TMI Blog2021 (3) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 131, however, the question is what is the basis of assessee in making any admission in statement recorded under section 131 of the I.T. Act, 1961. Statement of assessee alone cannot be the basis for making any estimated additions against the assessee. May be the assessee has retracted from the statement given under section 131 later on and there is a delay in retracting by filing a letter and affidavit to the Income Tax Authorities as well as President of Noida Authority, but, the delay in retracting the statement is of no significance because there were no corroborative material found during the course of search at the residence of Smt. Kusum Lata or Shri Ramendra Kumar Singh or at the residence of the assessee. Thus, in the absence of any corroborative evidence, statement of Shri Ramendra Kumar Singh or assessee cannot be the basis for estimating the additions of commission against the assessee in all the assessment years under appeal. It is well settled Law that if no incriminating material was found during the course of search, such type of additions cannot be made against the assessee. See KABUL CHAWLA [ 2015 (9) TMI 80 - DELHI HIGH COURT] Statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d his colleagues which includes the assessee also. This fact was categorically admitted by Shri Ramendra Kumar Singh, an employee of the Noida Authority who was subordinate to Shri Yadav Singh. During his statement recorded on oath under section 132(4) of the I.T. Act, 1961 at the residence of Smt. Kusum Lata wife of Shri Yadav Singh at 8/10 Sector 51, Noida. Clinching evidences in the form of diary and loose slips were found from the possession of Shri Ramendra Kumar Singh who came to see Mr. Yadav Singh at the residence of Smt. Kusum Lata. These incriminating documents were seized during the course of search. The perusal of the said dairy as well as slips clearly reveals the fact that Shri Yadav Singh and his colleagues including the assessee who is working as an Accountant with the Noida Authority and directly reports to Shri Yadav Singh were involved in receipt of illegal commission for awarding of contract works. It was clearly brought out in the assessment order that Shri Yadav Singh, Shri Ramendra Kumar Singh and Assessee indulged in awarding contract to the builders/contractors against the commission of 5% of the contract value. The assessee has also accepted in statement r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nected with the case of the assessee. The assessee is not connected with Shri Yadav Singh or Shri Ramendra Kumar Singh in any manner. Copy of the Panchanama would show that nothing is recovered from the premises of the assessee at the time of search. The statement of assessee was never recorded under section 132(4) of the I.T. Act, 1961. The statement of assessee was recorded much later on after conclusion of the search on 03.02.2014 to 05.12.2014 in different sittings and assessee was required to write down in his handwriting a pre-written statement provided by the Investigating Officer. The wife and son of the assessee were also directed to appear in the O/o. Investigating Officer without any reasons though no clarification was required from them. No such statement was recorded from them. The assessee later on made a representation to the concerned Officers and protest was lodged for recording an incorrect statement under coercion. The assessee has also filed an Affidavit to the same effect. The assessee never received any commission. The A.O. called the wife and son of the assessee in order to put a pressure on assessee to agree to the statement to be recorded by the Investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant that quantum of such commission varies from ₹ 1,000 to ₹ 2,000 per bond. The detailed statement of the appellant is reproduced by the AO from page no. 20 to 29 of the assessment order. The AO estimated the illicit commission of the appellant @ 1500 per bond which cannot be faulted within absence of any other material on the contrary Therefore, AO has correctly estimated the commission income of the appellant during this relevant assessment years which is as follows : Even as A. Y. Contracts 100 to 2000 per bond lence average 1500/- 2009-10 606 90900 2010-11 333 499500 2011-12 569 853500 2012-13 896 1344000 2013-14 0 0 2014-15 1 1500 2015-16 113 177000 Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see or allowed any cross examination on behalf of assessee. If the A.O. wanted to use the third party statement or material against the assessee, the A.O. shall have to follow the procedure provided under section 153C of the I.T. Act, 1961. However, the A.O. framed the assessments under section 153A of the I.T. Act, 1961, therefore, such statements or material recovered in the case of Smt. Kusum Lata or Shri Ramendra Kumar Singh cannot be read in evidence against the assessee. No addition could be made against the assessee under section 153A because no incriminating material is found or seized during the course of search. Therefore, the case of the assessee would be covered by Judgment of Hon ble Delhi High Court in the case of CIT vs., Kabul Chawla 380 ITR 573. He has referred to reply of the assessee Dated 23.12.2016 which was filed before the CIT, Central Circle, Noida explaining under what circumstances statement of assessee was recorded under coercion and duress. The assessee denied to have made any voluntary statement. The assessee also explained that he has not made any investment in any house property in his name or in the name of his family members. He has also filed copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een made by the Ld. D.R. Since these are early hearing appeals, both the parties argued the appeals finally. The Ld. D.R, therefore, submitted that there is no merit in the appeals of assessee, therefore, same may be dismissed. 6. We have considered the rival submissions and perused the material on record. Learned Counsel for the Assessee relied upon the Judgment of Hon ble Delhi High Court in the case of PCIT [Central]-3 vs., Anand Kumar Jain (HUF) Others vide Order Dated 12.02.2021 (supra), in which the Hon ble Delhi High Court in paras 6 to 11 held as under : 6. We have considered the contentions of Mr. Sharma, however, we feel that the instant appeals do not raise any question of law, much less substantial question of law for our consideration. The relevant portion of the impugned order reads as under:- 5. ( ) We find that the Ld. Counsel for the assessee has drawn our attention towards the relevant portion of the judgment / decision of the Hon'ble Supreme Court of India, Hon'ble High Courts and various Benches of the Tribunal on the legal issue on which he argued, Ld. Counsel for the assessee further submitted that admittedly from assessee's own pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not prejudice the assessee, yet, we discern from the record that apart from the statement of Mr. Jindal, Revenue has failed to produce any corroborative material to justify the additions. On the contrary we also note that during the course of the search, in the statement made by the assessee, he denied having known Mr. Jindal. Since there was insufficient material to support the additions, the ITAT deleted the same. This finding of fact, based on evidence calls for no interference, as we cannot re-appreciate evidence while exercising jurisdiction under section 260A of the Act. 8. Next, we find that, the assessment has been framed under section 153A, consequent to the search action. The scope and ambit of section 153A is well defined. This court, in CIT v. Kabul Chawla, concerning the scope of assessment under Section 153A, has laid out and summarized the legal position after taking into account the earlier decisions of this court as well as the decisions of other High Courts and Tribunals. In the said case, it was held that the existence of incriminating material found during the course of the search is a sine qua non for making additions pursuant to a search and seizure ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. Plainly, the intention of the Parliament is to permit such examination only where the books of accounts, documents and assets possessed by a person are relevant for the purposes of the investigation being undertaken. Now, if the provisions of Section 132(4) of the Act are read in the context of Section 158BB(1) read with Section 158B(b) of the Act, it is at once clear that a statement recorded under Section 132(4) of the Act can be used in evidence for making a block assessment only if the said statement is made in the context of other evidence or material discovered during the search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in search action against a third person. We may note that the AO has used this statement on oath recorded in the course of search conducted in the case of a third party (i.e., search of Pradeep Kumar Jindal) for making the additions in the hands of the assessee. As per the mandate of Section 153C, if this statement was to be construed as an incriminating material belonging to or pertaining to a person other than person searched (as referred to in Section 153A), then the only legal recourse available to the department was to proceed in terms of Section 153C of the Act by handing over the same to the AO who has jurisdiction over such person. Here, the assessment has been framed under section 153A on the basis of alleged incriminating material (being the statement recorded under 132(4) of the Act). As noted above, the Assessee had no opportunity to cross- examine the said witness, but that apart, the mandatory procedure under section 153C has not been followed. On this count alone, we find no perversity in the view taken by the ITAT. Therefore, we do not find any substantial question of law that requires our consideration. 11. Accordingly, the present appeals, along with all pend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial as to how the assessee is connected with the seized material. Since the documents itself do not indicate any involvement of the assessee for getting any commission etc., therefore, such recovery of the Annexures A1 and A2 would not implicate the assessee for earning of any commission at any point of time. Thus, the evidences which remained with the Revenue was the statement of Shri Ramendra Kumar Singh recorded under section 132(4) of the I.T. Act, 1961. This statement of Shri Ramendra Kumar Singh is not corroborated with any evidence or material on record. Thus, his statement alone is not sufficient to fasten any liability upon the assessee so as to compute undisclosed income in the form of getting commission by the assessee. The assessee claimed that statement of Shri Ramendra Kumar Singh was not confronted to assessee and no right of cross-examination have been allowed to assessee. The Ld. D.R, however, submitted that while recording statement of assessee, statement of Shri Ramendra Kumar Singh have been referred to would clearly indicate that statement of Shri Ramendra Kumar Singh was confronted to the assessee. Therefore, there is a compliance to the provisions of Law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the residence of Smt. Kusum Lata or Shri Ramendra Kumar Singh or at the residence of the assessee. Thus, in the absence of any corroborative evidence, statement of Shri Ramendra Kumar Singh or assessee cannot be the basis for estimating the additions of commission against the assessee in all the assessment years under appeal. It is well settled Law that if no incriminating material was found during the course of search, such type of additions cannot be made against the assessee. We rely upon the Judgment of Hon ble Delhi High Court in the case of CIT vs., Kabul Chawla (supra). Further the statement of Shri Ramendra Kumar Singh and Annexures A1 and A2 found in their case being a third party cannot be referred to or relied upon in the case of the assessee unless the procedure provided under section 153C of the I.T. Act, 1961 have been adopted by the authorities below. Thus, the issue is entirely covered by Judgment of Hon ble Delhi High Court in the case of PCIT [Central]-3 vs., Anand Kumar Jain (HUF) Others (supra). Considering the totality of the facts and circumstances of the case, we do not find any justification to sustain any of the additions in any of the assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X
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