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TMI Blog2023 (4) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... by the latter. 3. That the Id.CIT(A), while confirming the above addition, erred to infer that the assessee's signatures were appearing on the backside of this cheque, though denied by assessee, which fact was also endorsed by the Id.AO in her remand report. 4. That the Id. CIT(A), ought to have sought a report of the forensic expert, rather than himself holding that the signatures on the cheque were not fake but of this assessee. 5. That the order under appeal is wholly against law and facts of the case." 3. Grounds of appeal in ITA No. 57/Asr/2022: "1. That the Id.CIT(A) grossly erred in confirming the addition of Rs.30 lacs, merely going by assessee's tentative offer made during search, when neither anything corroborating the surrender was found in search, nor thereafter during assessment proceedings. 2. That the ld. CIT(A), while upholding the above addition, was not justified in arbitrarily rejecting the assessee's most plausible explanation filed in appeal." 3. That the order under appeal is wholly against law and facts of the case." 4. The appellant has raised common issue except variation of figures on identical facts in the 1st ground of both the appeals per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued that the surrender was made without confronting any incriminating documents/assets to cover any kind of discrepancy of inadvertent nature which may have crept in the accounts with a view to earn immunity from penalty. The AR further submitted that while making the offer, the assessee was neither offered to recall the facts nor able to access the documents. Accordingly, as per the AR, at the time of filing the return, it was reduced to Rs. 10 lacs and the assessee filed letter with the return explaining the reason for reduction, as after revisiting the seized document record and other material, the assessee reached satisfaction that there was nothing incriminating to justify the surrender of Rs. 20 lacs and therefore in the return filed, the surrender was reduced to Rs. 10 lacs. The AR referred to CBDT Instruction on the issue and the order dated 27.04.2017 passed by the CIT(A)-1, Jalandhar in the case of Sh. Varinder Arora in Appeal No. ROT/106/16-17/CIT(A)- 1/Jalandhar for A. Y. 2011-12. In the paper book for the assessment year 2012- 13, the AR has filed the photocopy of the statement dated 07.05.2012 when the surrender was made and the relevant questions and the replies of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eds to be surrendered. There was sufficient time with the assessee after the search and before the operation of locker to consult any tax expert/counsel etc. Hence, in view of the time gap, the argument about pressure, coercion or allurement is not found acceptable. The assessee at the time of filing the return has not given any calculation etc. for retraction and simply stated that the surrender was not warranted. As per the legal provisions, the statement recorded u/s 132(4) has an evidentiary value under Income Tax Act, 1961. The argument about immunity from penalty etc. also has no merits because no guaranty can be given by any authority in violation of the specific provisions of the Income Tax Act, 1961. The reference to CBDT Circular on the issue has no applicability in this case because, the surrender was made voluntarily after more than a month of the main search, at the time of operation of the locker, when the atmosphere cannot be said to be highly surcharged or the assessee being virtually in the custody of the income tax department as argued by the AR in his submissions. The decision in the case of Sh. Varinder Arora may have been taken by the CIT(A)-1, Jalandhar on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings, we have held that the surrender admittedly on facts was made on mistaken belief of facts and law and in the face of the voluminous plethora of evidences countering each of the factors considered relevant by the Revenue for addition, we have found that reliance is only placed upon statement of the Director and employees. 67. Accordingly, considering the position of law, facts and submissions on record, the additions are directed to be deleted." 8. Per contra, the Ld. DR although supported the impugned order, however, he has not filed any rebuttal to the contention raised by the counsel. 9. Heard rival contentions, perused the material on record, impugned order, written submission and case law cited before us. It is admitted fact on record that the assessee has only honored Rs. 10,00,000/- instead of Rs. 20,00,000/- surrendered u/s 132(4) during search. It is also admitted facts that there no incriminating document or material referred by the AO to corroborate against the retraction by the assesse in both the assessment years. The AO has made the said addition merely based on statement recorded u/s 132(4), at the time of Locker operation by issuing a detailed show-caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/16-17/CIT(A)- 1/Jalandhar for A. Y. 2011-12. 11. Recently, Chandigarh Tribunal held that Accordingly, the claims advanced on behalf of the Revenue that there was no pressure whatsoever on the assessee while making the surrender, however, for the purposes of the present proceedings, we have held that the surrender admittedly on facts was made on mistaken belief of facts and law and in the face of the voluminous plethora of evidences countering each of the factors considered relevant by the Revenue for addition and that reliance was only placed upon statement of the Director and employees. In the instant case, no evidences countering/rebutting the argument of assessee on each of the factors considered relevant by the Revenue, particularly no incriminating material for addition. We have found that merely reliance is only placed upon statement of the assesse taken at the time of locker operation without confronting the incriminating material or any other corroborative evidence either at the time of recording statement u/s 132(4) or in the assessment proceedings. Such statement has no evidentiary value u/s 292C of the act as being not supported with any incriminating material/evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) stated that the AO is not an expert in the matter of identification of signature, so his comments about forging or otherwise of the signature on this cheque cannot be ignored. In our view, the Ld. CIT(A)'s observation on this issue are self contradictory by accepting the remand report of the AO partially. Firstly, He accepted the arguments of the AR on this issue to the extent of payment of Rs. 2.7 crore as the cheques were passed by the bank authorities in the name of Sh. Yog Raj Puri and the payment was also made to Sh. Yog Raj Puri and secondly, the cheque of Rs. 41 lacs, at the back, only the name of Sh. Jagdish Kumar was appearing (and there is no name/signature of Sh. Yog Raj Puri on the back of this cheque amounting to Rs. 41,00,000/-) where the signature of Jagdish Kumar explained by the AO as fake was rejected by holding that the AO is not an expert in the matter of identification of signature. Therefore, the AO's comments about forging or fake of the signature on this cheque ought to have not been ignored, and it was required to be corroborated with forensic expert report and that realization of cheque amount thereof. 15. Thus, the Ld. CIT(A) failed to establ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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