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TMI Blog2023 (11) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... e Capital Meter Group, whose directors were Shri Pawan Kumar Bansal and Shri Mahesh Kumar Gupta. During the course of such search proceedings. Shri Pawan Kumar Bansal, surrendered an amount of Rs. 7 crores. A letter written by Shri Pawan Kumar Bansal, in the capacity of the CEO of the assessee, made a surrender of Rs. 7 crores as the income of the group concern emanating out of the search in the Capital Meter Group. In his statement u/s 132(4), Shri Pawan Kumar Bansal, reiterated the contents of the letter, dated 01.09.2006, his stand that the surrender was made on behalf of Capital group of companies, stating therein, that a bifurcation will be provided later on. In the statement u/s 132(4) of the Act, Shri Pawan Kumar Bansal, also provided the bifurcation of the amount of Rs. 7 crores as income from various sources and investment made by Pawan Kumar Bansal, to the tune of Rs. 3,55,00,000/- and by Mahesh Kumar Gupta, to the tune of Rs. 3,45,00,000/-. The assessee company filed its' return of income for the AY 2007-08 declaring its total income at Rs. 80,53,110/-. The AO, in the assessee's case, accepted the returned income of the assessee by passing an Assessment Order u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the individuals. This is due to the fact that the surrender was on behalf of the group and that the AO should have followed up as to the specific details of the group entities in order to determine in whose hands the income should be added instead of merely relying on the statement of Pawan Kumar Bansal in absence of any incriminating material. 7. The department, being aggrieved with the order of the Ld. CIT(A), has preferred the appeal before the Tribunal. The Revenue relied on the judgment of the Hon'ble Delhi High Court in the case of Bhagirath Aggarwal vs. Commissioner of Income tax which holds that an addition to assessee's income relying on statement recorded during search operation cannot be deleted without proving the statement to be incorrect. 8. In order to determine whether or not there was any finding to such effect by the ITAT, the operative portion of the such order was examined. The ITAT held as under: "11.....When we see the cumulative effect of all the facts as well as the statements, following position emerges:- 12. Shri Pawan Kumar Bansal is an individual who is not carrying on any business in his individual capacity. The business is carried on by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the cumulative effect of the letter dated 1st September, 2006 and both the statements, the proper course would be to determine the undisclosed income on the basis of loose papers found and seized at the time of search. The CIT(A) did the same. 13. We, therefore, uphold the order of learned CIT(A) to the extent wherein he held that the income of the assessee i.e. Shri Pawan Kumar Bansal is to be determined on the basis of undisclosed income as per the noting on the loose papers..." 9. From the aforesaid, the following derivations emerge: (i) The ITAT has held that the surrender was made by the appellant company at an ad-hoc sum of Rs. 7 crores as a representative of Capital Group of companies. (ii) The ITAT has made any remarks/finding on the accessibility of such surrender in the hands of the appellate company. (iii) The ITAT has only upheld the order of the Ld.CIT(A) to extent that the income has been computed/added on the basis of incriminating material seized during the search action. In light of the contradiction in the statements by Mr. Pawan Kumar Bansal, both the authorities held that addition cannot have been made solely on the basis of such statements. Exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant company in its own hands but was made on behalf of the Capital Group of Companies which is also the finding of the ITAT. Thus, the non-retraction of such statement does not help the Assessing Officer's case at all to assess such disclosure in the hands of the appellant company, especially when detailed break-up was subsequently submitted by the same person, i.e. Mr. Bansal. 14. The Assessing Officer had duly examined the seized material in light of the statement of Mr. Bansal and came to a conclusion that such material pertained to Mr. Bansal and Mr. Gupta. In fact, the protective addition of Rs. 3.45 crores was also made in the hands of Mr. Bansal for an income which was added on substantive basis in the hands of Mr. Gupta. This shows that according to the Assessing Officer such income either pertained to Mr. Bansal or Mr. Gupta, the appellant company was never in sight to be taxed for such income. 15. In the impugned case, it is not the finding of the Tribunal that there was any undisclosed income of the appellant company that was not assessed to tax. Had there been any such categorical finding by the Tribunal, in that case the Assessing Officer was correct in reop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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