ACIT, Jaipur V. JOHARI LA SODHANI, Jaipur

ITA 145/JPR/2013

• Counselvise Citation: 14523114 RSA 2013
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 06-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KALIKA SINGH
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Search and seizure; Salary income; Loose papers; Opportunity of being heard; Retraction
• Section: 143(3); 133A; 234B; 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 145/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. CUKE VS. SHRI JOHARI LAL SODHANI, SB-204, RAJENDRA MARG, BAPU NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AGWPS 7021 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT C.O. NO. 09/JP/2013 (ARISING OUT OF ITA NO. 145/JP/2013 ASSESSMENT YEAR : 2010-11. SHRI JOHARI LAL SODHANI, SB-204, RAJENDRA MARG, BAPU NAGAR, JAIPUR. CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI KALIKA SINGH (CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23.06.2015. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 7.09.2015 2 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. VKNS'K@ ORDER PER: T.R. MEENA, A.M. THIS IS AN APPEAL BY THE REVENUE AND THE CROSS OBJE CTION IS BY THE ASSESSEE AGAINST THE ORDER DATED 16.11.2012 PASSED BY THE LEARNED CIT (A)(CENTRAL), JAIPUR FOR A.Y. 2010-11. THE EFFECTIV E GROUNDS OF APPEAL ARE AS UNDER :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A), CENTRAL, JAIPUR HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED ADVANCES AMOUNTING TO RS. 29,23,937/- WI THOUT APPRECIATING THE FACT THAT THE AO HAS MADE THE IMPU GNED ADDITION BASED ON THE EVIDENCE THAT ASSESSEE HAS ADMITTED IN THE SEARCH PROCEEDINGS AND FURTHER IN THE POST SEARCH PROCEEDI NGS BY FILING AN INDEPENDENT LETTER DATED 10.11.2009 BEFORE THE INVE STIGATION WING THAT HE HAS MADE UNDISCLOSED ADVANCES, BUT IN THE R ETURN AN AMOUNT OF RS. 5,36,063/- ONLY WAS DECLARED AS AGAINS T THE SURRENDERED AMOUNT OF RS. 34,50,400/-. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A), CENTRAL, JAIPUR HAS ERRED IN IGNORING THE STATEMENT OF ASSESSEE U/S 132(4) RECORDED ON OATH DISCLOSING UNACCOUNTED ADVA NCES WITHOUT ASSESSEE HAVING SHOWN THAT THE STATEMENT ON OATH WAS RECORDED UNDER THREAT OR COERCION, DESPITE THE FACT THAT EVE N IN PANCHANAMA ALSO, WHICH IS AN INDEPENDENT PIECE OF EVIDENCE, IT IS CLEARLY STATED BY THE TWO WITNESSES THAT THE STATEMENT OF ASSESSEE U NDER SECTION 132(4) OF THE I.T. ACT, 1961 WAS RECORDED WITHOUT ANY FORCE AND COERCION AND WAS READ OVER THE ASSESSEE WHO UNDERSTOO D BEFORE SIGNING. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A), CENTRAL, JAIPUR HAS ERRED IN IGNORING THE LETTER DA TED 10.11.2009 FILED BY THE ASSESSEE BEFORE THE INVESTIGATION WING REITERATING THE 3 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. ADMISSION ABOUT THE UNDISCLOSED ADVANCES IN SWORN ST ATEMENT EARLIER WITHOUT GIVING ANY COGENT REASON TO IGNORE T HE SAME. DESPITE THE FACT THAT THE LETTER HAS BEEN FILED BY THE ASSE SSEE ON HIS OWN; THAT TOO AFTER 20 DAYS SINCE THE SAME FACTS WERE ADM ITTED IN SWORN STATEMENT AND HAS BEEN PRESUMABLY PREPARED AT HIS O WN PREMISE, WHERE ALL POSSIBLE PROFESSIONAL HELP WAS AVAILABLE. 2. THE FIRST GROUND OF REVENUES APPEAL IS AGAINST D ELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED ADVANCES AMOUNTING TO RS. 29 ,23,937/-. EVEN ASSESSEE VIDE LETTER DATED 10.11.2009 HAD MADE DECLARATION O F UNDISCLOSED ADVANCES BUT SHOWN IN THE RETURN AT RS. 5,36,063/- IN PLACE OF RS . 34,60,400/-. 3. THE ASSESSEE HAS INCOME FROM SALARY AND OTHER SOU RCES. THERE WAS A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE I.T. ACT AND/OR SURVEY ACTION UNDER SECTION 133 OF THE IT ACT ON THE MEMBERS OF SO DHANI SWEETS GROUP ON 20.10.2009 OF WHICH THE ASSESSEE IS THE MOST IMPORT ANT MEMBER. DURING THE COURSE OF SEARCH, CASH, JEWELLERY, STOCK-IN-TRADE, V ALUABLES, DOCUMENTS, BOOKS OF ACCOUNT AND LOOSE PAPERS WERE FOUND AND SEIZED FROM THE PREMISES OF THE MEMBERS OF THE SODHANI SWEETS GROUP OF WHICH ONE SUCH MEMBER HAPPENS TO BE THE ASSESSEE. THE ASSESSEE FILED A RETURN OF IN COME FOR THE YEAR UNDER CONSIDERATION ON 27.10.2010 DECLARING TOTAL INCOME OF RS. 1,09,99,050/-. THE CASE WAS SCRUTINIZED UNDER SECTION 143(3) OF THE IT A CT. DURING THE COURSE OF SEARCH, THE ASSESSEE IN HIS STATEMENT RECORDED ON O ATH UNDER SECTION 132(4) OF THE ACT ON 20.10.2009 ADMITTED TO AN UNDISCLOSED IN COME WHICH WAS ADVANCED 4 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. BY HIM AS LOANS THROUGH HIS RELATIVES AND ACQUAINTA NCES. IN REPLY TO QUESTION NO. 18, THE ASSESSEE STATED THAT HE HAS NO ACCOUNT OF THE AMOUNTS OF LOANS ADVANCED TO PERSONS WHICH ACCORDING TO HIM WAS DONE O NLY ON THE BASIS FAITH AND CONFIDENCE OF HIS CLOSE RELATIVES AS WELL AS FRI ENDS. THIS FACT WAS AGAIN ADMITTED BY THE ASSESSEE IN REPLY TO QUESTION NO. 1 9 IN WHICH HE ADDITIONALLY STATED THAT HE HAS DISCUSSED THE MATTER OF SURRENDE R WITH HIS WIFE. THE AO FURTHER OBSERVED THAT THE ASSESSEE VIDE HIS LETTER DATED 10.11.2009 SUBMITTED TO THE INCOME TAX DEPARTMENT AND GAVE DETAILS OF THE SU RRENDER UNDER VARIOUS HEADS AND REITERATED THE SURRENDER MADE BY HIM IN H IS ABOVE REFERRED STATEMENT. THE ASSESSEE SURRENDERED AN AMOUNT OF RS. 34,60,400/ - ON ACCOUNT OF THE LOANS ADVANCED TO PEOPLES AS WELL AS TO COVER UP DISCREPAN CIES FOUND DURING THE COURSE OF SEARCH. WHILE EXAMINING THE RETURN OF IN COME FOR THE YEAR UNDER CONSIDERATION, IT WAS NOTICED BY THE AO THAT ASSESSE E HAD DISCLOSED ONLY AN AMOUNT OF RS. 5,36,063/- OUT OF RS. 34,60,400/-. TH EREFORE, THE AO GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE WHICH WAS AVAILED BY THE ASSESSEE BY LETTER DATED 27.12.2011 WHICH HAS BEEN R EPRODUCED BY THE AO AT PAGES 3 & 4 OF THE ASSESSMENT ORDER. AFTER CONSIDE RING THE ASSESSEES REPLY, THE AO HELD THAT THE ASSESSEE HIMSELF HAS RE-AFFIRMED T HE FACT OF SURRENDER OF RS. 34,60,400/- IN HIS ABOVE REFERRED LETTER AT POINT N O. 3. HAVING RE-AFFIRMED THE FACT OF ADVANCES OF LOANS TO PEOPLE ON MORE THAN ON E OCCASION INCLUDING 5 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. ADMITTING THE SAME IN HIS STATEMENT RECORDED ON OAT H UNDER SECTION 132(4) OF THE ACT IT IS UNFATHOMABLE AS TO WHY THE ASSESSEE H AS NOT DISCLOSED THE IMPUGNED AMOUNT IN HIS RETURN OF INCOME. THE STATEM ENT RECORDED DURING THE COURSE OF SEARCH IS UNADULTERATED STATEMENT BECAUSE THE ASSESSEE IS CAUGHT UNAWARES AND HAS NO TIME AND MEANS TO ANALYZE THE PR OS AND CONS OF MAKING A STATEMENT. IN THAT STATE, IT IS BUT REASONABLE TO EXPECT THAT THE ASSESSEE WOULD SPEAK WHAT IS NOT JUST THE TRUTH BUT THE SOLE TRUTH. THIS INFERENCE WITHOUT ANY HESITATION AND TROUBLE, CAN BE TRANSPORTED TO THE S TATEMENT OF THE ASSESSEE. THE AO FURTHER RELIED ON THE DECISION IN THE CASE OF HO TEL KIRAN VS. CIT, 82 ITD 453 (PUNE) WHEREIN IT WAS HELD THAT WHERE STATEMENT UNDER SECTION 132(4) WAS VOLUNTARILY MADE AND THERE WAS NO COERCION OR THREAT WHATSOEVER, THE SAME WOULD BE BINDING ON THE ASSESSEE, EVEN IF SUBSEQUENT LY RETRACTED. IN THE INSTANT CASE OF THE ASSESSEE, THERE HAS BEEN INSTANCE OF AN Y THREAT OR COERCION WHICH RENDERS THE STATEMENT OF THE ASSESSEE INVALID. IN CASE OF PRASAN CHAND SURANA VS. ACIT, 71 TTJ 466 IT HAS BEEN HELD THAT AN ADMISS ION, IF CLEARLY AND UNEQUIVOCALLY MADE IS THE BEST EVIDENCE AGAINST THE PARTY UNTIL THE SAME IS EFFECTIVELY REBUTTED WITH SOME CONCLUSIVE EVIDENCE. HE FURTHER RELIED ON THE DECISION IN THE CASE OF PARAM ANAND BUILDERS PVT. L TD. VS. ACIT ON STATEMENT RECORDED UNDER SECTION 132(4) AND BURDEN LIES ON TH E ASSESSEE TO ESTABLISH THE 6 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. STATEMENT WAS WRONG. THE AO FINALLY MADE ADDITION OF RS. 29,23,937/- TO THE INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A) WHO HAD DELETED THE ADDITION BY O BSERVING THAT THE ASSESSEE ADMITTED THE FOLLOWING INCOME BY WAY OF STATEMENT DAT ED 20.10.2009 UNDER SECTION 132(4) OF THE IT ACT :- PARTICULARS AMOUNT CASH FOUND 98,39,600/- ADVANCES GIVEN BY RAJUL SODHANI THROUGH MANISH TAMBI 10,00,000/- ADVANCE THROUGH ANIL MAHESHWARI ANN. A-9 PG.77 10,00,000/- PAYMENT FOR CASH PURCHASES AS PER ANNEXURE A-5 PG. 3-8 10,00,000/- CONSTRUCTION OF FACTORY AT KARTAPURA IND. AREA 22,0 0,000/- CONSTRUCTION OF HOUSE IN FRONT OF SHOP OF SODHANI SWEETS 10,00,000/- INVESTMENT IN JEWELLERY 5,00,000/- BALANCE ADVANCED ON INTEREST THROUGH RELATIVES 34,6 0,400/- TOTAL 200,00,000/- SUBSEQUENTLY, BY LETTER DATED 01.12.2009 AND 15.12. 2009 SUBMITTED TO THE DDIT(INV.), INCOME SOUGHT TO BE SURRENDERED AT RS. 2 ,00,00,000/- WAS STATED TO BE NOT CORRECT. THE CORRECT INCOME WAS DETERMINED AT RS. 96,15,124/-. FINALLY, SUCH SURRENDERED INCOME WAS ENHANCED TO RS. 1,10,40, 000/-. THE AMOUNT WAS OFFERED IN THE RETURN OF INCOME FILED BY THE ASSESS EE AND THAT OF M/S. SODHANI SWEETS PVT. LTD. THE DIFFERENCE BETWEEN ORIGINAL DIS CLOSURE OF RS. 2,00,00,000/- AND THE REVISED DISCLOSURE OF RS. 1,10,40,000/- WAS ON ACCOUNT OF TWO REASONS. 7 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. FIRST, THE CASH SURRENDERED AT THE TIME OF SEARCH WA S RS. 98,39,600/- WHICH WAS SUBSEQUENTLY REDUCED TO RS. 21,63,512/- WHICH RESULT ED INTO LESS DISCLOSURE OF RS. 76,76,080/-, BECAUSE AT THE TIME OF SEARCH THE SALE PROCEEDS OF SWEETS IN RESPECT OF CERTAIN DAYS BEFORE THE SEARCH HAD NOT B EEN CONSIDERED AT THE TIME OF SEARCH. THE SECOND REASON WAS THAT THIS SURRENDER OF RS. 34,60,400/- ON ACCOUNT OF UNDISCLOSED ADVANCES ADMITTED DURING THE COURSE OF SEARCH WAS RETRACTED BY STATING THAT SUCH SURRENDER WAS OBTAINE D UNDER DURESS IN AS MUCH AS NO INCRIMINATING DOCUMENTS OR ANY OTHER CORROBOR ATIVE DOCUMENTS WERE FOUND AND THIS SURRENDER WAS OBTAINED TO MAKE THE TOTAL S URRENDER OF RS.2,00,00,000/-. THE LD. CIT (A) FURTHER OBSERVED THAT THE ASSESSEE AL SO MADE FURTHER DISCLOSURE IN THE RETURN ITSELF OF RS. 8.40 LACS IN THE INCOME OF M/S. SODHANI SWEETS PVT. LTD. WHICH WAS NOT A SURRENDER DURING THE COURSE OF SEARCH . THE ASSESSEE ALSO SURRENDERED RS. 5,36,063/- IN HIS OWN CASE WHILE FIL ING THE RETURN OF INCOME TO COVER UP ANY OTHER ISSUE/INCRIMINATING PAPER/DOCUME NT ETC. SUCH SURRENDER HAS NOT BEEN MADE IN THE ORIGINAL AT THE TIME OF SEARCH . HE FURTHER OBSERVED THAT THE AOS CASE IS THAT THE AMOUNT OF RS.34.60 LACS WAS ORIGINALLY SURRENDERED U/S 132(4) BY STATEMENT DATE D 20.10.2009, AND THE ASSESSEE REITERATED SUCH SURRENDER VIDE LET TER DATED 10.11.2009. IT IS STATED THAT SUCH SURRENDER OF INC OME WAS MADE WITHOUT ANY DURESS OR COMPULSION AND THEREFORE SURRE NDER OF INCOME 8 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. SO MADE CANNOT BE RETRACTED. ON THE OTHER HAND THE APPELLANTS CASE IS THAT SUCH SURRENDER OF RS.34,60,000/- WAS MA DE UNDER DURESS AND THIS BEING A SEARCH CASE THERE WAS NO EVI DENCE TO INDICATE THAT THE APPELLANT HAS MADE ADVANCES TO SU CH AN EXTENT. IT IS STATED THAT SUCH SURRENDER OF RS.34.60 LACS WAS S HOWN TO MAKE OUT ROUND FIGURE OF TOTAL SURRENDER AT RS.2 CR. IT MAY BE NOTED THAT WHEN INITIAL SURRENDER OF RS.2 CR. WAS MADE, EXCEPT THE SURRENDER OF RS.34.60 LACS THE OTH ER ITEMS OF SURRENDER WERE BASED ON SPECIFIC INCRIMINATING DOCUM ENTS OF ASSETS. FOR EXAMPLE IN THE ORIGINAL SURRENDER, CASH AMOUNTI NG TO RS.9839600/- WAS FOUND AND THE SAME WAS ADMITTED AS I NCOME (THOUGH IN THE SUBSEQUENT STATEMENT PART OF THE CAS H SURRENDER WAS ALSO RETRACTED). THE SURRENDER ON ACCOUNT OF CASH WAS BASED ON ACCOUNT OF AVAILABILITY OF CASH. ANOTHER DISCLOSURE OF RS.10 LACS WAS MADE ON ACCOUNT OF ADVANCES GIVEN BY RAJUL SODHANI AND MANISH TAMBI AND THIS DISCLOSURE IS ALSO SPECIFIC IN AS MUC H AS VERY SPECIFIC NAMES ARE GIVEN. ANOTHER SURRENDER OF RS.10 LAC WAS MADE ON ACCOUNT OF ADVANCES THROUGH SH. ANIL MAHESHWARI WHIC H IS BASED ON INCRIMINATING DOCUMENT. SURRENDER OF RS.10 LACS ON ACCOUNT OF CASH PURCHASES WAS ALSO BASED ON INCRIMINATING DOCUMENTS. SURRENDER OF CONSTRUCTION OF FACTORIES AT KARTAR PURA INDUSTRIAL AREAS AT RS.22 LACS AND ON ACCOUNT OF CONSTRICTION OF HOUSE IN FRONT OF SHOP OF SODHANI SWEETS FOR RS.10 LACSWERE ALSO BASED ON SPECIFIC INVE STMENT MADE BY THE APPELLANT. ANOTHER SURRENDER OF RS.5 LACS ON ACCOUNT INVESTMENT IN JEWELLERY IS ALSO VERY SPECIFIC. HOWEVE R THE SURRENDER OF RS.34.60 LACS WHICH IS STATED TO BE ON ACCOUNT OF LOAN ADVANCED 9 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. THROUGH RELATIVES ETC. IS DEFINITELY NOT SPECIFIC I N AS MUCH AS NO SUPPORTING DETAILS AS TO WHOM LOAN WERE ADVANCED ARE ON RECORD. EVEN DURING THE SEARCH ALSO, NO EVIDENCE OF WHATSOEV ER NATURE WERE FOUND WHICH MAY INDICATE THAT SUCH ADVANCES WERE GENU INELY MADE. SUCH CORROBORATIVE FACTS GIVE CREDENCE TO THE CONTE NTION OF THE APPELLANT AS IF SURRENDER ON ACCOUNT OF ADVANCES TH ROUGH RELATIVE WAS RECORDED TO ROUND ABOUT THE TOTAL DISCLOSURE OF RS.2 CR. IF GENUINELY SUCH ADVANCES HAVE BEEN MADE, NAMES OF TH E RELATIVES THROUGH LOANS ARE ADVANCES, PERSON TO WHOM AMOUNT HA VE BEEN ADVANCES OR ANY OTHER INCRIMINATING DOCUMENTS IN TH E FORM OF INTEREST RECEIVED/MONEY ADVANCES WOULD HAVE BEEN FOU ND OR SEIZED. IT MAY FURTHER BE NOTED THAT THE SURRENDER FOR CASH ON AT RS.9839600/- WAS ORIGINAL MADE BUT SUBSEQUENTLY CASH AMOUNTING TO RS.7676080/- WAS EXPLAINED AND ACCORDINGLY WHILE F ILING THE RETURN OF INCOME ONLY DIFFERENCE OF RS.2163510/- WAS SHOWN AS INCOME. SUCH RETRACTION OF THE SURRENDER WAS ALSO AC CEPTED BY THE AO AND NO ADDITION TO THE EXTENT OF ORIGINAL SURREN DER WAS MADE BY THE AO. THIS FACT FURTHER PROVES THE CONTENTION OF T HE APPELLANT THAT THE ORIGINAL SURRENDER OF INCOME U/S 132(4) WAS NOT CORRECT OR FINAL. THE APPELLANT HAS ALSO RELIED UPON CERTAIN CASE LAWS IN WHICH IT HAS BEEN LAID DOWN THAT CONFESSION OR SURRENDER M AY BE EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT SAID THAT IT IS CONCLUSIVE. THE PERSON WHO MAKES THE ADMISSION CAN SHOW AND PROVE THAT IT IS CONCLUSIVE. THE PERSON WHO MAKES THE ADMISSION CAN SH OW AND PROVE THAT IT WAS INCORRECT. (PANNANGODE RUBBER PROD UCING CO. LTD. 10 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. VS. STATE OF KERALA 91 ITR 0018). IN THE JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT VS. ASHOK KUMAR SONI 291 ITR 172 ALS O HELD THAT ADMISSIONS ARE RELEVANT AND STRONG PIECE OF EVIDENC E BUT THEY ARE NOT CONCLUSIVE PROOF AND STATEMENT OF ADMISSION CAN ALWAYS BE EXPLAINED. THE AO HAS REFERRED TO THE DECISION OF HO NBLE ITAT, PUNE IN THE CASE OF HOTEL KIRAN VS. ACIT, REPORTED I N 82 ITR 453 AND IT IS CONTENDED THAT IN THIS CASE HONBLE ITAT HAS LAID DOWN THAT WHERE STATEMENT U/S 132(4) WAS VOLUNTARY AND THERE WAS NO COERCION OR THREAT THEN SUCH STATEMENT WOULD BE BIND ING ON THE ASSESSEE EVEN IF THE SAME WAS RETRACTED SUBSEQUENTLY . I HAVE GONE THROUGH THE ORDER OF HONBLE ITAT AND IT IS NOTED T HAT IN THE SAME ORDER IT HAS ALSO BEEN MENTIONED THAT SUCH STATEMEN T CAN BE RETRACTED BY THE ASSESSEE IN SPECIFIC CIRCUMSTANCES I.E. WHEN THE STATEMENT WAS OBTAINED UNDER COERCION THREAT DURESS OR UNDUE INTEREST, OR THE STATEMENT HAS BEEN GIVEN UNDER MIS TAKEN BELIEF EITHER OF FACT OR LAW ETC. THEREFORE EVEN IN THIS JUD GMENT IT HAS BEEN STATED THAT THE STATEMENT MADE U/S 132(4) CAN ALWAYS BE RETRACTED BY THE PERSON WHO MAKE SUCH STATEMENT. KEEPING IN VI EW THE PROPOSITION OF LAW LAID DOWN BY HONBLE SUPREME COURT AND HONBLE JURISDICTIONAL HIGH COURT IT IS NOTED THAT SURRENDE R AND ADMISSION MAY BE A STRONG PIECE OF EVIDENCE BUT THE SAME CAN BE EXPLAINED BY THE PERSON WHO MAKES SUCH CONFESSION. THE FACTS AND C IRCUMSTANCES OF THE APPELLANTS CASE INDICATE THAT WHATEVER WAS SU RRENDERED IN TOTALITY WAS NOT FOUND CORRECT. THE APPELLANT SURREND ERED CASH AMOUNTING TO RS.9845770/- BUT FINALLY PART OF SUCH SURRENDER WAS RETRACTED AND ADMISSION TO THE EXTENT OF RS.2163520 /- WAS ONLY FOUND TO BE CORRECT. THE RETRACTION OF SUCH SURRENDE RED INCOME WAS 11 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. NOT OBJECTED BY THE AO. THE APPELLANT ALSO SURRENDER ED RS. 3460400/- ON ACCOUNT OF LOAN AND ADVANCES THROUGH R ELATIVES BUT RETRACTED THE SAME BY STATING THAT SUCH SURRENDER WA S OBTAINED UNDER DURESS TO MAKE TOTAL SURRENDER OF RS. 2 CR. A ND THAT THERE WAS NOTHING ON RECORD DOCUMENTARY AND OTHERWISE THAT SUCH ADVANCES HAVE BEEN EVER BEEN MADE BY THE APPELLANT. THERE IS NO DISPUTE ON THE FACT THAT DURING THE COURSE OF SEARC H NO DOCUMENTARY EVIDENCE OR ANY CORROBORATIVE EVIDENCE ARE FOUND WHI CH MAY INDICATE THAT ANY SUCH ADVANCES HAVE BEEN MADE. IT MAY FURTHER BE NOTED THAT THE APPELLANT HAS ALSO SHOWN CERTAIN ADDI TIONAL INCOME AT HIS OWN WHILE FILING THE RETURN WHICH HAS NOT BEEN AD MITTED EARLIER. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES DISCUSSE D ABOVE I AM OF THE OPINION THAT PRIMA FACIE THERE WAS NO BASIS F OR MAKING OF SUCH ADDITION AMOUNTING TO RS. 2923937/- (3460400-5 36063) IN AS MUCH AS SUCH ADDITION IS NOT SUPPORTING BY ANY DOCU MENTARY OR CORROBORATIVE EVIDENCE. THEREFORE, THE ADDITION SO M ADE IS DELETED. 5. NOW THE REVENUE IS BEFORE US. THE LD. CIT D/R SUPP ORTED THE ORDER OF THE AO AND ARGUED THAT STATEMENT RECORDED UNDER SECTION 132(4) IS BINDING ON THE ASSESSEE. THE LD. CIT (A) WAS NOT RIGHT TO ACCEPT THE ASSESSEES RETRACTION WITHOUT ANY EVIDENCE AND REQUESTED TO CONFIRM THE OR DER OF THE AO. 6. AT THE OUTSET, THE LD. A/R OF THE ASSESSEE REITE RATED THE ARGUMENT MADE BEFORE LD. CIT (A). HE FURTHER RELIED UPON FOLLOWING DECISIONS :- 12 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. PULLANGODE RUBBER PRODUCE CO. LTD. VS. STATE OF K ERALA AND ANOTHER (1973) 91 ITR 18 (SC) - STATEMENT UNDER SECTION 132(4) IS NOT CONCLUSI VE. FEDERAL BANK LTD. VS. STATE OF KERALA (1995) 124 CTR 355 (KER.HC) - STATEMENT UNDER SECTION 132(4) IS NOT CONCLUSIV E. CIT VS. ASHOK KUMAR JAIN (2014) 111 DTR 291/229 TAXMAN 65 (RAJ.HC) - STATEMENT RECORDED UNDER SECTION 133A AND RETRACT ION FROM THE ORIGINAL DISCLOSURE BY GIVING EXPLANATION SUPPORTED BY THE MATERIAL ON RECORD. CIT VS. ASHOK KUMAR SONI (2007) 291 ITR 172 (RAJ. HC) - STATEMENT RECORDED UNDER SECTION 133A AND RETRACT ION FROM THE ORIGINAL DISCLOSURE BY GIVING EXPLANATION SUPPORTED BY THE MATERIAL ON RECORD. KAILASHBEN MANHARLAL CHOKSHI VS. CIT (2010) 328 ITR 411 (GUJ.HC) - STATEMENT RECORDED U/S 132(4) UNDER COERCION & DU RESS AND NOT VOLUNTARY U/S 132(4). CIT VS. DHINGRA METAL WORKS (2010) 328 ITR 384 (DEL.HC) - STATEMENT RECORDED UNDER SECTION 133A AND DISCREP ANCY IN STOCK RECONCILED BY THE ASSESSEE. M. NARAYANAN & BROS. VS. ACIT (2011) 339 ITR 192 (MAD. HC) - RETRACTION MADE BY PRODUCING MATERIAL EVIDENCE IN SUPPORT OF SUCH RETRACTION. JUGAL KISHORE GARG VS. DCIT 34 TAX WORLD 201 (JP) - STATEMENT GIVEN UNDER DURESS AND TO BUY PEACE BUT N O SUCH INVESTMENT IN PLOT WAS THERE. 13 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. DCIT VS. PRAMUKH BUILDERS (2008) 112 ITD 179 (AHD. TM) - STATEMENT UNDER SECTION 132(4). NO EVIDENCE OF CH ARGING OF ON- MONEY. FIRST GLOBAL STOCK BROKING (P) LTD. VS. ACIT (2008) 115 TTJ 173 (MUM.)(TRIB.) - ADMISSION UNDER SECTION 132(4), BUT NOT A CONCL USIVE EVIDENCE. THUS THE LD. A/R PRAYED TO CONFIRM THE ORDER OF LD. CIT (A). 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE LD. CIT (A) HAS DECIDED THE CASE CATEGORICALLY AND A SSESSEE HAS NOT HONOURED THE DISCLOSURE IN THE RETURN BECAUSE NO INCRIMINATING D OCUMENTS WERE FOUND DURING THE COURSE OF SEARCH. THE LD. CIT (A) HAD GIVEN VARIO US REASONS OF RETRACTION AND ALSO HAS CONSIDERED THE EVIDENCE FOR NOT HONOURING THE STATEMENT MADE UNDER SECTION 132(4) OF THE IT ACT. THE LD. D/R HAD NOT CON TROVERTED THE FINDINGS GIVEN BY LD. CIT (A). IT IS A LEGAL PROPOSITION THAT STATE MENT RECORDED UNDER SECTION 132(4) HAS EVIDENTIARY VALUE BUT IS REBUTTABLE PRES UMPTION. THE ASSESSEE HAS PRODUCED THE EVIDENCE BEFORE LD. CIT (A) AND HE CAME TO THE CONCLUSION THAT ADDITION MADE BY THE AO WAS NOT JUSTIFIED. THE CASE L AWS REFERRED BY THE ASSESSEE ALSO SUPPORT THE ASSESSEES CASE. THEREFORE , WE UPHOLD THE ORDER OF LD. CIT (A). THE REVENUES APPEAL IS DISMISSED. 8. NOW WE TAKE UP THE CROSS OBJECTION OF THE ASSESSEE . THE SOLE GROUND OF THE ASSESSEE IS AGAINST CHARGING OF INTEREST UNDER SECTION 234B WITHOUT CONSIDERING THE ADJUSTMENT OF AMOUNT LYING IN P.D. ACCOUNT. 14 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. 9. THE AO CHARGED THE INTEREST OF RS. 1,89,739/- UND ER SECTION 234B IN ITNS 150 WHICH WAS CHALLENGED BEFORE LD. CIT (A). THE CASH WAS LYING IN THE P.D. ACCOUNT AT RS. 98,45,770/-. THE AO SHOULD HAVE ADJU STED SUCH CASH AGAINST THE ADVANCE TAX LIABILITY ON THE REQUEST OF THE ASSESSE E. THE ASSESSEE HAD REQUESTED TO ADJUST THE SEIZED CASH AGAINST THE ADVANCE TAX L IABILITY AS UNDER :- DATE LETTER WRITTEN TO REMARKS P.B.NO. 25.2.10 DDIT (INV.)-III REQUEST FOR ADJUSTMENT OF TA X AMOUNT OF RS. 40 LACS IN A.Y. 2010-11 AS ADVANCE TAX 29 12.3.10 ACIT, C.C.-II REQUEST FOR ADJUSTMENT OF CASH AGAINST ADVANCE TAX FOR A.Y. 2010-11 ESTIMATED AT RS. 45 LACS. 30 16.3.10 LETTER OF DCIT, CC-2 REJECTING THE APPLICATION REGARDING ADJUSTMENT OF CASH IN ADVANCE TAX FOR THE REASON THAT THE APPLICATION IS WRITTEN BY THE AUTHORISED REPRESENTATIVE AND NO POWER OF ATTORNEY IS FILED. 31 22.3.10 ACIT, CC-2 AGAIN REQUEST FOR ADJUSTING THE CASH LYING IN PD ACCOUNT AGAINST ADVANCE TAX WITH POWER OF ATTORNEY 32 THE ASSESSEE FILED RETURN ON 27.10.2010 ACCORDING TO WHICH THE TAX LIABILITY WAS WORKED OUT AT RS. 34,51,200/-. IT WAS REQUESTED TO A DJUST THE AMOUNT FROM P.D. ACCOUNT VIDE LETTER DATED 27.10.2010. THE ADJUSTMEN T WAS FINALLY MADE ON 06.12.2010. AS PER SECTION 234B, THE INTEREST IS CH ARGEABLE IN CASE ASSESSEE HAD NOT PAID ADVANCE TAX. IN ASSESSEES CASE THE TOTAL CASH WAS SEIZED AT RS. 15 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. 98,45,770/-. THE ASSESSEE HAD REQUESTED BY LETTERS DATED 25.02.2010, 12.03.2010 AND 23.03.2010 TO ADJUST THE CASH AGAINS T THE ADVANCE TAX LIABILITY UNDER SECTION 207 OF THE IT ACT. AGAIN, AT THE TIME OF FILING OF THE RETURN ASSESSEE ALSO MADE REQUEST TO ADJUST THE SELF ASSES SMENT TAX OF RS. 34,51,200/- OUT OF AMOUNT LYING IN P.D. ACCOUNT OF CIT CENTRAL J AIPUR. THE AO, HOWEVER, MADE ADJUSTMENT ON 06.12.2010. THUS INTEREST ON RS. 34,51,200/- FOR THE PERIOD FROM 1.4.2010 TO 6.12.2010 I.E. FOR 9 MONTHS IS NOT ATTRIBUTABLE TO THE ASSESSEE. THIS WAS DUE TO DELAY ON THE PART OF THE DEPARTMENT I N MAKING THE ADJUSTMENT. THE LD. A/R RELIED ON THE FOLLOWING DECISIONS :- CIT VS. ARUN KAPOOR (2011) 334 ITR 351 (P&H) CIT VS. ASHOK KUMAR 334 ITR 355 (P&H) SATYA PRAKASH SHARMA VS. ACIT 20 DTR 561 (DELHI ITAT) ANAND SHANKAR MITTAL VS. DCIT 34 DTR 589 (JP) VISHWANATH KHANNA VS. UNION OF INDIA & ORS. (2011) 61 DTR 318. 10. THE LD. CIT (A) CALLED FOR A REPORT FROM THE AO O N THIS ISSUE. THE AO SUBMITTED THE REPORT TO THE LD. CIT (A) WHICH HAS BE EN REPRODUCED ON PAGES 16 16 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. & 17 OF HIS ORDER. A COPY OF THE REPORT WAS ALSO GI VEN TO THE ASSESSEE AND HELD THAT AS PER SECTION 132B THE SAID CASH CAN ONLY BE APPROPRIATED AGAINST THE EXISTING LIABILITY DETERMINED ON COMPLETION OF ASSE SSMENT. FURTHER, THE CBDT INSTRUCTION NO. 11/2006 DATED 1.12.2006 HAS AGAIN E MPHASIZED THAT SEIZED ASSETS ARE TO BE ADJUSTED FOR RECOVERY OF ANY EXIST ING LIABILITY. FURTHER, THE CBDT VIDE INSTRUCTION NO. F.NO.286/105/2005-IT(INV)-2 DAT ED 13.07.2006 HAD CLARIFIED THAT EXISTING PROVISIONS OF LAW DO NOT PERMIT APPLIC ATION OF SEIZED CASH AGAINST THE ADVANCE TAX LIABILITY OF THE ASSESSEE FOR THE Y EAR IN WHICH SEARCH TOOK PLACE. THEREFORE, PROVISIONS FOR APPLICATION OF SEIZED CASH ARE CRYSTAL CLEAR AND VERY SPECIFICALLY PROVIDE THAT THE SEIZED ASSETS INCLUDI NG CASH CAN BE ADJUSTED ONLY AGAINST EXISTING LIABILITY DETERMINED ON COMPLETION OF ASSESSMENT. THEREFORE, HE CONFIRMED THE ORDER OF A.O. 11. NOW THE ASSESSEE IS BEFORE US. THE LD. A/R OF THE ASSESSEE REITERATED THE SAME ARGUMENT MADE BEFORE LD. CIT (A) AND RELIED ON THE FOLLOWING DECISIONS :- CIT VS. ARUN KAPOOR (2011) 334 ITR 351 (P&H) CIT VS. ASHOK KUMAR 334 ITR 355 (P&H) SATYA PRAKASH SHARMA VS. ACIT 20 DTR 561 (DELHI ITAT) 17 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. ANAND SHANKAR MITTAL VS. DCIT 34 DTR 589 (JP) VISHWANATH KHANNA VS. UNION OF INDIA & ORS. (2011) 61 DTR 318. 12. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. THE CASE LAWS REFERRED BY THE ASSESSEE ARE SQUARELY APPL ICABLE. THEREFORE, INTEREST CHARGED UNDER SECTION 234B IS NOT JUSTIFIED AS ASSE SSEES CASH WAS LYING WITH THE DEPARTMENT IN P.D. ACCOUNT. THE ASSESSEE HAD MADE RE QUEST TO ADJUST THE ADVANCE TAX FROM THE CASH SEIZED AND LYING IN P.D. ACCOUNT, FROM TIME TO TIME. THEREFORE, WE ALLOW THE ASSESSEES CROSS OBJECTION. 13. IN THE RESULT, REVENUES APPEAL IS DISMISSED AN D CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7/09/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 7/09/2015 DAS/ 18 ITA NO.145/JP/2013 & C.O.NO.09/JP/2013 A.Y. 2010-11 . ACIT VS. SHRI JOHARI LAL SODHANI, JAIPUR. VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- ACIT CENTRAL CIRCLE-2, JAIPUR 2. IZR;FKHZ @ THE RESPONDENT- SHRI JOHARI LAL SODHANI, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 145/JP/2013 & C.O. NO. 09/JP/20 13) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR