Sri Rajendra Kumar Jain, Kakinada V. The ACIT Central Circle Rajahmundry, Rajahmundry

ITA 316/VIZ/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67367 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-04-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 08-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SASMAL
• Assessee Lawyers: P PRABHAKARA MURTHY
• Keywords: Unexplained investment; Search and seizure; Corroborative evidences; Retraction

Judgement Text

ITA NOS.315 & 316/VIZ/2011 BHAWAR LAL JAIN & RAJEND RA KUMAR JAIN, KAKINADA IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D. MANMOHAN , VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 315 /VIZAG/ 20 11 ASSESSMENT YEAR : 2009 - 10 BHAWAR LAL JAIN KAKINADA VS. ACIT CENTRAL CIRCLE RAJAHMUNDRY (APPELLANT) (RESPONDENT) PAWN NO. ACNPB 7683H ITA NO.316/VIZAG/2011 ASSESSMENT YEAR : 2009 - 10 RAJENDRA KUMAR JAIN KAKINADA VS. ACIT CENTRAL CIRCLE RAJAHMUNDRY (APPELLANT) (RESPONDENT) PAWN NO.ACNPB 7682G APPELLANT BY: SHRI P. PRABHAKARA MURTHY, ADVOCATE RESPONDENT BY: SHRI B . SASMAL, ADDL. CIT DATE OF HEARING : 30.04.2013 DATE OF PRONOUNCEMENT : 03.05.2013 ORDER PER SHRI D. MANMOHAN, VICE PRESIDENT:- THESE APPEALS ARE DIRECTED AGAINST THE ORDERS DAT ED 18.08.2011 PASSED BY THE LD. CIT(A)-1, HYDERABAD AND THEY PERT AIN TO THE ASSESSMENT YEAR 2009-10. ISSUE INVOLVED IN BOTH THE APPEALS B EING IDENTICAL, WE PROCEED TO DISPOSE OF THESE APPEALS BY A COMBINED ORDER FOR THE SAKE OF CONVENIENCE. AT THE TIME OF HEARING, LD. COUNSEL SUBMITTED THAT THE FACTS SET OUT IN THE APPEAL OF SHRI RAJENDRA KUMAR JAIN MAY BE PERMITTED TO BE REFERRED TO INSTEAD OF TAKING UP THE CASE OF SHRI BHAWAR LAL JA IN. THE LD. D.R. HAS NO OBJECTION IN THIS REGARD, WE THEREFORE, REFERRED TO THE FACTS MENTIONED IN THE RECORD OF SHRI RAJENDRA KUMAR JAIN. ITA NOS.315 & 316/VIZ/2011 BHAWAR LAL JAIN & RAJEND RA KUMAR JAIN, KAKINADA 2 2. THE ASSESSEES ARE MONEY LENDERS AND ARE ALSO ENG AGED IN THE TRADE OF GOLD AND SILVER. SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE GROUP CASES OF ASSESSEES ON 03.02.2009. SIMULTANEOUSLY, OPERATIONS WERE CARRIED OUT IN THE CASE OF THE ASSESSEES HEREIN. DURING TH E COURSE OF SURVEY OPERATIONS, UNACCOUNTED PLEDGED ORNAMENTS, BELONGIN G TO THE PAWN BROKING BUSINESS CARRIED ON BY THE ASSESSEES WERE FOUND. D URING THE POST SURVEY INVESTIGATIONS CONDUCTED BY THE INVESTIGATION WING, THE ASSESSEES ADMITTED ON OATH ON DATED 25.02.2009 THAT THERE WAS UNEXPLAI NED INVESTMENT IN PAWN BROKING BUSINESS AND THE PRINCIPAL AMOUNT OF ` .27,28,850/- PERTAINS TO BOTH THE BROTHERS WHO ARE SHARING THE SAME PREMISES FOR THEIR INDIVIDUAL BUSINESS ACTIVITIES. THEY HAVE ALSO ADMITTED THAT IT IS AN UNEXPLAINED INVESTMENT IN PAWN BROKING BUSINESS FOR THE ASSESSMENT YEAR 2009- 10 AND THEY WOULD PAY THE TAXES ON THE ADMITTED UNDISCLOSED INCOME. HAVI NG REGARD TO THE ADMISSION, THE ASSESSING OFFICER APPEARS TO HAVE NO T CONDUCTED ANY FURTHER ENQUIRIES; BUT THE ASSESSEES FILED THEIR RETURNS OF INCOME ON 27.07.2010 WITHOUT OFFERING THE ABOVE MENTIONED UNEXPLAINED IN COME TO TAX. 3. IT DESERVES TO BE NOTICED THAT SEARCH AND SEIZUR E OPERATIONS WERE CONDUCTED IN THE GROUP CASES ON 03.02.2009 AND SIMU LTANEOUSLY, SURVEY OPERATIONS WERE CONDUCTED IN THE CASE OF BOTH THE A SSESSEES AS WELL AS SMT. MADHUBALA JAIN WHO IS A PROPRIETRESS OF SRI RAJ JEW ELLERS AND SHE IS THE WIFE OF SHRI RAJENDRA KUMAR JAIN. AFTER A GAP OF ABOUT 20 DAYS, BOTH THE ASSESSEES ADMITTED THAT THE UNEXPLAINED INVESTMENT PERTAINS TO BOTH OF THEM AND WAS PREPARED TO OFFER IT AS THEIR UNDISCLOSED I NCOME AND WOULD PAY THE TAXES ACCORDINGLY. BUT AFTER A GAP OF 1 YEAR 5 MON THS, BOTH OF THEM HAVE RETRACTED FROM THE VOLUNTARY OFFER AND FILED THEIR RESPECTIVE RETURNS WITHOUT INCLUDING THE ABOVE MENTIONED UNDISCLOSED INCOME IN THE RETURNS. 4. WHEN THE ASSESSEES WERE CALLED UPON TO EXPLAIN A S TO WHY THE IMPUGNED AMOUNT WAS NOT OFFERED TO TAX, IT WAS CONT ENDED THAT ON THE DATE OF SURVEY AT THEIR PREMISES, THERE WAS A SIMULTANEO US SURVEY CONDUCTED AT THE PREMISES OF SHRI RAJ JEWELLERS (PROPRIETRESS SM T. MADHUBALA JAIN), WHEREIN THE AUTHORITIES FOUND CASH OF ` .1,00,150/- ONLY AS AGAINST CASH ITA NOS.315 & 316/VIZ/2011 BHAWAR LAL JAIN & RAJEND RA KUMAR JAIN, KAKINADA 3 BALANCE OF ` .28,53,240/- RECORDED IN THE BOOKS. IN OTHER WORDS THE DIFFERENTIAL AMOUNT WAS ACTUALLY UTILISED FOR THE P AWN BROKING BUSINESS BY BOTH SHRI BHAWAR LAL JAIN AND SHRI RAJENDRA KUMAR J AIN. 5. THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE. HE NOTICED THAT AT THE TIME OF SURVEY OPERATIONS, NEIT HER ASSESSEES NOR SMT. MADHUBALA JAIN HAVE GIVEN SUCH EXPLANATION. IT WAS NOT THE CASE OF THE ASSESSEES HEREIN THAT THE CASH BALANCE AS AVAILABLE IN THE BOOKS OF ACCOUNTS OF SMT. MADHUBALA JAIN WAS LENT TO BOTH THE ASSESSE ES HEREIN. IT WAS ALSO NOT THE CASE OF SMT. MADHUBALA JAIN THAT THE CASH D EFICIT WAS ON ACCOUNT OF ADVANCING THE DIFFERENTIAL AMOUNT TO THE ASSESSEES HEREIN. IN FACT DURING POST SURVEY INVESTIGATIONS, EVEN AFTER A GAP OF MOR E THAN 20 DAYS, BOTH THE ASSESSEES HEREIN ADMITTED THAT THE UNEXPLAINED INVE STMENT IN THE PAWN BROKING BUSINESS COMES OUT OF THE UNDISCLOSED INCOM E AND THEY WERE PREPARED TO PAY THE TAXES ON SUCH UNDISCLOSED INCOM E. THE A.O. FURTHER NOTICED THAT THE SURVEY FOLDER OF M/S. SRI RAJ JEWE LLERS (PROPRIETOR SMT. MADHUBALA JAIN) SHOWS THAT NO BOOKS OF ACCOUNTS WER E AVAILABLE; BOOKS COULD NOT BE PRODUCED FOR VERIFICATION OF THE CASH BALANCE. IT WAS ONLY AT A LATER STAGE THE SO CALLED COMPUTERIZED BOOKS WERE P RODUCED FOR VERIFICATION BUT THE SAME COULD NOT BE ACCEPTED TO EXPLAIN AWAY THE CASH DEFICIT SINCE, IN THE ABSENCE OF BOOKS, CASH DEFICIT COULD NOT BE QUA NTIFIED ON THE DATE OF SURVEY. 6. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, THE A.O. CONCLUDED THAT THE ASSESSEES HEREIN OUGHT TO HAVE OFFERED TO TAX UNEXPLAINED INCOME REFERABLE TO UNEXPLAINED INVESTMENT IN PAWN BROKING BUSINESS AND ACCORDINGLY BROUGHT TO TAX A SUM OF ` .6,86,400/- IN THE CASE OF SRI RAJENDRA KUMAR JAIN AND ` .20,42,450/- IN THE CASE OF SRI BHAWAR LAL JAIN. 7. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THAT THE CASH DEFICIT IN THE CASE OF THE WIFE OF SRI RAJENDRA KUMAR JAIN WAS ACTUALLY UTILISED FOR PAWN BROKING BUSINESS CARRIED ON BY BOTH THE ASSESS EES HEREIN. ITA NOS.315 & 316/VIZ/2011 BHAWAR LAL JAIN & RAJEND RA KUMAR JAIN, KAKINADA 4 8. DETAILED WRITTEN SUBMISSIONS WERE FILED BEFORE T HE CIT(A) TO CONTEND THAT DURING THE COURSE OF SURVEY OPERATIONS UNACCOU NTED PLEDGE ORNAMENTS BELONGING TO THE PAWN BROKING BUSINESS, CARRIED ON BY THE ASSESSEES HEREIN, WERE FOUND AND AT THE TIME OF FILING THE RETURN OF INCOME, IT WAS EXPLAINED THAT THE CASH DEFICIT IN THE CASE OF SMT. MADHUBALA JAIN WAS ACTUALLY UTILIZED FOR THE PAWN BROKING BUSINESS OF THE ASSESSEES. TH E A.O. OUGHT TO HAVE TAKEN INTO CONSIDERATION THE FACTUAL MATRIX OF THE CASE I.E. (A) SMT. MADHUBALA JAIN IS THE WIFE OF SRI RAJENDRA KUMAR JA IN (B) THE FAMILY OF SHRI RAJENDRA KUMAR JAIN AND SHRI BHAWAR LAL JAIN LIVE I N THE SAME HOUSE AND BOTH OF THEM CARRY ON THE SAME BUSINESS I.E. PAWN B ROKING BUSINESS. (C) SMT. MADHUBALA JAIN IS ALSO HAVING INDEPENDENT PROP RIETORY BUSINESS AND SHE IS A REGULAR INCOME-TAX ASSESSEE. EVEN FOR THE YEA R UNDER CONSIDERATION, SMT. MADHUBALA JAIN FILED A RETURN OF INCOME BEFORE DCIT CENTRAL CIRCLE, RAJAHMUNDRY. (D) THERE WAS A DEFICIT CASH BALANCE OF RS.27,53,090/- IN THE CASE OF SRI RAJ JEWELLERS (PROPRIETOR SMT. MADHUBAL A JAIN), OUT OF WHICH RS.27,28,850/- WAS ACTUALLY UTILISED FOR THE PAWN B ROKING BUSINESS OF THE ASSESSEES HEREIN. (E) EXCEPT STATING THAT THE ASSES SEE ADMITTED UNDISCLOSED INCOME DURING POST SURVEY OPERATIONS, NO OTHER POSI TIVE MATERIAL WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER TO PROVE THE PRE SENT CLAIM OF THE ASSESSEES AS FALSE. 9. LEARNED CIT(A) OBSERVED THAT SIMULTANEOUS SURVEY PROCEEDINGS TOOK PLACE IN THE CASE OF ASSESSEES HEREIN AS WELL AS IN THE PREMISES OF SRI RAJ JEWELLERS. ON THE DATE OF SURVEY NO BOOKS OF ACCOU NTS WERE AVAILABLE WITH SRI RAJ JEWELLERS SO AS TO PROVE THAT THE CASH DEFICIT IN THE BOOKS OF M/S. RAJ JEWELLERS WAS DIVERTED FOR ADVANCING IT AS LOAN TO THE ASSESSEES HEREIN. IT WAS ONLY SUBSEQUENT TO THE SEARCH THAT THE UNACCOUN TED ADVANCES MADE AGAINST PLEDGE OF GOLD WERE INCORPORATED IN THE BOO KS OF ACCOUNTS ON 20.02.2009 BY DEBITING THE PLEDGED ADVANCE ACCOUNT AND CREDITING THE ACCOUNT OF SMT. MADHUBALA JAIN. HE HAS ALSO TAKEN INTO CONSIDERATION THE CIRCUMSTANCES OF THE CASE IN COMING TO THE CONCLUSI ON THAT THERE WAS NO POSITIVE MATERIAL ON RECORD TO SHOW THAT THE INVEST MENTS MADE BY THE ASSESSEE WERE DIRECTLY LINKED TO CASH BALANCE IN TH E CASE OF M/S. RAJ ITA NOS.315 & 316/VIZ/2011 BHAWAR LAL JAIN & RAJEND RA KUMAR JAIN, KAKINADA 5 JEWELLERS. HAD THE CASH OF M/S. SRI RAJ JEWELLERS BEEN INVESTED IN PAWN BROKING, THE ASSESSEES WOULD HAVE BEEN AWARE OF THE SAME SINCE THE WIFE OF SRI RAJENDRA KUMAR JAIN AND THE SISTER-IN-LAW OF SH RI BHAWAR LAL JAIN IS THE PROPRIETRESS OF M/S. RAJ JEWELLERS; THE APPELLANT C OULD HAVE EASILY EXPLAINED THE SAME BEFORE THE INVESTIGATING OFFICERS AT THE T IME OF SURVEY SINCE THE INVESTMENT IS CLAIMED TO BE FROM OUT OF THE AVAILAB LE CASH IN THE FAMILY. IN FACT NO BOOKS WERE AVAILABLE IN THE PREMISES OF SRI RAJ JEWELLERS SO AS TO EXPLAIN THE ALLEGED CASH DEFICIT. THEREFORE, THE L EARNED. CIT(A) CONCLUDED THAT THE ALLEGED CASH DEFICIT IN THE BOOKS OF SRI R AJ JEWELLERS CANNOT BE CORRELATED TO THE UNEXPLAINED INVESTMENTS OF THE AS SESSEES, THAT TOO AFTER A PERIOD OF MORE THAN 1 YEARS. THUS THE EXPLANATIO N IS NOTHING BUT AN AFTERTHOUGHT. IN FACT THIS POSITION IS FORTIFIED B Y THE ENTRY MADE IN THE BOOKS OF SRI RAJ JEWELLERS OF ALMOST LIKE AMOUNT TO CREAT E A DEFICIT AND TO EXPLAIN THE INVESTMENT IN PAWN BROKING BUSINESS WHICH WAS A DMITTED TO BE UNEXPLAINED BY THE ASSESSEES HEREIN DURING THE COUR SE OF SURVEY. THUS, THE ADDITION MADE TOWARDS UNEXPLAINED INCOME WAS CONFIR MED BY THE LEARNED. CIT(A). FURTHER AGGRIEVED, ASSESSEES ARE IN APPEAL BEFORE US. 10. THE LEARNED COUNSEL REFERRED TO THE WRITTEN SUB MISSIONS FILED BEFORE THE CIT(A) AND ALSO THE ENCLOSURES FILED BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS CONTENTION THAT THE ASSESSEES HEREIN ARE BROTHERS AND THEY WERE CARRYING ON BUSINESS IN THE SAME PREMISES WITH COMMON STAFF. SRI RAJENDRA KUMAR JAINS CASE IS THAT HE HAD OBTAINED FINANCIAL HELP OF M/S. RAJ JEWELLERS BECAUSE THE PROPRIETOR IS HIS WIFE AND HE USED TO HELP HER TO THE EXTENT POSSIBLE IN HER FINANCIAL AFFAIRS. IT WAS A LSO CONTENDED THAT SMT. MADHUBALA JAIN ORDINARILY KEEPS HUGE CASH BALANCE W ITH HER AS SHE WAS CARRYING ON RETAIL TRADING BUSINESS IN GOLD JEWELLE RY AND SILVERWARE. BECAUSE OF THE FLUCTUATING RATES OF GOLD SHE WANTED TO INVE ST SUBSTANTIAL AMOUNT IN THE GOLD AND IN THAT PROCESS SHE HAS WITHDRAWN SUBSTANT IAL AMOUNT FROM THE PARTNERSHIP FIRM VIZ. M/S. RAJENDRA CONSTRUCTIONS. DURING THE FINANCIAL YEAR 2008-09 I.E. UP TO 3.2.2009, SMT. MADHUBALA JAIN WI THDREW AN AMOUNT OF RS.18,64,000/- FROM THE FIRM OF M/S. RAJENDRA CONST RUCTIONS. IT WAS ALSO CONTENDED THAT THIS MONEY WAS AVAILABLE WITH HER AP ART FROM FUNDS DRAWN ITA NOS.315 & 316/VIZ/2011 BHAWAR LAL JAIN & RAJEND RA KUMAR JAIN, KAKINADA 6 FROM THE PARTNERSHIP CONCERN AND THE SAME WAS UTILI SED FOR GIVING ADVANCES TO THE ASSESSEES HEREIN. THE LD. COUNSEL ALSO REFE RRED TO THE ASSESSMENT ORDER IN THE CASE OF SMT. MADHUBALA JAIN TO SUBMIT THAT THERE WAS NO ADDITION IN RESPECT OF DEFICIT CASH BALANCE AND IT WAS ACCEPTED IN HER ASSESSMENT THAT THE AMOUNT WAS ADVANCED TO THE ASSE SSEES HEREIN. BASED ON THAT PREMISE, HE RELIED UPON THE FOLLOWING TWO D ECISIONS IN SUPPORT OF HIS CONTENTION THAT WHEN THE ASSESSEES CLAIM IS SUPPOR TED WITH PROOF, SAME CANNOT BE REJECTED BY SIMPLY MENTIONING THAT THE AS SESSEES COULD NOT PROVE, OVERLOOKING THE FACT THAT AN ADMISSION DURING SURVE Y WITHOUT ANY SUPPORTING EVIDENCE CANNOT BE MADE A BASIS FOR ADDITION. 1. M. MAHENDRA VS. ACIT 133 TTJ 98 (CHENNAI) 2. M. NARAYANAN & BROS. VS. ACIT 339 ITR 192 (MAD RAS) 11. ON THE OTHER HAND, THE LD. D.R. SUBMITTED THAT BOTH THE ASSESSEES HAVE ACCEPTED DURING POST SURVEY INVESTIGATIONS PER IOD THAT UNEXPLAINED INVESTMENT IS OUT OF UNEXPLAINED CASH AVAILABLE WIT H THE ASSESSEES AND THEY HAVE ADMITTED THAT IT IS THEIR UNEXPLAINED INVESTME NT AND WOULD BE OFFERED TO TAX ACCORDINGLY. THE SEARCH IN THE GROUP CASES AS WELL AS SURVEY IN THE CASE OF ASSESSEES AND SMT. MADHUBALA JAIN TOOK PLACE ON 3.2.2009 BUT EVEN AFTER A SUFFICIENT GAP OF MORE THAN 2 WEEKS, NEITHER SMT. MADHUBALA JAIN CLAIMED TO HAVE ADVANCED THE AMOUNT TO THE ASSESSEES HEREIN NOR THE ASSESSEES HEREIN ADMITTED TO HAVE TAKEN THE LOAN FROM HER. I T IS NOT IN DISPUTE THAT BOTH THE ASSESSEES AS WELL AS SMT. MADHUBALA JAIN R ESIDE IN THE SAME PREMISES AND IT CANNOT BE SAID THAT DURING THE COUR SE OF SURVEY PROCEEDINGS, THEY WERE NOT AWARE OF THE SOURCE OF INVESTMENTS. IN FACT, IN THE CASE OF M/S. RAJ JEWELERS BOOKS WERE NOT AVAILABLE TO CORRE LATE AS TO HOW THE DEFICIT WORKED OUT. THUS, THE SPOT VERIFICATION CLEARLY PR OVE THE FACT THAT THE UNEXPLAINED INVESTMENTS IN THE HANDS OF BOTH THE AS SESSEES HEREIN EMANATES FROM THE UNDISCLOSED INCOME EARNED BY THE ASSESSEES AND THAT IS THE PRECISE REASON WHY BOTH THE ASSESSEES HAVE AGREED TO OFFER IT TO TAX IN THEIR STATEMENTS FILED ON 25.2.2009. THE LD. D.R. THEREF ORE SUBMITTED THAT RETRACTION AFTER MORE THAN ONE YEAR IS ONLY AN AFTE RTHOUGHT SINCE ON THE SPOT ENQUIRY GOES TO PROVE THAT SMT. MADHUBALA JAIN HAS NOT ADVANCED ANY MONEY ITA NOS.315 & 316/VIZ/2011 BHAWAR LAL JAIN & RAJEND RA KUMAR JAIN, KAKINADA 7 TO THE ASSESSEES HEREIN AND IT WAS NOT THE CASE OF THE ASSESSEES, DURING THE COURSE OF POST SURVEY OPERATIONS, THAT THEY HAVE TA KEN LOAN FROM SMT. MADHUBALA JAIN. HE THUS STRONGLY RELIED UPON THE O RDERS PASSED BY THE TAX AUTHORITIES. 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. IT IS WELL SETTLED THAT THE INITIAL ONUS I S UPON THE ASSESSEES TO PROVE THAT THERE IS SOURCE FOR MAKING INVESTMENTS AS OTHE RWISE IT CAN BE ASSUMED THAT THE ASSESSEES UTILISED UNEXPLAINED INCOME FOR MAKING INVESTMENTS. IN THE INSTANT CASE, EVEN AFTER SUFFICIENT GAP, RECKON ED FROM THE DATE OF SURVEY OPERATIONS CONDUCTED IN THE PREMISES OF THE ASSESSE ES HEREIN AS WELL AS ON M/S. RAJ JEWELLERS (PROPRIETOR SMT. MADHUBALA JAIN AND WIFE OF SHRI RAJENDRA KUMAR JAIN), IT WAS NOWHERE SPECIFIED THAT SHE MAIN TAINED BOOKS OF ACCOUNTS AND THE DEFICIT CASH BALANCE WAS ON ACCOUNT OF THE TRANSFER OF THE FUNDS FROM HER BOOKS TO THE ASSESSEES HEREIN. ON THE CONTRARY ON 25.2.2009, BOTH THE ASSESSEES HAVE GIVEN A STATEMENT ADMITTING THAT THE Y HAVE EARNED UNEXPLAINED INCOME WHICH WAS INVESTED IN PAWN BROKI NG BUSINESS. THEREFORE, FURNISHING THE SO CALLED COMPUTERIZED BO OKS IN THE CASE OF SMT. MADHUBALA JAIN OR RETRACTING FROM THEIR STATEMENTS AFTER 1 YEARS IN THE FORM OF FILING RETURNS OF INCOME BY NOT INCLUDING T HE IMPUGNED INCOME FOR TAX PURPOSES WOULD ONLY AMOUNT TO AN AFTERTHOUGHT. HAD THE ASSESSEES RETRACTED THE OFFER IMMEDIATELY OR HAD ANY OF THEM CLAIMED TH AT THERE IS AN APPROPRIATE SOURCE FOR MAKING INVESTMENTS IN PAWN BROKING BUSIN ESS, THE ASSESSING OFFICER WOULD HAVE CAUSED FURTHER ENQUIRIES BUT THE ASSESSEES HEREIN HAVE SCUTTLED THE INVESTIGATION PROCESS BY ADMITTING THE INCOME DURING POST SURVEY INVESTIGATIONS. 13. HAVING REGARD TO CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEES ARE NOT ENTITLED TO RETRACT FROM THEI R EARLIER STATEMENTS AFTER A GAP OF MORE THAN 1 YEAR. THE CASE LAW RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE ARE DISTINGUISHABLE ON FACTS. IN THE CASE OF M. MAHENDRA (SUPRA) THE RECORDS INDICATE THAT THE ASSESSEES ADVANCED LO ANS BUT DURING THE SURVEY, HE STATED THAT SUCH LOANS WERE AROUND RS.2,70,000/- AS AGAINST RECORDED ITA NOS.315 & 316/VIZ/2011 BHAWAR LAL JAIN & RAJEND RA KUMAR JAIN, KAKINADA 8 AMOUNT OF RS.1,99,678/-. THE COURT HELD THAT AN AD MISSION DURING SURVEY, WITHOUT ANY SUPPORTING EVIDENCE, CANNOT BE MADE A B ASIS FOR ADDITION. IN THE AFORECITED DECISION A SURVEY WAS CONDUCTED ON 2.3.2 005 AND THE ASSESSEE AND HIS FATHER AGREED TO OFFER CERTAIN AMOUNT AS IN COME, WHEREAS SUBSEQUENTLY THEY HAVE RETRACTED WHILE FILING THE R ETURN OF INCOME. IN THIS FACTUAL BACK DROP, THE BENCH OBSERVED THAT THE ASSE SSEE RETRACTED THE ADMISSION THOUGH BELATED AND HENCE ADMISSIONS CANNO T BE MADE A BASIS FOR ADDITION IN THE LIGHT OF THE DECISION OF THE HONBL E MADRAS HIGH COURT IN THE CASE OF S. KHADER KHAN 300 ITR 157 PARTICULARLY WHE N THE ASSESSEE EXPLAINED, BY GIVING ENTIRE DETAILS, ABOUT THE AVAI LABILITY OF CASH AT THE TIME OF SURVEY. SIMILARLY, IN THE CASE OF M. NARAYANA AND BROTHERS (SUPRA) THE HONBLE COURT RELIED UPON THE CIRCULAR OF THE CBDT, WHEREIN DEPARTMENTAL OFFICERS WERE DIRECTED NOT TO GIVE MORE EMPHASIS TO THE RECORDED STATEMENTS RATHER THAN GOING BY THE FACTS ON RECORD. IN THE C ASE BEFORE US, HOWEVER, THE FACTS ON RECORD DO NOT LEND SUPPORT TO THE STAND OF THE ASSESSEES. SURVEY TOOK PLACE ON 3.2.2009. NEITHER THE ASSESSEES HERE IN NOR SMT. MADHUBALA JAIN FURNISHED ANY MATERIAL ON RECORD TO INDICATE T HAT THE DEFICIT CASH IN THE BOOKS OF SRI RAJ JEWELLERS WAS ON ACCOUNT OF THE FA CT THAT THE SAID AMOUNT WAS GIVEN TO THE ASSESSEES HEREIN AND EVEN THE ASSE SSEES HAVE NEVER STATED THAT THEY HAVE UTILISED THE MONEY BELONGING TO RAJ JEWELLERS IN THEIR PAWN BROKING BUSINESS. WHEN BASIC FACTS WERE NOT BROUGH T ON RECORD THE ONLY INFERENCE THAT COULD HAVE BEEN DRAWN DURING THE COU RSE OF SURVEY OPERATIONS WAS THAT THE ASSESSEES HAVE NO EXPLAINABLE SOURCE F OR MAKING INVESTMENTS AND THE INVESTMENTS ARE OUT OF UNEXPLAINED INCOME. EVEN AFTER A GAP OF MORE THAN 20 DAYS BOTH THE ASSESSEES HAVE ADMITTED IN THEIR STATEMENTS. IN THE PECULIAR FACTS OF THE CASE, WE ARE OF THE CONSI DERED OPINION THAT THE SUBSEQUENT PRODUCTION OF THE SO CALLED COMPUTERIZED BOOKS SHOULD NOT BE TAKEN AS A BASIS TO ACCEPT THE PLEA OF THE ASSESSEE S THAT SHE HAD ADVANCED THE AMOUNT TO BOTH THE ASSESSEES HEREIN. WHEN BOTH THE ASSESSEES AS WELL AS SMT. MADHUBALA JAIN ARE RESIDING IN THE SAME HOU SE AND WHEN SUBSTANTIAL AMOUNT AVAILABLE IN THE BOOKS OF M/S. RAJ JEWELLERS WAS GIVEN TO BOTH THE ASSESSEES HEREIN, IT CANNOT BE SAID THAT TWO SEASON ED BUSINESS PERSONS WOULD SIMPLY REFUSE TO EXPLAIN THE SOURCE AT THE TI ME OF SURVEY AND EVEN ITA NOS.315 & 316/VIZ/2011 BHAWAR LAL JAIN & RAJEND RA KUMAR JAIN, KAKINADA 9 THEREAFTER IN ORDER TO SCUTTLE FURTHER PROCEEDINGS AND TO PERMIT THE REVENUE AUTHORITIES TO REMAIN IN DARK OFFER IT AS INCOME, I N THEIR STATEMENTS ON 25.2.2009. THUS, CIRCUMSTANTIAL EVIDENCE LEND SUPP ORT TO THE CONCLUSION REACHED BY THE LD. CIT(A). WE THEREFORE, UPHOLD TH E ORDER OF THE LD. CIT(A) AND DISMISS THE APPEALS FILED BY THE ASSESSEES. 14. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE ES ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 03.05.2013 SD/ - SD/ - (B . R . BASKARAN) ( D. MANMOHAN ) ACCOUNTANT MEMBER VICE PRESIDENT VISAKHAPATNAM, DATED 3 RD MAY, 2013 VG/SPS COPY TO 1 SHRI BHAWAR LAL JAIN, DR.NO.5 - 1 - 83, SURYA RAO PETA, KAKINADA - 533 001, EAST GODAVARI DISTRICT. 2 SHRI RAJENDRA KUMAR JAIN, DR.NO.5 - 3 - 25, SURYA RAO PETA, KAKINADA - 533001, EAST GODAVARI DISTRICT. 3 ACIT, CENTRAL CIRCLE, RAJAHMUNDRY 4 THE CI T, RAJAHMUND RY 5 THE CIT (A) , RAJAHMUNDRY 6 THE DR, ITAT, VISAKHAPATNAM. 7 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM