TMI Blog1999 (6) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. In the statement recorded under section 132(4), the assessee disclosed a sum of Rs. 56 lakhs but while filing return the assessee declared a sum of Rs. 37,75,450. On being asked to explain the reason for returning a lower figure, the assessee stated that the surrender/declaration was not for assessment year 1988-89 alone, rather it represented total of the capital/assets in addition to what was being shown in details of wealth and the returns of income filed. It was further clarified that Rs. 56 lakhs did not represent the total surrender made by the assessee which finally stood at Rs. 67,75,450, out of which Rs. 30 lakhs pertained to preceding assessment years, i.e., 1984-85 to 1987-88. It was submitted that a petition for the said earlier years was pending before the Settlement Commission. The Assessing Officer observed that total surrender made by the assessee including the figure returned for assessment year 1988-89 amounted to Rs. 65,25,450 instead of Rs. 67,75,450 stated by the assessee. It was also observed that the amount surrendered before the Settlement Commission in the earlier years was not full and true. Further with reference to the seized documents, the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame was made without proper knowledge. The further submission on the part of the assessee was that higher disclosure vis-a-vis assessment year 1988-89 was made by mistake as the undisclosed income for earlier years was also included and which fact was amply proved by the petition moved before the Settlement Commission for assessment years 1984-85 to 1987-88 disclosing unaccounted income of Rs. 27.50 lakhs. As regards statement made under section 132(4) read with Explanation 5 to section 271(1)(c), the plea was to the effect that this represented only an admission and if the assessee could show from record that the said admission was erroneous the same was not binding. For the aforesaid proposition, reliance was placed on the decisions in Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 (SC), Narayan Bhagwant Rao Gosavi Balaji wale v. Gopal Vinayak Gosavi AIR 1960 SC 100 and CIT v. Bharat General Reinsurance Co. Ltd. [1971] 81 ITR 303 (Delhi). It was further pleaded by the assessee's counsel that a statement under section 132(4) could not be above law and only the correct income was liable to be assessed irrespective of the statement made. Reference was also in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the legislature while inserting Explanation 5 to section 271(1)(c); and (vii) The assessee's contention that he had disclosed an amount of Rs. 27.50 lakhs for preceding assessment years was not considered relevant for deciding the issue in question since in the statement recorded under section 132(4) the assessee had specifically made the disclosure of unaccounted income amounting to Rs. 56 lakhs for the assessment year in question. The decisions relied upon by the assessee's counsel in support of the arguments were found distinguishable and not applicable and the CIT(A) in the final analysis confirmed the addition. 4. Before us. ld. counsel for the appellant reiterated the arguments advanced before the tax authorities highlighting that the surrender had been made without seeing the seized material and under the impression that it would solve all the problems of the assessee. It was submitted that search and seizure took place on 11-12-1987, when the assessee's initial statement was recorded followed by another statement under section 132(4) on 27-1-1988 and during the course of which the assessee purportedly declared a sum of Rs. 56 lakhs as is income for assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed during assessment year 1988-89 was taken into account then the total disclosed income would come to Rs. 69.75 lakhs. In concluding, the ld. counsel urged that since the explanation about the lower income shown in the return as against higher figure surrendered under section 132(4) was valid both [on facts and in law, the Tribunal be pleased to allow necessary relief to the assessee. 5. The ld. D.R. strongly supported the orders passed by the tax authorities and the subsequent arguments advanced by him were a reiteration of the reasons recorded both on facts and in law in rejecting the assessee's claim. According to the ld. D.R., there was sufficient time gap between the search and the date of surrender and it could not be a case where the assessee did not know the implication of what he was stating and it could also not be a case where he could allege that there had been any pressure on him to surrender certain amount. According to the ld. D.R., the incriminating documents were found during raid and the assessee fully knowing well the income which he had kept back from the department surrendered a sum of Rs. 56 lakhs under section 132(4) read with Explanation 5 to section 271( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c). It is noted from perusal of the assessment order that penalty proceedings under section 271(1)(c) have already been initiated. The other legal aspect which was raised by the parties was whether the assessee could retract from the statement made and after considering the case law on the subject as also the decisions of various High Courts and of Hon'ble Supreme Court, we are left in no doubt that an assessee after making a statement/admission can retract but such going back should be on sufficient ground. No doubt, the statement/admission made by the assessee was without any duress and it was also not a case where the assessee did not have sufficient time but it is undoubtedly a situation where the assessee made a statement surrendering an amount of Rs. 56 lakhs without having any recourse to the seized material. That apart, the amount of Rs. 56 lakhs increased inasmuch as the assessee filed return for assessment year 1988-89 showing an income of Rs. 37,96,395 and also filed a petition for settlement pertaining to assessment years 1984-85 to 1987-88, where initially he offered for settlement a sum of Rs. 27.50 lakhs but which subsequently was increased to Rs. 32 lakhs, making a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be explained or shown to be wrong; but they do raise an estoppel and shift the burden of proof on to the person making them or his representative-in-interest. Unless shown or explained to be wrong, they are an efficacious proof of the facts admitted." Krishan Lal Shiv Chand Rai's case : "It is an established principal of law that a party is entitled to show and prove that the admission made by him probably is in fact not correct and true." In the decision of the Ahmedabad Bench of the Tribunal, relied upon by the ld. counsel, the facts were somewhat identical as the assessee in statement under section 132(4) disclosed income of Rs. 3 lakhs but during assessment proceedings he retracted explaining that he was in a confused state of mind and made the statement without understanding the legal implication. The Assessing Officer made the addition of Rs. 3 lakh which was sustained by the CIT(A) and on second appeal the Tribunal noted that the assessee in an affidavit retracted no doubt after some delay at the time of assessment proceedings. On the facts of that case, the Tribunal held that the addition could not be made merely on the statement of the assessee under section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
