DCIT, Ambala V. Sh. Vipin Aggarwal, Ambala Cantt.

ITA 241/CHANDI/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2564 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Gross profit estimation; Unexplained investment; Business income; Search and seizure; Accommodation entries; Procedural lapse; Competent authority; Assessment record; Retraction
• Section: 133A; 133(6); 131; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 241/CHD/2014 ASSESSMENT YEAR: 2009-10 THE DCIT, VS SHRI VIPIN AGGARWAL, CIRCLE, PROP. M/S MUSSADI LAL AMBALA. HARI KISHAN DASS JEWELLERS, KESERA ROAD, AMBALA CANTT. PAN: ABIPA6889L (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI S.K.MITTAL ASSESSEE BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 15.01.2016 DATE OF PRONOUNCEMENT : 20.01.2016 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) PANCHKULA DATED 04.12.201 3 FOR ASSESSMENT YEAR 2009-10 CHALLENGING THE DELETIO N OF ADDITION OF RS. 90 LACS. 2. ACCORDING TO THE OFFICE, THE DEPARTMENTAL APPEAL IS TIME BARRED BY 17 DAYS. IT IS EXPLAINED THAT DELAY IN FILING OF APPEAL WAS DUE TO PROCEDURAL LAPSES. THE LD. COUNSEL FOR THE ASSESSEE DID NOT OBJECT TO THE 2 CONDONATION OF DELAY. CONSIDERING ABOVE AND THAT LD . COUNSEL FOR THE ASSESSEE HAS NO OBJECTION, THE NOMI NAL DELAY IN FILING DEPARTMENTAL APPEAL IS CONDONED. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER NOTED THAT THE ASSESSEE WAS IN THE BUSINESS OF PURCHASE AND SALE OF GOLD, SILVER & DIAMOND JEWELLE RY BESIDES DOING LABOUR JOB WORK OF MAKING JEWELLERY O UT OF GOLD AND NEW JEWELLERY. A SURVEY OPERATION UNDER SECTION 133A (1) OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 23.06.2009. DURING THE COURSE OF SURVEY OPERATION INVENTORIES O F CASH, STOCK AND LIST OF CHEQUE BOOKS/PAY IN SLIPS E TC FOUND AT THE BUSINESS PREMISES OF THE ASSESSEE WERE PREPARED. CERTAIN INCRIMINATING DOCUMENTS WERE FOUN D, WHICH WERE IMPOUNDED. STATEMENT OF SH. VIPIN AGGARWAL, THE PROPRIETOR OF THE BUSINESS WAS RECORD ED. FROM THE IMPOUNDED DOCUMENTS, THE AO NOTED THAT A LETTER WAS WRITTEN BY THE ASSESSEE TO PEARL INDIA, NEW DELHI REGARDING CESSATION OF LIABILITY WORTH RS.90 LACS WHICH WAS BEING SHOWN AS STANDING BY THE ASSESSEE I N HIS RETURN. AS A RESULT OF SURVEY OPERATION, THE AS ESSEE OFFERED AN ADDITIONAL INCOME OF RS.2.25 CORES OVER AND ABOVE HIS REGULAR BUSINESS INCOME FOR THE A.Y.2009- 10 AND A.Y.2010-11 ON ACCOUNT OF DISCREPANCY IN STOCK AND CASH PAYMENT OUT OF BOOKS AND ADMISSION WITH RESPEC T TO CESSATION OF LIABILITY OF RS.90 LACS. 3 3(I) THE AO NOTICED THAT THE ASSESSEE HAD SHOWN O NLY INCOME TO THE TUNE OF RS.7,91,694/- AND HAD NOT DECLARED THE INCOME TO THE TUNE OF RS.90,00,000/- SURRENDERED DURING THE COURSE OF SURVEY PROCEEDINGS RELEVANT TO A.Y. 2009-10. TO CONFRONT THIS RETRACTI ON THE AO SUMMONED THE ASSESSEE U/S 131 OF THE ACT AND RECORDED HIS STATEMENT ON OATH. THE STATEMENT HAS B EEN REPRODUCED ON PAGE 3 OF ASSESSMENT ORDER. SINCE, TH E STATEMENT RECORDED ON OATH IN RESPONSE TO SUMMON U/ S 131 OF THE ACT BY THE AO HAS EVIDENTIARY VALUE AND HAVE RELEVANCE TO GROUND, THEREFORE FOR THE SAKE OF CLAR ITY AND REFERENCE, THE SAME IS REPRODUCED AS UNDER:- Q. PLEASE DISCLOSED YOUR IDENTITY A. I AM VIPIN AGGARWAL S/O LATE SHRI HAN KISHA N DASS, AGED 50 YEARS, PROP. M/S MUSADDI LAI HARI KISHAN DASS, JEWELLERS, KASERA BAZAR, AMBALA CANTT. Q. DURING THE COURSE OF SURVEY U/S 133A(1) OF THE ACT, CONDUCTED AT YOUR BUSINESS PREMISES ON 23.06.2009, YOU WERE SHOWN A DOCUMENT WHICH WAS THE LETTER WRITTEN BY YOU TO SH. GAUTAM OF MS. PEAR L INDIA, NEW DELHI. AS PER THAT LETTER, YOU HAD ACCEPTED THAT YOU HAD MADE PAYMENT OF RS.90,00,000/- (RUPEES NINETY LACS ONLY) TO M/S PEARL INDIA, NEW DELHI AND AS ON 23.03.2009 YOU HAD NO BALANCE OUTSTANDING TO THE SAID CONCERN AND YOU WERE ASKED TO EXPLAIN WHETHER THE SAID PAYMENT HAD BEEN REFLECTED IN YOUR BOOKS OF ACCOUNTS OR NOT . IN RESPONSE, YOU HAD REPLIED 'AT PRESENT I AM UNABL E TO EXPLAIN THE DETAILS OF THIS TRANSACTION. I AM AL SO NOT ABLE TO VERIFY THE SAME WITH MY BOOKS. THEREFORE, I OFFER THIS AMOUNT OF RS.90,00,000/- (RUPEES NINETY LACS ONLY) AS MY ADDITIONAL INCOME OVER AND ABOVE MY REGULAR INCOME FOR THE A. Y. 2009-10 TO BUY PEACE OF MIND. ' WHEREAS IN THE RETURN OF INCOME FILED BY YOU FOR TH E ASSESSMENT YEAR 2009- 10, THIS ADDITIONAL INCOME OF 4 RS.90,00,000/- (RUPEES NINETY LACS ONLY) HAS NOT BEEN REFLECTED. PLEASE EXPLAIN THE REASONS THEREOF. A. MY STATEMENT WAS RECORDED DURING THE COURSE OF SURVEY AT AROUND 3.00AM IN THE NEXT MORNING. BY THAT TIME I WAS TOTALLY EXHAUSTED AND DEPRESSED. I COULD NOT MAKE OUT, WHAT STATEMENT I WAS GIVING. THAT SAID DOCUMENT IS NOT IN MY HAND WRITING AND HAS NEVER BEEN WRITTEN BY ME. AS A MATTER OF FACT, THIS PAYMENT WAS STILL OUTSTANDING AS ON THE DATE O F SURVEY AND ACTUAL PAYMENT THEREOF HAS DULY BEEN MADE AT A LATER DATE BY ACCOUNT PAYEE CHEQUES. FURTHER, THE ACTUAL AMOUNT OUTSTANDING TO THE SAID CONCERN WAS RS. 1,35,10,686.18. Q. DURING THE COURSE OF SURVEY, THE DOCUMENT AS REFERRED TO ABOVE WAS FOUND FROM YOUR BUSINESS PREMISES, AND I AM SHOWING YOU THE SAME, WHICH WAS DULY SIGNED BY YOU DURING THE COURSE OF SURVEY OPERATIONS. IF THE SAME HAS NOT BEEN WRITTEN BY YOU, AS STATED BY YOU IN THE EARLIER REPLY, PLEASE INTIMATE AS TO WHOM THE SAID PAPER BELONGS TO A. I DO NOT KNOW AS TO WHOM DOES IT BELONGS TO AND HOW I HAVE SIGNED IT. SD/- (VIPIN AGGARWAL) THE STATEMENT GIVEN BY ME AS ABOVE IS AT MY OWN AND WITHOUT ANY DURESS PRESSURE. FURTHER, CERTIFIED THAT THE PARTICULARS RECORDED/GIVEN AS ABOVE ARE CORRECT AND TRUE TO THE BEST OF MY KNOWLEDGE AND NOTHING HAS BEEN CONCEALED THEREIN. SD/ (VIPIN AGGARWAL) ' 3(II) THE STATEMENT OF THE ASSESSEE WAS NOT ACCEPT ED BY THE AO AND NOTED THAT THE ASSESSEE RETRACTED FROM H IS STATEMENT WHILE FILING THE RETURN OF INCOME FROM TH E YEAR UNDER CONSIDERATION WHICH WAS FILED ON 30,09.2 009. DURING THE INTERVENING PERIOD OF MORE THAN THREE MONTHS, THE ASSESSEE HAD IN NO MANNER ORAL OR WRITT EN 5 INTIMATED THE DEPARTMENT ABOUT THE GENUINENESS OF T HE STATEMENT GIVEN BY HIM. HAD THERE BEEN ANY IOTA OF CONFUSION IN THE MIND OF ASSESSEE ABOUT STATEMENT G IVEN BY HIM HE COULD HAVE APPROACHED THE COMPETENT AUTHORITY TO CLEAR HIS STAND WITHIN A PERIOD NON QUESTIONABLE. THE ASSESSEE RETRACTED FROM HIS STATE MENT AFTER THREE MONTHS AND THE MANNER OF FILING OF RETU RN OF INCOME EXCLUDING THE SURRENDERED INCOME CLEARLY DEPICTS THAT THE SAID RETRACTION WAS AN AFTERTHOUGH T. 3(III) THE AO ALSO QUOTED THE DECISIONS THAT IN T HE CASE OF BACHITTAR SINGH VS. CIT(2010) 236 CTR 587 (P&H) THE HON'BLE PUNJAB & HARYANA HIGH COURT HELD THAT THE STATEMENT RECORDED DURING THE SURVEY IS VALID. THE RETRACTION OF ADDITIONAL INCOME ON THE GROUND THAT THE STATEMENT WAS THE RESULT OF DURESS WAS NOT ACCEPTED . SIMILAR VIEW WAS TAKEN IN THE CASE OF DR. S.C. GUPT A VS. CIT(2001) 170 CTR (ALL). IN THE CASE OF SURINDER KU MAR CHARANJIT KUMAR VS. CIT (2006) 201 CTR 37 (P&H), IT WAS HELD THAT THE RETRACTION SHOULD BE AT THE EARLI EST OPPORTUNITY OR AT LEAST WITHIN THE REASONABLE TIME. IN THE CASE OF DR.S.S. GULATI VS. DCIT I.T.A. NO.671 O F 2009 [P&H] - IT WAS HELD THAT WHERE THE APPELLANT H AD HIMSELF SURRENDERED THE AMOUNT VOLUNTARILY, PAID TH E TAXES IN ADVANCE ON THE SURRENDERED AMOUNT; THE ALLEGATION OF COERCION AND DURESS IS BASELESS AND I T IS AN AFTERTHOUGHT. THE STATEMENT GIVEN IN A SPONTANEO US AND NATURAL MANNER, CANNOT BE IGNORED KEEPING IN VI EW 6 THE FACTS AND CIRCUMSTANCES OF THE CASE WHERE THERE DOES NOT APPEAR TO BE ANY REASON FOR THE APPELLANT FOR RETRACTING FROM THE SURRENDER, WHICH IT HAS ALREADY MADE DURING SURVEY AND ON WHICH IT HAS ALREADY PAID ADVANCE TAX VOLUNTARILY. FURTHER, THE ASSESSEE HAD SIGNED THE DOCUMENT AND ACCEPTED THE CESSATION OF LIABILITY IN HIS STATEMENT RECORDED DURING THE COUR SE OF SURVEY PROCEEDINGS. IN VIEW OF THESE FINDING, THE A O CONCLUDED THAT THE RETRACTION MADE BY THE ASSESSEE FROM THE STATEMENT RECORDED DURING SURVEY PROCEEDINGS IN WHICH SURRENDERED AMOUNT OF RS.90 LACS WAS INVOLVED WAS CLEARLY AN AFTERTHOUGHT AND HENCE UNACCEPTABLE. AN ADDITION OF RS.90 LACS WAS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE COUNSEL FOR THE ASSESSEE FILED WRITTEN SUBMISSION W HICH IN BRIEF, IS REPRODUCED AS UNDER :- 'THE BRIEF FACTS OF THE CASE ARE THAT THE S URVEY U/S 133A(1) AT THE BUSINESS PREMISES OF THE APPELLANT WAS CONDUCTED ON 23. 06.2009 WHICH RELATE TO A. Y. 2010-11 AND ADDITIONAL INCOME OF RS .L, 35,00, 000/- WAS GOT DECLARED RELEVANT TO, A.Y. 20 10- 11. BUT AFTER THE CONCLUSION OF SURVEY, THE SURVEY OFFICER IN CHARGE DISCUSSED THE SAME WITH HIS SENIOR BOSS ABOUT SURVEY ON PHONE AND ON FURTHER INSTRUCTI ONS HE DIRECTED THE APPELLANT THAT THIS ADDITIONAL INCOME HAS TO BE REVISED AT HIGHER FIGURE BUT BY THAT TIME ALL THE CALCULATIONS IN RES PECT OF STOCK AND CASH HAD ALREADY BEEN MADE AND THERE WAS NO WAY OUT TO I NCREASE THE ADDITIONAL INCOME. A STRATEGY WAS CHALKED OUT TO HA VE ADDITIONAL SURRENDER OF RS.90 LACS TO WHICH THE ASSESSEE HAD S HOWN GREAT REACTANCE. IT WAS ALREADY 3. 00 AM OF NEXT MORNING AND THE APPELLANT 7 WAS TOTALLY EXHAUSTED AND DEPRESSED. TO INCREASE TH E SURRENDER AMOUNT, A FALSE PIECE OF EVIDENCE WAS CREATED TO TH E EFFECT THAT THE ASSESSEE HAD REPAID A SUM OF RS.90 LACS TO ONE OF I TS CREDITOR M/S PEARL INDIA LTD. WHOSE CREDIT BALANCE AS ON THE DAY OF SURVEY WAS RS.L,35,10,686.18 BROUGHT FORWARD FROM A.Y. 2009-10 I.E. YEAR UNDER CONSIDERATION. OUT OF SAID CREDIT BALANCE, THE PAYM ENTS WERE MADE BY ACCOUNT PAYEE CHEQUES IN A.Y. 2010-11 AND CLOSING B ALANCE AS ON 31.03.2010 AS RS. 35,10,686. 18. THE LETTER WAS GOT WRITTEN IN HINDI BY SOMEONE ON B EHALF OF THE ASSESSEE ON THE DAY OF SURVEY I.E. 23.06.2009, WHIC H IS IMPOUNDED DOCUMENTS NO. 2 AND COPY OF THE SAME IS ENCLOSED. T HE ENGLISH VERSION OF THIS LETTER IS REPRODUCED AS UNDER:- TO SH. GAUTAM JI, PEARL INDIA, NEW DELHI ACCORDING TO MY BOOKS FOR THE FINANCIAL YEAR ENDING 31.03.2009,1 HAD SHOWN RS.90 LACS AS PAYABLE WHICH IN FACT I HAVE ALREADY PAID, NOW NOTHING REMAINS PAYABLE. P LEASE NOTE. SD/- (VIPIN AGGARWAL) 23.06.2009 INTERPOLATED AS 23.03.2009 THIS LETTER WAS IMPOUNDED BY THE SURVEY PARTY AND M ADE THE BASIS FOR DECLARATION OF ADDITIONAL INCOME OF RS.90 LACS FOR THE A.Y. 2009-10 AND THE ASSESSEE WAS ASKED TO PUT SIGNATURES ON THIS NEWLY WRITTEN LETTER. THE ASSESS EE PUT HIS SIGNATURE ON THE DAY OF SURVEY MENTIONING DATE AS 23.06.2009 WHICH WAS DATE OF SURVEY. THIS DATE WAS GOT INTERPOLATED AS 23.03.2009 TO MAKE IT RELEVANT FOR THE YEAR UNDER CONSIDERATION. THIS IS CLEAR FROM THE LETTER REPRODUCED ABOVE IT LOOKS UTOPIAN THAT THE ASSESSEE 'S LETTER WAS DATED 23.03.2009, THE DAY COINCIDING WITH THE D ATE OF SURVEY. THIS DATE WAS SELECTED TO MINIMIZE THE CUTT ING IN 8 ORIGINAL DATE 23.06.2009 TO MAKE IT 23.03.2009, TO SUPPORT SURRENDER. THIS WAS THE ABUSE OF AUTHORITY. THE LANGUAGE OF THIS LETTER IS TOTALLY INCORRECT. A S PER THIS LETTER, IT IS WRITTEN THAT AS PER BOOKS FOR THE YEA R ENDING 31.03.2009,1 HAVE SHOWN RS.90 LACS AS PAYABLE AS ON 31.03.2009, WHEREAS AS PER BOOKS OF ACCOUNTS AND BA LANCE SHEET ALREADY AVAILABLE ON THE FILE OF AO, THIS FIG URE WAS RS.1,35,10,686.18. FURTHER IN THIS LETTER, IT HAS BEEN GOT WRITTEN THA T I HAVE IN FACT ALREADY PAID THIS AMOUNT AND NOTHING REMAINS P AYABLE. KINDLY NOTE. THIS WAS FACTUALLY INCORRECT. IN THIS CONNECTION, THE ATTENTION IS DRAWN TO THE F ACT THAT THIS IS TOTALLY CONTRARY -WITH THE BOOKS OF ACCOUNT S, SECONDLY HAD THIS LETTER BEEN SENT TO THE ADDRESSEE, CARBON COPY SHOULD HAVE BEEN FROM PART OF OUR RECORD AND NOT OR IGINAL AND FOR SUCH AN IMPORTANT COMMUNICATION, IT COULD H AVE BEEN SENT BY REGISTERED POST/COURIER AND RECEIPT THEREOF SHOULD HAVE BEEN STITCHED WITH THIS LETTER. NO SUCH EVIDEN CE WAS AVAILABLE, MORE SO THIS WAS ORIGINAL LETTER SAID TO HAVE BEEN WRITTEN ON 23.03.2009, THEN WHY THE ORIGINAL LETTER WAS LYING IN OUR RECORD, NO WORD O/C (OFFICE COPY) WAS WRITTE N ON THIS LETTER, NO RECEIPT OF HAVING BEEN SENT THIS LETTER IS ON RECORD, NO PROPER ADDRESS OF THIS FIRM IN DELHI HAS BEEN WR ITTEN ON THE LETTER. THE DATE ON SIGNATURES HAD BEEN INTERPO LATED AND GOT REPEATED THE SAME CLEARLY REFLECTS THAT THIS LE TTER WAS ENGINEERED TO ENHANCE THE SURVEY AND AS SUCH THIS I S CONTRARY TO THE SPIRIT OF SECTION 133A OF THE I.T. ACT AND BOARD'S CIRCULAR ON THE SUBJECT. THE FACTS MENTIONE D IN THIS LETTER ARE ORAL AND DO NOT TALLY WITH THE BOOKS OF ACCOUNTS AND AS SUCH STATEMENT RECORDED DURING THE COURSE OF SURVEY ABOUT THIS LETTER WAS ALSO INVOLUNTARY AND INACCURA TE OBTAINED TO JUSTIFY THE SURRENDER, WHEN THE BASIS O F EVIDENCE IS UNREAL AND CREATED. THE STATEMENT OF ASSESSEE BA SED ON THIS EVIDENCE IS ALSO UNREAL HAVING NO EVIDENTIARY VALUE. 9 5. THE ASSESSEE FURTHER SUBMITTED THAT AO IS NOT AUTHORIZED TO RECORD STATEMENT ON OATH U/S 133A OF THE ACT AND IF IT HAS BEEN DONE THE STATEMENT RECORDED U/S 133A OF THE ACT HAS NO EVIDENTIARY VALUE. IN THIS CONTEXT, THE APPELLANT RELIED UPON THE FOLLOWING JUDGMENTS :- I) TDI MARKETING PVT. LTD. VS. ACIT ITA NO. 1069/DEL/2007 (ITAT DEL) II) UNITEX PRODUCTS LTD. VS. ITO [2008] 22 SOT 429 (MUM) III) PAUL MATHEWS & SONS V. CIT [ 2003] 263 ITR 101 (KER) IV) CIT V. DHINGRA METAL WORKS 328 ITR 384 (DEL). 6. THE ASSESSEE ALSO EMPHASIZED ON THE STATEMENT RECORDED U/S 133A AT THE TIME OF SURVEY AND STATEME NT RECORDED U/S 131 ON OATH AT THE TIME OF ASSESSMENT PROCEEDINGS ARE DIFFERENT AND DIFFERENTIATED FACTS IN THE STATEMENT GIVEN AT TWO STAGES. THE ASSESSEE ALSO DISTINGUISHED ON THE FACTS THE CASE LAWS RELIED BY THE AO IN THE ASSESSMENT ORDER. FURTHER, THE ASSESSEE R ELIED ON THE JUDGMENT GIVEN BY HON'BLE SUPREME COURT IN T HE CASE OF CIT VS. S. KHADAR KHAN SON (2012) 25 TAXMANN.COM 413 WHEREIN THE JUDGMENT GIVEN BY HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. S. KHADAR KHAN SON [2008] 300 ITR 157 THAT SECTION 133 A DOES NOT EMPOWER ANY ITO TO EXAMINE ANY PERSON ON OATH, SO STATEMENT RECORDED U/S 133A HAS NO 10 EVIDENTIARY VALUE AND ANY ADMISSION MADE DURING SUC H STATEMENT CANNOT BE MADE BASIS OF ADDITION WAS UPHE LD. 7. THE SUBMISSIONS MADE BY THE ASSESSEE AND THE FACTS STATED THEREIN WERE FORWARDED TO THE AO VIDE THIS OFFICE LETTER NO. 1139-40 DATED 10.12.2012 TO VERIF Y FROM THE BOOKS OF ACCOUNT/ASSESSMENT RECORD/ SURVEY RECO RD OF THE ASSESSEE VIS-A-VIS THE CREDITOR M/S PEARL IN DIA LTD. AND SUBMIT A REPORT. SIMULTANEOUSLY A LETTER N O. 1148-49 DATED 11.12.2012 WAS ALSO ISSUED TO PEARL I NDIA LTD. (PACL LTD.), NEW DELHI SEEKING INFORMATION U/S 133(6) OF THE ACT IN THE ASSESSEE'S CASE ASKING COP Y OF ACCOUNT OF THE ASSESSEE AS PER BOOKS OF PEARL INDIA LTD. AS ON 31.03.2009 AND 31.03.2010. IN RESPONSE A REPL Y FROM PACL LTD. DATED 17.01.2013 WAS RECEIVED WITH COPIES OF STATEMENT OF ACCOUNT OF THE ASSESSEE ENCL OSED AS ON 31.03.2009 AND 31.03.2010. THE STATEMENT OF ACCOUNT SHOWED OPENING AND CLOSING BALANCES AS ON 31.03.2009 AND 31.03.2010. THEREAFTER, A SUMMON U/S 131 OF THE ACT DATED 15.03.2013 WAS ISSUED TO PEARL INDIA LTD., NEW DELHI REQUIRING THE LEDGER FOR A.Y. 2009- 10 AND 2010-11 AND AUDITED BALANCE SHEET FOR A.Y. 2009-10 AND 2010-11. IN RESPONSE TO THE NOTICE U/S 131 OF THE ACT, THE PACL LTD. REPLIED AND ENCLOSED THE AUDITED BALANCE SHEET FOR A.Y. 2009-10 AND 2010-11. THE INFORMATIONS RECEIVED IN RESPONSE TO NOTICES U/ S 133(6) AND U/S 131 OF THE ACT, THE SAME WERE AGAIN FORWARDED TO THE AO VIDE THIS OFFICE LETTER NO.67 DATED 11 09.04.2013 TO VERIFY THE FACTS FROM THE BOOKS OF ACCOUNT/ASSESSMENT RECORD AND BALANCE SHEET OF PEAR L INDIA LTD., NEW DELHI. 7(I) A REPORT WAS CALLED FROM THE AO ON THE WRIT TEN SUBMISSION FILED BY THE ASSESSEE AND INFORMATION RECEIVED FROM PEARL INDIA LTD. VIDE THIS OFFICE LETTERS 10.12.2012 AND 09.04.2013 RESPECTIVELY. THE ASSESSING OFFICER SUBMITTED A REPORT DATED 10.06.20 13 THE RELEVANT POINTS BROUGHT IN THE REPORT ARE AS UN DER :- 1) AS REGARDS, THE FALSE PIECE OF EVIDENCE AND CUTTING ON THE DATE, IT IS SUBMITTED THAT THIS IS N OT THE SURRENDER LETTER BUT THE LETTER DATED 23.03.200 9 WRITTEN BY THE ASSESSEE SH. VIPIN AGGARWAL TO SH. GAUTAM JI, PEARL INDIA, NEW DELHI REGARDING CESSATION OF LIABILITY WORTH RS.90 LACS OF GAUTA M'S COMPANY. ON THIS LETTER SH. VIPIN AGGARWAL HAD SIGNED AND CUTTING OF DATE FROM 23.06.2009 TO 23.03.2009 ON WHICH THE ASSESSEE, SH. VIPIN AGGARWAL SIGNED. THE CONTENTION OF THE ASSESSEE THA T HE WAS EXHAUSTED AT 3.00 AM WHEN HIS STATEMENT WAS RECORDED IS ALSO NOT WORTH APPRECIATING BECAUSE THE ASSESSEE AND HIS COUNSEL, SH. V. K. JAIN PUT THEIR SIGNATURE AFTER READING THE LETTER ADDRESSED TO SH. GAUTAM JI, C/O M/S PEARL INDIA LTD. DELHI. FURTHER, THE TIME OF RECORDING THE STATEMENT DURING THE COURSE OF SURVEY IS NOT MENTIONED IN THE SURVEY REPORT. 2) FURTHER, THE ASSESSEE'S CONTENTION THAT THE DATE WAS CHANGED FROM 23.06.2009 TO 23.03.2009 IS ALSO NOT HOLD GOOD WHEN THE ASSESSEE PUT HIS SIGNATURE ON THE CUTTING OF DATE. HE HIMSELF HAS CORRECTED TH E DATE AND THE SAME WAS AGAIN CORRECTED BY PUTTING THE CORRECT DATED I.E. 23.03.2009. IT IS AFTERTHOUG HT STORY MADE BY THE ASSESSEE JUST TO RETRACT THE SURRENDER AMOUNT. HE HAS ALSO GIVEN BIFURCATION OF HEAD WISE SURRENDER AMOUNT OF EACH ASSESSMENT YEAR. 3) ON EXAMINATION OF THE INFORMATION SUBMITTED BY PEARL INDIA LTD. VIDE LETTER DATED 06.05.2013, IT H AS 12 BEEN OBSERVED THAT THE ASSESSEE HAS MADE THE PAYMENT OF RS. 1,00,00,000/- THROUGH ACCOUNT PAYEE CHEQUES OF DIFFERENT DATES TO M/S PEARL INDIA LTD. (PACL INDIA LTD.), NEW DELHI. THE AMOUNT OF RS.1,00,00,000/- IS ALSO REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE COMPANY MAINTAINED WITH UNION BANK OF INDIA, DELHI. 4) PEARL INDIA LTD. VIDE ITS LETTER DATED 31.05.201 3 HAS INFORMED THAT THE AMOUNT OUTSTANDING AGAINST M/S MUSSADI LAI HARI KISHAN DASS JEWELLERS, KASERA BAZAR, AMBALA CANTT SHOWN IN THE LOANS AND ADVANCES IN THE BALANCE SHEET. THE COMPANY HAS SHOWN LOANS AND ADVANCES AT RS. 16,64,69,11,284/- AS ON 31.03.2009. 7(II) THE AO CONCLUDED THAT THE ASSESSEE COMPANY H AS GIVEN ADVANCES FOR PURCHASE OF LAND TO M/S MUSSADI LAI HARI KISHAN DASS JEWELLERS, AMBALA CANTT. ALL THE DOCUMENTS SUBMITTED BY THE ASSESSEE APPEARS TO BE MANIPULATED AND HENCE NOT WORTH CONSIDERING. THE COMPANY PEARL INDIA LTD. HAS GIVEN THE ACCOMMODATIO N ENTRIES TO THE ASSESSEE APPELLANT JUST TO COVER UP THE TRANSACTIONS. IN VIEW OF THE FACTS, IT IS REQUESTED THAT THE MATTER MAY BE DECIDED ON MERITS. 8. THE REPORT OF THE ASSESSING OFFICER WAS SUPPLIED TO THE ASSESSEE TO FURNISH ITS COMMENTS. THE SALIENT P OINTS BROUGHT IN BY ASSESSEE ON AO'S REPORT ARE AS UNDER :- 1) NO SUCH LETTER EXISTED IN OUR RECORDS TILL THE TIME OF SURVEY. IT WAS ONLY CREATED DURING THE COURSE OF SURVEY PROCEEDINGS TO EXTRACT MORE SURRENDER. THE FOLLOWING CIRCUMSTANCES PROVE THE FACT A) THIS LETTER HAS BEEN GOT ADDRESSED TO A PERSON OF THE RANK OF CLERK WHICH IS NEVER POSSIBLE AS SUCH AN IMPORTANT COMMUNICATION COULD ONLY BE MADE TO THE MANAGING DIRECTOR OR 13 ANY IMPORTANT PERSON IN A LIMITED COMPANY. THIS SHOULD HAVE BEEN PROPERLY ADDRESSED, B) THE CONTENTS OF THIS LETTER ARE TOTALLY INCORRECT :- I) IT HAS BEEN SAID THAT THE SAID LETTER WAS WRITTEN BY THE APPELLANT ON 23.03.2009. THERE COULD BE VERY REMOTE CO-INCIDENCE THAT THIS DATE COULD BE 23.03.2009 WOULD MATCH WITH THE DATE OF SURVEY I.E. 23.06.2009. THE THEORY OF PROBABILITY SAYS THAT THE CHANCES OF MATCHING 23.03.2009 WITH 23.06.2009 COULD ONLY BE 1/365. II) THE LANGUAGE OF LETTER IS TOTALLY INCORRECT AND CONTRADICTORY THE FACTS OF THE CASE. THIS LETTER SAYS THAT AS PER MY BOOKS OF ACCOUNTS FOR THE YEAR ENDED 31.03.2009, THE APPELLANT SHOWN COMPANY'S CREDIT AS RS.90 LACS, HOW COULD A PERSON WHO IS WRITING A LETTER ON 23.03.2009 CAN SAY THAT THIS AMOUNT PAYABLE FOR THE YEAR ENDED 31.03.2009 WHICH WAS NOT CLOSED BY THEN. THE TENSE USED IN THE LETTER DEPICTS THAT THIS WAS GOT WRITTEN AFTER CLOSE OF YEAR 31.03.2009 I.E. THE DATE OF SURVEY 23.06.2009. III) AS PER OUR BOOKS OF ACCOUNTS, THE OPENING BALANCE OF COMPANY WAS RS. 1,35,10,686.18 AND WHEREAS THIS LETTER SAYS THAT AS PER MY BOOKS OF ACCOUNTS FOR THE YEAR ENDED 31.03.2009, THE AMOUNT PAYABLE WAS RS.90 LACS. IV) THIS LETTER SAYS THAT I HAD ALREADY GIVEN THIS AMOUNT AND NOTHING REMAINS PAYABLE. THIS DOES NOT MATCH WITH THE BOOKS OF ACCOUNTS AND THERE IS NO TRACE FROM WHERE THE FIGURE OF RS.90 LACS HAS BEEN IMPORTED, CLEARLY ESTABLISHED THAT THIS IS ASSUMED FIGURE ONLY FOR THE PURPOSE OF SURVEY. V) THIS WAS ORIGINAL HAND WRITTEN PAPER, HAD IT BEEN SENT TO ADDRESSEE IT SHOULD HAVE BEEN A CARBON COPY WITH POSTAL RECEIPT ATTACHED ON IT AS THIS WAS AN IMPORTANT COMMUNICATION. VI) THIS WAS NOT ACCOMPANIED BY ANY CORROBORATED EVIDENCE FROM OTHER SIDE I.E. A PRINTED OR AT LEAST HAND WRITTEN RECEIPT SENT BY THE ADDRESSEE. VII) THE DOCUMENT WAS NOT IN THE HANDWRITING OF ASSESSEE AS DEPOSED BY HIM IN HIS DULY SWORN STATEMENT U/S 131 DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 14 2. THE AO IN ITS REMAND REPORT HAS ADMITTED THAT THERE IS A CUTTING IN THE DATE AND THAT THE APPELLA NT HAS CORRECTED THE DATE BY OVER-WRITING AND HAS REPEATED THAT DATE. IN ORDINARY COURSE OF ACTION, N O ONE REPEATS THE DATES AFTER CORRECTING ORIGINAL DAT ES AS IT IS AN ONLY OFFICIAL WAY OF CERTIFYING THE DAT ES. THIS CLEARLY CONVEYS THAT THIS WAS DICTATED BY SOME OFFICIAL AND WRITTEN BY AN OFFICER. 3. THE AO HAS NOT CONTRADICTED THAT THE STATEMENT WAS RECORDED AT 3AM OF NEXT MORNING BUT IN A WAY HAVE CONFIRMED THE SAME. THE AO HAS CONFIRMED 'ALL THE COMMUNICATIONS WITH M/S PEARL INDIA LTD IN WHICH THEY HAVE CONFIRMED TO HAVE RECEIVED PAYMENT AT A LATER STAGE. 4. THE AO HAS NOT GIVEN ANY REASON OR ANY FINDING THAT HOW ALL THE DOCUMENTS SUBMITTED BY THE ASSESSEE APPEAR TO BE MANIPULATED AND HOW A LIMITED COMPANY WORTH 14000 CRORES SHOWING NET PROFIT OF RS.708726275/- COULD GIVE ACCOMMODATION ENTRIES TO APPELLANT TO COVER UP THE TRANSACTIONS. 8(I) THE ASSESSEE ALSO REFERRED TO THE CBDT INSTR UCTION F. NO. 286/2/2003-IT(INV. II) DATED 10.03.2003 ON T HE SUBJECT 'CONFESSION OF ADDITIONAL INCOME DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATION' WHEREIN THE CBDT HAS INSTRUCTED AS UNDER :- '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.' THE SURVEYING OFFICER HAS ACTED IN COMPLETE DISREGA RD TO THE CBDT INSTRUCTIONS. IF THE SURVEYING TEAM HAD RE ALLY COLLECTED SOME EVIDENCE IT SHOULD HAVE BEEN LEFT TO BE APPRECIATED AT THE TIME OF ASSESSMENT AND NOT TO ENFORCE EXTRA SURRENDER. THE EVIDENCE COLLECTED BY THE CIT(A) BY WAY OF INQUIRY AND ALSO COLLECTED BY THE AO 15 DURING REMAND PROCEEDING SUPPORTS THE CONTENTION OF ASSESSEE THAT THE AMOUNT OF RS.1,35,10,686.18 WAS S TILL OUTSTANDING ON THE DATE OF SURVEY AND WAS PAID LA TER ON. THE APPELLANT ALSO RELIED UPON THE DECISIONS OF ITAT, CHANDIGARH BENCH IN THE CASE OF NARESH KUMAR VERMA VS ACIT 32 TAXMANN.COM 280 AND ITAT, DELHI BENCH IN THE CASE OF MAHESH OHRI VS. ACIT (2013) 23 ITR 522. 8(II) IN THE ASSESSMENT ORDER, THE AO HAS RELIED O N FEW JUDICIAL PRONOUNCEMENTS ON WHICH THE ASSESSEE HAS SUBMITTED THAT THE FACTS OF THE CASE ARE DISTINGUIS HABLE AND NOT APPLICABLE TO ASSESSEE'S CASE. IN THE CASE OF BACHITTAR SINGH (SUPRA), THE HON'BLE PUNJAB & HARYA NA HIGH COURT HELD THAT EVEN IF THE STATEMENT UNDER SECTION 133A WAS NOT AT PAR WITH THE STATEMENT UNDE R SECTION 132(4) AND DID NOT HAVE THAT EVIDENTIARY VA LUE, SUCH STATEMENT CANNOT BE HELD TO BE IRRELEVANT MATE RIAL SO AS TO BE RULED OUT OF CONSIDERATION IN TOTALITY OF FACTS, PARTICULARLY IN THE ABSENCE OF REGULAR BOOKS OF ACCOUNT. THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNT OR ANY OTHER AUTHENTIC CONTEMPORANEOUS EVIDENCE OF AGRICULTURAL INCOME. IN THE PRESENT CAS E, THE ABOVE DECISION OF THE PUNJAB & HARYANA HIGH COURT I S NOT APPLICABLE AS THE ASSESSEE IS MAINTAINING REGUL AR BOOKS OF ACCOUNTS AND WERE PRODUCED BEFORE THE AO. IN THE CASE OF SURINDER KUMAR CHARANJIT KUMAR (SUPRA) 16 NOWHERE IT HAS BEEN OBSERVED THAT RETRACTION SHOULD BE AT THE EARLIEST OPPORTUNITY OR AT LEAST WITHIN A REASONABLE TIME. RATHER IN THIS CASE, THE CIT (APPE ALS) DELETED THE ADDITION OF RS.2,94,632/- ON ACCOUNT OF LOW GP AND TRIBUNAL RESTORED THE SAID ADDITION ON ACCOUNT OF LOW GP AND THE HIGH COURT OF PUNJAB & HARYANA HAS DECLINED TO ENTERTAIN THE APPEAL. AS REGARDS THE CASE OF DR. S.S. GULATI (SUPRA), THE FA CTS OF THIS CASE TOO ARE TOTALLY DIFFERENT TO THE FACTS OF APPELLANT CASE AND HENCE THIS JUDGMENT TOO AS RELIE D UPON BY THE AO DOES NOT SUPPORTS THE CASE OF ASSESS ING OFFICER. 9. THE LD. CIT(APPEALS) CONSIDERING THE SUBMISSIONS OF PARTIES, REMAND REPORT AND MATERIAL ON RECORD DE LETED THE ENTIRE ADDITION. HIS FINDINGS IN PARA 5.11 TO 5.18 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 5.11 I HAVE GONE THROUGH THE FACTS OF THE CASE, T HE WRITTEN SUBMISSION FILED BY THE APPELLANT, REMAND REPORT OF THE A.O. AND THE RE JOINDER FILED BY THE APPELLANT. IT IS GATHERED THAT THE AO HAS MADE ADDITION OF RS. 90 LACS ON ACCOUNT OF ADDITIONAL SURRENDER DURING THE COURSE OF SURVEY ON 23.06.2009. THIS SURRENDER WAS ON THE BASIS OF DOCUMENT IMPOUNDED DURING THE C OURSE OF SURVEY WHERE THE APPELLANT SH. VIPIN AGGARWAL WROTE A LETTER TO SHRI GAUTAM JI, PEARL INDIA, NEW DELHI THAT ACCORDING TO HIS BOOKS FOR TH E FINANCIAL YEAR ENDING 31.03.2009. HE HAD SHOWN RS.90 LACS AS PAYABLE WHIC H IN FACT HE HAD ALREADY PAID AND NOTHING REMAINS PAYABLE. THE DOCUMENT WAS SIGNED BY SH. VIPIN AGGARWAL AND THE DATE WAS MENTIONED AS 26.06.2009 C ORRECTED AS 23.03.2009. THE APPELLANT DID NOT OFFER RS.90 LACS FOR TAXATION IN ITS RETURN FILED FOR A.Y. 2009-10 ON 30.09.2009. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE AO AGAIN RECORDED STATEMENT ON OATH BY ISSUING SUMMON U/S 131 OF THE ACT WHERE SHRI VIPIN AGGARWAL STATED THAT HE WAS TOTALLY EXHAUSTED AND DEPRESSED AND HE COULD 17 NOT MAKE OUT WHAT STATEMENT HE WAS GIVING. THE DOCU MENT WAS NOT IN HIS HAND WRITING AND HAS NEVER WRITTEN BY HIM. HE ALSO STATE D THAT THE ACTUAL AMOUNT OUTSTANDING TO THE SAID CONCERN WAS RS. 1,35,10,686 .18. IN RESPONSE TO SECOND QUERY WHEN THE AO QUESTIONED REFERRING TO TH E DOCUMENT THAT THE SAME WAS WRITTEN BY YOU PLEASE INTIMATED AS TO WHOM THE SAID PAPER BELONGS TO. SH. VIPIN AGGARWAL REPLIED THAT HE DOES NOT KNOW AS TO WHOM IT BELONGS TO AND HOW HE HAS SIGNED IT. THIS STATEMENT WAS NOT ACCEPTED B Y THE AO AND THE AO NOTED THAT THE APPELLANT HAS NOT INTIMATED THE DEPARTMENT ABOU T THE GENUINENESS OF STATEMENT GIVEN BY HIM BETWEEN THE PERIOD OF DATE OF SURVEY T ILL THE DATE OF FILING OF RETURN. THE ASSESSEES RETRACTION FROM HIS STATEMENT AFTER T HREE MONTHS WAS AN AFTERTHOUGHT. THE AO FURTHER RELIED ON THE DECISION S OF HIGH COURTS AND CONCLUDED THAT THE RETRACTION MADE BY THE ASSESSEE FROM THE S TATEMENT RECORDED DURING THE SURVEY PROCEEDINGS IN WHICH SURRENDERED AMOUNT OF R S.90 LACS WAS INVOLVED WAS CLEARLY AN AFTERTHOUGHT AND ACCEPTABLE. THE AO MADE THE ADDITION OF RS.90 LACS ON ACCOUNT OF UN-EXPLAINED INVESTMENT U/S 69 OF THE ACT. 5.12 DURING THE APPELLATE PROCEEDINGS, THE APPELLA NT SUBMITTED THAT THE DOCUMENT WAS FABRICATED, DID NOT BELONG TO THE APPE LLANT AND THE STATEMENT GIVEN ON THE BASIS OF QUERY RAISED ON DOCUMENT WAS GIVEN UNDER STRESS AND DURESS. THE APPELLANT SUBMITTED THAT AS PER LANGUAGE OF THE LET TER THE CONTENTS ARE FACTUALLY INCORRECT AS THE LETTER SHOWS PAYABLE AMOUNT OF RS. 90 LACS FOR THE YEAR ENDING 31.03.2009 WHEREAS AS PER THE BOOKS OF ACCOUNT AND BALANCE SHEET WAS RS.1,35,10,686.18. THE APPELLANT HAS FURTHER BROUGH T THE FACTS THAT THE CONTENT OF LETTER SHOWING YEAR ENDING 31.03.2009 CA NNOT BE WRITTEN ON 23.03.2009 WHICH IS PRIOR TO 31.03,2009, MOREOVER, IF SUCH LETTER WAS WRITTEN BY THE APPELLANT THE ORIGINAL COPY WOULD NO T REMAIN IN HIS OFFICE RATHER THE APPELLANT WOULD KEEP CARBON COPY. NO EVI DENCE OF DISPATCH OF SUCH LETTER WAS AVAILABLE. NO RECEIPT OF HAVING BEEN SEN T THIS LETTER WAS AVAILABLE ON RECORD, NO PROPER ADDRESS OF THE COMPANY IN DELH I WAS WRITTEN ON THE LETTER. THAT DATE ON SIGNATURE HAD BEEN INTERPOLATE D AND GOT REPEATED IN SUCH A MANNER WHICH CLEARLY REFLECTS THAT THIS LETTER WA S ENGINEERED TO ENHANCE THE SURRENDERED AMOUNT. THE DATE OF THE LETTER BELOW SI GNATURE WAS WRITTEN AS 23.06.2009 WHICH AFTER CORRECTION WAS WRITTEN AS 23 .03.2009. SINCE THE COMPLETE DATE WAS NOT CHANGED SO THE DATE OF SURVEY WAS CORRECTED IN SUCH A MANNER TO GIVE IT ANOTHER MONTH WITH LEAST CUTTING AND WHICH WOULD PERTAIN TO A.Y. 2009-10. THE APPELLANT FURTHER RELIED ON CB DT CIRCULAR AND JUDICIAL 18 PRONOUNCEMENTS WHEREIN THE HON'BLE COURTS HELD THAT THE AO IS NOT AUTHORIZED TO RECORD STATEMENT ON OATH U/S 133A AND IF SUCH STATEMENT HAS BEEN RECORDED U/S 133A OF THE ACT, IT HAS NO EVIDEN TIARY VALUE. THE APPELLANT FURTHER EMPHASIZED THAT STATEMENT RECORDED ON OATH U/S 131 AT THE TIME OF ASSESSMENT PROCEEDINGS WAS NOT CONSIDERED. THE APPE LLANT ALSO RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F S. KHADAR KHAN SON (SUPRA). 5.13 AT THE APPELLATE PROCEEDINGS STAGE, THE INFO RMATION U/S 133(6) AND U/S 131 WERE SOUGHT BY MY PREDECESSOR AND SUCH INFORMAT ION GATHERED IN THE FORM OF COPIES OF STATEMENT OF ACCOUNT OF THE APPEL LANT AS ON 31.03.2009 AND 31.03.2010 AND AUDITED BALANCE SHEET OF PEARL INDIA LTD., NEW DELHI FOR A.Y 1 2009-10 AND 2010-11 WAS FORWARDED TO THE AO TO VERI FY THE FACTS FROM THE BOOKS OF ACCOUNT, ASSESSMENT RECORD AND BALANCE SHEET OF PEARL INDIA LTD. THE APPELLANT SUBMISSION WAS ALSO FORWARDED TO THE AO FOR ITS REPORT. THE A.O. ON ITS EXAMINATION HAS NOT ACCEPTED THAT T HE DOCUMENT WAS A FALSE PIECE OF EVIDENCE. THE AO IN THE REMAND REPORT HAVE ALSO NOT DENIED ON THE OPENING AND CLOSING BALANCES-AS SHOWN IN THE BOOKS OF ACCOUNT. THE AO CONCLUDED THAT THE COMPANY PEARL INDIA LTD. HAS GIV EN THE ACCOMMODATION ENTRY TO THE APPELLANT TO COVER UP OF THE TRANSACTION AND SUBMITTED THAT IN VIEW OF THE FACTS OF THE CASE THE MATTER MAY BE DECIDED ON MERI TS. THE APPELLANT IN ITS REJOINDER AGAIN REITERATED THAT NO SUCH LETTER EXIS TED IN HIS RECORD TILL THE TIME OF SURVEY. IT WAS ONLY CREATED DURING THE COURSE OF SU RVEY TO EXTRACT MORE SURRENDER. THE APPELLANT DENIED THE CONTENT OF THE LETTER AS T OTALLY INCORRECT AS SUBMITTED IN PARA 5.8 (ANTE). 5.14 AFTER CONSIDERATION OF RIVAL SUBMISSIONS A ND ON PERUSAL OF THE DOCUMENT IN QUESTION, IT IS NOTED THAT THE DATE HAS BEEN CORREC TED BY OVERWRITING AND THE DATE HAS BEEN REPEATED BELOW ON THE LETTER. THE LET TER IS NOT WRITTEN ON ANY LETTER HEAD OF THE APPELLANT NOR PROPERLY ADDRESSED. THE D ATE OF SURVEY WAS 23.06.2009 AND CORRECTED DATE WAS 23.03.2009 WHICH CANNOT BE SAID TO BE A MERE CO-INCIDENCE. THE CONTENT OF THE LETTER SAYS F OR THE YEAR ENDED 3L03.2009 WHEREAS THE LETTER AFTER CORRECTION IS SUPPOSED TO BE SIGNED ON 23.03.2009. THE LANGUAGE OF THE LETTER DEPICTS THAT SUCH LANGUAGE C AN BE ONLY AFTER THE CLOSE OF 19 THE YEAR I.E. 31.03.2009. FURTHER, THE AMOUNT PAYAB LE IN THE LETTER IS SHOWN TO BE RS.90 LACS WHEREAS AS PER APPELLANT'S BOOKS OF ACCO UNT THE OPENING BALANCE WAS RS. 1,35,10,686.18. THE ACCOUNTS FOR THE SUBSEQUENT PERIOD ALSO SHOWS THAT THE APPELLANT HAS MADE PAYMENT ON VARIOUS DATES BY ACCO UNT PAYEE CHEQUES AND THE CLOSING BALANCE AS ON 31.03.2010 WAS RS.35,10,6 86.18. SO, IF THE APPELLANT HAS MADE PAYMENT PRIOR TO THAT THE QUESTION OF MAKI NG PAYMENT ON SUBSEQUENT DATES BY ACCOUNT PAYEE CHEQUES DOES NOT ARISE. THE INFORMATION GATHERED DIRECTLY FROM PEARL INDIA LTD. NEW DELHI T HROUGH NOTICES U/S 133(6) AND 131 SHOWS THAT THERE WERE RUNNING ACCOUNTS WITH THE APPELLANT AND PEARL INDIA LTD. HAS SHOWN IN ITS ACCOUNT THE PAYMENTS RE CEIVED ON THE SUBSEQUENT DATES. THE APPELLANT SUBMISSION IS ALSO CONSIDERABL E THAT IN SUCH SITUATION THE ORIGINAL HAND WRITTEN PAPER WOULD NOT REMAIN IN THE APPELLANT'S OFFICE RATHER THERE COULD HAVE BEEN A COPY AND ACKNOWLEDGMENT RECEIPT. THESE FACTS SUPPORT THE CONTENTION OF THE APPELLANT THAT DOCUMENT IN QUESTION DOES NOT BELONG TO THE APPELLANT. 5.15 REGARDING THE STATEMENT RECORDED DURING THE COURSE OF SURVEY AS WELL AS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS NOTED ON EXAMINATION OF STATEMENT RECORDED AT THE TIME OF SU RVEY THAT IT SHOWS THERE WAS A BREAK IN RECORDING THE STATEMENT, SIGNA TURE OF THE APPELLANT WERE TAKEN AND THEREAFTER THE RECORDING OF STATEMENT WAS CONTINUED ON QUESTION PERTAINING TO THE DOCUMENT REGARDING CESSATION OF L IABILITY. IN ANSWER TO THE QUERY IN THE STATEMENT RECORDED AT THE TIME OF SURV EY THE APPELLANT HAD REPLIED THAT AT PRESENT HE WAS UNABLE TO EXPLAIN THE DETAILS OF TRANSACTIONS, HE WAS ALSO NOT ABLE TO VERIFY THE SAME WITH HIS BOOKS AND THEREFOR E HE OFFERED AMOUNT OF RS.90 LACS AS HIS ADDITIONAL INCOME OVER AND ABOVE HIS RE GULAR INCOME FOR A.Y. 2009- 10 TO BUY PEACE OF MIND. THIS SHOWS THAT THE DOCUME NT IN QUESTION WAS NOT VERIFIED WITH THE BOOKS OF ACCOUNT. THERE WAS NO FI NDING OF THE SURVEY TEAM ABOUT THE BALANCES AS PER BOOKS OF ACCOUNT. THE STA TEMENT OF APPELLANT SHOWING THAT HE WANTS TO OFFER INCOME TO BUY PEACE OF MIND SHOWS HIS STATUS OF MIND AT THE TIME OF RECORDING OF HIS STATEMENT. T HE AO HAS AGAIN RECORDED STATEMENT ON OATH U/S 131 DURING THE ASSESSMENT PRO CEEDING AND THE AO HAS NOT BEEN ABLE TO DENY OR REBUT THE STAND TAKEN BY THE A PPELLANT IN HIS STATEMENT BY BRINGING ANY OTHER FACT OR DISCREPANCY. FURTHER, TH E AO HAS NEITHER MADE ANY 20 INQUIRY NOR HAS GIVEN ANY FINDING ABOUT ANY DISCREP ANCY NOTED BY HIM ON THE BASIS OF BOOKS OF ACCOUNT OR ANY INQUIRY MADE WITH PEARL INDIA LTD. RATHER, THE INQUIRY CONDUCTED AT THE APPELLATE STAGE SHOWS THAT THE APPELLANT HAD RUNNING ACCOUNT AND THERE EXISTS, OPENING AND CLOSING BALAN CES IN THE ACCOUNT AS PER BOOKS OF ACCOUNT OF PEARL INDIA LTD. 5.16 IT IS WORTHWHILE TO QUOTE THE CIRCULAR ISSUED BY TH E CENTRAL BOARD OF DIRECT TAXES DATED 10.03.2003 WHICH READS AS FOLLOW S :- 'INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHE RE ASSESSEE HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE U NDISCLOSED INCOME DURING THE COURSE OF THE SEARCH AND SEIZURE AND SUR VEY OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CREDIBLE EVIDEN CE, ARE LATER RETRACTED BY THE CONCERNED ASSESSES WHILE FILING RE TURNS OF INCOME. IN THESE CIRCUMSTANCES, ON CONFESSIONS DURING THE COUR SE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEF UL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND C ONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INF ORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCL OSED BEFORE THE INCOME TAX DEPARTMENT. SIMILARLY, WHILE RECORDING STATEMEN T 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, THE ASSESSING OFFICER SHOULD RELY UPON THE EVIDENCES/MATERIALS GATHERED DURING T HE COURSE OF SEARCH/SURVEY OPERATIONS OR THEREAFTER WHILE FRAMIN G THE RELEVANT ASSESSMENT ORDERS.' EVEN THE CBDT HAS TAKEN COGNIGENCE OF SUCH INSTANCE S WHICH COMPEL TO ISSUE ADVISORY CIRCULAR THAT WHILE RECORDING STA TEMENT DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAINED CONFESSION TO THE UNDISCLOSED I NCOME. 5.17 IN THE DECISION GIVEN IN THE CASE OF PULKNGODE RUBBER PRODUCE CO. LTD. VS. STATE OF KERALA [1973] 91 ITR 18, THE HON'BLE SUPRE ME COURT HELD THAT AN 21 ADMISSION IS EXTREMELY AN IMPORTANT PIECE OF EVIDEN CE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO M ADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. IN A RECENT JUDGMENT IN THE CASE O F CIT VS. S. KHADAR KHAN SON (SUPRA), THE HON'BLE SUPREME COURT UPHELD THE FINDI NG OF MADRAS HIGH COURT THAT SECTION 133A DOES NOT EMPOWER ANY ITO TO EXAMI NE ANY PERSON ON OATH, SO STATEMENT RECORDED U/S 133 A HAS NO EVIDENTIARY VAL UE AND ANY ADMISSION MADE DURING SUCH STATEMENT CANNOT BE MADE BASIS OF THE A DDITION. THE WORD 'MAY' USED IS SECTION 133A(3)(III) MAKES IT CLEAR THAT TH E MATERIAL COLLECTED AND THE STATEMENT RECORDED DURING THE SURVEY U/S 133 A ARE NOT CONCLUSIVE PIECE OF EVIDENCE BY THEMSELVES. THE STATEMENT OBTAINED U/S 133 A WOULD NOT AUTOMATICALLY BIND UPON THE ASSESSEE. 5.18 IN VIEW OF DISCUSSION IN ABOVE PARAS AND THE J UDICIAL PRONOUNCEMENTS OF HON'BLE SUPREME COURT, I AM OF THE VIEW THAT THE AD DITION OF RS.90 LACS MADE ON THE BASIS OF QUESTIONABLE DOCUMENT AND STATEMENT RE CORDED DURING THE COURSE OF SURVEY U/S 133 A AT THE PREMISES OF APPELLANT WHICH HAS NOT BEEN CORROBORATED WITH ANY FURTHER FINDING OR ANY OTHER EVIDENCE FROM THE THIRD PARTY IS NOT JUSTIFIED. HENCE, THE ADDITION OF RS.90 LACS IS DEL ETED. THIS GROUND OF APPEAL IS ALLOWED. 10. THE LD. DR RELIED UPON ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT STATEMENT OF THE ASSESSE E WAS RECORDED DURING THE COURSE OF SURVEY IN THE PRESENCE OF HIS COUNSEL. THEREFORE, IT COULD NOT BE SAID THAT THE STATEMENT OF THE ASSESSEE RECORDED DURING THE COURSE OF SURVEY WAS RECORDED UNDER PRESSURE. HE HA S RELIED UPON DECISION OF HON'BLE PUNJAB & HARYANA HI GH COURT IN THE CASE OF BACHHITTAR SINGH 328 ITR 400 (SUPRA) AND SUBMITTED THAT SINCE ASSESSEE RETRACTED FROM THE STATEMENT AROUND THREE MONTHS, THEREFORE, RETRACTION WAS NOT VALID. 22 10(I). ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND REFERRED TO VARIOUS DOCUMENTS FROM THE PAPER BOOK TO SHOW THAT THE SEIZED PAPER P B- 82 WAS FABRICATED AND DID NOT LEAD TO ANY PAYMENT O F RS. 90 LACS. HE HAS SUBMITTED THAT SEIZED PAPER IS NOT CORROBORATED BY ANY EVIDENCE BECAUSE M/S PACL LTD. HAS SHOWN THE AMOUNT OUTSTANDING IN THEIR BOOKS OF ACCOUNT AND LATER ON, PAYMENTS HAVE BEEN RECEIVED B Y THEM THROUGH CHEQUES. THIS INFORMATION IS VERIFIED BY THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS. C OPIES OF THE BALANCE SHEET OF THE ASSESSEE AND M/S PACL L TD. HAVE BEEN BROUGHT ON RECORD TO JUSTIFY THE FINDINGS OF THE LD. CIT(APPEALS). DURING THE COURSE OF SURVEY, STATEMENT OF ASSESSEE COULD NOT BE RECORDED. SINCE ASSESSEE PROVED THAT SEIZED PAPER WAS INCORRECT, THEREFORE, RETRACTION FROM THE STATEMENT WAS JUSTIF IED AND RELIED UPON ORDER OF ITAT CHANDIGARH BENCH IN T HE CASE OF SANJEEV KUMAR VS ITO 31 ITR (TRIBUNAL ) 680 . 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE COPY OF THE S EIZED PAPER IS FILED AT PAGE 82 OF THE PAPER BOOK. THE L D. CIT(APPEALS) CORRECTLY NOTED THAT DATE HAS BEEN CORRECTED IN THE SAME BY OVER-WRITING THE DATE, HAS BEEN REPEATED BELOW ON THE LETTER. THE DATE OF SURVEY WA S 23.06.2009 AND CORRECTED DATE WAS 23.03.2009 WHICH COULD NOT BE SAID TO BE MERE CO-INCIDENCE. THE CON TENTS 23 OF THE SEIZED PAPER SAY THAT FOR THE YEAR ENDING 31.03.2009, WHEREAS THE LETTER AFTER CORRECTION IS SUPPOSED TO BE SIGNED ON 23.03.2009. THE LANGUAGE O F THE LETTER SHOWS THAT SUCH LANGUAGE COULD ONLY BE WRITTEN ONLY AFTER THE CLOSE OF THE YEAR I.E. 31.03 .2009. THE FINDINGS OF FACT RECORDED BY LD. CIT(APPEALS) A RE CORRECT AND BASED ON PROPER APPRECIATION OF THE SEI ZED PAPER. IF A PERSON IS WRITING SUCH A LETTER ON 23.03.2009, HE CANNOT ANTICIPATE WHAT WOULD BE DUE ON LATER DATE ON 31.03.2009. FURTHER, THE AMOUNT PAYA BLE AS PER THE SEIZED PAPER WAS SHOWN AT RS. 90 LACS WHEREAS AS PER ASSESSEE'S BOOKS OF ACCOUNT (PB-8 SUNDRY CREDITORS) AS PER BOOKS OF ACCOUNT OF THE ASSESSEE, THE BALANCE WAS RS.1.35 CR. THE ACCOUNTS FOR SUBSEQUENT PERIOD ALSO SHOW THAT ASSESSEE HAS MADE PAYMENT ON VARIOUS DATES BY ACCOUNT PAYEE CHEQUES A ND THE CLOSING BALANCE AS ON 31.03.2010 WAS RS. 35,10,686/-. SO, IF THE ASSESSEE HAS MADE PAYMENTS PRIOR TO THAT, THE QUESTION OF MAKING SUBSEQUENT PAYMENT BY ACCOUNT PAYEE CHEQUE WOULD NOT ARISE. P B- 32 IS LEDGER ACCOUNT OF M/S PACL LTD. SHOWING PAYME NTS OF RS. 1 CRORE ON DIFFERENT DATES THROUGH BANKING CHANNEL, COPY OF THE BANK ACCOUNT OF THE ASSESSEE A S WELL AS COPY OF BANK ACCOUNT OF M/S PACL LTD. FILED ON RECORD ALSO SUPPORT THE EXPLANATION OF THE ASSESSEE . THE ASSESSING OFFICER ALSO OBTAINED INFORMATION DIR ECTLY FROM M/S PACL LTD., NEW DELHI THROUGH NOTICES UNDER SECTION 133(6) AND 131 WHICH SHOWS THAT THERE WERE 24 RUNNING ACCOUNTS WITH THE ASSESSEE AND M/S PACL LTD . HAS SHOWN IN ITS ACCOUNT THE PAYMENT RECEIVED ON SUBSEQUENT DATES. THE LD. CIT(APPEALS) ALSO NOTED THAT THERE IS A CONSIDERABLE FORCE IN THE SUBMISSION OF ASSESSEE BECAUSE WHEN ORIGINAL SEIZED PAPER (PB-82) IS WRITTEN, HOW THE SAME REMAINED IN THE OFFICE OF THE ASSESSEE BECAUSE IT SHOULD HAVE REACHED M/S PACL LT D. BUT RECOVERY OF THE ORIGINAL SHOWS THAT NO PAYMENTS HAVE BEEN MADE BY ASSESSEE AS ALLEGED IN THE SEIZED PAPER. THE LD. CIT(APPEALS) ALSO NOTED THAT THERE IS A BREAK IN THE RECORDING OF THE STATEMENT ON THE DATE OF THE SURVEY AND ASSESSEE WAS NOT ABLE TO EXPLAIN THE DETAILS OF THE TRANSACTIONS. THIS SHOWS THAT THE DOCUMENT IN QUESTION WAS NOT VERIFIED FROM THE BOOK S OF ACCOUNT OF THE ASSESSEE. THERE WAS ALSO NO FINDING OF THE SURVEY TEAM ABOUT THE BALANCES AS PER BOOKS OF ACCOUNT OF THE ASSESSEE. THE LD. CIT(APPEALS), THER EFORE, RIGHTLY CONSIDERED THE BOARDS CIRCULAR THAT IN SUC H A SITUATION, CONFESSIONAL STATEMENT SHOULD NOT BE OBTAINED BECAUSE IT SHOULD BE BASED ON CREDIBLE EVIDENCES. 12. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KISHAN LAL SHIV CHAND 88 ITR 293 HELD THAT IT IS AN ESTABLISHED PRINCIPLE OF LAW THAT A PARTY IS ENTITL ED TO SHOW AND PROVE THAT AN ADMISSION MADE BY HIM WAS IN - FACT NOT CORRECT AND TRUE. HON'BLE SUPREME COURT IN THE CASE OF PULLANGODE RUBBER & PRODUCE COMPANY LTD . 25 91 ITR 18 HELD THAT ASSESSEE SHOULD BE GIVEN OPPORTUNITY TO SHOW THAT ADMISSION IS INCORRECT OR DOES NOT SHOW CORRECT STATE OF FACTS. THE ITAT CHANDIG ARH BENCH IN THE CASE OF SANIEEV KUMAR (SUPRA) HELD AS UNDER : HELD, ALLOWING THE APPEAL, THAT THE ADDITION WAS MADE WITHOUT PROPER EVIDENCE AND MERELY ON THE BASIS OF A STATEMENT RECORDED DURING THE SURVEY, WHICH COULD NO T BE SUSTAINED. NO PROPER ENQUIRY WAS CONDUCTED. THEREFOR E, THE ADDITION MADE WAS TO BE DELETED. 13. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DISCUSSION, IT IS CLEAR THAT THE SEIZED PAPER (PB-82) IS NOT RELIABLE, DID NOT SHOW CORRECT STATE OF AFFAIRS AND SAME IS NOT CORROBORATED BY ANY INDEPENDENT EVIDENCE. THERE IS INTERPOLATION OF TH E DATE IN THE SAME AND THE LANGUAGE CONTAINED THEREIN CLEARLY SHOW THAT THE LETTER IS NOT DISCLOSING CORR ECT FACTS. IT IS ALSO NOT EXPLAINED WHY THE ORIGINAL L ETTER REMAINED WITH THE ASSESSEE AND HOW THE PAYMENT OF R S. 90 LACS HAVE BEEN VERIFIED. M/S PACL LTD. DID NOT CONFIRM ALLEGED PAYMENT. THEREFORE, ASSESSEE HAD A JUSTIFICATION TO RETRACT FROM THE EARLIER STATEMENT MAKING SURRENDER OF RS. 90 LACS. THE ASSESSEE, HA S BEEN ABLE TO SHOW THAT THE RETRACTION FROM THE EARL IER STATEMENT WAS JUSTIFIED AND BASED ON THE FACTS AND MATERIAL ON RECORD. THE LD. CIT(APPEALS), ON PROPE R APPRECIATION OF FACTS AND MATERIAL ON RECORD, CORRE CTLY DELETED THE ADDITION. THE DECISION RELIED UPON BY LD. 26 DR WOULD NOT SUPPORT THE CASE OF THE REVENUE BECAUS E OF THE FACTS AND CIRCUMSTANCES AS CONSIDERED ABOVE. WE, THEREFORE, DO NOT FIND ANY ERROR IN THE ORDER O F LD. CIT(APPEALS) IN DELETING THE ADDITION. 14. IN THE RESULT, DEPARTMENTAL APPEAL FAILS AND IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNES H SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20 TH JANUARY,2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD