TMI Blog2016 (10) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... is directed against the order of Commissioner of Income Tax (Appeals), Kolhapur dated 03-02-2014 for the assessment year 2009-10. The assessee has assailed the findings of Commissioner of Income Tax (Appeals) in confirming the addition of ₹ 34,02,400/- u/s. 69 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) as unexplained investment in the hospital building. 2. The brief facts of the case as emanating from records are: The assessee is a medical practitioner. A survey action 133A of the Act was carried out at the hospital premises of the assessee on 12-02-2009. During the course of survey, statement of the assessee was recorded wherein the assessee allegedly declared additional income of ₹ 34,02,400/-. At the time of filing of return of income on 30-10-2009 the assessee declared total income of ₹ 3,62,290/-. First notice u/s. 143(2) was issued to the assessee on 08-03-2010. The assessee vide communication dated 04-03-2009 retracted from the disclosure statement made during the course of survey. However, the Assessing Officer made addition of ₹ 34,02,400/- as unexplained investment in the hospital building u/s. 69 of the Act. Agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. For construction (Unexplained expenditure) ₹ 30,00,000/-. ii. Unsecured loans (Unidentified unsecured loans) ₹ 97,000/-. iii. Interior decoration in hospital ₹ 3,05,400/-. _____________ Total ₹ 34,02,400/- 3.1 Subsequently, the assessee on 04-03-2009 i.e. within fortnight retracted from the disclosure. The assessee furnished the details of source of funds for investment in hospital building to the Commissioner of Income Tax-I, Kolhapur. The ld. AR referred to the letter dated 04-03-2009 along with annexures at pages 8 to 15 of the paper book. The ld. AR pointed that the assessee during the course of assessment proceedings had furnished the details of bank account before the Assessing Officer, however, the same was not considered. The assessee had given the details of entire expenditure incurred on hospital during financial years 2006-07, 2007-08, and 2008-09, as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Ajit Chintaman Karve Vs. ITO reported as 311 ITR (AT) 66 (Pune). 4. On the other hand Shri P.L. Kureel representing the Department strongly defending the findings of Commissioner of Income Tax (Appeals) submitted that the assessee had never stated before the Assessing Officer or the Commissioner of Income Tax (Appeals) that the statement recorded u/s. 133A was under coercion or any undue inference. The assessee had voluntarily disclosed during the recording of statement that an amount of ₹ 68 lakhs (approximately) has been spent till the date of recording of statement on construction of hospital. The assessee had voluntarily admitted ₹ 34,02,400/- as additional income and the assessee even offered to pay tax on the said amount. The assessee had issued cheques to the tune of ₹ 10,56,000/- to discharge his tax liability. The assessee at the conclusion of statement had stated that he is making statement voluntarily and without any pressure, therefore, the plea of the assessee at a belated stage that the statement was recorded under pressure should not be accepted. The ld. DR further submitted that the decision of the Pune Bench of the Tribunal on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord at pages 66 and profit and loss account for the period 01-04-2008 to 31-03-2009 at page 67 of the paper book show that the books of account were finalized on 31-10-2009 by the Chartered Accountant at Sangli. Therefore, we find merit in the plea of the assessee. 7. In so far as admission of ₹ 34,02,400/- during the course of survey is concerned, we find that the addition u/s. 69 is not supported by any documentary evidence. On the contrary, the assessee has been able to explain the source of funds alongwith supporting documents. A perusal of the documents on record shows that the assessee has spent more than ₹ 70 lakhs on the construction of hospital building excluding cost of land. The said expenditure on construction is spread over the period of 3 financial years i.e. 2006-07, 2007-08 and 2008-09 (up to 30-01-2009). The source of funds for construction of hospital building in financial year 2008-09 (assessment year 2009-10) includes : i. Bank loan ₹ 24,51,987/-. ii. Joint family funds ₹ 4,00,500/-. iii. Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DT letter F. No. 286/2/2003-IT(Inv.II) dt. 10-03-2003 3) CBDT letter F. No. 286/98/2013-IT(Inv.II) dt. 09-01-2014 Sir/Madam, Instances/complaints of undue influence/coercion have come to notice of the CBDT that some. assessees were coerced to admit undisclosed income during Searches/Surveys conducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole and officers concerned in poor light. 2. I am further directed to invite your attention to the Instructions/Guidelines issued by CBDT from time to time, as referred above, through which the Board has emphasized upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence. 3. In view of the above while reiterating the aforesaid guidelines of the Board, I am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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