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K.P.M. NAIR Versus THE ASST. COMMISSIONER OF INCOME TAX

2016 (8) TMI 514 - GUJARAT HIGH COURT

Addition on salary received - addition on evidence of the statement made by the assessee’s wife - Held that:- It is borne out that the authorities proceeded on the basis of the statement made by the assessee’s wife that she was paying salary to the assessee every month. This statement had been denied by the assessee but the same was not retracted by the assessee’s wife. However, what remains to be seen here is that the revenue has not been in a position to bring any evidence on record so as to s .....

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documents, in our opinion, cannot be permitted. In the case of Standard Tea Processing Co. Ltd. (2013 (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 he .....

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BHAVI 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 Tribunal, Ahmedabad Bench C in C.O. No. 146/Ahd/2003 for block assessment period 08.09.1990 to 1998-99 and upto 21.10.1999 has preferred the present Tax Appeal for consideration of the following substantial question of law: Whether the .....

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ncome to be ₹ 8000/- from Om Travels which is being run in the name of his wife which fact had been confirmed by his wife in her statement in reply to question no. 17. Later on the assessee denied to have received any salary from Om Travels vide letter dated 12.10.2001. The Assessing Officer by multiplying ₹ 8000/- per month for the ten previous block years which came to ₹ 9,60,000/- treated the same as the undisclosed income of the assessee. The CIT(A) as well as the Tribunal .....

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m Om Travels In the statement recorded u/s 132(4), in reply to question no. 5 assessee had stated that monthly income is approximately ₹ 8000 from Om Travels which is being run in the name of his wife. In response to question no. 17 assessee s wife has stated that she has been paying ₹ 8000 per month as remuneration to him from Om Travels for looking after the business. Accordingly vide this office notice dt. 6.9.2001 the assessee was called upon to furnish particulars of salary rece .....

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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 r .....

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her your are assess to tax or not. If assess to tax the designation of IT authorities with whom you are filing your returns of income A-5 At present I am not filing any return of income. My monthly income is approximately from the vehicle ₹ 8000/- from the vehicle which is used for the travel business. However, I was filing returns of income upto A.Y. 1984-85 as I was having salary income from Auto Motive Mfg. Ltd. Since Om Travel is proprietary concern of my wife, she is filing her return .....

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ncome for ten years. In this connection he has relied upon a decision of the Delhi High Court in the case of Commissioner of Income Tax vs. Harjeev Aggarwal reported in [2016] 70 taxmann.com 95 (Delhi) and submitted that a statement recorded under section 132(4) can form a basis for a block assessment only if such statement relates to any incriminating evidence of undisclosed income unearthed during search and seizure. Referring to the substantial question of law raised in the said decision, he .....

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t in the case of M. Narayanan & Bros. vs. Assistant Commissioner of Income-tax, Special Investigation Circle, Salem reported in [2011] 339 ITR 192 (Madras) and submitted that the court therein has held that 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 .....

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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 from 01.06.1999 to 31.10.1999 i.e. for a period of six months and not for the entire block peri .....

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had only denied receiving any salary and therefore as the statement remained unretracted, the Assessing Officer made the said addition. 4.1 Mr. Bhatt submitted that the amount of ₹ 8000/- seems to be a smaller amount on record. However, there is much more to it as the assessee used to manage the business affairs under the name of his wife and has always tried to evade tax. He submitted that this Court may not interfere in the impugned order. 5. Having heard learned advocates for both the .....

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e assessee s wife u/s 134(2) of the Act which has been denied by the assessee, the revenue has not produced any substantial evidence to prove its case. 5.1 In the case of Harjeev Aggarwal (supra), the Delhi High Court in para 23 has held as under: 23. It is also necessary to mention that the aforesaid interpretation of Section 132(4) of the Act must be read with the explanation to Section 132(4) of the Act which expressly provides that the scope of examination under Section 132(4) of the Act is .....

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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 .....

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the Income-tax Department. Similarly, while recording statement during the course of search & seizure and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, Assessing Officers should rely upon the evidences/ materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders. [Emph .....

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