TMI Blog2020 (1) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... the initial order itself reflects that the view expressed therein is a prima facie view. Therefore, the first set of contentions that on the basis of the observations/findings in the initial order, the Settlement Commission, while passing the final order, ought not to have arrived at different conclusions than those arrived at in the initial order needs no countenance. Nonetheless, we make it clear that we shall further deal with this issue as to whether the Settlement Commission could have arrived at a different conclusion while passing the impugned (final) order under Section 245C(1) of the Act. In the light of the long time gap between the days of search on one hand and the dates of the filing of the affidavit the remittance of tax, the explanations offered by the petitioner to the effect that he was under immense pressure at those distant times are not worthy of credence acceptance, being implausible. Though there is no dispute with regard to the legal position in regard to the right to explain an admission and the evidentiary value of the retracted confessions, since it is not possible in the facts circumstances of the case to accept the contention of the petitioner t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the respondents, there is non disclosure of the details of various transactions related to incomes from real estate business. Hence, we find that the Settlement Commission is justified in concluding that the applicant had stated that the income offered relates to reimbursements of sales promotion expenses and also discounts made to dealers wrongly debited, but, the claim made by the petitioner is not supported by any evidences or details and hence, the manner of earning unaccounted income as claimed by the applicant stands disproved and that the Settlement Commission is further justified in rejecting the Settlement Application since it does not constitute a full and true disclosure of income nor has revealed a true picture of manner in which it has been earned. In the light of the discussion supra, we are of the considered view that there is sufficient material and are also reasons for the Settlement Commission coming to a different conclusion while passing the final order and that the final order is sustainable both under facts and in law for the reasons assigned therein. The above discussed aspects are sufficient to sustain the impugned order. Hence, there is no need, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oap Works. A search was conducted on the petitioner company as well as the deponent, on 30.08.2016, under Section 132 of the Income Tax Act,1961 [ the Act , for brevity]. The search was conducted from 30.08.2016 to 02.09.2016. The petitioner filed a Settlement application, on 13.11.2018, before the Income Tax Settlement Commission [ Settlement Commission , for brevity], Chennai 1st respondent, under Section 245C(1) of the Act. Notices under Section 153A of the Act were issued reopening the assessments for the assessment years 2011-12 to 2016-17 for filing the returns of income. On 26.11.2018, order under Section 245D(1) was passed allowing the Settlement application to be proceeded with further under Section 245D(1) of the Act. Later the Settlement Commission called for a report from the Principal Commissioner of Income Tax. The Principal Commissioner of Income Tax submitted a report, dated 24.12.2018, under Section 245D(2B) of the Act objecting to the Settlement application being proceeded with by the Commission. The said report was forwarded to the petitioner and was received by the petitioner s Chartered Accountant on 28.12.2018. A reply, dated 04.01.2019, was filed responding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted line being helpless. The deponent is not sufficiently educated to read and understand what was being recorded. The investigating officers themselves calculated the cash amount at 9% of the turnover. The addition of 9% on estimate, as cash paid over and above the sales for the assessment years 2013-14 to 2016-17 was worked out by the search party at ₹ 17,54,21,383/-. Search party required that the deponent should accept the said amount as additional income under Section 132(4) of the Act of the petitioner company and that the same should be offered to tax. At that point of time, the deponent had no choice but to accept the same with the hope and expectation that the harassment would abate. Quantification of additional income as per statement under Section 132(4) of the Act with the break up of the said sum is as under: Assessment Year Additional Income (Rs) 2013-14 67,19,801 2014-15 2,12,80,610 2015-16 5,58,53,658 2016-17 9,15,67,314 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner company advertises its products and a portion of the advertisement costs are borne by the distributors. These distributors remitted funds to the extent of ₹ 94,97,907/- by crossed account payee cheques towards their share of advertisement cost. The same was omitted to be taken as income while filing the original return for the assessment year 2016-17 though the amount so received was shown in the balance sheet. Hence, the said amount was declared as undisclosed income in the application filed before the Settlement Commission. A sum of ₹ 1,20,95,157/- was claimed as expenditure towards discounts payable to the distributor. Though the accounting entry was made in the books of accounts for the said amount, payment was not made. Hence, the entry should have been reversed. The expenditure should not have been claimed as a deduction. Since the said amount was claimed as a deduction in the returns originally filed for the assessment year 2017-18, it was offered as undisclosed income in the application filed before the Settlement Commission. The company incurred expenditure of ₹ 55,00,000/- towards business. The same were recorded in a spiral register numbered a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 064/-. A perusal of the applicant s submissions would show that the retraction is mainly based on the ground that the earlier declaration was not based on any material evidence if it were to be sustained. To the above observation of the Commission, the objections of the applicant are as follows: In the returns of income, the petitioner has not included the sum of ₹ 17,54,21,838/- and retracted from the said declaration made under Section 132(4) of the Act as no such income was actually earned by the company. The said sum is not reflected in the form of any investment, asset, cash or in any other form. If any such income was really earned, it would have manifested itself in the form of some asset or the other, in the intense search that was conducted on the petitioner and the deponent for almost four days. Repeated statements were recorded only because no evidence was found. Questions were put by search party and even answers were dictated by them. The deponent merely signed on the dotted line being helpless. Apart from the statements of the petitioner, which were retracted, the statements from two employees viz., Ramaswamy Ramasankar and Subbaraju Jagan were also recorded. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded in short intervals. In all 15 statements of the deponent were recorded. The deponent retracted from the disclosure given under Section 132(4) of the Act and has not offered the same to tax in returns of income filed. The deponent s education is marginal. He can hardly read, write or understand English. The mental trauma to which the deponent was subjected is inexplicable. He lost his faculty of reasoning and simply nodded to whatever the investigating officer stated. The Settlement Commission was completely in error in assuming that the deponent was not in any perturbed state of mind. The observation of the Commission is erroneous, imaginary and borders on absurdity. The further observation of the Commission is as follows: Moreover, the declaration u/s.132(4) was based on valid documents seized like in Annexure A/BCCP4/01 and Annexure BSW/1, both showing cash receipts. The objections of the applicant are as follows: - The observation is based on incorrect factual position. The material numbered as A/BCCPL/01 by search party comprises of 35 pages containing the details of expenditure aggregating ₹ 49,16,642/- incurred by the company. The company in al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les of company products: ₹ 70,07,537/-. The said Ramesh was delaying in making payments. The deponent insisted for payment of the amounts due towards sale proceeds of materials sold to him. Ramesh sent a sum of about ₹ 78.00 lakhs in cash which was reported as stolen in transit. The amount was sent by Ramesh through his sub distributor. FIR was registered in Guntur about the theft of money by the said Ramesh. Copy of the said report is sent to the deponent explaining as to what happened. The amount was subsequently paid to the company by cheque/RTGS. This transaction has nothing to do with this declaration under the provisions of the Act. It is an admitted position that sale proceeds of sales effected are all included in the books of accounts. They are all accounted sales. Hence, the material has no relevance. The description by the Settlement Commission that BSW/5 is confirmation by the dealer of payment in cash is absolutely not correct. There is no nexus between the material found and the conclusion drawn. The said G.Ramesh was not examined. Except guess work there is no proof available to substantiate that the amount represents the cash receipt outside the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been disclosed before the Assessing Officer c) the manner in which such income has been derived; d) the additional amount of income tax payable on such income and such other particulars as may be prescribed to be stated in the application filed before the Settlement Commission. The undisclosed income declared was earned in the course of business. It represents discounts to the distributors not payable, expenses incurred not supported by bills or vouchers or erroneous debit to the profit loss account. The objection that the manner of earning unaccounted income has not been declared, does not apply to the facts explained by the petitioner. While passing the initial order under Section 245D(1) of the Act all the above facts and circumstances were examined and were found to have been fulfilled. Thus, the reasons namely there is no nexus between the material cited and the decision taken by the Settlement Commission; wrong facts are assumed; the reasoning adopted was based on wrong facts; there are no grave procedural defects and there is violation of natural justice as the time given is very short; mere non acceptance of claim is assumed to be synonymous with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself. In doing so, it is often argued by the defender of an impugned decision that the Court is not competent to exercise its power when there are serious disputed questions of facts; when the decision of the Tribunal or the decision of the fact finding body or the arbitrator is given finality by the statute which governs a given situation or which, by nature of the activity the decision maker's opinion on facts is final. But while examining and scrutinizing the decision making process it becomes inevitable to also appreciate the facts of a given case as otherwise the decision cannot be tested under the grounds of illegality, irrationality or procedural impropriety. How far the court of judicial review can reappreciate the findings of facts depends on the ground of judicial review. For example, if a decision is challenged as irrational, it would be well-nigh impossible to record a finding whether a decision is rational or irrational without first evaluating the facts of the case and coming to a plausible conclusion and then testing the decision of the authority on the touch-stone of the tests laid down by the Court with special reference to a given case. This position is wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and true disclosure of income as required under 254C(1) of the Act it would be necessary for the Revenue to prove that there was a non disclosure of primary facts and ntr merely non acceptance of certain claims made before the Commission. Mere non acceptance of the claim made by the deponent is treated as failure to make full and true disclosure of income, erroneously; and, hence the impugned order deserves to be set aside. The findings of the Settlement Commission are irrational and arbitrary. The Settlement Commission should have independently applied its mind to the explanation furnished to it but it failed to do so. The objections of the Principal Commissioner of income tax were simply taken as final and sacrosanct. There is no nexus between the material cited, reasons given and the decision taken by the Settlement Commission. Adverse decision is taken based on facts non existent or facts assumed. The Settlement Application is rejected by the first respondent on the basis of objections given by the 2nd respondent on the grounds irrational, unreasonable and unsupportable in law. Hence, the present writ petition is filed. The case of the respondents as stated in the counter af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed even before the Settlement Commission that there was coercion. Further, while filing petition before the Settlement Commission undisclosed income of ₹ 2.71 Crore is admitted. If there was coercion on the day of search, the same should have been brought before the investigation wing or other higher authorities. The petitioner was always assisted by more than one qualified chartered accountant and was helped by them. The Chairman and Managing Director was attending the income tax office along with his qualified chartered accountant and was always promising to pay taxes on undisclosed income admitted by him. In fact in the month of November/December 2018, the Chairman and Managing Director has appeared before the 2nd respondent along with two chartered accountants and stated that they paid more than 50% of the taxes on undisclosed income admitted and requested some time to pay the remaining taxes. Unless the assessee admits the undisclosed income he would not have paid huge tax of ₹ 5.74 Crore on the same undisclosed income. There cannot be any coercion for years together especially when the business of the assessee runs into hundreds of crores and when the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The department need not get corresponding unaccounted assets/cash etcetera during search operations especially when the assessee and his staff admit about the unaccounted income. The assessee has admitted undisclosed income on three occasions and filed an affidavit about the unaccounted income and payment of taxes. Cash of ₹ 66,07,000/- (seized ₹ 65,00,000/-) and unaccounted jewellery worth ₹ 1,56,74,578/- were found during search in the residential premises of the deponent and cash of ₹ 4,50,000/- (seized ₹ 4,00,000/-) was found in the factory premises of the petitioner company besides cash of ₹ 89,12,090/- (Seized ₹ 87,05,400/-) was found in the premises of M/s.Bharati soap works a proprietary concern of the deponent of the writ affidavit. Certain documents containing details of investment of ₹ 5.20 crores in M/s.Gowtham Buddha Textile Park Pvt Ltd and unsecured loan of ₹ 1.00 Crore advanced by the Chairman and Managing Director to M. Chinnathorai were found. The chairman and managing director while answering question no.8 of his deposition, on 22.10.2016, has stated about the above investments and a part of investment in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cash of ₹ 78,58,460/- to Govinda Ram Attal to be given to the petitioner company but the cash was lost in transit and an FIR was filed. This fact establishes the continuous practice of under invoicing the sale and collecting the differential amount from distributors by way of cash. The contention of the Chairman Managing Director that he retracted from his original statement recorded on oath during the course of search proceedings is incorrect inasmuch as he never retracted from the earlier statement either by addressing a latter to the department or by way of a statement made on oath. Merely because he has not disclosed the undisclosed income of ₹ 17,54,21,383/-, which was detected by the department during the course of search proceedings, in the returns filed pursuant to the notices issued u/s 153A of the Act, it would not amount to retraction. During the course of search, it has been stated on behalf of the assessee that it is under invoicing the sale invoices to an extent of 8% to 9% of the total sale value. The details of the income admitted in the application filed before the Settlement Commission are correct. The manner of earning the income as explained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner has stated that the Settlement Commission passed an order under section 245D(1) of the Act allowing its application to be proceeded with, on examination of material placed before the Commission and that the Commission has held that the application is fit to be allowed to be proceeded with further. Since the said order was passed only at the admission stage, it is not an order in favour of assessee. The petitioner has stated that Settlement Commission has passed the impugned order summarily rejecting its application. Settlement Commission heard the case on 08.01.2019 and then passed the order. The Settlement Commission invalidated the application filed by the assessee since it does not constitute a full and true disclosure of income and as the assessee has not revealed a true and correct picture of the manner in which unaccounted income was earned, which are prerequisites of section 245C of the Act. Hence, the assessee s petition before Settlement Commission was not summarily rejected. Only after receiving the inputs from department and after giving an opportunity to argue the case and file written submissions by assessee company, the assessee s petition was rightly rejected b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... W/01 both showing cash receipt; BSW/5 is a corroborative evidence in the nature of confirmation by dealers. Settlement Commission observed that the declaration under section 132(4) was given based on valid proof vide annexure BSW/05. The submission of the petitioner that the material seized vide the said annexure has no relevance for declaration made under section 132(4) of the act is incorrect because it contains corroborative evidences in the nature of confirmations by dealers stating that cash was also paid to the assessee company. The Settlement Commission observed that the chairman and executive director confirmed unaccounted profits @ 8% later 9% of the sales. The Settlement Commission observed that there cannot be duress or mental stress even after two months of initiation of search especially when the assessee was being aided by legally competent counsel during that period. The petitioner stated that ₹ 4.00 lacs only was found and no other undisclosed asset was found at the time of search. Huge cash of ₹ 91,05,400/- was also seized from the premises of the assessee company and residence of managing director as per the appraisal report of investigation wing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... almyrah with prohibitory order issued under section 132(3) of the Act. The Assistant Director of Income Tax said that he will not release the prohibitory order and allow the jewellery to be released unless the said affidavit is given. Almost about 50 days were over by then. The entire jewellery was seized. All the jewellery of the ladies of the deponent was entirely locked up. The deponent was under great pressure from the family as well as from the income tax authorities. Left with no alternative, the deponent signed and gave the affidavit on behalf of the company and on behalf of himself to get atleast some jewellery released. The affidavit was prepared to the dictations of the assessing officer and once again it was signed by the deponent on the dotted line. The deponent was subjected to immense pressure, fear, coercion and repeated threats. He was threatened that the consequences will be disastrous in the event he does not accept additional income as shown in the statement drawn up under section 132(4) of the Act. He was specifically asked to accept the additional income in his self interest and not to be guided by the chartered accountants. The deponent was asked to pay tax as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- to ₹ 3,00,000/- per day. Monies were received towards sale proceeds on cash sales which were recorded in the books of accounts. Cash receipts collected by Jagan were passed on to the head cashier Ramaswamy Ramasankar. Assistant Director of Income Tax has not questioned these employees about the nature of payments and whether the amounts received were recorded in the books of accounts. Being aware that all these were recorded as sales made in cash, the Assistant Director of Income tax chose not to examine them further. If really the distributors paid monies in excess of the invoice, an enquiry with the dealers should reveal this position too. In the counter, it is stated that the department conducted enquiries from the dealers of the company on random basis. It is obvious that the dealers denied any such payments made in cash over and above the invoice price. Hence, the counter is silent on the outcome of the enquiry. There was no material or evidence found at all in the course of search to support any receipt of monies in cash over and above the invoice price by the company or by the deponent. The deponent reliably understands that in the assessments of dealers made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which is recorded in annexure A/BCCPL/01 seized by the search party. The details of all expenses incurred by the company can be verified from the annexure itself. The amount incurred represents expenditure incurred under various heads and is recorded in the books of accounts of the company. Since most of it constitutes expenses not allowable as deduction, the same was offered as income before the Settlement Commission. All the facts have been stated in the application filed before the Settlement Commission. The same were scrutinised by the Settlement Commission before passing the order under section 245D(1) of the Act. The very same factual position existed while passing the impugned order under section 245D(2c) of the Act invalidating the application. The only difference was principal Commissioner repeatedly objected to in his report before the Settlement Commission. Barring the objection, all facts were before the Settlement Commission, which were gone into at the time when the order under section 245D(1) of the Act was passed. The factual position was presented and verified by the Settlement Commission and it formed part of the order allowing the application to be proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deponent barely understands English. He could not have replied in the language in which the answers to questions were recorded in the statements. Annexures A/BCCPL/01, BSW/01 and BSW/05 do not substantiate even in any remote manner that the petitioner company has received cash in excess of sale price by any under invoicing of sales. The said annexures are no proof at all and do not support the correctness of declaration under section 132(4) of the Act obtained from the deponent. The deponent never stated that he received unaccounted cash at 8% and later at 9% of the sale price by under invoicing. The answers were written by search party/Assistant Director of Income Tax who has recorded the statement. He was asked to sign on the dotted line, while under duress, stress and coercion and pressure. No under invoicing was done. The same was not included in the return filed by the deponent and also by the petitioner company. The statement was recorded from the deponent under section 132(4) of the Act was retracted later at the time of filing of return. The books of accounts contained a book balance of ₹ 1,52,05,400/- on the date of search. The entire cash is officially explained. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The first and foremost set of contentions of the writ petitioner is as under: - On the Settlement Application being filed on 13.11.2018, the Settlement Commission passed an initial order under Section 245D(1) of the Act on examination of the SOF, the record and related material and on giving thoughtful consideration and after expressing satisfaction that technical parameters in the application with regard to pendency of assessment proceedings, tax liability exceeding the threshold limit, payment of application fee and intimation to the assessing officer have been duly fulfilled by the writ petitioner. In the said initial order, it was also held that the writ petitioner has explained the manner in which the additional income is derived in the SOF and that there is prima facie no material, which warrants the conclusion that true and full disclosure has not been made by the applicant/writ petitioner or it has not disclosed the manner of earning such income, and that all the requirements laid down under Section 245C(1) of the Act have been fulfilled by the writ petitioner. After recording such findings, the Settlement Commission held in the initial order that the Settlement App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further deal with this issue as to whether the Settlement Commission could have arrived at a different conclusion while passing the impugned (final) order under Section 245C(1) of the Act. The next set of contentions of the writ petitioner is as under: - The first ground mentioned by the Settlement Commission is that the petitioner disclosed unaccounted income at ₹ 47,31,17,971/- before the investigating wing; but, in the Settlement application the petitioner disclosed only ₹ 12,95,00,000/- as unaccounted income and that there are several statements recorded from the Chairman-cum-Executive Director of the petitioner (hereinafter deponent , for short), under Section 132(4) of the Act, disclosing the unaccounted income at ₹ 47,31,17,971/- and that the annexures A/BCCPL/01, BSW/1 and BSW/5, which are seized, are the corroborating evidences; and, hence, the application of the writ petitioner does not constitute true and full disclosure of the income. Acting under Section 132(4) of the Act statements were obtained from the deponent in relation to the petitioner company and also in relation to his proprietary business. In all, 14 statements were recorded in quic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circular and it is also stated in the later circular that any instance of undue influence/coercion in the recording of the statement during search/survey/other proceeding under the Act and/or recording a disclosure of undisclosed income under undue pressure/coercion shall be viewed by the Board adversely. In the present case, the authorities acted contrary to the instructions, which are binding. Hence, all the confessions obtained of undisclosed income have to be ignored as they lack credibility and evidentiary value. By filing the returns of income, the petitioner retracted from the confessions by not including the sum of ₹ 17,54,21,838/-. The applicant has only disclosed ₹ 2,70,93,064/-. It is open to the petitioner to show that the admission made in the statement by the person, who made the statement, is not correct. If the statement is retracted, the department has to establish its own case independently. A confession without any material to buttress the case of the department is of no avail and that too a retracted confession of the assessee or its representative cannot constitute the basis. The evidence found as a result of search would not take within its sweep s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l times vide statements dated 02.09.2016, 07.09.2016, 30.09.2016 and 30.10.2016 that he is under invoicing the sales bills to the extent of 8% to 9% of the total sale invoice and is receiving the differential amount by cash. The search operations were held from 30.08.2016 to 02.09.2016. The contention that the alleged threat and coercion continued even by the time the later statements were made cannot be countenanced more particularly as the petitioner was aided and advised by accountants and chartered accounts, who were well qualified. The later statements were also made with the very same incriminating information. The assessee even filed an affidavit, on 19.10.2016, affirming the admission of additional income. The said affidavit was filed after lapse of 47 days after the search concluded. The said admission of additional income was voluntary and no coercion was involved. Even before the Settlement Commission, while filing the application and admitting the undisclosed income of ₹ 2.71 Crores, the petitioner never stated that there was coercion. If really there was coercion during the search operations, the petitioner should have brought the same to the notice of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after long lapse of time from the days of search seizure and at the times the affidavit was filed and the tax was remitted. In the light of the long time gap between the days of search on one hand and the dates of the filing of the affidavit the remittance of tax, the explanations offered by the petitioner to the effect that he was under immense pressure at those distant times are not worthy of credence acceptance, being implausible. Though there is no dispute with regard to the legal position in regard to the right to explain an admission and the evidentiary value of the retracted confessions, since it is not possible in the facts circumstances of the case to accept the contention of the petitioner that the confessions or the information including the affidavit and remittance of part of tax was obtained from the petitioner under fear, threat and coercion etcetera, the said decisions do not advance the case of the petitioner any further. Dealing now with the other part of these set of the contentions, namely requirement of collection of evidence related to undisclosed income and that the information in the statements or confessions are not in the nature of clinching evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the petitioner explained the statements of above employees. The explanation with regard to statement recorded on 30.08.2016 of Ramaswamy Ramasankar is that he has not admitted any cash receipt from the dealers and that he was again called and his second statement was recorded, on 17.09.2016, and that in his said statement, it was recorded as if he confirmed cash receipt from the distributor/dealer and that the said admission was obtained by instilling fear, duress and coercion and that there was no receipt of any cash from any distributor/dealer and that no statements are obtained from the distributors in proof of cash payments were made available to the deponent. Insofar as the said statements of the said employees, the further explanation of the petitioner is as follows: - The company makes cash sales; everyday some sale receipts in cash are received; the average receipt of cash is ₹ 2,75,000/- per day as stated by Ramaswamy Ramasankar; it represents the cash that is recorded in the books of accounts; the turnover of the company and that of the deponent s proprietary business was more than ₹ 200 crores during the year when the search took place; the cash sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 4,50,000/- (seized ₹ 4,00,000/-) was found in the factory premises of the petitioner besides cash of ₹ 89,12,090/- (seized ₹ 87,05,400/-) was found in the premises of the proprietary concern of the deponent. Though some explanations were offered for cash seizures, insofar as the jewelry, the petitioner accepted that the jewelry may be treated as unaccounted income by explaining the source of acquisition as income from real estate business amounting to 12.95 Crores and the same was accepted in the application filed before the Settlement Commission. It is to be noted that the contention of the petitioner that the admission of additional income should be represented with equal amount of cash, asset or investment does not merit acceptance as there is no such requirement under law. It is enough if one aspect is found by the department viz., either source or modus operandi of unaccounted income generation or destination of unaccounted income and the department need not get corresponding unaccounted assets/cash etcetera during search operations. That apart, the petitioner s own admission in the affidavit filed after 47 days and payment of huge tax (part) in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the names of parties to such transactions. Be that as it may. In the application before the Settlement Commission the petitioner declared additional income in the assessment year 2016-17 in a sum of ₹ 94,97,907/- towards reimbursement from the distributors by account payee cheques not offered as income besides additional income in the assessment year 2017-18 in a sum of ₹ 1,20,95,157/- towards discounts payable to distributors. The details of the distributors to whom the discounts are payable are not disclosed. Though an accounting entry was stated to have been made in the books of accounts for the said amount, admittedly, no payment was made; hence, the entry was said to have been reversed and was offered as undisclosed income in the application filed before the Settlement Commission. As regards amount of ₹ 1.00 Crore paid to Chinnathorai, the petitioner explains it as the amount given out of income from real estate business. There is no true and full disclosure as to the details of this income from real estate business. As rightly contended by the respondents, the statements of dealers and distributors are not filed insofar as the income admitted in the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no disclosure by the assessee. The Chapter under which this provision of law occurs is meant for those assesses who want to disclose income not disclosed till then together with the manner in which the said income is derived. (See: CIT v. Express Newspaper Ltd. [(1994) 206 ITR 0443 ]. In the said decision it is held as follows: - The disclosure under Section 245-C must be of an income not disclosed before the Assessing Officer. If the Assessing Officer (or the income tax authority) has already discovered it and has either gathered the material to establish the particulars of such income or fraud fully or is at a stage of investigation/enquiries where the material gathered by him is likely to establish the particulars of such income or fraud, the assessee cannot be allowed to defeat or forestall, as the case may be, the entire exercise of the income tax authorities just by approaching the Commission. In such a case, it cannot be said that he is acting voluntarily or in good faith. He should not be allowed to take advantage of the comparatively easy course of Settlement. He must be allowed to face the normal channels of assessment/appeal etc. Section 245-C is meant for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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