ITO, Pune V. M/s M/s. Namrata Construction Co., Pune

ITA 2250/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80031 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 09-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: NITIN W KHARE
• Keywords: Search and seizure; Retraction
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.2250/PN/2012 (ASSESSMENT YEAR : 2009-10) ITO, WARD-8(3), PUNE .. APPELLANT VS. M/S. NAMRATA CONSTRUCTION CO., 592, RAVIWAR PETH, TALEGAON DABHADE, TALUKA MAVAL, PUNE 410506. .. RESPONDENT PAN NO.AABFN1736B ITA NO.2251/PN/2012 (ASSESSMENT YEAR : 2009-10) ITO, WARD-8(3), PUNE .. APPELLANT VS. M/S. NAMRATA DEVELOPERS, 592, RAVIWAR PETH, TALEGAON DABHADE, TALUKA MAVAL, PUNE 410506. .. RESPONDENT PAN NO.AABFN1735C ITA NO.2252/PN/2012 (ASSESSMENT YEAR : 2009-10) ITO, WARD-8(4), PUNE .. APPELLANT VS. M/S. SARJAN CONSTRUCTION, 592, RAVIWAR PETH, TALEGAON DABHADE, TALUKA MAVAL, PUNE 410506. .. RESPONDENT PAN NO.AAFFSS5805E ASSESSEE BY : SHRI NITIN W. KHARE REVENUE BY : SHRI S.P. WALIMBE DATE OF HEARING : 10-07-2014 DATE OF PRONOUNCEMENT : 14-07-2014 2 ORDER PER R.K. PANDA, AM : THE ABOVE 3 APPEALS FILED BY THE REVENUE ARE DIRECT ED AGAINST THE SEPARATE ORDERS DATED 02-08-2012 OF THE CIT(A)- V, PUNE RELATING TO ASSESSMENT YEAR 2009-10. FOR THE SAKE OF CONVEN IENCE, ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.2252/PN/2012 (M/S.SARJAN CONSTRUCTION) : 2. GROUND OF APPEAL NO.1 BY THE REVENUE READS AS UN DER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE OF RS.2.5 0 CRORES MADE ON SUBSTANTIVE BASIS, WITHOUT CONSIDERING THE FACT THAT RET RACTION FILED LATERON , I.E. AFTER 18 DAYS IS ONLY AN AFTERTHOUGHT AND CANNOT BE CONSIDERED VALID WITHOUT ANY EVIDENCE TO PROVE THAT DECLARATION MADE OF RS.2.5 CRORES WAS UNDER DURESS. 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE FIRM, WHICH IS ENGAGED IN THE BUSINESS OF CONSTRUCTION ACTIVITY, B ELONGS TO NAMRATA GROUP. THERE WAS A SURVEY ACTION IN RESPECT OF THIS GROUP ON 19 TH AND 20 TH DECEMBER 2008. DURING THE COURSE OF SURVEY ACTION, STATEMENT OF SHRI. SHAIIESH SHAH, ONE OF THE PARTNERS OF THE GROUP CONCERNS, WAS RECORDED U/S 133A OF INCOME-TAX ACT. IN REPLY T O QUESTION NO. 10, SHRI SHAILESH SHAH OFFERED ADDITIONAL INCOME OF ` 2.5 CRORES ON BEHALF OF THE GROUP CONCERNS. IT WAS ALSO SUBMITTED THAT TAXES WILL BE PAID ON THE ADDITIONAL INCOME AND THE DETAILS OF TH E SAME WILL BE SUBMITTED LATTER ON. SUBSEQUENTLY, SHRI DHARMESH SH AH, WHO LOOKS AFTER ACCOUNTS OF THE GROUP CONCERN, FILED LETTER D ATED 30.12.2008 IN THE LETTER HEAD OF 'SARJAN CONSTRUCTIONS' AND SUBMI TTED THE 3 BIFURCATION OF THE SAME AND CONFIRMING THE DECLARAT ION MADE BY SHRI SHAILESH SHAH DURING THE COURSE OF SURVEY IN THE FO LLOWING MANNER : M/S. SARJAN CONSTRUCTION - FOR UNDISCLOSED STOCK OF CEMENT ` 1.00 CRORE INCLUDED IN WIP. M/S. SARJAN CONSTRUCTION - FOR UNDISCLOSED STOCK OF STEEL ` 1.50 CRORES INCLUDED IN WIP. 2.2 SUBSEQUENTLY, SHRI SHAILESH SHAH AS WELL AS SHR I DHARMESH SHAH RETRACTED THE DECLARATIONS MADE AND FILED AFFI DAVITS IN THIS REGARD. THE ASSESSING OFFICER TREATED THE DECLARATI ON AS AN AFTERTHOUGHT. KEEPING IN VIEW THE FACT THAT AUTHORI ZATION U/S 133A WAS ISSUED IN CASE OF M/S. NAMRATA CONSTRUCTION COM PANY AND M/S. NAMRATA DEVELOPERS, WHERE SHRI SHAILESH SHAH HAPPEN S TO BE PARTNER, AND HAS MADE DECLARATION OF ` 2.5 CRORES IN THE GROUP CONCERN, THE DECLARATION OF ` 2.5 CRORES WAS BIFURCATED AND ADDITION OF ` 1.25 CRORES EACH WAS MADE IN THE CASE OF M/S. NAMR ATA CONSTRUCTION COMPANY AND M/S. NAMRATA DEVELOPERS ON PROTECTIVE BASIS WHILE ADDITION OF ` 2.5 CRORES WAS MADE IN THE CASE OF SARJAN CONSTRUCTION (THE APPELLANT) ON SUBSTANTIVE BASIS. 3. BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE STAT EMENT OF SHRI S.K. SHAH WAS RECORDED ON OATH AT THE END OF THE SU RVEY ACTION, I.E. ON 20-12-2008 AT AROUND 04.00 A.M. (EARLY MORNING). SHRI S.K.SHAH IS NEITHER AN EMPLOYEE NOR A PARTNER OR AUTHORISED SIGNATORY OF THE ASSESSEE FIRM, I.E. M/S. SARJAN CONSTRUCTION. FURT HER, THERE IS NO DECLARATION FOR AND ON BEHALF OF THE ASSESSEE, I.E . M/S.SARJAN CONSTRUCTION. IT WAS ALSO SUBMITTED THAT THE STATE MENT WAS RETRACTED BY SHRI S.K. SHAH IMMEDIATELY BY FILING AN AFFIDAVI T. ALTHOUGH THE INCOME TAX DEPARTMENT HAS IMPOUNDED ABOUT 30 FILES CONTAINING 4 VARIOUS DOCUMENTS, THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HAS NOT FOUND ANY INCRIMINA TING DOCUMENTS THEREIN. NONE OF THE IMPOUNDED DOCUMENTS WERE SCRU TINISED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS. THE ASSESSING OFFICER HAS NOT CROSS EXAMINED THE PERSON S WHO HAVE MADE THE STATEMENTS OR THE RETRACTIONS, I.E. SHRI S .K. SHAH, OR SHRI DHARMESH SHAH, ACCOUNTANT OF THE FIRM, WHO HAS GIVE N THE BIFURCATION OF THE DECLARATION. THE ASSESSEE WAS N EVER CONFRONTED WITH ANY MATERIAL ON RECORD INCLUDING THE IMPOUNDED DOCUMENTS SO AS TO JUSTIFY THE ADDITION OF RS.2,50,00,000/-. RE LYING ON THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE O F PAUL MATHEWS AND SONS VS. CIT REPORTED IN 129 TAXMANN 416 AND VA RIOUS OTHER DECISIONS IT WAS SUBMITTED THAT STATEMENT ON OATH C ANNOT BE RECORDED DURING ACTION U/S.133A OF THE INCOME TAX ACT. REFE RRING TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. DHINGRA METAL WORKS REPORTED IN 196 TAXMANN 488 IT WAS SUBMITTED THAT STATEMENT MADE DURING 133A ACTION CAN BE RETRA CTED IF THE FACTS ON RECORD DO NOT JUSTIFY THE SAME. IT WAS FURTHER SUBMITTED THAT THE RETRACTION WAS MADE BY WAY OF FILING OF AFFIDAVITS AND SINCE THE ASSESSING OFFICER FAILED TO CROSS EXAMINE THE DEPON ENT, THEREFORE, THE AFFIDAVIT BECOMES FINAL. FOR THIS PROPOSITION, THE ASSESSEE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF MEHTA PARIKH & CO. VS. CIT REPORTED IN 30 ITR 181. 4. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION OF RS.2.50 CRORES BY OBSERVING AS UNDER : 5 12. I HAVE CAREFULLY CONSIDERED THE FACTS OF THIS CASE AS WELL AS REPLY OF THE APPELLANT. IN THIS CASE THE ADDITION OF ` 2,50,00,000/- HAS BEEN MADE BY THE ASSESSING OFFICER ON SUBSTANTIVE BASIS A S DECLARATION OF ` 2.5 CRORES WAS MADE BY SHRI. SHAILESH SHAH ON BEHALF OF NAMRATA GROUP AND ALSO CONSIDERING THE LETTER OF S HRI DHARRNESH SHAH DATED 30/12/2008 IN WHICH AFFIRMING THE CONFIR MATION OF SHRI SHAILESH SHAH BIFURCATION OF THE DECLARATION OF ` 2.5 CRORES WAS GIVEN. IN VIEW OF RETRACTION AND CONSIDERING THE FACT THAT THE DECLARATION U/S. 133A WAS MADE BY SHRI SHAILESH SHAH, WHO HAPPENS TO BE PARTNER OF THE FIRMS M/S.NAMRATA DEVELOPERS AND M/S. NA MRATA CONSTRUCTION CO, ADDITION OF ` 1.25 CRORES EACH WAS MADE IN THE ABOVE MENTIONED TWO FIRMS ON PROTECTIVE BASIS. AFTER GOING T HROUGH THE STATEMENT RECORDED U/S 133A OF THE INCOME-TAX ACT AS W ELL AS REPLY OF THE APPELLANT, IT IS SEEN THAT THE ADDITION OF ` 2,50,00,000/- MADE IN THIS CASE IS NOT SUPPORTED BY ANY EVIDENCE AND IS WITHOU T ANY BASIS. THE SURVEY ACTION U/S.133A WHICH WAS STARTED ON 19.12 .2008 CONTINUED FOR THE SECOND DAY, BUT NOTHING INCRIMINAT ING COULD BE FOUND BY THE SURVEY TEAM WHICH IS PROVED FROM THE PER USAL OF STATEMENT RECORDED U/S.133A OR INCOME-TAX ACT AS WELL AS FROM THE FACT THAT NO IMPOUNDED MATERIAL HAS BEEN DISCUSSED AND UTILIZED IN THE ASSESSMENT. 13. AS REGARDS, DECLARATION MADE IN THE COURSE OF SURVE Y U/S. 133A IS CONCERNED, IT IS SEEN THAT THE AUTHORIZED OFFI CER HAS RECORDED THE STATEMENT U/S 133A OF INCOME-TAX ACT ON OATH, WH ILE THERE IS NO PROVISION TO RECORD THE STATEMENT U/S 133A OF INCOME-T AX ACT ON OATH. FOR THE SAKE CLARITY SECTION 133A (3)(III) WHIC H EMPOWERS AN INCOME-TAX AUTHORITY TO RECORD THE STATEMENT DURING THE COURSE OF SURVEY IS REPRODUCED AS UNDER: '(3) AN INCOME-TAX AUTHORITY ACTING UNDER THIS, SEC TION MAY (I) IF HE SO DEEMS NECESSARY, PLACE MARKS O F IDENTIFICATION ON THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS INSPECTE D BY HIM AND MAKE OR CAUSE TO BE MADE EXTRACTS OR COPIES THEREFROM, 24 [(IA) IMPOUND AND RETAIN IN HIS CUSTODY FOR SUCH PE RIOD AS HE THINKS FIT ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS INSPECTED BY HIM: PROVIDED THAT SUCH INCOME-TAX AUTHORITY SHALL NOT- (A) IMPOUND ANY BOOKS OF ACCOUNT OR OTHER DO CUMENTS EXCEPT AFTER RECORDING HIS REASONS FOR SO DOI NG; OR 25 (B) RETAIN IN HIS CUSTODY ANY SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS FOR A PERIOD EXCEEDING TEN DAYS(EXCLUSIVE OF HOLIDAYS) WITHOUT OBTAINING THE APPROVAL OF THE CHI EF COMMISSIONER OR DIRECTOR GENERAL THEREFORE, AS THE CASE MAY BE,]] (II) MAKE AN INVENTORY OF ANY CASH, STOCK OR OTHER VALUABLE ARTICLE OR THING CHECKED OR VERIFIED BY HI M, (III) RECORD THE STATEMENT OF ANY PERSON WHICH MAY BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER TH IS ACT. ' 24. INSERTED BY THE FINANCE ACT, 2002, W.E.F. 1-6-2002, 25. SUBSTITUTED BY THE FINANCE ACT, 2003, W.E.F: 1- 6- 2003. PRIOR TO ITS SUBSTITUTION, CLAUSE (B) READ A S UNDER : (B) RETAIN IN HIS CUSTODY ANY SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS FOR A PERIOD EXCEEDING FIFTEEN DAYS(EXCLUSIVE OF HOLIDAYS) WITHOUT OBTAINING TH E 6 APPROVAL OF THECHIEF COMMISSIONER OF DIRECTOR GENER A/ OR COMMISSIONER OF DIRECTOR THEREFORE, AS THE CASE MAY BE, ' 14. THUS, IT CAN BE SEEN THAT THERE IS NO PROVISION TO RECORD THE STATEMENT U/S 133A (3)(III) OF INCOME-TAX ACT ON OATH AND IF DONE, THE SAME CANNOT BE SAID TO HAVE LEGAL SANCTITY WHATSOEV ER. HON'BLE KERALA HC IN THE CASE OF PAUL MATHEWS & SONS V/S CIT(20 03) 129 TAXMAN 416(KER.) HAS ALSO HELD THAT STATEMENT U/S 133A CANNOT BE RECORDED ON OATH. COMING TO THE MERIT OF THE STATEME NT IT IS SEEN THAT UPTO QUESTION NO. 9, THE AUTHORIZED OFFICER ASKED GE NERAL QUESTIONS AND THEREAFTER IN QUESTION NO. 10, SHRI. SHAILESH SHA H WAS ASKED AS TO WHETHER HE INTENDS TO SAY ANYTHING. IN REPLY SHRI. S HAILESH SHAH STATED THAT HE PROPOSED TO OFFER ADDITIONAL INCOME OF ` 2.5 CRORES, QUESTION NO. 10 OF THE STATEMENT IS REPRODUCED FOR THE SAKE OF CLARITY. 'Q. NO, 10 DO YOU WANT TO SAY ANYTHING ON YOU R OWN ? ANS : ON BEHALF OF THE GROUP OF CONCERNS, I PROPOSE TO OFFER A SUM OF ` 2.5 CRORES TO TAXATION AS ADDITIONAL INCOME ON AND ABOVE, THE BOOK PROFIT FOR THE ASSESSMENT YEAR 2009-10 AND ALSO PROMISED TO MAKE THE PAYMENT OF ADVANCE TAX W ITHIN THE DUE DATE BUT BEFORE 31.03.2009. DETAILS WILL BE SUBMITTED LATERON.' 15. THIS STATEMENT WAS GIVEN AFTER COMPLETION OF GENER AL QUESTIONS. IT IS ALSO IMPORTANT TO KNOW THAT NO INCRIMI NATING PAPERS WERE FOUND AND CONFRONTED BY THE SURVEY TEAM. AFTER FINISHING OF GENERAL QUESTIONNAIRE, SHRI. SHAILESH SHAH WAS STRAIGHT AWAY ASKED AS TO WHETHER HE WANTED TO SAY ANYTHING ON HIS OWN. I T IS IN RESPONSE TO THIS QUESTION THAT OFFER OF ADDITIONAL INCOME OF ` 2.5 CRORES WAS MADE FOR TAXATION. 16. AS FAR AS VALIDITY OF DECLARATION U/S 133A OF INC OME-TAX ACT, IT CAN BE SEEN THAT THE STATEMENT RECORDED U/S 133A OF IN COME-TAX ACT CAN BE USED FOR THE PURPOSE OF ASSESSMENT, PROVIDED THE S AME IS SUPPORTED BY EVIDENCES GATHERED BY THE ASSESSING OFFICER BASED ON SURVEY ACTION. IN THIS CASE IT IS SEEN THAT NO INCRIMINA TING EVIDENCE WAS BROUGHT ON RECORD EITHER DURING SURVEY OR DURING THE ASSESSMENT PROCEEDINGS. UNLIKE STATEMENT US 132(4) OF INCO ME-TAX ACT 1961, WHICH IS RECORDED ON OATH, STATEMENT RECORD ED U/S 133A HAS NO EVIDENTIAL VALUE AND THEREFORE, ADDITION BASED MERELY ON STATEMENT RECORDED U/S 133A OF INCOME-TAX ACT CANNOT BE JUSTIFIED. THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF CIT V S. DHINGRA METAL WORKS(2011) 196 TAXMANN 488(DELHI) HAS HELD THAT STAT EMENT MADE U/S 133A OF INCOME-TAX ACT CAN BE RETRACTED IF THE FACTS ON RECORD DO NOT JUSTIFY THE SAME. IN THIS CASE, IT IS SEEN THAT SHRI. SHAILESH K. SHAH HAS RETRACTED THE DECORATION MADE U/ S 133A OF INCOME-TAX ACT BY WAY OF FILING AN AFFIDAVIT DATED 07.01.2009 STATING THAT SURVEY ACTION WHICH WAS STARTED ON 19.12.2008 AT 10.00 A.M. CONTINUED TILL 20.12.2008 TILL 4.00 A.M. AND DUE TO TENSION AND DISTRESS CAUSED BY THE SURVEY ACTION, HE SIGNED THE DECLA RATION OF OFFERING ADDITIONAL INCOME OF ` 2.5 CRORES FOR THE A.Y. 2009-10. IT WAS FURTHER STATED THAT DECLARATION OF ADDITIONAL INCOME OF ` 2.5 CRORES WAS NEVER WARRANTED IN VIEW OF THE FACTS THAT NOTHING INCRIMINATING WAS FOUND BY THE SURVEY TEAM. AS REGARDS LETTER OF SHR I. DHARMESH SHAH DATED 30.12.2008 WHEREIN BIFURCATION OF DECLAR ATION WAS GIVEN IN RESPECT OF M/S. SARJAN CONSTRUCTION, IT WAS SUBMITTE D THAT SHRI. DHARMESH SHAH WAS MERELY AN ACCOUNTANT AND HIS OFFER W AS NOT BINDING ON HIM. IT IS ALSO SEEN THAT SHRI. DHARMESH SH AH ALSO RETRACTED HIS ACTION BY WAY OF FILING AFFIDAVIT ON 0 7.01.2009. THE 7 ASSESSING OFFICER HAS TREATED THE REJECTION AS AN AFTERTH OUGHT BUT THE QUESTION IS THAT WHETHER ADDITION CAN BE SUSTAINED ME RELY ON THE BASIS OF DECLARATION MADE U/S. 133A OF INCOME-TAX ACT WHICH STANDS RETRACTED AND THE ADDITION IS NOT SUPPORTED BY ANY EV IDENCE GATHERED BY THE ASSESSING OFFICER EITHER DURING SURVEY PROCEEDINGS OR DURING ASSESSMENT PROCEEDINGS, IN MY VIEW, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDITION OF ` 2.5 CRORES MERELY ON THE BASIS OF STATEMENT RECORDED U/S 133A OF INCOME-TAX ACT WHICH WAS SUBSEQUENTLY RETRACTED. THEREFORE, ACTION OF THE ASSESSIN G OFFICER MAKING ADDITION OF ` 2.5 CRORES ON THAT BASIS CANNOT BE UPHELD. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO DELET E THE ADDITION. THE GROUND IS THUS ALLOWED. 4.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT SURVEY ACTION WAS CARRIED OUT ON 1 9/20-12-2008 IN NAMRATA GROUP OF CASES. THERE IS ALSO NO DISPUTE T O THE FACT THAT DURING THE SAID SURVEY THE STATEMENT SHRI SHAILESH SAHA, WHO IS A PARTNER OF NAMRATA CONSTRUCTION AND NAMRATA DEVELOP ERS WAS RECORDED ON 19-12-2008 BY THE ACIT, CIRCLE-8, PUNE. THERE IS ALSO NO DISPUTE TO THE FACT THAT SHRI S.K.SHAH IN HIS RE PLY TO QUESTION NO.10 HAS OFFERED A SUM OF RS.2.50 CRORES AS ADDITI ONAL INCOME OVER AND ABOVE THE BOOK RESULTS. THERE IS ALSO NO DISPU TE TO THE FACT THAT THE ABOVE STATEMENT WAS RETRACTED BY SHRI S.K.SHAH AFTER 18 DAYS AS PER THE GROUND RAISED BY THE REVENUE. SINCE THE AS SESSEE RETRACTED THE DECLARATION OF HIS ADDITIONAL INCOME OF RS.2.50 CRORES, THE ASSESSING OFFICER MADE ADDITION OF THE SAME IN THE CASE OF THE ASSESSEE FIRM, I.E. M/S. SARJAN CONSTRUCTION ON SUB STANTIVE BASIS. SIMILARLY, THE ASSESSING OFFICER MADE ADDITION OF R S.1.25 CRORES 8 EACH IN THE CASE OF NAMRATA CONSTRUCTION COMPANY AN D NAMRATA DEVELOPERS RESPECTIVELY FOR THE SAME ASSESSMENT YEA R. WE FIND THE LD.CIT(A) DELETED THE ADDITION ON THE GROUND THAT T HE ADDITION OF RS.2.50 CRORES MADE IN THE HANDS OF THE IMPUGNED AS SESSEE IS NOT SUPPORTED BY ANY EVIDENCE AND IS WITHOUT ANY BASIS. NO INCRIMINATING DOCUMENTS WERE FOUND BY THE SURVEY TE AM. RELYING ON VARIOUS DECISIONS HE HAS ALSO HELD THAT THERE IS NO PROVISION TO RECORD THE STATEMENT U/S.133A OF THE I.T. ACT ON OATH. SI NCE THE ADDITION WAS BASED MERELY ON THE BASIS OF DECLARATION MADE U /S.133A OF THE I.T. ACT WHICH HAS SUBSEQUENTLY BEEN RETRACTED AND SINCE THE ADDITION WAS NOT SUPPORTED BY ANY EVIDENCE GATHERED BY THE A SSESSING OFFICER EITHER DURING THE SURVEY PROCEEDINGS OR DURING THE ASSESSMENT PROCEEDINGS HE DELETED THE ADDITION. THE LD. DEPART MENTAL REPRESENTATIVE COULD NOT CONTROVERT THE ABOVE FACTU AL FINDINGS GIVEN BY THE LD.CIT(A). 5.1 WE FIND THE CBDT VIDE CIRCULAR F. NO.286/2/2003 DATED 10- 03-2003 HAS INSTRUCTED ITS FIELD OFFICERS WHICH REA D AS UNDER: INSTANCES HAVE COME TO THE NOTICE OF THE BOARD, WHER E ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS UN DISCLOSED INCOME DURING THE COURSE OF SEARCH AND SEIZURE AND SUR VEY OPERATIONS. SUCH CONFESSIONS IF NOT BASED UPON EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEE WHILE FILING RETURN S OF INCOME. IN THESE CIRCUMSTANCES CONFESSIONS DURING THE COURSE OF SEA RCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL P URPOSE. IT IS THEREFORE ADVISED THAT THERE SHOULD BE FOCUS AND CONCE NTRATION ON COLLECTION OF EVIDENCES OF INCOME WHICH LEADS TO INFO RMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE INCOME TAX DEPARTMENT SIMILARLY WHILE RECORDING STATEMENT D URING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS, NO A TTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO UNDISCLOSED IN COME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER IN RESPECT OF PENDING ASSESSMENT PROCEEDINGS ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCE/MATERIALS GATHE RED DURING THE COURSE OF SEARCH/SURVEY OPERATION OR THEREAFTER WHILE FRAMING RELEVANT ASSESSMENT ORDER. FROM THE FOREGOING INSTRUCTIO N, IT IS CLEAR THAT IT WOULD NOT BE OPEN FOR A. O. TO MAKE AN ASSESSME NT WRONGLY 9 RELYING ON CONFESSIONAL STATEMENT OF THE ASSESSEE. THE A. O. WOULD BE BOUND TO MAKE AN ASSESSMENT ONLY ON THE BASIS OF EVIDENCE AND MATERIALS GATHERED DURING SURVEY/SEARCH OPERATIONS. 5.2 WE FIND THE HONBLE SUPREME COURT IN THE CASE O F KHADAR KHAN SONS REPORTED IN 210 TAXMANN 248/254 CTR 228 H AS HELD THAT SECTION 133A DOES NOT EMPOWER ANY ITO TO EXAMINE AN Y PERSON ON OATH. THE STATEMENT RECORDED U/S.133A HAS NO EVIDE NTIARY VALUE AND ANY ADMISSION DURING SUCH STATEMENT CANNOT BE MADE THE BASIS OF ADDITION. 5.3 SIMILARLY, THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. DHINGRA METAL WORKS REPORTED IN 328 ITR 384 HAS HEL D THAT THOUGH AN ADMISSION MADE DURING SURVEY IS AN IMPORTANT PIE CE OF EVIDENCE, IT CANNOT BE SAID TO BE CONCLUSIVE AND IT IS OPEN T O THE PERSON WHO HAS MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT . SIMILARLY, THE HONBLE CHATTISGARH HIGH COURT IN THE CASE OF ITO V S. VIJAY KUMAR KESAR REPORTED IN 327 ITR 497 HAS HELD THAT WHERE A DDITION WAS BASED SOLELY ON ASSESSEES CONFESSION DURING SURVEY WHICH WAS LATER RETRACTED AND THE CIT(A) AFTER CONSIDERING MATERIAL PRODUCED BY ASSESSEE DURING ASSESSMENT PROCEEDINGS AND ON DUE A PPRECIATION THEREOF HAD ACCEPTED EXPLANATION OF ASSESSEE FOR RE TRACTION OF HIS ADMISSION AS BONAFIDE AND FURTHER ACCEPTED BOOKS OF ACCOUNT PREPARED BY ASSESSEE ON BASIS OF DULY VERIFIED PRIM ARY EVIDENCE AND THE TRIBUNAL HAVING CONFIRMED THE ORDER OF CIT(A) T HE DELETION WAS HELD TO BE JUSTIFIED. 5.4 SINCE IN THE INSTANT CASE THE ADDITION WAS MADE ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SURVEY WHIC H WAS SUBSEQUENTLY RETRACTED AND SINCE NO CORROBORATIVE E VIDENCE WAS 10 FOUND EITHER DURING THE COURSE OF SURVEY OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THEREFORE, IN VIEW OF THE C IRCULAR ISSUED BY CBDT DATED 10-03-2003 AND THE DETAILED REASONING GI VEN BY THE CIT(A), WE FIND NO INFIRMITY IN THE ORDER OF THE CI T(A) DELETING THE ADDITION MADE BY THE AO. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. 6. GROUND OF APPEAL NO.2 BY THE REVENUE READS AS UN DER : 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN HOLDING THAT THE ROAD ACQUISITION AR EA IS TO BE CONSIDERATE AS PART OF AREA OF THE PLOT FOR CALCULATI ON OF MINIMUM 1 ACRE OF AREA FOR CLAIMING DEDUCTION U/S.80IB(10) OF THE INCOME TAX ACT, 1961. 6.1 AFTER HEARING BOTH THE SIDES WE FIND THE AO DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE AREA OF DIFFERENT PART OF THE PROJECT SHREERANG VIHAR & VRINDAVAN AT TALE GAON DABHADE, TALUKA MAVAL, DIST, PUNE WAS LESS THAN ONE ACRE AS THE ROAD DIVIDED THE BUILDINGS AS NOTED IN PARA 8 OF THE ASSESSMENT ORDER (ON THE BASIS OF EARLIER YEARS ORDERS) WAS AS UNDER : PART A - 3287.840 SQ.M PART B - 2663.828 SQ.M PART C - 223.586 SQ.M PART D - 550.376 SQ.M. 6.2 THE ASSESSING OFFICER NOTICED THAT THE ROAD CON STRUCTED BY THE CORPORATION DIVIDED PLOT A & B AND THEREFORE AREA O F EACH BUILDING WAS LESS THAN ONE ACRE. THE ASSESSING OFFICER ALSO NOTED THAT APPROVAL FOR THE PROJECT WAS TAKEN FROM TIME TO TIM E AND THEREFORE EACH BUILDING WAS A DIFFERENT PROJECT, AREAS OF WHI CH WAS LESS THAN AN 11 ACRE THEREFORE, THE ASSESSEE WAS NOT ENTITLED FOR D EDUCTION U/S.80IB(10) OF INCOME TAX ACT. 7. IN APPEAL THE LD.CIT(A) FOLLOWING HIS ORDERS FOR A.YRS. 2002- 03 TO 2007-08 ALLOWED THE CLAIM OF DEDUCTION U/S.80 IB(10). WE FIND THE ORDER OF THE CIT(A) HAS BEEN UPHELD BY THE TRIB UNAL AND THE GROUNDS RAISED BY THE REVENUE HAVE BEEN DISMISSED V IDE ITA NOS. 505 TO 510/PN/2011 FOR A.YRS. 2002-03 TO 2007-08. SINCE THE LD.CIT(A) HAS FOLLOWED HIS ORDERS FOR EARLIER YEARS WHICH HAVE BEEN UPHELD BY THE TRIBUNAL, THEREFORE, IN ABSENCE OF AN Y CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ALLOWING DEDUCTION U/S.80IB(10) OF THE I.T. ACT. T HE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. ITA NO.2250/PN/2012 (M/S. NAMRATA CONSTRUCTION COMP ANY) : 8. GROUND OF APPEAL NO.1 BY THE REVENUE READS AS U NDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE OF RS. 1. 25 CRORES MADE ON PROTECTIVE BASIS, WITHOUT CONSIDERING THE FACT THA T RETRACTION FILED LATERON , I.E. AFTER 18 DAYS IS ONLY AN AFTERTHOUGHT AND CANNOT BE CONSIDERED VALID WITHOUT ANY EVIDENCE TO PROVE THAT DECLARATION MADE OF RS.2.5 CRORES WAS UNDER DURESS. 8.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUND IS IDENTICAL TO GROUNDS OF APPEAL NO.1 IN ITA NO.2252/ PN/2012. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISE D BY THE REVENUE HAS BEEN DISMISSED ON THE GROUND THAT THE ASSESSEE HAS RETRACTED HIS STATEMENT AND NO CORROBORATIVE EVIDENCE/MATERIAL WA S FOUND DURING THE COURSE OF SURVEY OR ASSESSMENT PROCEEDINGS. FO LLOWING THE SAME REASONING, THIS GROUND BY THE REVENUE IS DISMISSED. 12 9. GROUND OF APPEAL NO.2 BY THE REVENUE READS AS UN DER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE ROAD ACQUISITION AREA IS TO BE CONSIDERED AS PART OF AREA OF THE PLOT CALCULATION OF MINIMUM 1 A CRE OF AREA FOR CLAIMING DEDUCTION U/S.80IB(10) OF THE INCOME TAX AC T, 1961. 9.1 AFTER HEARING BOTH THE SIDES, WE FIND THE AO NO TICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S.80IB(10) OF THE I.T. ACT IN RESPECT OF ITS PROJECTS SHRINIVAS SANKUL AND LIT TLE HEART LOCATED AT TALEGAON DABHADE, TALUKA MAVA, DIST. PUNE. THE AO FURTHER NOTED THAT AFTER DEDUCTING AREA OF INTERNAL ROAD OF 940.59 SQ.MTRS THE TOTAL AREA OF THE PROJECT WAS LESS THAN ONE ACRE AN D THEREFORE THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION U/S.80IB(10) OF I.T. ACT. ACCORDINGLY, HE DISALLOWED THE DEDUCTION CLAIMED AM OUNTING TO RS.8,50,780/- U/S.80IB(10) OF I.T. ACT. 10. IN APPEAL THE LD.CIT(A) ALLOWED THE CLAIM OF DE DUCTION U/S.80IB(10) BY OBSERVING AS UNDER : 18. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AS WELL AS REPLY OF THE APPELLANT, IT IS SEEN THAT THE ISSUE IS CO VERED BY THE EARLIER DECISIONS OF MY PREDECESSORS AND ALSO COVERED BY THE DECISIONS OF HONBLE ITAT IN A.Y. 2004-05 AND 2005-06 , ITA NO.503 & 504/PN/2011. THEREFORE, RELYING UPON THE EARLIER DECISIONS OF MY PREDECESSOR AS WELL AS DECISIONS OF HONBLE ITAT IN A.Y. 2004-05 AND 2005-06, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.8,50,780/- AS THE CLAIM HAS BEEN MADE IN RESPECT OF THE SAME PROJECT. ACCORDINGLY, THIS GROUND IS ALLOWED. 10.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 11. AFTER HEARING BOTH THE SIDES WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) WHO HAS FOLLOWED THE ORDER OF H IS PREDECESSORS WHICH HAS BEEN UPHELD BY THE TRIBUNAL. NOTHING CON TRARY WAS 13 BROUGHT TO OUR NOTICE BY THE LD. DEPARTMENTAL REPRE SENTATIVE. ACCORDINGLY, THIS GROUND BY THE REVENUE IS DISMISSE D. ITA NO.2251/PN/2012 (M/S. NAMRATA DEVLOPERS) : 12. THE ONLY GROUND RAISED BY THE REVENUE READS AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE OF RS. 1.25 CROR ES MADE ON PROTECTIVE BASIS, WITHOUT CONSIDERING THE FACT THAT R ETRACTION FILED LATERON , I.E. AFTER 18 DAYS IS ONLY AN AFTERTHOUGHT AND CANNOT BE CONSIDERED VALID WITHOUT ANY EVIDENCE TO PROVE THAT DECLARATION MADE OF RS.2.5 CRORES WAS UNDER DURESS. 12.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E GROUND IS IDENTICAL TO GROUND OF APPEAL NO.1 IN ITA NO.2252/P N/2012. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISE D BY THE REVENUE HAS BEEN DISMISSED ON THE GROUND THAT THE ASSESSEE HAS RETRACTED HIS STATEMENT AND NO CORROBORATIVE MATERIAL WAS FOUND D URING THE COURSE OF SURVEY OR ASSESSMENT PROCEEDINGS. FOLLOWING THE SAME REASONING, THIS GROUND BY THE REVENUE IS DISMISSED. 13. IN THE RESULT, ALL THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 14-07-2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT ME MBER PUNE DATED: 14 TH JULY, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-V, PUNE 4. THE CIT-V, PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE