ACIT, CC - 2(4), Kolkata, Kolkata V. Sri Subhash Kumar Agarwal, Kolkata

ITA 1446/KOL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9738 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 15-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANKAR HALDER SRDR
• Assessee Lawyers: A K TIBREWAL
• Keywords: Unexplained investment; Search and seizure; Document seized; Tangible material; Retraction; Documents seized
• Section: 143(3); 153A; 132; 139

Judgement Text

1 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA ( ) . . , . . , ) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT & SHRI A. T. VARKEY, JM] I.T.A. NO. 1446/KOL/2017 ASSESSMENT YEAR: 2013-14 ACIT, CENTRAL CIRCLE 2(4), KOLKATA VS. SRI SUBHASH KUMAR AGARWAL (PAN : ADAPA3090R) APPELLANT RESPONDENT DATE OF HEARING 12.04.2019 DATE OF PRONOUNCEMENT 01.07.2019 FOR THE APPELLANT SHRI SHANKAR HALDER, SR. DR, JCIT FOR THE RESPONDENT SHRI A.K. TIBREWAL, FCA, A.R. ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER OF THE LD. CIT(A)-20, KOLKATA DATED 21 ST MARCH 2017FOR THE ASSESSMENT YEAR 2013-14 AGAINST THE ORDER PASSED U/S 143(3) DATED 19.04.2015 BY THE DY.CIT, CENTRAL CIRCLE-2(4), KOLKATA. 2. THE SOLITARY ISSUE INVOLVED IN THE SEVERAL GROUNDS TAKEN BY THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) DELETING THE ADDITION OF RS.2,75,02,192/- MADE BY THE AO TO THE TOTAL INCOME OF THE ASSESSEE. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT SEARCH OPERATIONS U/S 132 WAS CONDUCTED UPON THE ASSESSEE ON 30.11.2012. IN THE COURSE OF SEARCH THE INVESTIGATING AUTHORITIES FOUND AND SEIZED DOCUMENTS WITH ID MARK SA/1 TO SA/3 & SKA/1 TO SKA/3. IN THE STATEMENT GIVEN U/S 132(4) THE ASSESSEE HAD VOLUNTARILY DISCLOSED INCOME OF RS.7,00,00,000/-. THE BREAK-UP OF DISCLOSURE AS GIVEN BEFORE THE INVESTIGATION AUTHORITIES WAS AS FOLLOWS: 2 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 SL NO PARTICULARS DOCUMENT REFERENCE F.Y 2012-13 TOTAL AMOUNT 1 INCOME FROM TRANSACTION IN GOLD & SILVER RS.2,92,22,592.00 RS.2,92,22,592.00 2 INVESTMENT IN JEWELLERY AS PER ANNEXURE 2 OF PANCHNAMA RS. 19,57,315.00 RS. 19,57,315.00 AS PER ANNEXURE 0 OF PANCHNAMA RS. 24,65,277.00 RS. 24,65,277.00 AS PER PAGE 3 TO 4 OF SA/04 RS.1,21,96,901.00 RS.1,21,96,901.00 3 CASH SEIZED AS PER ANNEXURE C PANCHANAMA RS. 12,00,000.00 RS. 12,00,000.00 4 EXPENDITURE IN FURNITURE PG.NO.1 TO 6 OF SA/02 RS. 10,02,813.00 RS. 10,02,813.00 5 DISCREPANCIES, TECHNICAL ADJUSTMENTS &MISC.INCOME RS.1,25,38,146.00 RS.1,25,38,146.00 TOTAL RS.6,05,83,044.00 3. LATER ON VIDE DULY NOTARIZED AFFIDAVIT DATED 28 TH JANUARY 2013 THE ASSESSEE PARTIALLY RETRACTED THE ABOVE STATEMENT AND BREAK-UP OF INCOME SO GIVEN BEFORE THE INVESTIGATION AUTHORITIES. THE RELEVANT EXTRACTS OF THE AFFIDAVIT IS AS FOLLOWS: 8. THEY HAVE ALSO FORCED ME TO MAKE THE DISCLOSURE AT THE HIGHER AMOUNT OF RS.2,75,02,192/- ON ACCOUNT OF TRANSACTION GOLD & SILVER AND ALSO BY FILING A DISCLOSURE PETITION ADMITTING THE SAID AMOUNT. 9. THESE FACTS ARE:- (A) I HAVE BEEN REGULARLY FILLING RETURNS FOR THE PAST MANY YEARS BOTH IN MY PERSONAL CAPACITY AS WELL AS FOR MY GROUP COMPANIES IN WHICH PRESENTLY I HOLD A STATE IN EITHER AS MEMBER OR DIRECTOR. THE SAID DOCUMENTS HAVE BEEN EXAMINED THOROUGHLY BY THE INCOME TAX AND OTHER GOVERNMENT DEPARTMENT FOR A NUMBER OF YEARS AND THE CORRECTNESS OF THOSE DOCUMENTS HAVE BEEN ACCEPTED COMPLETELY. (B) THE STATEMENT MADE BY ME UNDER PRESSURE OR THREAT DO NOT HAVE ANY VALUE WHATSOEVER WITHOUT ANY INDEPENDENT CORROBORATION. ( C ) I WOULD LIKE TO SUBMIT THAT I HAVE NOT EARNED ANY INCOME OF RS.2,75,02,192/- IN GOLD & SILVER. THERE IS NO ANY DOCUMENT OR CORROBORATIVE EVIDENCE WERE FOUND DURING THE COURSE OF SEARCH & SEIZURE CONDUCTED UNDER SECTION 132(1) OF INCOME TAX ACT, 1961 FROM ANY PREMISES OF MR. SUBHASH KUMAR AGARWALA AND HIS ASSOCIATES AND COMPANIES REGARDING SUCH INCOME. FURTHER, I HAVE BEEN FORCED TO MAKE THIS DISCLOSURE IN REGARD TO EARNING IN 3 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 GOLD & SILVER WHICH HAS NEVER BEEN EARNED, NOR ANY DOCUMENT ALSO FOUND AND NEVER DEALT IN GOLD & SILVER IN MY LIFE, NOR I AM REGISTERED WITH ANY BROKER FOR DEALING IN GOLD & SILVER. THE CBDT BOARD HAS GIVEN THE INSTRUCTION THAT ANY DISCLOSURE SHOULD BE SUPPORTED WITH THE CORROBORATIVE EVIDENCE. I ALSO WANT TO CLARIFY THAT IN OUR DISCLOSURE PETITION WE HAVE BEEN DISCLOSED THAT INVESTMENT IN JEWELLERY AND PAYING THE TAX WHEREAS THE JEWELLERY HAS BEEN PURCHASED OUT OF THE AFORESAID INCOME. 10. IN VIEW OF THE FOREGOING I ONCE AGAIN STATE THAT MY STATEMENT RECORDED BY THE INCOME TAX AUTHORITIES AT THE TIME OF SEARCH AND LETTER IN DISCLOSED AT HIGHER AMOUNT OF RS.2,75,02,192/- ARE HEREBY RETRACTED AND I ONCE AGAIN TOTALLY DENY THE CONTENTS. THE SAID STATEMENTS BE TREATED AS NULL AND VOID AS HAVE BEEN NEVER BEEN MADE BE ME. 4. THEREAFTER THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE RELEVANT AY 2013-14 DECLARING TOTAL INCOME OF RS.3,29,11,130/-. IN THE COURSE OF PROCEEDINGS U/S 143(3) THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE BREAK-UP OF THE INCOME OF RS.3,30,80,852/- OFFERED TO TAX IN THE RETURN OF INCOME. IN RESPONSE THE ASSESSEE FURNISHED A DETAILED STATEMENT EXPLAINING THE INCOME OFFERED WITH REFERENCE TO THE INCRIMINATING MATERIAL FOUND AND SEIZED IN THE COURSE OF SEARCH ALONG WITH APPLICATION OF SUCH INCOME. BEFORE THE AO THE ASSESSEE REITERATED THAT HE HAD NOT EARNED ANY INCOME OF RS.2,75,02,192/- IN GOLD & SILVER AND THAT NO INCRIMINATING DOCUMENT OR CORROBORATIVE EVIDENCE IN THIS REGARD WAS FOUND FROM THE PREMISES OF THE ASSESSEE IN THE COURSE OF SEARCH. HE SUBMITTED THAT SUCH DISCLOSURE WAS GIVEN UNDER DURESS AND COERCION. THE AO HOWEVER WAS NOT AGREEABLE TO THE SUBMISSIONS OF THE ASSESSEE. AT PARA 4.1 OF THE ORDER THE AO OBSERVED THAT SUCH DISCLOSURE OF INCOME OF RS.2,75,02,192/- FROM GOLD & SILVER WAS GIVEN BY THE ASSESSEE SUO MOTO IN HIS STATEMENT GIVEN U/S 132(4) AND THAT HE HAD NOT FILED FORMAL RETRACTION BEFORE THE SAID OFFICER. THE AO WAS OF THE VIEW THAT THE ASSESSEE IS THE BEST JUDGE OF HIS OWN STATE OF AFFAIRS AND THEREFORE ONCE HE HAD SPECIFIED A PARTICULAR AMOUNT AS INCOME FROM TRADING IN GOLD & SILVER THEN HE COULD NOT REFUSE TO OWN UP SUCH VOLUNTARY DISCLOSURE. THE AO THEREFORE DECIDED TO ASSESS THE INCOME OF THE ASSESSEE WITH REFERENCE TO THE ORIGINAL STATEMENT GIVEN U/S 132(4) AND HENCE ADDED THE AMOUNT OF RS.2,75,02,192/- TO HIS TOTAL INCOME BY WAY OF INCOME ON ACCOUNT OF GOLD & SILVER AS DISCLOSED. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) DELETED THE IMPUGNED ADDITION HOLDING THAT NO ADDITION CAN BE MADE SOLELY ON THE BASIS OF ADMISSION IN STATEMENT U/S 132(4) WITHOUT ANY CORROBORATIVE MATERIAL OR REFERENCE TO ANY INCRIMINATING DOCUMENTS. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 4 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ASSAILING THE ORDER OF THE LD. CIT(A), THE LD. DR APPEARING ON BEHALF OF THE REVENUE CONTENDED THAT THE IMPUGNED ADDITION WAS MADE WITH REFERENCE TO THE SEIZED DOCUMENTS ID MARKED SA/1 PAGES 5 TO 11 AND THEREFORE IT CANNOT BE SAID THAT THE ADDITION WAS NOT BACKED BY CORROBORATIVE MATERIAL OR INCRIMINATING DOCUMENTS. HE ALTERNATIVELY SUBMITTED THAT THE ADDITIONS CAN ALSO BE MADE IN THE HANDS OF THE ASSESSEE WITHOUT ANY INCRIMINATING MATERIAL AS WELL. IN SUPPORT THEREOF HE RELIED ON THE JUDGMENTS OF THE HONBLE KERALA HIGH COURT IN THE CASES OF E.N. GOPAKUMAR VS CIT (390 ITR 131)&CIT VS ST. FRANCIS CLAR DECOR TILES (385 ITR 624). PER CONTRA THE LD. AR OF THE APPELLANT SUPPORTED THE ORDER OF THE LD. CIT(A). REFERRING TO THE SEIZED DOCUMENTS ID MARKED SA/1 PAGES 5 TO 11, HE POINTED OUT THAT NONE OF THE ENTRIES THEREIN CONTAINED ANY REFERENCE TO INCOME FROM TRANSACTION IN GOLD & SILVER. HE INVITED OUR ATTENTION TO THE FINAL DISCLOSURE OF THE ASSESSEE WHEREIN IT WAS STATED THAT THESE DOCUMENTS CONTAINED BROKER ENTRIES AND THAT WITH REFERENCE TO THESE DOCUMENTS THE ASSESSEE HAD ALREADY OFFERED COMMISSION OF 0.20 PER HUNDRED AGGREGATING TO RS.1,38,43,846/- WHICH INTER ALIA FORMED PART OF THE INCOME DECLARED IN THE RETURN FILED U/S 139 OF THE ACT. THE LD. AR SUBMITTED THAT THE CBDT IN THEIR CIRCULAR NO. 286/2/2003- IT(INV) HAS SPECIFICALLY INSTRUCTED THE FIELD OFFICERS TO TAKE DISCLOSURES ONLY WITH REFERENCE TO SEIZED INCRIMINATING MATERIAL AND/OR WHICH IS BACKED BY CORROBORATIVE EVIDENCE WHICH SHOWS THAT ANY BALD DISCLOSURE GIVEN BY AN ASSESSEE U/S 132(4) CANNOT BE SIMPLY ADDED TO HIS TOTAL INCOME WITHOUT SUPPORTING CREDIBLE EVIDENCE OR DOCUMENT. HE POINTED OUT THAT THE JUDGMENTS REFERRED TO BY THE LD. DR WAS FACTUALLY DISTINGUISHABLE AND HAS BEEN PASSED IN COMPLETELY DIFFERENT CONTEXT AND THEREFORE NOT APPLICABLE TO THE GIVEN FACTS OF THE PRESENT CASE. HE THEREFORE PRAYED THAT THE ORDER OF THE LD. CIT(A) BE UPHELD. 6. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND AFTER EXAMINATION OF THE DOCUMENTS ON RECORD, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) DELETING THE ADDITION. IT MAY BE TRUE THAT IN THE STATEMENT MADE BEFORE THE AUTHORIZED OFFICER IN THE COURSE OF SEARCH U/S 132(4) THE ASSESSEE MADE DISCLOSURE OF RS.7,00,00,000/- WHICH INTER ALIA INCLUDED SUM OF RS.2,75,02,192/- BEING PROFIT DERIVED FROM HIS TRANSACTIONS IN GOLD & SILVER. LATER ON HOWEVER THE ASSESSEE RETRACTED HIS STATEMENT U/S 132(4) BY MAKING A SWORN DECLARATION. IT IS TRUE THAT IN LAW AN ADMISSION OR CONFESSIONAL STATEMENT U/S 132(4) CAN BE 5 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 CONSIDERED AS GOOD PIECE OF EVIDENCE BUT IT HAS TO BE KEPT IN MIND THAT SUCH STATEMENT BY ITSELF CANNOT BE THE SOLE AND ONLY BASIS FOR MAKING THE ADDITION TO THE INCOME OF THE ASSESSEE. IT IS A TRITE LAW THAT EVEN IF THE ASSESSEE MAKES A ADMISSION OR CONFESSION BEFORE THE DEPARTMENT, HE CAN RETRACT ON THE BASIS OF COGENT REASON THAT ADMISSION WAS MADE WITHOUT ANY BASIS/MATERIALS OR INFLUENCED BY THREAT, COERCION OR INFLUENCE AND THEN THE AO CAN DRAW ADVERSE CONCLUSIONS AGAINST THE PERSON MAKING IT ONLY IF SUCH ADMISSION IS CORROBORATED WITH SOME TANGIBLE AND CREDIBLE EVIDENCE OR AT LEAST SOME MATERIAL TO SUPPORT SUCH A VIEW. IN THE PRESENT CASE WE FIND THAT IN THE IMPUGNED ORDER THE AO RELIED SOLELY ON THE ASSESSEES DECLARATION U/S 132(4) MADE BY THE ASSESSEE IN SUPPORT OF THE INCOME ALLEGEDLY EARNED FROM HIS TRANSACTIONS IN GOLD & SILVER. IN THE ASSESSMENT ORDER EVEN THOUGH THE ADDITION WAS MADE WITH THE REMARK INCOME ON ACCOUNT OF GOLD & SILVER AS DISCLOSED, THE AO WAS UNABLE TO CORRELATE SUCH INCOME WITH ANY OF THE SEIZED MATERIAL OR INCRIMINATING EVIDENCE GATHERED IN THE COURSE OF SEARCH OR THEREAFTER FROM WHICH ONE COULD INFER THAT THE ASSESSEE DURING THE RELEVANT YEAR HAD IN FACT CONDUCTED ANY TRANSACTIONS IN GOLD & SILVER FROM WHICH HE EARNED THE INCOME OF THE MAGNITUDE ASSESSED. WE THEREFORE FIND MERIT IN THE LD. ARS SUBMISSIONS THAT BUT FOR THE DECLARATION MADE BY THE ASSESSEE U/S 132(4) NO INCRIMINATING MATERIAL WAS AVAILABLE OR GATHERED BY THE DEPARTMENT ON THE BASIS OF WHICH THE ADDITION OF RS.2,75,02,192/- COULD BE JUSTIFIED. 7. IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE THIS TRIBUNAL, THE LD. DR TRIED TO JUSTIFY THE SAID ADDITION WITH REFERENCE TO SEIZED DOCUMENTS BEARING ID MARKS SA/1 PAGES 5 TO 11. WE HAVE CAREFULLY EXAMINED THESE DOCUMENTS BUT FIND THAT NONE OF THE PAGES CONTAINED DETAILS OF TRANSACTIONS MADE BY THE ASSESSEE IN GOLD & SILVER. RATHER WE FIND THAT THESE PAGES CONTAINED NOTINGS OF BILLINGS ARRANGED BY THE ASSESSEE FOR OTHER BODIES CORPORATE FROM WHICH THE ASSESSEE HAD VOLUNTARILY OFFERED INCOME AT 0.20 PER HUNDRED OF THE BILLED AMOUNTS. THE COMMISSION OF RS.1,38,43,846/- WAS OFFERED TO TAX BY THE ASSESSEE IN HIS TOTAL INCOME, WHICH WAS ACCEPTED BY THE AO IN THE IMPUGNED ORDER. WE THEREFORE FIND PRIMA FACIE MERIT IN THE LD. ARS SUBMISSION THAT EVEN WITH REFERENCE TO SEIZED DOCUMENTS BEARING ID MARKS SA/1 PAGES 5 TO 11, THE ADDITION OF RS.2,75,02,192/- ON ACCOUNT OF TRANSACTIONS IN GOLD & SILVER WAS NOT PERMISSIBLE. IN THIS REGARD WE FIND MERIT IN THE LD. ARS RELIANCE ON 6 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 THE CBDT CIRCULAR BEING NO. 286/2/2003-IT(INV) DATED 10.03.2003 WHEREIN THE BOARD HAD INSTRUCTED AS FOLLOWS: INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHERE ASSESSEE HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATION. SUCH CONFESSION, IF NOT BASED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEE WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, SUCH CONFESSIONS DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENT. SIMILARLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDINGS ALSO. ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES/MATERIALS GATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATIONS OF THEREAFTER WHILE FRAMING THE RELEVANT ASSESSMENT ORDERS. 8. APPLYING THE ABOVE CIRCULAR TO THE ASSESSEES CASE WE FIND THAT EXCEPT RELYING ON THE STATEMENT U/S 132(4) OF THE ACT, THE AO DID PRECIOUS LITTLE TO BRING ON RECORD ANY CONVINCING MATERIAL TO JUSTIFY HIS CONCLUSION THAT THE ASSESSEE HAD CONDUCTED TRANSACTIONS IN GOLD & SILVER YIELDING INCOME OF RS.2,75,02,192/-. IN THIS REGARD WE MAY GAINFULLY REFER TO THE OBSERVATIONS MADE BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF DY.CIT VS NARENDRA GARG (72 TAXMANN.COM 355). 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS MADE BY LEARNED ADVOCATES FOR BOTH THE SIDES. IT IS TRUE THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER PURSUANT TO THE STATEMENT RECORDED U/S 132(4) OF THE ACT. THE ASSESSEE HAS RETRACTED FROM THE SAID DISCLOSURE WHICH HAS NOT BEEN ACCEPTED BY THE REVENUE. IT IS REQUIRED TO BE BORNE IN MIND THAT THE REVENUE OUGHT TO HAVE COLLECTED ENOUGH EVIDENCE DURING THE SEARCH IN SUPPORT OF THE DISCLOSURE STATEMENT. IT IS A SETTLED POSITION OF LAW THAT IF AN ASSESSEE, UNDER A MISTAKE, MISCONCEPTION OR ON NOT BEING PROPERLY INSTRUCTED, IS OVERASSESSED, THE AUTHORITIES ARE REQUIRED TO ASSIST HIM AND ENSURE THAT ONLY LEGITIMATE TAXES ARE COLLECTED. THE ASSESSING OFFICER CANNOT PROCEED ON PRESUMPTION U/S 134(2) OF THE ACT AND THERE MUST BE SOMETHING MORE THAN BARE SUSPICION TO SUPPORT THE ASSESSMENT OR ADDITION. IN THE PRESENT CASE, THOUGH THE REVENUE'S CASE IS BASED ON DISCLOSURE OF THE ASSESSEE STATED TO HAVE BEEN MADE DURING THE SEARCH U/S 132(4) OF THE ACT, THERE IS NO REFERENCE TO ANY UNDISCLOSED CASH, JEWELLERY, BULLION, VALUABLE ARTICLE OR DOCUMENTS CONTAINING ANY UNDISCLOSED INCOME HAVING BEEN FOUND DURING THE SEARCH. 7 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 9. WE ALSO RELY ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KAILASHBENMANHARLALCHOKSHI VS CIT (328 ITR 411), WHEREIN THAT CASE THE ASSESSEE HAD VOLUNTARY OFFERED RS.7 LACS IN THE STATEMENT GIVING U/S 132(4) OF THE ACT, IN THE COURSE OF SEARCH WHICH COMPRISED OF RS. 4 LAKHS AS UNACCOUNTED INVESTMENT IN A HOUSE PROPERTY; RS. 1 LAKH AS AN UNACCOUNTED INVESTMENT IN FURNITURE; RS. 1 LAKH AS AN UNACCOUNTED INVESTMENT IN GOLD ORNAMENTS AND RS. 1 LAKH AS UNACCOUNTED CASH. SUBSEQUENTLY HOWEVER THE ASSESSEE RETRACTED FROM THE SAID DISCLOSURE AND STATED THAT THE DISCLOSURE OF RS. 50,000 ONLY WAS ACCEPTABLE TO HIM. HE SUBMITTED THAT THE DISCLOSURE OF RS. 7 LAKHS WAS MADE UNDER PRESSURE AND COERCION. THE AO HOWEVER ASSESSED THE INCOME AFTER MAKING ADDITION OF RS.7 LACS SOLELY ON THE BASIS OF HIS STATEMENT GIVEN U/S 132(4). ON APPEAL THE HIGH COURT DELETED THE ADDITION OBSERVING THAT ON MERE ADMISSION U/S 132(4) THE AO COULD NOT HAVE ADDED THE SAID SUM UNLESS IT STOOD CORROBORATED BY SOME TANGIBLE MATERIAL OR EVIDENCE. THE RELEVANT EXTRACTS OF THE JUDGMENT ARE AS FOLLOWS: 26. IN VIEW OF WHAT HAS BEEN STATED HEREINABOVE WE ARE OF THE VIEW THAT THIS EXPLANATION SEEMS TO BE MORE CONVINCING, HAS NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW AND ADDITIONS WERE MADE AND/OR CONFIRMED MERELY ON THE BASIS OF STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. DESPITE THE FACT THAT THE SAID STATEMENT WAS LATER ON RETRACTED NO EVIDENCE HAS BEEN LED BY THE REVENUE AUTHORITY. WE ARE, THEREFORE, OF THE VIEW THAT MERELY ON THE BASIS OF ADMISSION THE ASSESSEE COULD NOT HAVE BEEN SUBJECTED TO SUCH ADDITIONS UNLESS AND UNTIL, SOME CORROBORATIVE EVIDENCE IS FOUND IN SUPPORT OF SUCH ADMISSION. WE ARE ALSO OF THE VIEW THAT FROM THE STATEMENT RECORDED AT SUCH ODD HOURS CANNOT BE CONSIDERED TO BE A VOLUNTARY STATEMENT, IF IT IS SUBSEQUENTLY RETRACTED AND NECESSARY EVIDENCE IS LED CONTRARY TO SUCH ADMISSION. HENCE THERE IS NO REASON NOT TO DISBELIEVE THE RETRACTION MADE BY THE ASSESSING OFFICER AND EXPLANATION DULY SUPPORTED BY THE EVIDENCE. WE ARE, THEREFORE, OF THE VIEW THAT THE TRIBUNAL WAS NOT JUSTIFIED IN MAKING ADDITION OF RS. 6 LAKHS ON THE BASIS OF STATEMENT RECORDED BY THE ASSESSING OFFICER UNDER SECTION 132(4) OF THE ACT. THE TRIBUNAL HAS COMMITTED AN ERROR IN IGNORING THE RETRACTION MADE BY THE ASSESSEE. 10. IDENTICAL VIEW WAS ALSO EXPRESSED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ACIT VS USHA AGARWAL IN ITA NO. 142/KOL/2014DATED 18.06.2016 WHEREIN IT WAS HELD AS UNDER: 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ENTIRE ADDITION OF RS 1 CRORE MADE BY THE LEARNED AO WAS MERELY BASED ON THE DISCLOSURE MADE BY THE ASSESSEES HUSBAND WHILE MAKING TOTAL DISCLOSURE OF RS 7.5 8 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 CRORES FOR THE TOTAL GROUP AS A WHOLE AND THE ASSESSEES NAME HAS BEEN INCLUDED IN THE FIGURE OF RS 1 CRORE ONLY IN ORDER TO MAKE THE TOTAL DISCLOSURE TO RS 7.5 CRORES. WE FIND THAT NO INCRIMINATING MATERIALS WHATSOEVER WAS FOUND DURING THE COURSE OF SEARCH REPRESENTING UNDISCLOSED INCOME OR UNDISCLOSED ASSETS BELONGING TO THE ASSESSEE JUSTIFYING THE DISCLOSURE MADE IN THE SUM OF RS. 1 CRORE. UNDER THESE CIRCUMSTANCES, IT IS RIGHT ON THE PART OF THE ASSESSEE TO HAVE RETRACTED FROM THE EARLIER DISCLOSURE WHILE FILING HER RETURN OF INCOME FOR THE ASST YEAR 2010-11. WE DRAW SUPPORT FROM THE FOLLOWING CASE LAWS IN THIS REGARD:- (I) PULLANGODE RUBBER PRODUCE CO. VS STATE OF KERALA AND ANR (1973) 91 ITR 18 (SC) THE HONBLE SC HAS OBSERVED THAT AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE. IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. (II) CIT VS RAVINDAR KUMAR JAIN (2011) 201 TAXMAN 95 (JHARKHAND HC) 6. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE APPELLANT AND PERUSED THE REASONS GIVEN IN THE ORDERS PASSED BY THE CIT(A). 7. IT IS NOT IN DISPUTE THAT DURING THE COURSE OF SEARCH, THE ASSESSEE FIRST SUBMITTED THAT HE HAS NOTHING TO DISCLOSE AND THEREFORE FIRST STAND OF THE ASSESSEE WAS THAT HE HAD NO UNDISCLOSED INCOME AND THEN THE ASSESSEE ALLEGED TO HAD STATED THAT HE HAD ALSO UNDISCLOSED INCOME OF RS. 7 LAKHS. HOWEVER, THE ASSESSING OFFICER HIMSELF FOUND THAT OUT OF SAID AMOUNT OF RS. 7 LAKHS, THE AMOUNT WHICH THE ASSESSEE STATED HAS BEEN DEPOSITED IN THE BANK, WAS NOT FOUND IN ANY BANK AND AMOUNT OF RS. 3 LAKHS HAD ALREADY BEEN DELETED BY THE ASSESSING OFFICER HIMSELF. THEREFORE, PART OF ALLEGED ADMISSION OF ASSESSEE WAS NOT FOUND CORRECT. NOT ONLY THIS, EVEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER ITSELF IT IS APPARENT THAT THE ASSESSEE, IN ADDITION TO STATING THAT HE DEPOSITED RS. 3 LAKHS IN DIFFERENT SAVING BANK ACCOUNTS OF ORIENTAL BANK OF COMMERCE, HE ALSO LENT SOME MONEY TO PRIVATE PERSONS THAT FACT WAS ALSO FOUND NOT CORRECT BY THE ASSESSING OFFICER HIMSELF. THEREFORE, THE ADMISSION MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF SEARCH CONTAINED THREE FACTS-(I) THAT HE HAD NO UNDISCLOSED INCOME, (II) THE ASSESSEE HAD UNDISCLOSED INCOME OF RS. 7 LAKHS, AND (III) THAT HE HAD INVESTED RS. 4 LAKHS IN STOCK OF M/S. MOOLCHAND JAIN AND SONS IN SUPPORT OF WHICH THERE WAS NO EVIDENCE COLLECTED BY THE ASSESSING OFFICER AND THEN DEPOSIT OF RS. 3 LAKHS IN THE BANK ACCOUNT WHICH COULD NOT HAVE BEEN IF HIS STATEMENT AS GIVEN AT THE RELEVANT TIME IS DEEMED CORRECT, BECAUSE THE ASSESSEE ALSO STATED THAT HE LENT SOME OF THE AMOUNTS TO SOME PERSONS. THEREFORE RELYING ON ONLY ONE SUCH STATEMENT GIVEN BY THE ASSESSEE IN THESE CIRCUMSTANCES WHERE OUT OF THREE TWO FACTS WERE FOUND TO BE NOT CORRECT, THEN IN THESE FACTS AND CIRCUMSTANCES, IT WAS THE DUTY OF THE ASSESSING OFFICER TO COLLECT MORE EVIDENCE IN SUPPORT OF THE FACT THAT THERE WAS UNDISCLOSED INCOME OF RS. 7 LAKHS IN THE HANDS OF THE ASSESSEE. THESE REASONS HAD BEEN CONSIDERED BY THE CIT(A) AS WELL AS BY THE ITAT AND THEREFORE, THEIR FINDINGS ABOUT THE TAXABLE INCOME OF THE ASSESSEE HAS BEEN GIVEN IN THE FACTS OF THE CASE. 9 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 (III) KAILASHBENMANOHARLALCHOKSHI VS CIT (2010) 328 ITR 411 (GUJ) HELD, THAT THE STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SECTION 132(4) OF THE ACT AT MIDNIGHT. IN NORMAL CIRCUMSTANCES, IT WAS TOO MUCH TO GIVE ANY CREDIT TO THE STATEMENT RECORDED AT SUCH ODD HOURS. THE PERSON WOULD NOT BE IN A POSITION TO MAKE ANY CORRECT OR CONSCIOUS DISCLOSURE IN A STATEMENT IF SUCH STATEMENT WAS RECORDED AT SUCH ODD HOURS. THE ASSESSEE HAD GIVEN PROPER EXPLANATION FOR ALL THE ITEMS UNDER WHICH DISCLOSURE WAS SOUGHT TO BE OBTAINED FROM THE ASSESSEE. WITH REGARD TO THE INVESTMENT IN HOUSE PROPERTY HE HAD STATED THAT HE TOOK THE PLOT IN 1964 FROM THE HOUSING SOCIETY WHICH WAS CONSTRUCTING THE BUNGALOW FOR WHICH THE ASSESSEE MADE CONTRIBUTION FROM TIME TO TIME AND TOOK POSSESSION IN 1974 WHEN ONLY ONE GROUND FLOOR WAS CONSTRUCTED. HE HAD BEEN LIVING THERE AND DURING 1986 TO 1988 HE HAD CONSTRUCTED THE FIRST FLOOR AND HAD INCURRED EXPENSES OF RS. 2,03,185.65 AND THIS AMOUNT HAD BEEN WITHDRAWN FROM THE ACCOUNT OF THE FIRM WHICH HE WAS A PARTNER. THE DEPARTMENTAL VALUER HAD ACCEPTED THE COST OF CONSTRUCTION AND THERE WAS NO REASON TO MAKE ADDITION OF RS. 4 LAKHS ON THE BASIS OF THE DISCLOSURE MADE BY THE ASSESSEE. THE REVENUE HAD NOT BROUGHT ANY EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAD IN FACT INCURRED RS. 4 LAKHS AND THAT AMOUNT WAS INVESTED OUT OF UNDISCLOSED INCOME. THE ADDITION ON ACCOUNT OF GOLD ORNAMENTS COULD NOT BE SUSTAINED SINCE LOOKING INTO THE QUANTUM OF HOLDING AND THE ASSESSEES EXPLANATION THIS WAS A NORMAL HOLDING WHICH COULD BE FOUND IN ANY MIDDLE CLASS INDIAN FAMILY. THE FURNITURE ON THE GROUND FLOOR WAS 15 YEARS OLD AND THE ASSESSEE HAD SPENT RS. 25,000 FOR RENOVATION AFTER MAKING WITHDRAWAL FROM THE FIRMS ACCOUNT. WITH RESPECT TO FURNITURE IN THE FIRST FLOOR A DETAILED SOURCE OF INVESTMENT OF FURNITURE PURCHASED WITH DUE CONFIRMATION FROM THE PARTY CONCERNED HAD BEEN FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. SINCE NO PAYMENT FOR THIS ADDITIONAL FURNITURE WAS MADE BY THE ASSESSEE TILL THE DATE OF SEARCH, NO ADDITION COULD BE MADE ON THIS COUNT. THE EXPLANATION OF THE ASSESSEE WAS CONVINCING BUT NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW. MERELY ON THE BASIS OF THE ADMISSION OF THE ASSESSEE THE ADDITIONS COULD NOT BE MADE UNLESS AND UNTIL SOME CORROBORATIVE EVIDENCE WAS FOUND IN SUPPORT OF SUCH ADMISSION. THE STATEMENT RECORDED AT SUCH ODD HOURS COULD NOT BE CONSIDERED TO BE A VOLUNTARY STATEMENT, IF IT WAS SUBSEQUENTLY RETRACTED AND NECESSARY EVIDENCE WAS LED CONTRARY TO SUCH ADMISSION. THE TRIBUNAL WAS NOT JUSTIFIED IN MAKING ADDITION OF RS. 6 LAKHS. (IV) SIMILAR VIEWS WERE EXPRESSED BY THE HONBLE COURTS IN THE FOLLOWING CASES:- CIT VS CHANDRAKUMARJETHMALKOCHAR REPORTED IN (2015) 230 TAXMAN 78 (GUJARAT) M.NARAYANAN& BROS VS ACIT REPORTED IN (2011) 339 ITR 192 (MAD) 7 ITA NO.142/K/2014 & CO NO.16/K/2016 USHA AGARWAL. AY 2010-11 CIT VS S KHADER KHAN SONS REPORTED IN (2008) 300 ITR 157 (MAD) WHICH WAS LATER APPROVED BY HONBLE SUPREME COURT BACHITTAR SINGH VS CIT REPORTED IN (2010) 328 ITR 400 (P&H) 10 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES AND JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE HOLD THAT THE LEARNED CITA HAD RIGHTLY DELETED THE ADDITION MADE IN THE SUM OF RS 1 CRORE. 11. AS REGARDS THE LD. CIT, DRS RELIANCE ON THE DECISIONS OF THE HONBLE KERALA HIGH COURT IN THE CASE OF E.N. GOPAKUMAR VS CIT (SUPRA) & CIT VS ST. FRANCIS CLAR DECOR TILES (385 ITR 624) (SUPRA); WE FIND THAT ON THE FACTS OF THE PRESENT CASE THESE JUDGMENTS DO NOT HAVE ANY RELEVANCE. IN THESE JUDGMENTS THE PRIMARY ISSUE WAS WHETHER IN THE ORDERS PASSED U/S 153A IN THE CASE OF UNABATED ASSESSMENTS IT WAS OPEN FOR THE AO TO MAKE ANY ADDITION IN RESPECT OF AN ISSUE FOR WHICH NO INCRIMINATING DOCUMENT OR MATERIAL WAS FOUND. IN THE PRESENT CASE ADMITTEDLY THE ASSESSMENT YEAR IN QUESTION PERTAINS TO THE FINANCIAL YEAR DURING WHICH THE SEARCH PROCEEDINGS WERE CARRIED OUT BY THE REVENUE. IN THE CIRCUMSTANCES THEREFORE SECTION 153A DID NOT HAVE ANY APPLICATION AND THE ASSESSMENT ORDER IN QUESTION WAS PASSED U/S 143(3) ONLY. HAVING REGARD TO THESE FACTS WE FIND THAT THE JUDGMENTS RELIED UPON BY THE LD. DR DID NOT HAVE ANY APPLICATION BECAUSE THE QUESTIONS ADJUDICATED BY THE HONBLE HIGH COURT WERE ENTIRELY DIFFERENT FROM THE ISSUE INVOLVED IN THE PRESENT APPEAL. 12. FOR THE REASONS SET OUT IN THE FOREGOING THEREFORE WE ARE OF THE CONSIDERED VIEW THAT NO ERROR WAS COMMITTED BY THE LD. CIT(A) WHEN THE ADDITION OF RS.2,75,02,192/- WAS DELETED BY HIM. BEFORE US THE LD. DR DID NOT BRING TO OUR ATTENTION ANY CONVINCING OR CREDIBLE MATERIAL WHICH WOULD PERSUADE US TO HOLD THAT DURING THE RELEVANT YEAR THE ASSESSEE HAD CONDUCTED TRANSACTIONS IN GOLD & SILVER FROM WHICH HE COULD HAVE EARNED INCOME OF RS.2,75,02,192/-. IN ABSENCE OF ANY SUCH CORROBORATIVE MATERIAL, WE UPHOLD THE LD. CIT(A)S ORDER DELETING THE ADDITION OF RS.2,75,02,192/-. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 01 JULY, 2019 SD/- SD/- (P. M. JAGTAP) (ABY. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 01 JULY, 2019 BISWAJIT, SR. PS 11 ITA NO.1446/KOL/2017 SRI SUBHASH KUMAR AGARWAL, AY 2013-14 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT . ACIT, CC 2(4), ROOM NO. 406, 4 TH FLOOR, AAYAKAR BHAWAN POORVA, 110, SHANTIPALLY, KOLKATA 700 107. 2 RESPONDENT . SRI SUBASH KUMAR AGARWAL, 17, GANESH CHANDRA AVENUE, 7 TH FLOOR, KOLKATA 700 013. 3. 4. CIT(A)- , KOLKATA (SENT THROUGH E-MAIL) CIT- , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR