TMI Blog2018 (4) TMI 1841X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. Since these transactions are unaccounted transactions and only found during the course of search and seizure operation, therefore, there cannot be any other evidence in the shape of entries in the books of accounts except the persons concerned who have duly made the statements on oath as the affidavits were filed by the assessee in this regard. Statement u/s 132(4) alone cannot be considered as a conclusive piece of evidence by ignoring the other facts and evidence which may establish the correct facts regarding the transactions in dispute - when the assessee has filed the evidences in support of the claim that a sum of ₹ 1,60,00,000/- was received by the assessee which was available for advance given during the year under consideration then in the absence of any enquiry conducted by the AO to controvert the facts and to dispute the evidence filed by the assessee, the addition made by the AO and sustained by the ld. CIT (A) is not justified. Hence we delete the addition made on this account. - Decided in favour of assessee. - ITA No. 378/JP/2017 - - - Dated:- 27-4-2018 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM Assessee by : Shri S.L. Poddar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain amounts against the names of various persons. Since these entries pertain to two assessment years 2013-14 and 14-15, therefore, the assessee surrendered the total undisclosed income of ₹ 11,25,00,000/- comprising of an amount of ₹ 1,60,00,000/- surrendered for the assessment year 2013-14 and balance for the assessment year 2014-15. However, in the return of income filed by the assessee for the assessment year 2014-15 i.e. the year under consideration the assessee has offered undisclosed income of ₹ 8,05,00,000/- and, therefore, a sum of ₹ 1,60,00,000/- was short in comparison to the income disclosed in the statement recorded under section 132(4) of the Act. The AO proposed to make the addition of the said differential amount of ₹ 1,60,00,000/- against which the assessee contended that since a sum of ₹ 1,60,00,000/- was surrendered for the assessment year 2013-14 on account of advance given to two persons, namely, Shri Hanuman and Shri Radheyshyam which was received back by the assessee and, therefore, the total advance of ₹ 9,65,00,000/- given during the year under consideration is including the said sum of ₹ 1,60,00,000/- recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further contended that so far as the entries in the seized material are concerned, the assessee has admitted the transaction as advance given for purchase of land. However, since the advance of ₹ 1,60,00,000/- given to Shri Hanuman and Shri Radheyshyam comprising of ₹ 75,00,000/- and ₹ 85,00,000/- each was received back by the assessee and was available for re-advancing during the year under consideration and, therefore, the assessee has reduced the said amount of ₹ 1,60,00,000/- from the undisclosed income for the year under consideration. There is no dispute that the said amount was already surrendered by the assessee for the year 2013-14. Hence the amount received back by the assessee was available as source for advancing during the year under consideration. The ld. A/R has submitted that the surrender in the statement under section 132(4) was obtained in violation of CBDT Circular dated 10th March, 2003 as well as dated 18.12.2014 wherein the Board has clearly instructed the department that there should be focus and concentration on collection of evidence of income and no attempt should be made to obtain confession as to undisclosed income. Thus the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Supreme Court in the case of Pullangode Rubber Produce Co. vs. State of Kerala and Another, 91 ITR 18 (SC) wherein it was held that an admission is an important piece of evidence but it cannot be said that it is conclusive. It is open to the person who made the admission to show that it is incorrect. Thus when the assessee has subsequently filed the evidence to show that what is admitted in the statement under section 132(4) is not correct as a part of the amount was received by the assessee and available for re-advance during the year under consideration and hence to the extent of said amount of ₹ 1,60,00,000/- the said admission is incorrect. The ld. A/R has then relied upon the decision of Mumbai Bench of the Tribunal in ITA Nos. 2250 and 2251/Mum/2013 in the case of M/s. Tribhovandas Bhimji Zaveri (Delhi) Pvt. Ltd. vs. ACIT and submitted that the Tribunal in a similar situation when the assessee offered the additional income of ₹ 6,00,00,000/- at the time of search proceedings found to be a surrender obtained by the authorities due to pressure exerted by the search party, the Tribunal has taken note of the fact that the search continued for days together and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for the financial year 2012-13 and relevant to the assessment year 2013-14. The said statement recorded under section 132(4) being question no. 21 as under :- The statement was made by the assessee in respect of the entries found recorded in the seized material at page no. 7 of Annexure-AS Exhibit-1. Thus it is clear that the assessee admitted undisclosed income of ₹ 1,60,00,000/- on account of advances given to Shri Hanuman of ₹ 75,00,000/- and Shri Radheyshyam of ₹ 85,00,000/- respectively. The said income of ₹ 1,60,00,000/- was duly offered to tax for the assessment year 2013-14. Apart from this amount of ₹ 1,60,00,000/-, the assessee has also disclosed a sum of ₹ 9,65,00,000/- as undisclosed income on account of advances given to various persons during the year under consideration. However, in the return of income filed on 13.9.2014 the assessee has offered only ₹ 8,05,00,000/- as undisclosed income as against ₹ 9,65,00,000/- disclosed and surrendered in the statement recorded under section 132(4). Therefore, there was a difference of ₹ 1,60,00,000/- in the undisclosed income surrendered by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vances are given before 31.03.2013 as stated in page no. 7 of the AS-1, Exhibit-1, and the search was conducted on the residential premises of the assessee on 23.05.2013, in-between these two dates the assessee has received back these amounts from Mr. Hanuman ji and Mr. Radheyshyam ji and this amount reflected again in advance given by the assessee in Exhibit-2 and cash found on the premises of the assessee, the assessee at the time of statements has included the same amount twice, but at the time of filing of return the assessee has rectified the mistake and paid tax on net amount only, this will make the net undisclosed income of the assessee as 9.65 crores. You are therefore requested to consider the same and oblige. 5.3. The reply of the assessee is as under :- REGARDING ADDITION OF ₹ 1.6 CRORE IN ASSESSMENT YEAR 2014-15. Regarding show cause notice for making addition of ₹ 1.6 crore our submission is that the assessee has given advance of ₹ 1.60 crores to one Mr. Hanuman (75 lacs) and Mr. Radheyshyam (85 lacs) these advances are given before 31.03.2013 as stated in page no. 7 of the AS-1, Exhibit-1 and the search was conducted on the residential pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the time of refund of the said amount. The assessee produced the affidavits of these two persons in support of the fact that these amounts were repaid by these two persons on 20th April, 2013. For ready reference, we reproduce the affidavits filed by these persons as under :- As regards the seized material, the assessee has never disputed the entries recorded in the seized material that the amounts found against each entry represents the advance given by the assessee for purchase of land. However, the only dispute is regarding the amount received back by the assessee from these two persons total amounting to ₹ 1,60,00,000/- out of the advance of ₹ 11,25,00,000/-. The seized material entries are representing only the advances given by the assessee and, therefore, the amount received back by the assessee would not be considered as contrary to the entries in the seized material which represents only the transaction of advances given by the assessee. Hence, once the assessee has brought on record this fact that a sum of ₹ 1,60,00,000/- was received by the assessee on 20th April, 2013 though the said fact could not be explained in the statement recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the fact that the said amount was received back by the assessee. Since these transactions are unaccounted transactions and only found during the course of search and seizure operation, therefore, there cannot be any other evidence in the shape of entries in the books of accounts except the persons concerned who have duly made the statements on oath as the affidavits were filed by the assessee in this regard. Therefore, the statement under section 132(4) alone cannot be considered as a conclusive piece of evidence by ignoring the other facts and evidence which may establish the correct facts regarding the transactions in dispute. Hence in view of the above facts and circumstances of the case, we are of the considered opinion that when the assessee has filed the evidences in support of the claim that a sum of ₹ 1,60,00,000/- was received by the assessee which was available for advance given during the year under consideration then in the absence of any enquiry conducted by the AO to controvert the facts and to dispute the evidence filed by the assessee, the addition made by the AO and sustained by the ld. CIT (A) is not justified. Hence we delete the addition made on thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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