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Pr. CIT (C) -2 New Delhi Versus Avinash Kumar Setia

[2017] 395 ITR 235 - Did the ITAT fall into error in holding that the surrender made by the assessee in the course of the survey and confirmed two months later in writing, was deserved to be deleted in the circumstances of the case for lack of any corroborative material? - Held that: - The Court is not satisfied that the retraction made by the Assessee two years after the declaration was bonafide. There was no satisfactory explanation for not including the said amount in the return of income fil .....

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der Section 260A of the Income Tax Act, 1961 ( Act ) against the order dated 28th April, 2016 passed by the Income Tax Appellate Tribunal ( ITAT ), Delhi in ITA No. 1787/Del/2014 for the Assessment Year ( AY ) 2009-10. 2. While admitting the appeal on 22nd February, 2017 the following question of law was framed: Did the ITAT fall into error in holding that the surrender made by the assessee in the course of the survey and confirmed two months later in writing, was deserved to be deleted in the c .....

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een tendering the explanations/clarifications about various documents from time to time. I hereby declare that I shall pay income tax on Estimated Income} over and above my Normal Income} of ₹ 1}2 00}000/- (Rupees One Crore Twenty Five Lacs Only) and pay income tax thereon in due course of time. This income will be as per the impounded documents} impounded computers and/or impounded record I his estimated Income shall be declared in my own individual case or any other associates concern or .....

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filed his return of income on 26th September, 2009 for the AY 2009-10, he did not include the aforementioned amount as part of his income. He made no reference to the declaration made by him on 18th December, 2008. Nearly two years after the above declaration, the Assessee submitted the following letter dated 16th December, 2010: Withdrawal dated 16.12.2010 of declaration dated 18.12.2008 Sir, Re:- In the matter of Sh. Avinash Kumar Setia withdrawal of surrender declaration made during survey o .....

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iled to remove the pressure of the Income Tax Authorities and it does not represent true and correct picture of the affairs. Further it is also submitted that there was no incriminating documents seized/found during the course of suggesting the undisclosed income of ₹ 1.25 crore in the hands of assessee. This fact is also proved from the seized documents and books of accounts regularly maintained by the assessee. Keeping this factual position into consideration and background, no such inco .....

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ted 10th March 200J. by of India, Ministry of Finance and Company affairs, Department of Revenue, CADT which is reproduced as under: (omitted) ...... Further as informed earlier, that there was no incriminating documents seized/found during the course of suggesting the undisclosed income of ₹ 1.25 crore and a/so no such incriminating documents has been pointed out by your goodself in the questionnaire issued by you to suggest that there was undisclosed income earned by the assessee during .....

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(Ahm) In view of the above facts as informed earlier, no incriminating documents seized/found during the course of suggesting the undisclosed income nor any such documents were confronted by the assessing officer which can result into an addition of additional income of ₹ 1.25 crore. Hence no such income was included and in view of the above facts, no adverse inference may kindly be drawn in this regard. Any other clarification if needed, the same shall be given at your convenience. Sd/-& .....

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surrender which was voluntarily made . 7. The Assessee then filed an appeal against the above assessment order before the CIT(A). By order dated 14th January 2013, the CIT (A) rejected the plea of the Assessee inter alia on the ground that at the time of survey, when confronted with questions that were inconvenient , the Assessee gave an assurance that details would be provided later and, therefore, succeeded in getting an immediate reprieve. But at the time of declaring the unaccounted income, .....

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rs. Therefore, the disclosure of the unaccounted income quantified at ₹ 1,25,00,000 by the Appellant and admitted voluntarily deserves to be accepted. 8. The CIT (A) then discussed the decisions relied upon by the Assessee and the Circular of the CBDT. It was noted that the reliance placed by the Assessee on the said circular was misplaced since it deals with the directions to the officers not to obtain declaration during search and survey. In the case in hand, no declaration was obtained .....

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ounsel for Assessee sought to rely upon the decision dated 14th September, 2016 passed by this Court in ITA 585/2016 ( Pr CIT-4 v. IIBS Infonet Pvt. Ltd. ). By the said order this Court affirmed an order dated 8th March 2016 passed by the ITAT in ITA No. 6509/Del/2014. The facts of the said case are that a search and seizure operation was conducted on 30th June, 2009. During the course of a survey under Section 133 A of the Act of that very date, a statement was recorded of the Director of the A .....

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y under Section 133A of the Act. As observed by the CIT(A), the Assessee voluntarily made a declaration two months after the survey. There was absolutely no compulsion on the Assessee to make such a declaration. The Assessee waited for two years to resile from the said declaration. The submission of learned counsel for the Assessee that since he had filed a return on 26th September, 2009 without disclosing the sum of ₹ 1.25 crores, he should be deemed to have resiled from the said declarat .....

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es not come to the assistance of the Assessee. 12. Learned counsel for the Assessee next relied upon the decision of this Court dated 4th October, 2010 in ITA No. 1111/2010 (Commissioner of Income Tax v M/s Dhingra Metal Works). Here again, during the course of the survey conducted on 14th September, 2004, the Respondent Assessee surrendered an amount of ₹ 99.5 lakhs and offered it to tax. Within a period of slightly over two months thereafter, on 29th November, 2004, he gave a letter stat .....

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