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2014 (8) TMI 1083 - ITAT KOLKATA

2014 (8) TMI 1083 - ITAT KOLKATA - TMI - Addition as per disclosure made by the assessee - Held that:- We find that there is no basis for making this disclosure and thereafter addition made by AO to the returned income of the assessee as there is no corroborative or direct evidence which shows that the assessee has earned this amount of ₹ 1 cr. There is no deposit in the bank account and there is no cash or incriminating papers found during the course of search on the premises of the asses .....

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I.T.A No.1784/Kol/2012 - Dated:- 1-8-2014 - Shri P. K. Bansal, AM & Shri Mahavir Singh, JM] For the Appellant: Shri A. K. Das, JCIT, Sr. DR For the Respondent: Shri Rajeeva Kumar, Advocate ORDER Per Shri Mahavir Singh, JM : This appeal by revenue is arising out of order of CIT(A), Central-II, Kolkata in Appeal No. 265/CC-XIII/CIT(A)C-II/11-12 dated 14.09.2012. Assessment was framed by JCIT(OSD), C.C-XIII, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) f .....

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on the facts and circumstances of the case and in law the Ld. CIT(A) erred in relying upon various case laws which are against the revenue, and not considering the case laws in favour of revenue. 3. Briefly stated facts leading to the above issue are that a search and seizure operation was conducted on Shyam Steel & Power group of cases on 26.03.2010 u/s. 132 of the Act. A consequential search was also conducted in the bank Account No.504011039472 maintained with ING Vaishya Bank Ltd., H. B .....

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y he disclosed additional income of ₹ 1 cr. Accordingly, AO initiated proceedings u/s. 153C of the Act. During the year under consideration i.e. AY 2010-11, the AO made addition of this ₹ 1 cr. and completed assessment u/s. 153C of the Act read with section 143(3) of the Act vide order dated 28.12.2011. During the course of assessment proceedings the assessee was asked to explain as to why a sum of ₹ 1 cr. surrendered during the course of search, as admitted by the assessee, be .....

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stigation Wing of the Department. That is why, according to assessee, the disclosure made during the course of search was not included in the return of income. The assessee contended that there is no basis for making this disclosure as there is no corroborative or direct evidence which shows that the assessee has earned this amount of ₹ 1 cr. There is no deposit in the bank account and there is no cash or paper found relating to which this income is to be declared. But the AO added the sum .....

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pparent that search & seizure operation was conducted in the case of Shyam Steel & Power Ltd. Group on 26.03.2010. Consequently the search was also conducted on 06.05.2010 in the bank accounts held in the name of M/s. Manomay Distributors Pvt. Ltd. and M/s. Omni Trexim Pvt. Ltd. The appellant was one of the Directors in the above mentioned companies, however, no search operation was conducted in his case. In the course of search operation in the bank accounts, the appellant submitted a l .....

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the assessment year 2010-11. In the said letter appellant also stated that on the bank accounts of the above named companies, prohibitory order u/s. 132(3) has been placed and the balance lying with the said bank accounts may be used for payment of tax on his additional income. However, in the return of income filed by the appellant for assessment year 2010-11, he did not disclose the additional income of ₹ 1 crore as admitted ìn the letter dated 06.05.2010. Therefore, in the cours .....

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;de letter dated 06.05.2010. It was submitted before the A0 that there was no basis of said dìsclosure and that he had filed the disclosure letter under coercion and pressure. That, no search action was conducted in his case and there is no material on record which may suggest that he had earned undisclosed income on account of commission. No incriminating documents were found in his case. It was also contended before the AO that the bank accounts of the companies which were put under pro .....

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as made by him under coercion. That, he did not complain to the higher authorities and the retraction was not made ìmmediately after the search & seizure action was over. It is also held by the AO that by making voluntary surrender of undisclosed income, the appellant induced the search party not to proceed with collectìon of other evidence. On careful consideratìon of the facts and in law, I am of the opinion that the AO was not justífied making addition of ͅ .....

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, no where, it is mentioned that the claim of appellant is not correct and that evidences were found in the case of appellant supporting the disclosure of ₹ 1 crore as undisclosed ìncome earned on account of commission. In the assessment order, not even a síngle piece of incriminating evidence/document has been discussed by the AO which may suggest that the appellant had earned undisclosed income or which may support and corroborate the disclosure made by the appellant. I fin .....

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material on record to establish that the appellant had earned the undisclosed income of ₹ 1 crore. In the course of appellate proceedings, the appellant filed copies of assessment orders in the case of M/s. Manomay Distributors Pvt. Ltd. and M/s. Omni Trexim Pvt. Ltd. for A.Y. 2010-11 dated 28.12.2011 passed by the same AO who passed the order in the case of appellant. In the case of both the companies, the bank balances were accepted by the AO as duly accounted for in the books of accoun .....

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made on the basis of the statement recorded u/s. 132(4) if the assessee retracted later and surrender was not corroborated by independent evidence. Similarly, ín the case of Kailashben Manharlal Choksì vs. CIT, 174 Taxmann 466, the Hon ble Hígh Court of Gujarat has held that merely on the basis of the statement made u/s. 132(4), the assessee could not be subjected to addition unless and until some corroborative evidence was found by the revenue in support of such addition. F .....

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undue emphasis should not be placed on the statements recorded. In fact, it had given a mandate not to obtain confession as to the undisclosed income. 5.1 The similar view was expressed by the Hon ble Madras High Court in the case of CIT vs. Khader Khan Son reported in 300 ITR 157 wherein it has referred to the said Circuiar dated 10.03.2003 issued by the CBDT. In ìts order dated 04.07.2007, the Hon ble High Court has quoted from the said Cìrcular which is extracted as under What i .....

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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, 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 disclo .....

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while framing the relevant assessment orders. In the case of appellant no incriminating material representing his undisclosed income was found in search. The AO has also brought no material on record to show that there was any undisclosed income earned by the appellant. I am of the opinion that no addition to the income of the appellant can be made merely on the basis of statement, which was retracted later on, specifically when there is no incriminating document or asset representing undisclose .....

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