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TMI Blog2025 (4) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... e survey and corroborated by the Director of the company at the time of statement recording." 2. That the appellant craves leave to add, amend, alter or forgo any ground/(s) of appeal either before or at the time of hearing of the appeal." 3. Brief facts of the case are that, the Assessee filed e-return for Assessment Year 2017-18 declaring loss of Rs. 20,789/- which was processed u/s 143(1) of the Income Tax Act, 1961 ('Act' for short). The return was processed u/s 143(1) of the Act. Subsequently, the case was manually selected for security. An assessment order came to be passed on 25/12/2019 by making addition of Rs. 22,25,00,000/- treating the same as unexplained investment and deemed to be the income of the Assessee u/s 69 of the Act. Aggrieved by the assessment order dated 25/12/2019, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 27/02/2023, allowed the Appeal of the Assessee by deleting the addition made by the A.O. Aggrieved by the order of the Ld. CIT(A) dated 27/02/2023, the Department of Revenue preferred the present Appeal on the grounds mentioned above. 4. The ld. D.R. submitted that the Ld. CIT(A) erroneously held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leting the Addition, thus sought for allowing the Appeal of the Revenue. 7. Per contra, the Assessee's representative submitted that the Ld. AO failed to gather any discrepancy in the books of account or any further evidences through his independent application of mind to substantiate the income disclosed by the Assessee Company during the survey proceeding u/s 133A of the Act, which was also retracted in the stipulated time frame. 8. The Assessee's representative further submitted that the statement made by then Director, Sh. Narendra Bansal was under pressure and coercion. The Director himself retracted from the statement within stipulated time and wrote the same to the Pr. Commissioner of' Income Tax-4, New Delhi on 15.12.2016. The then managing director Sh. Narendra Bansal along with other two Directors sworn the affidavit before Add. Sessions Judge, Saket, New Delhi. The other two directors Nidhi Markanday and Sh. Amitabh Khurana have also supported the retraction of Sh. Narendra Bansal through their affidavits and went on to narrate the actual facts of the survey proceeding on the wee hours of 14- 15 September, 2016. 9. The Ld. AR further submitted that the AO examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statement made during the survey on 14-15 September, 2016 and the said affidavit has been sworn before the Add. Sessions Judge. Saket, New Delhi. The other Directors NidhiMarkanday and Sh. Amitabh Khurana solemnly affirmed and confirmed the averments made in the above stated affidavit of Sh. Narendra Bansal by retracting from the statement made during the survey u/s 133A of the Act on wee hours of night of 14-15 September, 2016 and stated that the statement was result of forced confession. The other two directors have also supported the statement of Sh. Narendra Bansal in their affidavit and stated that the survey team concluded an invasive action and went about examining each and every document present at the premises including but limited to the books of accounts and when they found nothing, the survey team extracted a forced confession of alleged undisclosed income to create a tax liability. They further stated that the survey team threatened to convert the survey into search if the said impounded papers were not prepared as instructed. Further, other two directors stated in the affidavit stated that the dumb document only relying upon which the team may give it a colour of ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted under Section 133Aofthe Act. Infact, there is no such payment made by the Assessee. Further, the AO has completely failed to bring even iota of evidence on record to prove any generation of unaccounted money and also transfer of such money to the Assessee. Also, such unaccounted cash payments as alleged by AO, who has failed to substantiate /outflow of the money. To substantiate the above claim of the Assessee, the Assessee has also produced the audited financials for the assessment year under consideration. 15. It is found from the record that the L d. A.O. made addition on the basis of loose papers found in the premises of a third party and based on the statement of the third party. Further, the statement recorded under Section 131 of the Act was also retracted later by Shri Narendra Bansal. Further, the loose sheets found in the premises of the third party were not even signed by the Assessee or any of its staff and the loose sheets found in the premises of the third party were not corroborated by the AO with any further evidence or investigation. 16. The Hon'ble Apex Court in the case of Common Cause (A Registered Society) VS Union of India [TS-5012SC-2017-01, (2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire decision being based on huge amounts revealed from seized documents, not being supported by actual cash passing hands, additions under sec.69C were not sustainable." 18. Similar ratio have been laid down in the following judicial pronouncements: a. CIT Vs. P.V. Kalyanasundaram(164Taxman78)(SC) b. Deputy CIT vs. Bhumala Uma Rani (2019) Taxpub (DT)2432 (ITAT Visakhapatnam) c. Principal CIT, Central Vs. Krutika Land (P) d. CIT, Bangalore vs. IBC Knowledge Park (P) Ltd. (69 Taxmann.com 108 (Kar) e. CIT, Central-Ill Vs. Lavanya Land (P) Ltd. (83Taxmann.com 161) (Bombay) f. CIT, Central - Ill Vs. Arpit Land (P) Ltd. (78 Taxmann.com 300)(Bombay) 19. On bare reading of the seized document it is found that, there is no heading to describe the nature of transaction that depicts in the spiral pad. There were no correct date with year to suggest that these transactions are pertaining to the assessment year. It does not indicate as to who prepared the documents and whether the figures mentioned therein was in Rupees or in any other currency. There is no signature of the person who prepared it or there was no authentication of these documents. Further, in the loose slip has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High court in the case of CIT Vs SantLal vide [2020] 118 Taxmann.com 432 held as under:- "13. In view of the aforesaid facts and the concurrent findings given by the CIT (A) and ITAT, it is evident that the Revenue has not been able to produce any cogent material which could fasten the liability on the respondent. The CIT(A) has also examined the assessment record and has observed that the AO did not make any further inquiry/investigation on the information passed on by the DCIT, Central Circle-19, New Delhi. No attempt or effort was made to gather or corroborate evidence in this relation. 14. In these facts and circumstances, we are not inclined to entertain the present appeal as no substantial question of law arises for our consideration. Accordingly, the present appeal is dismissed". 23. Before us, ld. D.R. canvassed a contention that Assessee had admitted the transactions in his statement recorded u/s 131 of the Act and that could be the base for addition in the hands of present Assessee and it is not necessary to give any cross examination of the parties involved herein. In our opinion, admission of the third party could not be enforceable against the other party. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 132(4) of the Act. The said Section is reproduced herein below :- "132.SEARCH AND SEIZURE. xxx xxxxxxxxxxxx (4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922) or under this Act. [Explanation : For the removal of doubts, it is hereby declared that the examination of any person under this sub- section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income-tax Act, 1922 (11 of 1922) or under this Act." (emphasis supplied) 12. From the aforesaid, it is apparent that while Section 132(4) of the Act specifically authorizes an officer to examine a person on oath, Section 133A does not permit the same. 13. The Kerala High Court in Pau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself. 15. In any event, it is settled law that though an admission is extremely important piece of evidence, it cannot be said to be conclusive and it is open to the person who has made the admission to show that it is incorrect. 16. Since in the present case, the respondent-assessee has been able to explain the discrepancy in the stock found during the course of survey by production of relevant record including the excise register of its associate company, namely, M/s. D.M.W.P. Ltd., we are of the opinion that the AO could not have made the aforesaid addition solely on the basis of the statement made on behalf of the respondent-assessee during the course of survey." 26. In the case of Deputy Commissioner of Income-tax, Circle-2(1) v. Bansal Credits Ltd, [2016] 74 taxmann.com 224 (Delhi - Trib.), the Coordinate Bench of the Tribunal at Delhi Benches, by relying on the above decision of Hon'ble Delhi High Court in the case of CIT v. Dhingra Metal Works and also the CBDT Letter F.No.286/2/2003-IT(Inv.II) dated 10th March, 2003, held that the addition cannot be made only on the basis of surrender made at the time of survey in following manners:- "11. Thus, the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reupon. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention but we must also notice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded." 29. In the present case the addition has been made by the A.O. relying upon the sole statement, which was retracted, having no evidentiary value in the absence of any corroborative material as per the law laid down by the Apex Court and followed by High Courts and Tribunals. In absence of any other piece of evidence to make addition of Rs. 22.25 Crore 'on pro rata basis' u/s 69 of the Act in the hands of the Assessee, the Ld. CIT(A) rightly deleted the addition. Further it is also found that there is no corresponding addition made in the hands of the alleged cash beneficiaries or even corrective action proposed by the AO in the assessment of the beneficiaries of the alleged cash. By considering the above mentioned settled position of law, we find no error or infirmity in the order of the Ld. CIT (A) in deleting the addition made by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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