M BHATT, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. The assessee being aggrieved and dissatisfied with the impugned judgment and order dated 28.02.2007 passed by the Income Tax Appellate Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... els. This fact was pointed out to the assessee vide this office notice dt. 19.10.2001 and the assessee was required to show cause as to why the sum of ₹ 96,000 per annum for the last 10 years which comes to ₹ 9,60,000 should be taken as his undisclosed income. In reply sent by Registered Post, assessee did not comment on his own statement u/s 132(4) which was also supported by his wife s statement. The assessee merely stated that he has not received any salary. It is to be appreciated here that neither the assessee nor his wife till date has retracted from their sworn statement u/s 132(4). Thus, mere denial at the time of assessment i.e. after a considerable lapse of time that he has not received any salary does not serve any purpose, unless the assessee has retracted from his statements with cogent reasons and that too, within a reasonable time. Accordingly, sum of ₹ 9,60,000 being salary of 10 previous years relevant to the Block Period is hereby added to compute his undisclosed income. 3.1 Mr. Hemani has further drawn the attention of this Court to Question no. 5 asked to the assessee and questions no. 10 and 17 asked to the wife of assessee which are repro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when assessee had explained his statement as not correct in context of materials produced, the amount could not be added to assessee s income on basis of his statement. He submitted that in light of the aforesaid decisions, the order passed by the Tribunal is required to be reversed. 3.4 In the alternative, Mr. Hemani submitted that even if the entire case is assumed against the assessee, without prejudice to the submissions made hereinabove, the income assessed by the revenue ought to have been for the relevant year and not the entire block period. In this regard he has relied upon a decision of this Court rendered in Commissioner of Income Tax -II vs. Standard Tea Processing Co. Ltd. reported in [2013] 34 taxmann.com 31 (Gujarat) wherein this Court has held that in absence of link between document found during search and assessee s activities for entire block period, addition for undisclosed income on account of inflated purchase price could be made only for period to which document was related and not for entire block period. He submitted that in the instant case the statement was recorded in October 1999 and therefore the assessment ought to have been only for the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 132(4) of the Act can form a basis for a block assessment only if such statement relates to any incriminating evidence of undisclosed income unearthed during search and cannot be the sole basis for making a block assessment. [Emphasis Supplied] 5.2 We would also like to refer to the circular dated 10.03.2003 issued by the revenue and relied upon by learned advocate for the assessee which relates to confession of additional income during the course of search and seizure and survey operation. The said circular reads as under: 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 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, such confessions during the course of search 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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