TMI Blog2009 (5) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... r, during the course of survey two small diaries were found and impounded. The diaries contain certain notings indicating cash receipts which were not recorded in the regular books of account. As per the diaries (inventorised as Serial Nos. 34 and 35), the amount received in cash works out to ₹ 20,44,100/- and ₹ 19,10,500/- respectively. There were also certain other discrepancies and to cover such discrepancies an amount of ₹ 1,00,31,181/- was declared as income, in the sworn statement dated 5,12.2002 (though actually it was signed in the early hours on 06.12.2002). 4. It may be noticed that the assessee firm consists of three partners, i.e.:- (1) Shri Satish Kantilal Mehta 40% share of profit (2) Shri Jayesh Kantilal Mehta (Elder brother) 40% share of profit (3) Mrs. Saryuben K. Mehta (Mother) 20% share of profit A statement was obtained from Shri Satish Kantilal Mehta during the course of survey proceedings wherein an amount of ₹ 1,00,31,161/- was declared as additional income. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies were written in one sitting by the partners of the firm at the insistence of the survey team and despite the fact that no details were contained in the so-called diaries, except the date and figures, the Assessing Officer assumed that the figures represent the amount received by the assessee in the form of professional charges. It was also brought to the notice of the learned CIT(A) that the statement recorded by the survey team was retracted immediately by the partners as well as by the Chartered Accountant concerned by filing affidavits. During the course of assessment proceedings the Assessing Officer has recorded a statement dated 3.3.2006 and even at that stage it was brought to the notice of the Assessing Officer that the survey team forced the partners to write down the figures in the so-called diaries and this was already brought to the notice of the tax authorities by filing affidavits. However, even in the said statement, the Assessing Officer has not clarified that the affidavits of the partners were rejected vide letter dated 19.12.2002. The case of the assessee, under the circumstances, was that the affidavits were not rejected and hence the initial burden of provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh these points raised by the appellant. I find that these are very trivial facts which do not vitiate the authenticity of the content of the diary. Therefore, I do not attach any significance to these points. Looking to all these facts and circumstances of the case i.e. the diary written in the handwriting of Mr. Satish Mehta and his unequivocal and unambiguous statement during the survey, it leaves no doubt in my mind to hold that these diaries are authentic along with its contents. The onus is very much on the appellant to explain the entries of the diaries which he has failed. Here, it is also very important to mention that though, the appellant has offered an income of ₹ 1,00,31,161/- during the survey, but the AO acting reasonably not to make any addition at ₹ 60,78,551/- on account of sundry creditors after verification. Therefore, the AO cannot be blamed for adopting prejudiced and unreasonable approach against the appellant. In ultimate analysis, it may be pointed out that the AO has made addition of ₹ 39,54,800/- on undisclosed professional charges attributed to the entries made in these to diaries. Therefore, on considered fact. I am convinced that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement of the assessee during the course of assessment, the learned counsel submitted that despite categorically explaining in the statement that the statement obtained by the survey party was not voluntary, the Assessing Officer has not indicated even at that stage that vide letter dated 19.12.2002 the affidavits were rejected. In fact, the claim of rejection of the affidavits was noticed only from the remand report since the assessee was not served a copy of such letter, i.e. letter dated 19.12.2002. He has also referred to the statement of Shri Satish Mehta during the course of survey proceedings to submit that statement recorded on 5.12.2002 at 2.30 p.m. does not contain any question with regard 'to the so-called 'small diaries' containing the notings of professional receipts. The statement was temporarily concluded at 10.30 p.m. on the same day and resumed on 6.12.02 at 5.00 a.m. and only at this stage, a mention was made with regard to the small diaries which also lend support to the contention of the assessee that the so-called diaries were not found during the course of survey but the survey party has compelled the partners to make certain entries in the small d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. With regard to the burden of proof cast upon the revenue, the learned counsel placed reliance on the decision of the apex court in the case of Vinod Solanki, reported in 2009 (233) ELT 157 (SC) wherein the Hon'ble Supreme Court observed that upon retraction of a statement by filing the affidavits the initial burden to prove that confession was voluntary is on the department and in absence of discharging such burden and also without bringing any evidence to show that the assessee has actually earned such income, the sole reliance upon the statement is not permissible. The learned counsel for the assessee has also referred to the instructions dated 10.3.2003 of the CBDT wherein the officers of the Revenue Department were advised to avoid obtaining the confessional statements. In other words, addition should be based upon credible evidence and should not be merely based upon statements obtained during the course of survey/search. The learned counsel for the assessee thus submitted that there is no material on record to suggest that the assessee has earned income to the tune of ₹ 39,54,600/- in the form of professional receipts. 10. On the other hand, the learned Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Immediately thereafter i.e. on 16.12.2002, both the partners of the firm i.e. Shri Satish Mehta and Shri Jayesh Mehta filed affidavits stating that survey was earned out from 1.00 p.m. on 05.12.2002 and it continued the whole night and then concluded at 8.00 a.m. on 06.12.2002. 13. The case of the assessee is that in the presence of the Chartered Accountant, Shri Bhupendra M. Shah, the concerned officers of the survey team compelled the partners and directed them to scribble down certain figures in a small diary and then the same was impounded by them based upon which the assessee was made to declare additional income for the assessment year 2003-04 though the fact remains that the assessee had not earned any income as mentioned in the diary. It was further submitted that all the pages in the diary were written with the same ball point pen in one breath as per the compulsory requirement of the officers of the survey team. It was submitted that Shri Bhupendra M. Shah, Chartered Accountant of the assessee firm was present during the survey proceedings and was a witness to the highhandedness of the survey team. It was also submitted that the contents of the said diary is not suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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