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2016 (10) TMI 1010

Imposition of penalty u/s 77(8) of the Rajasthan Sales Tax Act, 1994 - excess physical stock found, than what was recorded in books - the stock of Namkeen on spot verification was 6422 kg whereas in the books it was weighted at 3892 kg only and, therefore, there was excess stock of 2530 kg - Held that: - the assessee failed to discharge the onus immediately as soon as the survey took place and the onus as noticed earlier was to bring to the notice of the higher officials of the Revenue, if something wrong happened in the survey proceedings and such having not been brought, the onus has not been discharged. - It is settled law that once the officer conducting survey on the basis of the very own statements of the respondent assessee having accepted the guilt/charge, having accepted about the excess stock and has no explanation to offer, it may not be proper for the court to enter upon merits of the controversy at all and unless it is demonstrated that the penalty proceedings initiated and imposed, is mala fide, perverse, based on no evidence, misreading of evidence or which a reasonable man could not form or that the person concerned was not given due opportunity, resulting in pr .....

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porting with bills and books but when the assessee himself requested to pass order on the spot accepting the excess stock, the observation of the both the Appellate Authorities is perverse and contrary to the material on record. Nothing was required to be done by the AO when the assessee himself agreed to the excess stock having been found and accepted. Learned counsel also contended that how this explanation was offered before the Dy. Com. (Appeals) that the so-called two witnesses are the employees/workers of the assessee and had it been so, such an additional affidavit placed before the Dy. Com. (Appeals) ought not to have been accepted without seeking explanation from the AO. She also contended that the officers of the Anti Evasion Wing have taken due precautions of R.50 of the Rules, and the finding of the Tax Board so also of the Dy. Com. (Appeals) is perverse and require to be interfered with. Learned counsel also relied upon judgment passed in ACTO, WardII v. B.C. & Company & Another (2013) 66 VST 3 (Raj), where on identical facts this court had upheld the claim of Revenue. 5. Per contra, learned counsel for the assessee contended that both the Appellate Authorities .....

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for the assessee as to whether there was pressure or coercion inflicted on the assessee and now it was for the assessee to prove by evidence that coercion or pressure was built upon the assessee by the survey team. 11. The principles about the statements having been recorded at the time of survey/search being pari materia insofar as the Income Tax proceedings or the Central Excise proceedings or/and the Sales Tax proceedings, in my opinion, is identical and in the instant case the respondent assessee claims that by a subsequent act before the Dy. Com. (Appeals), an affidavit appears to have been filed claiming that on account of threat/pressurising tactics and coercion the statements were recorded at the time of survey & search and statements being on account of threat or otherwise cannot be said to be proper. It has already been expressed earlier that despite chance having been provided to the counsel for respondent he is unable to produce the copy of the said affidavit for perusal of the court and the records which have been produced of the AO which was produced by the counsel for Revenue and which is also seen by the counsel for the respondent, at-least no affidavit or any .....

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n be used as a strong evidence against the assessee in assessing the income, the burden lies on the assessee to establish that the admission made in the statements are incorrect/wrong and that burden has to be discharged by an assessee at the earliest point of time and in the instant case we notice that the AO in the Assessment Order observes :- "Regarding the amount of ₹ 44.285 lakhs, it is now contended that the statement u/s 132(4) was not correct and these amounts are in thousands, not lakhs i.e. it is now attempted to retract from the statements made at the time of S & S operations". Therefore, what we gather from the Assessment Order and on perusal of the above finding that the retraction was at the stage when the assessment proceedings were being finalised i.e. almost after a gap of more than an year. Such a so-called retraction in our view is no retraction in law and is simply a self-serving statement without any material. 15.1 xxx xxx xxx xxx 15.2 This Court in Raj Kumar Sodhani v. The CIT [DB ITA No.15/2015, decided on 28.4.2016] has taken this very view that retraction after a sufficient long gap looses its sanctity. 15.3 xxx xxx xxx xxx 15.4 The ques .....

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t were that a search was conducted under Section 132(4) on 28.6.2001, which resulted that there was suppression of sale. Cash book was recorded upto 25.6.2001. Though cash book showed a cash balance of ₹ 21,31,523/- but the physical balance found on spot was only ₹ 34,552/-. On interrogation of Managing Partner and the employees revealed that only 80% of the actual sales turnover in respect of liquor was recorded in the cash book. The AO arrived at a conclusion that there was concealment of income. The Court, after analysing the findings and after quoting Section 132(4) of the Act in extento so also explanation, observed ad infra :- ..Going by the above provision along with its Explanation we find that the statement of the partner and employees recorded and documents collected are relevant and admissible in respect of all matters for the purpose of any investigation connected with any proceedings under the Income-tax Act. Hence, we are of the opinion that the statements so recorded and documents collected by the Assessing Officer cannot be brushed aside as done by the Appellate Tribunal stating that it is having only very limited application. We answer the question in f .....

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annot be retracted at the mere will of the party. A statement made under oath deemed and permitted to be used in evidence, by express statutory provision, has to be taken as true unless there is contra evidence to dispel such assumption. A self-serving retraction, without anything more cannot dispel the statutory presumption. The admission made by the assessee before the Assessing Officer corroborated by the title deeds seized in search absolved the Department from discharging any burden regarding the additions made on the strength of such admission. Admission as has been often held is the best evidence on a point in issue and though not conclusive is decisive of the matter unless successfully withdrawn or proved erroneous. Any retraction of a clear admission made has to be on the ground of it being either erroneous or factually incorrect or one made under threat or coercion. In the instant case, the first appellate authority has clearly found that the plea of the assessee that the admissions were made under threat and coercion is clearly unfounded. The Tribunal also has categorically refused to consider the issue of threat and coercion. In such circumstances, the Tribunal ought to .....

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in the statement recorded under section 132(4). Deletion of the additions vis-à-vis the property transactions on the reasoning that the Department cannot do so on the basis of the admission made under section 132(4) and on the premise that the Department ought to have proved retraction to be untrue cannot be countenanced in view of the specific words employed in section 132(4). 15.7 The High Court of Madras in the case of K. Sakthivel v. Assistant Commissioner of Income Tax (2012) 252 CTR (Mad) 531, had also an occasion to consider an identical situation of statements having been recorded under Section 132(4) of the Act, where retraction was made during the course of the assessment proceedings and much later than the statements had been recorded, the Court held thus :- 18. As regards the contention of the assessee that the statement recorded was in violation of provisions of CPC and CrPC, we do not think that the said contention would be well received by this Court. The conduct of the assessee has to be seen herein. The assessee made a statement in the enquiry conducted by the department as regards the parting of a sum over and above what was recorded in the sale deed. A re .....

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olice officers. The confession, though retracted, is an admission and binds the petitioner. So there is no need to call panch witnesses for examination and crossexamination by the petitioner. 13. Therefore taking into consideration the above observation of this court, though in Income Tax proceedings, it was not at all justified on the part of the Dy. Com. (Appeals) so also the Tax Board to have accepted an affidavit after a sufficient long gap inasmuch as the survey was conducted on 28.10.2002 and the order of the Dy. Com. (Appeals) is dt 8.6.2005 which is almost about 2½ years later. The so-called retraction/resiling of statements before Dy. Com. (Appeals) after a long gap looses significance and cannot be accepted. 14. On perusal of the facts noticed earlier, in my view the assessee failed to discharge the onus immediately as soon as the survey took place and the onus as noticed earlier was to bring to the notice of the higher officials of the Revenue, if something wrong happened in the survey proceedings and such having not been brought, the onus has not been discharged. 15. It is settled law that once the officer conducting survey on the basis of the very own statements .....

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