Appeal Details
Counselvise Citation
35820914 RSA 2014
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-12-2015
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Next Hearing Date
09-11-2015
Assessment Year
2009-2010
Appeal Filed On
03-06-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A. NO.361 (ASR)/2014 STAY APPLICATION NO.62 (ASR)/2014 (ARISING OUT OF ITA NO.361(ASR)/2014) ASSESSMENT YEAR: 2009-10 PAN: AIPPS4271G SH. RAVI SHANKER SINGH, C/O M/S. SHREE DHANWANTRI HARBLES, 277-EAST MOHAN NAGAR, AMRITSAR. VS. THE INCOME TAX OFFICER, WARD 3(4), AMRITSAR. (APPELLANT) (RESPONDENT) I.T.A. NOS.360 (ASR)/2014 STAY APPLICATION NO. 61(ASR)/2014 (ARISING OUT OF ITA NO.360(ASR)/2014) ASSESSMENT YEARS: 2009-10 PAN: AIWPS0936K SMT. SHAKUNTLA DEVI, C/O M/S SHREE DHANWANTRI HERBALS, 277-EAST MOHAN NAGAR, AMRITSAR. VS. THE INCOME TAX OFFICER, WARD 3(4), AMRITSAR. (APPELLANT) (RESPONDENT) I.T.A. NO.359 (ASR)/2014 STAY APPLICATION NO.64(ASR)/2014 (ARISING OUT OF ITA NO.359(ASR)/2014) ASSESSMENT YEARS: 2009-10 PAN: ABTPS3361G SH. UMA SHANKER SINGH C/O M/S SHREE DHANWANTRI HERBALS, 277-EAST MOHAN NAGAR, AMRITSAR. VS. THE INCOME TAX OFFICER, WARD 3(4), AMRITSAR. (APPELLANT) (RESPONDENT) I.T.A. NO.358 (ASR)/2014 STAY APPLICATION NO.63(ASR)/2014 (ARISING OUT OF ITA NO.358(ASR)/2014) ASSESSMENT YEARS: 2009-10 PAN: ABTPS3360H 2. ITA NOS.3 61,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 SH. JAGDISH PARSHAD SINGH, C/O M/S SHREE DHANWANTRI HERBALS, 277-EAST MOHAN NAGAR, AMRITSAR. VS. THE INCOME TAX OFFICER, WARD 3(4), AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PADAM BAHL (CA) RESPONDENT BY: SH. TARSEM LAL (DR) DATE OF HEARING: 0 9.11.2015 DATE OF PRONOUNCEM ENT: 22.12.2015 ORDER PER T. S. KAPOOR (AM): THESE ARE FOUR APPEALS FILED BY DIFFERENT ASSESSEE AGAINST THE COMMON AND CONSOLIDATED ORDER OF LEARNED CIT(A) DATED 18.0 3.2014 FOR THE ASST YEAR 2009-10. THESE APPEALS HAVE SIMILAR MATTERS FOR ADJ UDICATION AND THESE WERE HEARD TOGETHER AND THEREFORE, FOR THE SAKE CONVENIE NCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 2. THE ASSESSEES HAS TAKEN SIMILAR GROUNDS OF APPEA L WITH THE DIFFERENCE IN AMOUNTS ONLY. FOR THE SAKE OF CONVENIENCE, THE GROU NDS OF APPEALS TAKEN BY THE ASSESSEE IN ITA NO.361(ASR)/2014, ARE REPRODUCE D BELOW. (I) THAT THE LEARNED COMMISSIONER OF INCOME TAX(AP PEALS), AMRITSAR HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.20,00,000/- MADE BY THE LEARNED ASSESSING OFFICER TOWARDS ALLEGED SURRENDER U/S 133 A OF THE INCOME TAX ACT,1961 IGNORING ALL THE EVIDENCE FILED AND EXPLAN ATION OFFERED. (II) THAT BOTH THE LEARNED COMMISSIONER OF INCOME T AX(APPEALS), AMRITSAR AND LEARNED ASSESSING OFFICER HAVE FAILED TO APPRECIATE THAT THE SURRENDER WAS MADE UNDER DUREFF AND COERCION AND THE INSTRUCTIONS ISSU ED BY THE CBDT AND CASES DECIDED BY THE COURTS WERE TOTALLY IGNORED AND THE PRINCIPLES OF EQUITY AND JUSTICE WERE IGNORED AND THE FACT THAT THE SAME STOOD RETRA CTED. (III) THAT BOTH THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), AMRITSAR AND LEARNED ASSESSING OFFICER HAVE FAILED TO APPRECIATE THAT AS PER INSTRUCTIONS OF THE CBDT THE SURRENDER MUST MATCH THE EVIDENCE COLLECTE D DURING SURVEY SO AS TO BE IN CONFORMITY WITH THE DOCTRINE OF ACQUIESCENCE. 3. ITA NOS.3 61,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 (IV) THAT BOTH THE COMMISSIONER OF INCOME TAX(APPE ALS), AMRITSAR AND LEARNED ASSESSING OFFICER HAVE FAILED TO APPRECIATE THAT TH E SO CALLED DOCUMENTS SEIZED DURING THE SURVEY WERE DUMB DOCUMENTS WHICH DID NOT BEAR ANY DATE NOR CONTAINED ANY NARRATIONS OR PARTICULARS OF ALLEGED TRANSACTION. (V) THAT BOTH THE COMMISSIONER OF INCOME TAX(APPEAL S), AMRITSAR AND LEARNED ASSESSING OFFICER HAVE FAILED TO APPRECIATE THAT SO CALLED INCRIMINATING DOCUMENTS BORE THE SAME HANDWRITING WERE SIMILARLY WORDED AND WERE PREPARED ON THE BACK SIDE OF THE PRICE LIST/ADVERTISEMENT BILLS AND A CARBON COPY OF THESE DOCUMENTS WERE AVAILABLE WITH THE ASSESSEE PROVIDIN G THE TOTAL PERVERSITY OF THE SURVEY PROCEEDINGS. (VI)THAT THE APPELLANT CRAVES LEAVE TO ADD AMEND OR WITHDRAW AND NEW GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 3. THE BRIEF FACTS AS NOTED IN ASSESSMENT ORDER DAT ED 29.12.2011 PASSED IN THE CASE OF SH. RAVI SHANKER SINGH ARE THAT A SURVE Y UNDER SECTION 133A OF THE INCOME TAX ACT 1961 WAS CONDUCTED IN THE CASE OF M/ S SH. DHANWANTRI HARBALS, 277-EAST MOHAN NAGAR, AMRITSAR ON 10.02.20 09 WHICH WAS CONCLUDED ON 11.2.2009. DURING THE SURVEY PROCEEDINGS SOME PA PERS ALLEGEDLY GIVING DETAILS OF DEALINGS/TRANSACTIONS MADE BY THE PARTNE RS OF THE ASSESSEE FIRM WERE FOUND AND THEREFORE, ONE OF THE PARTNER SH. RAVI SH ANKAR SINGH WAS CONFRONTED WITH THE DOCUMENTS AND SH. RAVI SHANKER SINGH SURRE NDERED AN AMOUNT OF RS. 65 LACS IN THE HANDS OF HIMSELF AND THAT OF THE PAR TNERS OF THE FIRM AS DETAILED BELOW. 1. DR. RAVI SHANKER SINGH RS.20,00,000/-(RAS. TWENTY LAKHS) 2. DR. JAGDISH PARSHAD SINGH RS.20,00,000/-(RAS TWE NTY LAKHS) 3. DR. UMA SHANKAR SING RS. 20,00,000/-(RS.TW ENTY LAKHS) 4. SMT. SHANKUNTLA DEVI RS. 5,00,000/- (RS. FIVE LAKHS) THE SAID SURRENDER WAS HOWEVER RETRACTED ON 23.2.20 09, BY FILING SIMILAR LETTERS TO THE HIGHER AUTHORITIES. FOR THE SAKE OF CONVENIE NCE CONTENTS AS CONTAINED IN LETTER DATED 23.02.2009 AND AS REPRODUCED IN THE AS SESSMENT ORDER ARE REPRODUCED BELOW. 4. ITA NOS.3 61,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 WITH REFERENCE TO ABOVE SUBJECT, WE WOULD LIKE TO SUBMIT THAT IT IS THE PREROGATIVE WITH LEGAL SANCTION U/S 133A OF THE INCOME TAX ACT THAT THE OFFICERS AUTHORIZED CAN CARRY OUT SURVEY OPERATION AGAINST THE ASSESSEE IN ACCORDANCE WITH THE LETTER AND SPIRIT OF LAW ALONG WITH CIRCULARS, GUIDELINES AND THE INTERPRETATIONS PLACED THEREON BY THE DECISIONS OF THE COURTS. AT THE SAME TIME, IT IS THE RIGHT OF THE ASSESSEE THAT HE SHOULD BE PUT THROUGH THIS PROCESS OF SURVEY PROCEEDINGS WITHOUT THE CONCERNED OFFICERS COMMITTING ANY LEGAL ERROR OF OMISSION AND COMMISSION OR TO TRAMPLE UPON HIS LEGITIMATE RIGHTS AND THAT NO ILLEGALITIES ARE PERPETRATED AGAINST HIM. BEFORE NARRATING OUR LITAN Y OF WOES, WE WOULD LIKE TO FIRST OF ALL REPRODUCE THE RELEVANT PARAS FROM THE SURVEY MANUAL ISSUED BY CBDT FOR CONDUCTING SURVEY U/S 133A OF INCOME TAX ACT. PARA(22). GENERAL OFFICERS OF THE RANK OF DEPUTY/AS SISTANT COMMISSIONER OF INCOME TAX OFFICERS CARRY OUT SURVEY UNDER THE DIRE CT SUPERVISION OF JOINT/ADDITIONAL COMMISSIONER OF INCOME TAX, INSPEC TORS OF INCOME TAX ARE NORMALLY AUTHORIZED FOR CARRYING OUT SUCH SURVEYS W HICH INVOLVE AUTHORIZED FOR CARRYING OUT SUCH SURVEYS WHICH INVOLVE ONLY VERIFI CATION OF BOOKS OF ACCOUNT FOR ASCERTAINING THE ENTRY OF PARTICULAR TRANSACTION BY A BUSINESS CONCERN. THE OFFICER PROPOSING TO CONDUCT A SURVEY SHOULD RECORD THE REA SONS FOR CONDUCTING THE SURVEY IN A PREPARATORY NOTE AND OBTAIN THE APPRO VAL OF THE JURISDICTIONAL JOINT/ADDITIONAL COMMISSIONER OF INCOME TAX. PARA(23). CONDUCT OF A SURVEY HAS TWO ASPECTS. FIRS T, THE ACTUAL CONDUCT AT BUSINESS/PROFESSIONAL PREMISES; AND SECOND, COORDIN ATING THE SURVEY OPERATIONS FROM THE CONTROL ROOM IN THE OFFICE. WITHIN TWO HOU RS OF COMMENCEMENT OF THE SURVEY OPERATION, INTIMATION SHOULD BE SENT BY THE SURVEY TEAM TO THE CO- ORDINATION OF SURVEY FROM THE CONTROL ROOM GENERALL Y ARISES DURING SURVEY CONDUCTED ALONG WITH THE SEARCH OR IN CASES OF SURV EY OPERATIONS WHERE A LARGE NUMBER OF PREMISES ARE COVERED. PARA (30). AFTER OBTAINING INFORMATION AND TAKING T HE ACTIONS MENTIONED ABOVE, THE TEAM LEADER MAY PROCEED WITH RECORDING OF PRELI MINARY STATEMENT. RECORDING OF PRELIMINARY STATEMENT SHOULD COMMENCE PREFERABLY WITHIN HALF AN HOUR OF 5. ITA NOS.3 61,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 STRIKE TIME. A FORMAT OF THE QUESTIONS TO BE ASKED IN THE PRELIMINARY STATEMENT IS GIVEN AS PER ANNEXURE B: IT MAY BE MENTIONED THAT THE QUESTIONS GIVEN ARE ONLY INDICATIVE AND NOT EXHAUSTIVE AND MAY NOT BE APPLIC ABLE TO ALL THE TYPES OF SURVEYS AND SITUATIONS. WE WOULD LIKE TO FURTHER REPRODUCE QUESTION NO.18 AND THE ANSWER THERE TO FROM CHAPTER V OF THE SURVEY MANUALS:- QUESTION: CAN NORMAL CONDUCT OF BUSINESS HE STOPPED DURING A SURVEY ? ANSWER: NO. THE ASSESSEE SHOULD BE ALLOWED TO CONDU CT NORMAL BUSINESS DURING A SURVEY. IT WILL FURTHER BE PERTINENT TO QUOTE HERE THE CLA RIFICATION ISSUED BY CBDT UNDER F.NO.286/2/2003-IT(INV) DATED 10.03.2003:- TO ALL CHIEF COMMISSIONER OF INCOME TAX, (CADRE CONTR A) & ALL DIRECTORS GENERAL OF INCOME TAX INV. SIR, SUBJECT: CONFESSION OF ADDITIONAL INCOME DURING TH E COURSE OF SEARCH & SEIZURE AND SURVEY OPERATION-REGARDING. INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHER E ASSESSEE HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED IN COME DURING THE COURSE OF THE SEARCH AND SEIZURE AND SURVEY OPERATIONS. SUCH CONF ESSIONS, IF NOT BASED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCE RNED ASSESSEES WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, ON CONFE SSIONS DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SER VE ANY USEFUL PURPOSE. IT IS THEREFORE ADVISED THAT THERE SHOULD BE FOCUS AND CO NCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WH AT HAS BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DE PARTMENTS. SIMILARLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH AND SEIZURES AND SURVEY 6. ITA NOS.3 61,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONF ESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO, ASSESSING OFFICER SHOULD RELY UPON THE EVIDENCE/MATERIALS GATHERED DU RING THE COURSE OF SEARCH/SURVEY OPERATIONS OR THEREAFTER WHILE FRAMIN G THE RELEVANT ASSESSMENT ORDER. IT WAS POINTED OUT TO THE DEPARTMENTAL OFFICERS BY US AND OUR LEGAL COUNSELS AND CHARTERED ACCOUNTANT WHO HAD BEEN CALLED THIS WAS A WRONG AUTHORIZATION. THEY WERE SHOWN THE LEASE DEED EXECUTED BY OUR FIRM SHRE E DHANWANTRI HERBALS, AMRITSAR IN FAVOUR OF SHREE DHANWANTRI HERBALS, KIS HANPURA. HIMACHAL PRADESH AT A LEASE RENTAL OF RS.70,000/-PER MONTH W.E.F 01. 04.2008. THEREFORE, AMRITSAR FIRM SINCE 01.04.2008 WAS CARRYING ON THE MANUFACTU RING OR SALES ACTIVITIES. THE MANUFACTURING AND SALES IN THE SAID PREMISES WERE B EING CARRIED ON BY SHREE DHANWANTRI HERBALS, KISHANPURA, HIMACHAL PRADESH AN D IT WAS THEIR STOCK AND THEIR BOOKS OF ACCOUNTS LYING IN OUR PREMISES OVER WHICH THE SURVEY TEAM HAD NO DIRECT JURISDICTION. THE OFFICERS FELT THEMSELVES A T SEA BUT OBTAINED INSTRUCTIONS FROM THEIR ADDITIONAL CIT AND AFTER THAT THEY CONTI NUED WITH SURVEY AT CHECKING OUT STOCKS AND BOOKS OF ACCOUNTS OF KISHANPURA FIRM S AMIRTSAR UNIT. NO DISCREPANCY AT STOCK AND CASH WAS DISCOVERED IN SO FAR AS OUR MEMORY GOES. WORTHY ADDITIONAL CIT PAID VISIT TO THE PREMISES AT 9 PM AND WAS CLOSETED WITH HIS OFFICERS IN A CLOSED WITH THE OFFICERS IN A CLO SED ROOM FOR ABOUT ONE HOUR, THEREAFTER, THE PROCESS OF ARM TWISTING THE PARTNER ON SCENE SH. RAVI SHANKER SINGH STARTED WITH THREATS TO GIVE A SURRENDER NOT ONLY IN HIS NAME BUT IN THE NAME OF OTHER THREE PARTNERS ALSO. IT MAY PLEASE NO TED THAT THE SURVEY WAS SANCTIONED AGAINST FIRM BUT THE SURRENDER WAS O BTAINED IN THE NAMES OF PARTNERS FOR SHOWING HIGHER BUDGET COLLECTION BECAU SE THE PARTNERS ARE ASSESSED HERE BUT THE KISHANPURA FIRM IS ASSESSED IN HIMACHA L PARDESH. TOTAL SURRENDERED OF RS.65 LAKHS IN THE NAMES OF FOUR PAR TNERS WERE OBTAINED. AS TO THE MODE OF GATHERING OF EVIENCE, LESS SAID RIGHT N OW WOULD BE BETTER BUT MORE WILL BE SAID WHEN WE OBTAIN THE REQUISITE INFORMATI ON UNDER RIGHT TO INFORMATION ACT. 7. ITA NOS.3 61,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 THE SURVEY COMMENCED AT 1 PM AND FINISHED AT 6 AM N EST DAY. IT WILL BE INTERESTING TO MAKE A TIME AND MOTION STUDY OF THE WORK DONE AND THE SPENT WHICH WILL SPEAK FOR ITSELF ABOUT THE IRREGULARITIE S POINTED OUT ABOVE. WE ARE ENCLOSING HEREWITH THE PHOTOCOPY OF SUMMON D ATED 11.02.2009 ISSUED UNDER SECTION 131 AGAINST SHREE DHANWANTRI HERBALS, AMRITSAR ASKING FOR APPEARANCE ON THE SAME SAY. FIRSTLY, SUMMON U/S 131 CAN BE ISSUED TO INDIVIDUAL NOT AGAINST THE FIRM. SECONDLY, THE LEGA LITY OF THE SUMMON HAS TO BE SEEN IN THE LIGHT OF THE DECISION OF CALCUTTA HIGH COURT. THE CALCUTTA HIGH COURT IN DR. VIJAY PAHWA VS. DY. CIT(1996) 84 TAXMAN 416 (CAL.), IMPOSED A PERSONAL PENALTY ON THE LEADER OF THE SURVEY PARTY FOR ARBITER OF POWER UNDER DIRECTION 133A. AS SUMMONS UNDER SECTIO N 131(1) CAN BESERVED ONLY IN CASE OF OBSTRUCTION BY THE PERSON CONCERNED OR W HEN SOME SORT OF HINDRANCE IS PUT UP BY HIM. HOWEVER, IN THIS CASE THERE WAS NO P ENDING ADJUDICATION WHERE THE SUMMONING POWER CAN BE USED AT ALL. FURTHER, IT WAS SAID THAT THE ASSESSEES BOOKS WERE SEIZED, WITHOUT ANY APPARENT AUTHORITY. THE ASSESSING OFFICER AND AUTHORITIES DO NOT HAVE ANY POWER TO INTERRUPT THE ORDINARY PEACEFUL CITIZENS OF THE COUNTRY IN ANY MANNER THEY LIKE BY UTILIZING TH E LARGE POWERS GIVEN TO THEM WITHOUT KEEPING THEMSELVES STRICTLY WITHIN THE FOUR CORNERS OF THOSE LARGE POWERS. RIGHT TAKE ACTION AGAINST UNATHORIZED POWERS BY INC OME TAX AUTHORITIES. THE AUTHORITIES CONDUCTING SURVEY ARE NOT EMPOWERED TO TAKE SIGNATURE OF THE ASSESSEE WITHOUT ALLOWING HIM TO READ THE CONTENTS. IF SUCH ACTION IS TAKEN BY THE SURVEYING AUTHORITIES, THE ASSESSEE CAN BRING THE S AME TO THE NOTICE OF CONCERNED COMMISSIONER OF INCOME TAX. EVEN AN FIR CAN BE LEDG ED IF THE MATTER IS SERIOUS. IN THE CASE OF HANS RAJ CHHABRA VS. MUKESH MITTAL, ASSTT. CIT (1994) 77 TAXMAN 273 (DEL.), THE SURVEY TEAM HAD NOT PERMITTED EVEN TWO CUSTOMERS TO LEAVE THE SHOP AND ALSO DISCONNECTED THE TELEPHONE. THE SIGNA TURE OF THE ASSESSEE HAD ALSO BEEN TAKEN ON SOME DOCUMENTS FORCIBLY BY THE S URVEY TEAM. ON FILLING THE CASE AGAINST THE ACTION OF SURVEY TEAM, THE COURT O BSERVED THAT THE CASE WAS 8. ITA NOS.3 61,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 PRIMA FACIA A CASE UNDER SECTION 343, 427, 384 (EXT ORTION), 465 (FALSE DOCUMENTATION), 471 READ WITH SECTION 120B OF THE C ODE OF CRIMINAL PRODUCEDURE, 1908 AND OFFICER CONCERNED WAS ORDERED TO FACE THE TRIAL. THE SURRENDERED OBTAINED/EXTRACTED IS SET AT NAUGHT BY DOCTRINE OF ACQUIESCENCE WHICH HAS BEEN APPROVED BY THE CBDT IN THE INSTRUCT ION DATED 10.03.2003 CITED ABOVE. ACQUIESCENCE IMPLIES THAT A PERSON WHO IS SAID TO HAVE ACQUIESCED DID SO WHICH KNOWLEDGE OF HIS RIGHTS AND THE OTHER PERSON ACTED IN THE BONA FILE BELIEF THAT HE WAS ACTING WITHIN HIS RIGHTS. THE ABSENCE O F EITHER OF THESE ELEMENTS MAKES THE DOCTRINE INAPPLICABLE (SUCHIT V. HABIBULL AH, 99 I.C. 199 : RAM KRISHAN V. KARAN, AI 949, A. 6731. WHEN BOTH PARTIES ARE UN AWARE OF THEIR RIGHTS IN THE DISPUTED PROPERTY AND BOTH ARE LABORING UNDER SOME MISTAKE, THERE CAN BE NO ACQUIESCENCE [ABDL KHAIR V. JAMES, A 1957, P. 308]. ACQUIESCENCE DOES NOT SIMPLY MEANS STANDING BY. IT DOES NOT MEAN QUIESCEN CE ONLY. IT MEANS ASSENT AFTER PARTY HAS COME TO KNOW OF HIS RIGHT [CHAITANY A VS. RANJIT, A1939, C.263]. THERE CAN BE NO ACQUIESCENCE UNLESS THE PLAINTIFF K NOWS THE POSITION AT THE TIME OF ACQUIESCENCE [SAYERS V. COLLYER, 28 CH. D. 103, COWASJEE VS. C., A1937, R. 387]. ACQUIESCENCE IN IGNORANCE OF LEGAL RIGHTS CAN NOT AMOUNT TO AN EXTOPPE] [CHETTYAR FIRM V. KALIAMMA, A1935, R. 423; SANKARAN V. NANGEELI, A1935, M/1062]. AS REGARDS KNOWLEDGE, PERSONS CANNOT BE SAID TO ACQUIESCE IN THE CLAIM OF OTHERS UNLESS THEY ARE FULLY COGNIZANT OF THEIR RIGHTS TO DISPUTE THEM. BUT IT IS NOT NECESSARY THAT THE PLAINTIFF SHOULD HAVE KNOWN THE EXACT RELIEF TO WHICH HE WAS ENTITLED; IT IS ENOUGH THAT THE KNEW THE FAC T CONSTITUTI9ON HIS TITLE OF RELIEF [HALS. VOL. 13, P. 169]. THEREFORE, THE SURRENDER M ADE IS CONTRARY TO THIS DOCTRINE WHICH HAS ALSO BEEN ACCEPTED BY CBDT. LASTLY FOR THE TIME BEING CHEQUES AMOUNTING TO RS. 19.50 LAKHS WERE ORDERED TO BE ISSUED BY SH. RAVI SHANKAR SINGH, PAR TNER PRESENT DURING SURVEY. IT IS LEGALLY LAUGHABLE THAT SH. RAVI SHANKAR SINGH WA S MADE TO ISSUE THSE CHEQUES FROM HIS SAVING BANK ACCOUNT. MOREOVER, IT WAS DONE WITH AN UNSEEMINGLY HURRY THAT THEY DID NOT WIAT FOR THE CHEQUES FROM THE RES PECTIVE SAVINGS BANK ACCOUNTS 9. ITA NOS.3 61,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 OF THE CONCERNED PARTNERS. PERMIT US TO SAY, WITH A LL DUE RESPECT, THAT SURVEY IS NOT AN ASSESSMENT AND NO TAX CAN BE RECOVERED WITHO UT COMPLETING THE ASSESSMENT PROCEDURE. THEREFORE, THE DEPARTMENT HAS NO RIGHT TO KEEP THOSE CHEQUES, LEAVE ASIDE ENCAHS THEM. A CAVEAT WAS ISSU ED BY LIABLE TO PROSECUTION UNDER NEGOTIABLE INSTRUMENT ACT. THIS BELIEF IS MIS PLACED RAISED DEMAND. IN THE LETTER DATED 23.02.2009 BY THE VIRTUE OF WHI CH THE ASSESSEE RETRACTED FROM SURRENDERED OF RS.20 LAKHS, VIDE PARA 6 OF THE SAID LETTER OF RETRACTION WRITTEN TO CHIEF COMMISSIONER OF INCOME TAX, AMRITSAR THE ASSE SSEE STATED THAT NO CONCERN OTHER WHICH THE ASSESSING OFFICER AT AMRITSAR WAS H AVING DIRECT JURISDICTION EXISTED AT THE TIME OF SURVEY. HERE THE ASSESSEE IG NORED THE FACT THAT THE ERSTWHILE FIRM M/S. SHREE DHANWANTRI HERBALS, AMRIT SAR WAS EXISTING ON 01.04.2008 WHICH HAS BEEN ACCEPTED BY THE ASSESSEE IN ITS REPLY FILED IN THE CASE OF M/S. SHREE DHANWANTRI HERBALS, AMRITSAR FOR ASSE SSMENT YEAR 2009-10 AT THE TIME OF ASSESSMENT PROCEEDINGS OF ITS REPLY FILED O N 27.12.2011 WHERE IN THE ASSESSEE ACCEPTED THAT OUR CONTENTION ABOUT THE BU SINESS OF THE FIRM IS FURTHER FORTIFIED BY THE FACT THAT THE AGREEMENT OF MERGER WAS IMPLEMENTED ON 1 ST APRIL, 2008. THE DATE 1 ST APRIL, 2008 EXTENDS UPTO THE END OF THAT WORKING D AY. IN OTHER WORDS THE BUSINESS OF FIRM 2008 BECAUSE THE IMPLEME NTATION OF A BUSINESS AGREEMENT IS A PART OF BUSINESS ACTIVITIES OF ANY B USINESS FOR THAT FINANCIAL YEAR. IN THE LETTER OF RETRACTION FROM THE SURRENDER OF R S.50 LAKHS MADE DURING THE SURVEY U/S 133A. THE ASSESSEE REPLIED THAT SH. RAVI SHANKAR SINGH HAS NO AUTHORITY TO SURRENDER INCOME ON BEHALF OF OTHER ME MBERS I.E. SH. JAGDISH PARSHAD SINGH 20 LACKS, SH. UMA SHANKAR SINGH, 20 L ACS AND SMT. SHANKUNTLA DEVI 5 LACS. THE REPLY OF THE ASSESSEE IS IN VIOLAT ION OF AGREEMENT AND SCHEME OF MERGER WHICH IS MADE BY A SINGLE MEMBER I.E. SH. JA GDISH PARSHAD SINGH ON BEHALF OF ALL OTHER MEMBERS WHO WERE PARTNERS IN TH E ERSTWHILE FRIM M/S SHREE DHANWANTRI HERBALS, AMRITSAR. THEREFORE, THE DECLAR ATION OF SURRENDER BY SH. RAVI SHANKAR SINGH IS VALID IN THE EYES OF LAW AS W ELL AS ALL OTHER PROCEEDINGS OF THE SAID FIRM WERE BEING MADE BY SH. RAVI SHANKER S INGH BEING THE EXECUTIVE MEMBER. 10. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 THE LEARNED ASSESSING OFFICER HOWEVER, DID NOT ACCE PT THE RETRACTION AND MADE ADDITION OF THE RESPECTIVE AMOUNT OF SURRENDER IN T HE HANDS OF VARIOUS PARTNERS BY HOLDING SIMILAR FINDINGS IN EACH CASE. FOR THE S AKE OF CONVENIENCE FINDINGS OF ASSESSING OFFICER AS RECORDED IN THE CASE OF SH. RAVI SHANKER SINGH ARE REPRODUCED BELOW. AFTER GOING THROUGH THE CONTENTION OF THE ASSESSEE THAT THE PREMISES SURVEY U/S 133A WAS ILLEGAL IS NOT CORRECT AS THE FIRM M/S. SH REE DHANWANTRI HERBALS, AMRITSAR WAS EXISTING ON 01.04.2008 ON WHICH DATE T HE WHOLE OF THE BUSINESS, ASSETS (EXCEPT LAND AND BUILDING) WERE TRANSFERRED TO M/S. SHREE DHANWANTRI HERBALS, KISHANPUR AND THE LAND AND BUILDING WAS GI VEN ON LEASE FOR 5 YEARS @ 70,000/- P.M TO M/S. SHREE DHANWANTRI HERBALS, KISH ANPUR. THE ASSESSEE M/S. SHREE DHANWANTRI HERBALS, AMRITSAR WAS EXISTING FRO M 01.04.2003 ONWARD AS WELL AS ON THE DATE OF SURVEY. THE RETRACTION OF SU RRENDERED AMOUNTING TO RS.20 LAKHS IS NO DOUBT IS AN AFTER THOUGHT OF THE ASSESS EE AS PER THE CONTENTS OF THE STATEMENT RECORDING AT THE TIME OF SURVEY AND SUBSE QUENT STATEMENT RECORDED ON 25.02.2009. THE SURVEY WAS CONDUCTED IN THE SURREND ERED AMOUNT OF RS.20 LAKHS AS ADVANCE TAX. THE ASSESSEE ON THE BASIS OF INCRIMINATING DOCUMENTS IMPOUNDED AT THE TIME OF SURVEY, OFFERED A SURRENDE R OF RS.20 LAKHS. THOUGH IN THE POST SURVEY EVENTS, THE ASSESSEE RETRACTED FROM THE OFFER OF RS.20 LAKHS SURRENDERED AT THE TIME OF SURVEY BUT THE ASSESSEE STAND REGARDING DOCUMENTARY EVIDENCE IN THE SHAPE OF DOCUMENTS INVOLVING CASH T RANSACTIONS OF RS.20 LAKHS ON DIFFERENT DATES, IS AGAINST THE EVIDENCE ACT, TH E AUTHENTICITY OF WHICH CANNOT BE DENIED BY ANY MEANS. BUT THE DENIAL OF CORROBORATOR Y EVIDENCE IN THE SHAPE OF DOCUMENTS IMPOUNDED AT THE TIME OF SURVEY U/S 133A IS IN VIOLATION OF THE DECISION OF HONBLE SUPREME COURT DELIVERED IN THE CASE OF VINOD SOLANKI VS. UNION OF INDIA 2009(233) ELT (SC) WHERE IN IT HAS B EEN HELD THAT IF THE ASSESSEE RETRACT FROM THE SURRENDER MADE IN THE STATEMENT RE CORDED AT THE TIME OF SURVEY, A GENERAL CORROBORATORY EVIDENCE ADDUCED BY THE DEPAR TMENT IS SUFFICIENT TO ACT UPON THE STATEMENT RECORDED AT THE TIME SURVEY WHER EIN CONFESSION/SURRENDER HAS BEEN MADE BY THE ASSESSEE. THE VIEW WAS EARLIER TAKEN BY THE THREE JUDGE 11. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 BENCH OF THE SUPREME COURT IN THE CASE OF K.I.PAVUN NY VS. ASST. CCE 1997(90) ELT 241(S.C). HENCE THE SURVEY CONDUCTED IS VALID H AS PER PROVISIONS OF INCOME TAX, 1961 AND THE INCRIMINATING DOCUMENTS IMPOUNDED DURING SURVEY BELONGED TO ASSESSEE AS ALL THE DOCUMENTS ARE IDENTIFIED BY SH. RAVI SHANKAR SINGH. SURRENDER OF RS.20 LAKH DURING SURVEY UNDER SECTION 133A:- AS PER REPLY FILED ON 20.12.2011 IN THE CASE OF M/S SHREE DHANWANTRI HERBALS, AMRITSAR, THE ASSESSEE STATED THAT THE PARTNERS OF SO CALLED FIRM M/S. SHREE DHANWANTRI HERBALS, AMRITSAR WERE EXPLORING THE POS SIBILITY AND FEASIBILITY OF STARTING THE BUSINESS OF PURCHASE AND SALE OF HERBS OF THE NEW BUSINESS DURING THE FINANCIAL YEAR 2008-09 DURING WHICH THE SURVEY OPERATION UNDER SECTION 133A WAS CONDUCTED ON10.02.2009 AND THE IMPOUNDING OF THE DOCUMENT SHOWING THE CASH TRANSACTIONS OF 20 LAKH IN THE NAM E OF THE ASSESSEE OUT OF 65 LAKH DECLARED IN THE HANDS OF 4 PERSONS SH. JAGDISH PARSAD SINGH RS. 20,00,000/-, SH. RAVI SHANKAR SINGH RS. 20,00,000/- , SH. UMA SHANKAR SINGH RS.20,00,000/- AND SMT. SHAKUNTLA DEVI RS.5,00,000/ - REPRESENT THE UNDISCLOSED INVESTMENT TO BE MADE IN THE BUSINESS W HICH THE ASSESSEE COULD NOT START DURING THE YEAR UNDER CONSIDERATION. THE INTENTION OF THE ASSESSEE IS THAT HE WAS THE EX PLORING THE NEW AVENUES FOR CARRYING A BUSINESS WHICH CANNOT BE DONE WITHOUT AN Y INVESTMENT AND THE PAPERS IMPOUNDED AT THE TIME OF SURVEY UNDER SECTIO N 133A REPRESENT THE CASH TRANSACTIONS OF RS.20 LAKHS IS MEANT FOR NEW BUSINE SS AND IT IS THEREFORE ASSESSED AS INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE INCOME TAX ACT. ACCORDINGLY THE ADDITION OF RS.20 LAKHS IS MADE TO THE TAXABLE INCOME. PENALTY PROCEEDINGS U/S 271(1)(C ) ARE BEING INITIATING SEP ARATELY. INCOME OF THE ASSESSEE IS COMPUTED AS UNDER:- RETUNED INCOME RS.80,870/- ADD: ADDITION AS DISCUSSED ABOVE RS. 20,00,000/- TOTAL RS.2,080,870/- TOTAL TAXABLE INCOME RS. 2,080,870/- 12. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 INCOME TAX RS.5,29,261/- SURCHARGE RS.52,926/- EDUCATION CESS RS.17,465/- TOTAL RS.5,99,652/- ADD: INTEREST U/S 234 RS.28,809/- INTEREST U/S234B RS.1,90,140/- TOTAL TAX RS.8,18,601/- LESS PREPAID TAXES ORDER U/S 143(1) RS.23,470/- NET TAX PAYABLE RS.7,95,131/- ASSESSED ISSUE DEMAND NOTICE CHALLAN FORM AND COPY OF THE ORDER TO THE ASSESSEE. 4. AGGRIEVED THE ASSESSEES FILED THE APPEALS BEFORE THE LEARNED CIT(A), HOWEVER, LEARNED CIT(A) DID NOT ACCEPT THE CONTENTI ONS OF ASSESSEE AND PASSED A CONSOLIDATED ORDER DISMISSING THE APPEALS BY RECO RDING SIMILAR FINDINGS. LEARNED CIT(A)S FINDINGS AS RECORDED IN THE CASE O F SH. RAVI SHANKAR SINGH ARE REPRODUCED BELOW: 6. DURING APPELLATE PROCEEDINGS, THE COUNSEL OF TH E ASSESSEE HAS SUBMITTED THAT DOCUMENTS FOUND DURING SURVEY ARE DUMB DOCUMENTS AS THEY CAN NOT BE BRACKETED IN ANY YEAR. IT WAS FURTHER SUBMITTED BY THE COUNSEL THAT THESE WERE TWO SETS OF THESE DOCUMENTS AND THE CARBON COPY WAS NOT CEASED BY THE DEPARTMENT. THE ASSESSEE FURTHER SUBMITTED REGARDIN G UN-TENABILITY OF STATEMENT RECORDED DURING SURVEY U/S 133A IN THIS REGARD ASSE SSEE MAINLY RELIED ON THE DECISION OF S. KHADAR KHAN & SON (2008) 300 ITR 157 ,(MAD) WHICH WAS CONFIRMED BY HONBLE SUPREME COURT. THE AO HAS MADE ADDITION IN THE HAND OF EACH PARTN ER ON THE BASIS OF DOCUMENTS FOUND DURING COURSE OF SURVEY PERTAINING TO CASH TRANSACTION OF EACH PARTNER. I HAVE GONE THROUGH THESE DOCUMENTS AND IT CLEARLY MENTION NAME OF EACH OF THE PERSON AT THE TOP OF THE PAGE AND BELOW THAT DATE WISE CASH TRANSACTIONS ARE RECORDED. THESE TRANSACTIONS ARE N OT REFLECTED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE OR IN THE BOOKS OF ACCOUNT OF THE FIRM. THESE DOCUMENTS RUN FROM THE MONTH OF APRIL 2008 TO 11.02 .2009. COMPLETE DATE I.E. 13. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 11.02.2009 IS MENTIONED IN THE CASE OF THE FIRM. TH ESE DOCUMENTS RUN FROM THE MONTH OF APRIL 2008 TO 11.02.2009. COMPLETE DATE I. E. 11.02.2009 IS MENTIONED IN THE CASE OF SMT. SHANKUNTLA DEVI, FROM SAME IT CAN BE SAFELY INFERRED THAT TRANSACTIONS IN THESE PAPERS PERTAIN TO RELEVANT AS SESSMENT. YEAR. DURING COURSE OF SURVEY PROCEEDING, PARTNER OF THE AMRITSAR FIRM WAS NOT ABLE TO EXPLAIN THESE DOCUMENTS AND IN VIEW OF THE SAME DISCLOSURE OF INC OME WAS MADE OF RS.65 LAKHS IN THE HAND OF VARIOUS PARTNERS. THUS IT CAN BE SEEN THAT THESE ARE NOT DUMB DOCUMENTS AND FROM THEM DETAILS OF CASH TRANSA CTIN WHICH ARE NOT RECORDED BOOKS OF ACCOUNT IN HAND OF VARIOUS PARTNE RS CAN CLEARLY BE ASCERTAINED. SYSTMATIC DATE AND CORRESPONDING CASH AMOUNT CLEARL Y PROVES THAT ASSESSEE HAS NOT SHOWN THESE TRANSACTION IN HIS BOOKS OF ACCOUNT . IT WAS FURTHER ARGUED ON BEHALF OF THE ASSESSEE THAT AS THESE DOCUMENTS WERE IN TWO SETS I.E. ORIGINAL COPY AND A CARBON COPY, WHY CARBON COPY WAS NOT IMPOUNDE D. NON IMPOUNDING OF CARBON COPY DOES NOT PREJUDICE CASE OF THE ASSESSEE OR DEPARTMENT, AS DEPARTMENT HAS ALREADY IMPOUNDED ONE SET OF SUCH IN CRIMINATING DOCUMENTS. PRESENCE OF CARBON COPY CLEARLY INDICATE THAT ONE O F THE PARTNER HAS PREPARED ACCOUNT OF THESE UNACCOUNTED TRANSACTION FOR THE OT HER PARTNERS CONSIDERATION. THE ASSESSEE HAS FURTHER SUBMITTED THAT CBDT HAS I SSUED INSTRUCTION TO ALL THE CHIEF COMMISSIONERS IN DGIT INVESTIGATIONS VIDE NO.F.NO.286/2/2002- I.T/INV.) DATED 10.3.2003 REGARDING CONFESSION DURI NG SEARCH AND SEIZURE AND SURVEY OPERATIONS. IT FURTHER STATES THAT AO SHOULD RELY UPON THE EVIDENCE/MATERIAL GATHERED DURING THE COURSE OF SEA RCH/SURVEY OPERATION AND THERE AFTER WHILE FRAMING THE RELEVANT ASSESSMENT O RDER. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND I HAVE FOUND THAT THE AO HAS A SKED THE ASSESSEE VIDE HIS SHOW CAUSE NOTICE DATED 21.11.2011 TO EXPLAIN THE S OURCE OF THE CASH TRANSACTION REFERRED ON ABOVE IMPOUNDED PAGES AND THE ADDITION HAS BEEN MADE ON THE BASIS OF THESE IMPOUNDED PAGES ONLY AND NO GUESS WORK HAS BEEN INVOLVED IN COMPUTATION OF ANY UNDISCLOSED INCOME. IT IS CLEAR FROM ABOVE INSTRUCTION OF THE BOARD THAT THE AUTHORIZED OFFICERS SHOULD INTO COER CE THE ASSESSEE FOR DISCLOSURE AND DISCLOSURE SHOULD ONLY BE BASED ON INCRIMINATIN G MATERIAL. IT IS CLEAR FROM THE STATEMENT MADE DURING THE SURVEY PROCEEDING THAT AS SESSEE HAS SUOMOTO MADE DISCLOSURE DURING SURVEY PROCEEDING AND STATEMENT W AS RECORDED IN THE PRESENCE OF COUNSEL OF THE ASSESSEE. THE ASSESSEE HAS VEHEMENTLY RELIED ON HONBLE SUPR EME COURT DECISIONS IN THE CASE OF S. KHADAR KHAN SON 300 ITR 157 (MAD. ) WHERE IT WAS HELD THAT STATEMENT RECORDED U/S 133A DOES NOT HAVE ANY EVIDENTIARY VALUE. HOWEVER, JURISDICTIONAL HIGH COU RT IN THE CASE OF BACHITTAR SINGH VS. CIT AND OTHERS 325 ITR 400 (P&H) BY THEIR ORDER 21.07.2010 HAS HELD THAT STATEMENT MADE U/S 133A HAS EVIDENTIARY VALUE IN THIS REGARD. DURING THE COURSE OF APPELLATE PROCEEDINGS, COUNSEL OF THE ASS ESSEE ARGUED THAT BY DOCTRINE OF MERGER DECISION OF HONBLE MADRAS HIGH COURT BEC OMES DECISION OF HONBLE SUPREME COURT EVEN IF THE ORDER OF SUPREME COURT WA S BRIEF & CONCISE. THE COUNSEL HAD SUBMITTED DECISION OF SUPREME COURT IN THE CASE OF V.M. SALGAOCAR AND BOROTHERS PVT. LTD. VS. CIT 243 ITR 383 (SC) O N DOCTRINE OF MERGER. ONE HAS TO APPRECIATE THAT DOCTRINE OF MERGER AND LAW DECLA RED BY SUPREME COURT ARE TWO DIFFERENT THINGS. ON BASIS OF DOCTRINE OF MERGER OF SUPREME COURT ORDER, ONE CAN 14. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 NOT GO TO THE CONCERNED HIGH COURT FOR REVIEW AS OR DER OF SUPERIOR COURT HAS COME. WHEREAS, WHEN HONBLE SUPREME COURT DELIVER S PEAKING ORDER, IT MEANS DECLARATION OF LAW BY SUPREME COURT AS PROVIDE IN A RTICLE 141 OF THE CONSTITUTION OF INDIA. THIS WAS HELD BY HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. ALL INDIA SERVICES PENSIONERS ASSOCIATION ITR 1 988 SC 501. THIS OBSERVATION OF HONBLE SUPREME COURT WAS DISCUSSED IN THE ORDER OF MISS KAMLA KHUSHAL DASS TECH CHANDANI VS. O.D. MOHINDRA AND OTHERS 240 ITR 796 (BOM). THUS IT CAN NOT BE SAID THAT HONBLE SUPREME COURT HAS LAID DOWN A LAW THAT STATEMENT RECORDED DURING SURVEY PROCEEDINGS U/S 133A HAS NO EVIDENTIARY VALUE. THIS ISSUE DEPENDS ON SPECIFIC FACTS AND CIRCUMSTANCES O F EACH CASE AND SUCH STATEMENT CAN NOT HELD TO BE IRRELEVANT MATERIAL SO AS TO BE RULED OUT OF CONSIDERATION IN TOTALITY OF FACTS OF CIRCUMSTANCES . I HAVE GONE THROUGH THE ABOVE ORDER OF HONBLE SUP REME COURT IN CASE OF KHADIR KHAN, WHERE CIVIL APPEAL FILED BY THE DEPARTMENT HA S BEEN DISMISSED AS UNDER: ORDER HEARD LEARNED COUNSEL ON BOTH SIDES. LEAVE GRANTED. THIS CIVIL APPEAL FILED BY THE DEPARTMENT PERTAINS TO ASSESSMENT YEAR 2001-02. IN VIEW OF THE CONCURRENT FINDINGS OF FACT CIVIL APPEA L IS DISMISSED. NO ORDER AS TO COSTS. THUS IT CAN BE SEEN THAT HONBLE SUPREME COURT HAS DISMISSED DEPARTMENTS APPEAL WITHOUT ANY SPEAKING ORDER IN T HIS REGARD. IN FACT HONBLE MADRAS HIGH COURT IN A SUBSEQUENT DECISION HAS STAT ED VERY CLEARLY THAT ADDITION CAN BE MADE ON THE BASIS OF ASSESSEES STATEMENT IN SURVEY, IF IT IS SUPPORTED BY RELEVANT MATERIAL, CIT VS. BALA SUBRAMANIAM 215 TAX MAN 288(2013). FURTHER, SIMILAR VIEW HAS BEEN TAKEN BY JURISDICTIONAL HIGH COURT IN THE CASE OF BACHITTAR SINGH VS. CIT & OTHERS 328 ITR 400 (P&H), WHERE DEC ISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF KHADAR KHAN SON WAS ALSO DISCUSSED. THE RELEVANT PARA IS REPRODUCED AS UNDER: WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS MADE. THE TRIBUNAL CATEGORICALLY HELD THAT IN THE FACT AND CIRCUMSTANCES, THE ORDER OF CIT(A) COULD NOT BE UPHELD AS RETRACTION FROM STATEMENT HAD TO BE AT THE EARLIEST OPPORTUNITY IN ABSENCE OF WHICH VOLUNTARY STATEMENT RECORDED IN THE PRESENCE OF FAMILY MEMBERS WAS AN IMPORTANT MATERIAL WHICH COULD BE ACTED UPON. RELEV ANT OBSERVATIONS ARE:- IT IS NOT THE CASE THAT THE ASSESSEE PRODUCED THE RECORDS, BOOKS OF ACCOUNT OR THE IT RECORD OF THE PERIOD WHEN THE ASSESSEE CLAIMED T O HAVE DONE PATATO BUSINESS BY CLAIMING BAD DEBT. AS FAR AS THE QUESTION POSED BY THE LEARNED CIT(A) IN HIS ORDER, WHETHER THE ASSESSEE CAN RETRACT HIS STATEME NT THE OBVIOUS REPLY IS YES BUT THAT SHOULD BE AT THE EARLIEST OPPORTUNITY WHEN THE STATEMENT WAS RECORDED OR AT LEAST WITHIN A REASONABLE TIME, CONSEQUENTLY, THE VOLUNTARY STATEMENT THAT TOO RECORDED IN THE PRESENCE OF FAMILY MEMBERS AND COUNSEL IS AN IMPORTANT PIECE OF EVIDENCE WHICH SIMPLY CANNOT BE TRASHED ASIDE UN LESS AND UNTIL OTHERWISE IS PROVED. IDENTICAL RATIO WAS LAID DOWN BY THE HONBL E JURISDICTIONAL HIGH COURT IN THE CASE OF SURINDER KUMAR CHARANJIT KUMAR VS. CIT (2006) 201 CYR 15. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 (P&H) 37 : (2006) 282 ITR 78 (P&H) , ON SURRENDER OF AMOUNT DURING INCOME-TAX SURVEY OPERATION, THROUGH ON ADOP TION OF GP RATE, THE TRIBUNAL WAS HELD TO BE JUSTIFIED. THEREFORE, UNDER THE FACT S, ONUS IS ON THE ASSESSEE AND NOT ON THE REVENUE TO SUBSTANTIATE ITS CLAIM. IN TH E LIGHT OF THE AFORESAID FACTS AND JUDICIAL PRONOUNCEMENTS, ON THE IMPUGNED, ISSUE, WE RESERVE THE ORDER OF THE LEARNED CIT(A) AND RESTORE THE STAND OF THE LEARNED AO. IT IS NOT DISPUTED THAT STATEMENT WAS MADE BY THE A SSESSEE AT THE TIME OF SURVEY, WHICH WAS RETRACTED ON 28 TH MAY, 2003 AND HE DID NOT TAKE ANY FURTHER ACTION F OR A PERIOD OF MORE THAN TWO MONTHS. IN SUCH CIRCUMSTA NCES, THE VIEW TAKEN BY THE TRIBUNAL THAT RETRACTION FROM THE EARLIER STATEMENT WAS NOT PERMISSIBLE IS DEFINITELY A POSSIBLE VIEW. MERE FACT THAT SOME ENT RIES WERE MADE IN A DIARY COULD NOT BE HELD TO BE SUFFICIENT AND CONCLUSIVE TO HOLD THAT STATEMENT EARLIER MADE WAS FALSE. THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNT WHICH MAY HAVE BEEN MAINTAINED DURING REGULAR COURSE OF BUSI NESS OR ANY OTHER AUTHENTIC C ONTEMPORANEOUS EVIDENCE OF AGRICULTURAL INCOME. IN THE CIRCUMSTANCES, STATEMENT OF THE ASSESSEE COULD CERTAINLY BE ACTED UPON. AS REGARDS JUDGMENTS PTDLANGODE RUBBER CO. LTD (SUP RA) AND ESTER INDUSTRIES LTD. (SUPRA) RELIED UPON BY THE ASSESSEE, EVEN THRO UGH IT MAY BE OPEN TO SHOW AN EARLIER STATEMENT OR AN ENTRY TO BE ERRONEOUS, IN THE PRESENT CASE, THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT EARLIER STATEMENT WAS NOT PROVED TO BE INCORRECT. AS REGARD S JUDGMENT OF THE MADRAS HIGH COURT IN S. KHADER KHAN SON (SUPRA), WE ARE O F THE VIEW THAT EVEN IF STATEMENT UNDER S. 133A WAS NOT AT PAR WITH STATEME NT UNDER S. 132(4) AND DID NOT HAVE THAT EVIDENTIARY VALUE , SUCH STATEMENT CANNOT BE HELD TO BE IRRELEVANT MATERIAL SO AS TO BE RULED OUT OF CONSIDERATION IN TOTALITY OF FACTS, PARTICULARLY IN ABSENCE OF REGULAR BOOKS OF ACCOUNT. THE TRIBUNAL R IGHTLY FOLLOWED OBSERVATIONS OF ALLAHABAD HIGH COURT IN DR. S.C. GUPTA (SUPRA) AND OF THIS COURT IN SURINDER KUMAR (SUPRA). THUS, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE HELD TO BE PERVERSE OR ILLEGAL. THE ASSESSEE WAS NOT ABLE TO REBUT PRESUMPTION AVAI LABLE TO THE DEPARTMENT ALSO REGARDING THESE DOCUMENTS, AS PROVIDED IN SECTION 2 92 C OF INCOME TAX ACT. THE SECTION 292C STATE AS UNDER:- 292C (1) WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, M.ONEY , BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH U/S 132 (OR SURVEY U/S 133A), IT MAY, IN ANY PROCEEDING UNDER THIS ACT, BE PRESUMED (I) THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS T O SUCH PERSON; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTH ER DOCUMENTS ARE TRUE; AND (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SU CH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR WHICH MAY REASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY, OR TO BE IN THE HANDWRITING OF, ANY PARTICULAR PERSON, ARE IN THAT PERSONS HANDWRITING, AND IN THE CASE OF A DOCUMENT STAMPED, EXECUTED OR ATTESTE D, THAT IT WAS DULY STAMPED 16. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT P URPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED.) THIS ISSUE OF PRESUMPTION WAS FURTHER CONFIRMED BY HONBLE MUMBAI HIGH COURT IN THE CASE OF SURRENDER M.KHANDHAR VS. ACIT AND OTHERS (2009) 224 CTR (BOM) 459. EVEN HONBLE SUPREME COURT HAS HELD THAT EVIDENCE FOUND THROUGH ILLEGALITY OR ILLEGAL ACTION CAN BE UTILIZED AS EVIDENCE, AS HELD IN THE CASE OF POORAN MAI VS. DII'ECTOR OF INSPECTION 93 ITR 505 (SC) AND IN THE CASE OF DR. P ARTAP SINGH VS. DIRECTOR OF ENFORCEMENT 155 ITR 166 (SC). BURDEN WAS ON THE ASSESSEE TO PROVE THAT APPARENT WAS NOT REAL AS HELD IN THE CASE OF SUMATI DAYAL VS. CIT (1995) 214 ITR 801 (SC) BY HONBLE SUPREME COURT, WHERE IT WAS FUR THER HELD THAT TEST OF HUMAN PROBABILITY ARE ALSO TO BE APPLIED. SIMILARLY, HON BLE SUPREME COURT HAS HELD IN THE CASE OF DAULAT RAM RAWAT MAI CASE (1973) 87 ITR 349 (SC) THAT BURDEN IS ON THE PARTY WHO CLAIMS THAT APPARENT IS NOT REAL. THE OTHER ISSUE RAISED BY THE ASSESSEE IS THAT SURR ENDER OF UNDISCLOSED INCOME OF ALL THE FOUR PARTNERS WAS OBTAINED FROM DR. RAVI SHANKAR( PARTNER) AND NO ATTEMPT WAS MADE TO GET THIS SURRENDER RATIFIED FROM THE OTHER PARTNERS WHEN PROCEEDING U/S 131 WERE SET INTO MOTION. SURRENDER OF RS. 65 LAKHS WAS MADE BY THE PARTNER OF THE ASSESSEE FIRM SUO MOTO DURING SURVEY PROCEEDINGS BY DR. RAVI SHANKAR IN THE PRESENCE OF LEGAL COUNSEL. CA SH. GAURAV ARO RA AND SH. SUNRINDER MAHAJAN, ADVOCATE AND FAMILY ACCOUNTANT. FURTHER; ASSESSEE HAS MADE SUCH SURRENDER AFTER DISCUSSING WITH FAMILY ME MBERS AS THEY WERE OUT OF STATION ON THE DATE OF SURVEY. THIS ISSUE WAS CONFI RMED BY DR. RAVI SHANKAR SINGH IN HIS STATEMENT U/S 131 OF THE INCOME TAX AC T . . ON 25.02.2009 I.E. AFTER 15 DAYS FROM RECORDING OF ORIGINAL STATEMENTS. THUS ON THE BASIS OF ABOVE IT CAN BE SAID THAT ASSESSEE HAS SUOMOTO OFFERED ADDITIONAL INCOME DURING COURSE OF SURVEY PROCEEDINGS AND DURI NG PROCEEDING HIS LEGAL COUNSEL & ACCOUNTANT WERE PRESENT. WHILE REPLYING TO THE QUESTION, NO. 10 IN HIS STATE MENT RECORDED AT THE TIME OF SURVEY PROCEEDINGS IN THE CAPACITY OF ONE OF THE EX ECUTIVE PARNERS OF THE FIRM SAID THAT: I AND OUR FAMILY ACCOUNTANT AND LEGAL COUNSEL CA S H. GAURAV ARORA. SH. SUNRINDER MAHAJAN, ADVOCATE. SINCE I AM UNABLE TO EXPLAIN THESE ENTRIES, THEREFORE, I ON MY OWN BHHL AND ON BEHALF OF MY FAMILY MEMBERS AS MENTIONED ABOVE SURRENDER THE SAID AMOUNTS AS NET ADDITIONAL INCOME FOR THE F.Y 2008-09 RELEVANT TO A.Y 2009-10 SUBJECT TO NO PENAL ACTION FOR THE PURPOSE TO PURCHASE PEACE OF MIND. THE SURRENDER IS MADE AS UNDER ...................THE BALANCE TAX WILL BE PAID BU 15.03.2009. AGAIN OF RECORDING OF STATEMENT OF THE SON OF THE 5 131 OF THE INCOME TAX ACT, 1961 ON 25.02.2009 I.E. AFTER 15 DAYS FROM RECORDING OF ORIGINAL STATEMENT. DR. RAVI SHANKAR SINGH RELYING TO QUESTION NO. 4 CONFIRMED THAT: I CONFIRM THAT SURVEY WAS CONDUCTED IN THE CASE OF OUR 'AMILU CONCERN M/S. DHANWANTRY HERBALS 277, EAST MOHAN NAQAR, .AMRITSAR IN THE PRESENCE OF OUR LEGAL COUNSELS SH. VINOD MAHAJAN AND SHRI SURINDER 17. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 MAHAJAN, ADVOCATES AND CERTAIN DOCUMENTS WERE ALSO IMPOUNDED AT THE TIME OF SURVEY U/S 133A OF THE INCOME TAX ACT, 1961. THUS IT CAN BE SEEN THAT THERE WAS NO COERCION OR T HREAT DURING SURVEY PROCEEDING TO THE ASSESSEE OR ANY OF ITS PARTNER. IT HAS BEEN CLEARLY HELD IN VARIOUS CASE-LAWS THAT FOR RETRACTION OF STATEMENT, THE ASSESSEE SHOU LD PROVE THAT THREAT OR COERCION WAS USED, MANOHAR LAI VISTU CHAND 61 ITD 55 (AHD) , PARMANAND BUILDERS PVT. LTD 69 1TD 29 (ITAT, MUMBAI). HONBLE KERALA HIGH C OURT HAS HELD THAT ASSESSMENT ON THE BASIS OF VOLUNTARY STATEMENT IS V ALID, KUNHAMBU AND SONS 219 ITR 230 (KERLA). IT WAS FURTHER HELD BY HONBLE SUPREME COURT THAT ADMISSION IS THE BEST EVIDENCE THOUGH NOT CONCLUSIVE, DECISIVE U NLESS PROVED ERRONEOUS IN THE CASE OF NARAYANA BHAGWANT RAO GOSAVI BALA WADA VS. BHOPAL AIR 1960 DC . HONBLE SUPREME COURT ALSO HAS HELD IN THE CASE OF SURJEET SINGH CHHABRA VS. UOI & OTHERS 1996 (17) RLT 331 (SC) DATED 25.10.199 6 THAT CUSTOM OFFICIALS ARE NOT POLICE AND THEREFORE, CONFESSION MADE BEFORE TH EM IS TO BE TAKEN ACCORDINGLY AND THAT PRINCIPLES OF NATURAL JUSTICE CAN NOT BE SAID TO BE VIOLATED RETRACTION MADE JUST AFTER SIX DAYS OF THE STATEMENT WAS NOT ACCEPTED BY THE HONBLE SUPREME COURT. THUS IT CAN BE SAID THAT SURVEY PROCEEDINGS WERE CARRIED OUT IN CORDIAL MANNER AND THERE WAS NO THREAT OR COERCION TO THE PARTNER PRESENT AT THE TIME OF SURVEY, AS HE WAS ABLY ASSISTED BY COUNSEL OF THE ASSESSEE SH. GA URAV ARORA AND SH. SUNRINDER MAHAJAN, ADVOCATE AND FURTHER THE PARTNER WAS IN CONSTANT TOUCH WITH HIS FATHER SH. J. P. SINGH WHO IS ALSO P ARTNER IN THE FIRM. IN VIEW OF ABOVE, ACTION OF THE AO REGARDING ADDITION OF UNDISCLOSED INCOME ON THE BASIS OF DOCUMENTS FOUND DURING SURVEY PROCEEDINGS IS CONFIRMED AND APPEAL IS DISMISSED 5. AT THE OUTSET, THE LEARNED AR INVITED OUR ATTENT ION TO WRITTEN SUBMISSIONS PLACED AT PAPER BOOK PAGE 1 TO 13 AND S UBMITTED THAT HE WILL BE ARGUING FROM THE WRITTEN SUBMISSIONS ITSELF. INVITI NG OUR ATTENTION TO THE FACTS OF THE CASES, THE LEARNED AR SUBMITTED THAT WARRANT S WERE ISSUED IN THE NAME OF DHANWANTRI HERBALS WHICH ITSELF WAS INCORRECT NAME AS THE NAME HAD BEE N CHANGED TO M/S SH. DHANWANTRI HERBALS. MOREOVER, HE SUBMITTED THAT THE SURRENDER WAS NOT MADE IN THE HANDS OF THE FIRM FOR WHICH WARRANTS WERE ISSUED BUT WAS OBTAINED IN THE NAME OF PARTNERS ON THE BASIS OF STATEMENT OBTAINED FROM ONE OF THE PARTNERS DR. RAVI SANKAR S INGH. HE SUBMITTED THAT EVEN CHEQUES FOR ADVANCE TAX ON THE SURRENDER AMOUN T WAS TAKEN FROM DR. 18. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 RAVI SANKAR SINGH ON BEHALF ALL PARTNERS. FURTHER H E INVITED OUR ATTENTION TO PAPER BOOK PAGE 15 TO 18, AND SUBMITTED THAT THESE ARE THE ALLEGED DOCUMENTS ON THE BASIS OF WHICH THE SURRENDER WAS OBTAINED DU RING THE SURVEY PROCEEDINGS. THE LEARNED AR SUBMITTED THAT THESE PA PERS DO NOT CONTAIN ANY YEAR AND SINCE THESE ARE WITH THE SAME PEN AND SAME HANDWRITING THEREFORE IT ITSELF PROVES THAT THERE WERE PREPARED AT THE SAME TIME AND THEREFORE, THESE ARE DUMB DOCUMENTS AND DO NOT CARRY ANY VALUE UNDER THE EYES OF LAW. HE FURTHER SUBMITTED THAT NO CORROBORATIVE MATERIAL WAS FOUND DURING THE SURVEY AND THEREFORE, NO ADDITION CAN BE MADE ON THE BASIS OF THESE DUMB DOCUMENTS. HE FURTHER SUBMITTED THAT THE SURRENDER WAS OBTAINED U NDER COERCION AND PRESSURE AND THEREFORE, IMMEDIATELY WITHIN THE PERI OD OF 12 DAYS, THE SAME WAS RETRACTED. HE FURTHER SUBMITTED THAT THE ASSESSEE D URING THE ASSESSMENT PROCEEDINGS HAD REQUESTED THE ASSESSING OFFICER TO GET VERIFIED FROM SOME HANDWRITING EXPERT AS TO WHO HAD WRITTEN THE ABOVE DOCUMENTS BUT FOR WHICH NO ACTION WAS TAKEN BY ASSESSING OFFICER. THE LEARN ED AR SUBMITTED THAT CARBON COPIES OF IMPOUNDED DOCUMENTS WERE NOT IMPOU NDED. THE LEARNED AR RELIED UPON A NUMBER OF CASE LAWS AS MENTIONED IN P APER BOOK PAGE 14 TO 428 FOR THE PROPOSITION THAT THE ADDITION ON THE BASIS OF DUMB DOCUMENTS CANNOT BE SUSTAINED. THE LEARNED AR PARTICULARLY RELIED UP ON THE CASE LAWS OF CIT VS. KEDAR KHAN REPORTED AT 210 TAXMAN SC 248 PLACED AT PAPER BOOK 361 TO 362. HE FURTHER PLACED HIS RELIANCE ON THE DECISION OF A MRITSAR BENCH OF ITAT IN THE CASE OF ITO VS. HANUMAN PODDAR AND REPORTED AT 98 TTJ ASR 705 AND FURTHER RELIED UPON THE CASE LAW DECIDED BY AMRITSAR BENCH IN THE CASE OF BANASARI DI 19. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 HATTI PRIVATE LTD. IN ITA 470 DATED 7 TH OCTOBER 2013 ON THE ISSUE OF RETRACTION. AS REGARDS THE ADDITION MADE IN THE HANDS OF OTHER PARTNERS, THE LEARNED AR SUBMITTED THAT THE ADDITION IN THE CASE OF OTHER PA RTNERS WAS MADE ONLY ON THE BASIS OF STATEMENT OF ANOTHER PERSON WHICH WAS NEVE R CONFRONTED TO THESE PERSONS AND THEREFORE, ADDITION IN THEIR HANDS IS I LLEGAL. 6. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THAT THE LEARNED AR HAD TRIED TO MAKE OUT A CASE OF COERCION AND PRESSURE W HICH IS NEVER THE CASE AS THE ASSESSEE HAD VOLUNTARY MADE SURRENDER AND IT IS ONLY ON THE BASIS OF ADVICE OF SOME LEGAL EXPERTS THAT THEY RETRACTED FROM SURR ENDER. THE STANDARD AND TECHNICAL LANGUAGE WHICH HAS BEEN USED IN THE RETRA CTION LETTER ITSELF PROVES THAT ASSESSEES ON THE BASIS OF SOME ADVICE ARE TRYI NG TO AVOID TAX LIABILITY DULY ADMITTED BY THEM DURING THE SURVEY PROCEEDINGS. HE SUBMITTED THAT IF THERE WAS COERCION DURING THE SURVEY THE ASSESSEE WAS AT LIBERTY TO FILE FIR AGAINST THE SURVEY OFFICIALS. HE SUBMITTED THAT THE ASSESSE ES WERE UNABLE TO EXPLAIN THE IMPOUNDED DOCUMENTS AND THEREFORE, THEY HAD MADE SU RRENDER. HE SUBMITTED THAT ON THE BACK OF DOCUMENTS IMPOUNDED THERE IS AD VERTISEMENT OF THE FIRM WHICH ITSELF PROVES THAT THESE DOCUMENTS WERE NOT P REPARED AS ALLEGED BY LEARNED AR. INVITING OUR ATTENTION TO ANSWER TO QU ESTION 11 OF STATEMENT THE LEARNED DR SUBMITTED THAT THIS ANSWER ITSELF PROVES THAT SURRENDER WAS ACTUAL AND VOLUNTARILY. HE SUBMITTED THAT THERE WERE THREE PERSONS WHO WERE PRESENT ON BEHALF OF THE ASSESSEES AND NO ONE HAD COME FORW ARD TO SAY THAT ANY COERCION WAS USED DURING THE SURVEY PROCEEDINGS. IN VITING OUR ATTENTION TO 20. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 LETTER DATED 25.02.2009 WRITTEN BY ASSESSEE, THE LE ARNED DR SUBMITTED THAT ASSESSEE IN THIS LETTER HAD ADMITTED THAT THERE WAS NO COERCION USED IN THE SURVEY PROCEEDINGS. INVITING ARE ATTENTION TO QUEST ION NOS.16 AND 17, THE LEARNED DR SUBMITTED THAT THE ASSESSEE HAD AGAIN CO NFIRMED THE SURRENDER. AS REGARDS THE ALLEGATION OF LEARNED AR THAT CARBON CO PIES OF IMPOUNDED DOCUMENTS WERE NOT IMPOUNDED, THE LEARNED DR SUBMIT TED THAT NON IMPOUNDING THE CARBON COPIES HAS NO SIGNIFICANCE. THE LEARNED DR IN THIS RESPECT HEAVILY RELIED UPON THE ORDER OF LEARNED CI T(A) AND RELIED UPON THE WRITTEN SUBMISSIONS WHICH FOR THE SAME OF COMPLETEN ESS ARE REPRODUCED BELOW. IT IS SUBMITTED THAT THE ASSESSEE IN THIS APPEAL H AS RAISED FIVE EFFECTIVE GROUNDS. NONE OF THE GROUND IS MAINTAINABLE AS DISCUSSED HER EUNDER GROUND WISE:- GROUND NO.L . THIS GROUND IS VAGUE IN NATURE AND THUS NEEDS NO COMMENT. GROUND NO.2 & 3: IN THESE GROUNDS, THE ASSESSEE HAS CLAIMED THAT TH E SURRENDER DURING THE COURSE OF SURVEY OPERATION CONDUCTED ON THE PREMISES OF THE ASSESSEE ON 10.02.2009 WAS SECURED BY THE DEPARTMENT UNDER D URESS AND COERCION. IT HAS FURTHER CONTENDED THAT THE LEARNED CIT(A) HAS IGNOR ED THE INSTRUCTION OF THE CBDT AND THE CASES DECIDED BY THE COURTS AND ALSO THE PR INCIPLES OF EQUITY AND JUSTICE. IT HAS BEEN FURTHER CONTENDED THAT EVIDENCE COLLECT ED MUST CONFORM WITH THE SURRENDER MADE AS PER THE DOCTRINE OF ACQUIESCENCE. IN THIS REGARD, IT IS SUBMITTED THAT THE FIRST ALLE GATION OF THE ASSESSEE IS THAT SURRENDER WAS SECURED BY THE DEPARTMENT UNDER DURES S AND COERCION. IN THIS REGARD, IT IS SUBMITTED THAT THERE NO COERCION OR P RESSURE WAS EXERTED UPON THE ASSESSEE WHICH IS WELL PROVED BY THE FOLLOWING EVID ENCE AND THE CIRCUMSTANCES IN WHICH THE SURVEY WAS CONDUCTED: A) THE ASSESSEE IN HIS STATEMENT RECORDED DURING THE C OURSE OF SURVEY HAD CONFESSED ON BEING ASKED TO EXPLAIN THE CASH ENTRIE S TOTALLING TO RS.65,00,000/- ON DIFFERENT DATES IN THE NAME OF FO UR PERSONS , THAT HE IS UNABLE TO EXPLAI N THE SAID ENTRIES AND THUS SURRENDERS THE SAID AMO UNTS AS NET ASSESSABLE INCOME FOR THE FINANCIAL YEAR 200 8-09 RELEVANT TO THE ASSESSMENT YEAR 2008-09 RELEVANT TO THE ASSESSMENT YEAR 2009-10 SUBJECT TO NO PENAL ACTION FOR THE PURPOSE TO PURC HASE PEACE OF MIND. ( KINDLY REFER TO ANSWER TO QUESTION NO.10 OF THE SAI D STATEMENT AT PAGE 4 OF THE ASSESSEE'S PAPER BOOK(APB). B) IN ANSWER TO QUESTION NO.11 IN WHICH THE ASSESSE E WAS ASKED TO TELL THE NAMES OF THE PERSONS WITH WHOM THE ABOVE CASH D EALINGS WERE MADE, THE ASSESSEE HAD STATED THAT ' SINCE WE HAVE ALREADY SURRENDERED AS NET ADDITIONAL INCOME AFTER DUE CONSULTATION WITH M Y FAMILY 21. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 MEMBERS AND HAVE ALREADY GIVEN NECESSARY CHEQUES AS ADVANCE TAX, OUR OFFICER MAY PLEASE BE ACCEPTED WITHOUT ANY CONSEQUENTIAL PENALTIES UNDER IT ACT, 1961. THE ABOVE SURRENDER H AS BEEN MADE VOLUNTARILY AND WITHOUT ANY COERCION JUST TO PURCHA SE PEACE OF MIND.' A CRITICAL ANALYSIS OF THIS ANSWER OF THE ASSESSEE REVEALS THE FOLLOWING:- (I) THE ASSESSEE WAS ASKED TO GIVE THE NAMES OF THE PERSONS WITH WHOM THE CASH TRANSACTIONS WORTH RS.65,00,000/- WERE MAD E BUT THE ASSESSEE HAD SKIRTED THE ANSWER. HERE LIES THE CONFESSION OF THE ASSESSEE THAT DOCUMENTS SHOWING CASH TRANSACTIONS WERE REAL BUT THE ASSESSEE DID NOT WANT TO REVEAL THE NAMES OF THOSE WITH WHOM THE SAID TRANSACTIONS WERE MADE AND AS SUCH HAD SKIRTED THE ANSWER FOR THE REASONS BEST KNOWN TO HI M. III) THERE WERE AS MANY AS THREE COUNSELS ASSISTING THE ASSESSEE DURING THE COURSE OF SURVEY IN WHOSE PRESENCE THE DEPARTME NT'S OFFICERS HAD CONDUCTED SURVEY OPERATION. HOW COULD THE DEPARTMENT COERCE O R EXERT PRESSURE UPON THE ASSESSEE TO MAKE THE SURRENDER WHEN THE PROCEEDINGS WERE BEING WITNESSED BY THREE PERSONS WHO WERE ASSESSEE'S COUNSELS. THE ASS ESSEE HAS NO-WHERE CONTENDED THAT THREE COUNSELS WHOM HE HAD CALLED AT HIS PREMISES AT THE TIME OF SURVEY TOO HAD COLLUDED WITH THE DEPARTMENT OR THAT THEY TOO WERE COERCED. NONE OF THREE HAS COME FORWARD TO SUPPORT THE ALLEGATION OF THE ASSESSEE THAT COERCION OR PRESSURE WAS EXERTED UPON HIM TO MAKE THE SURREN DER. I BELIEVE NONE OF THEM WOULD HAVE KEPT SILENT IF REALLY COERCION OR PRESSU RE WAS EXERTED UPON THE ASSESSEE. IT IS SUBMITTED THAT WITHOUT THE WITNESS MAKING ANY AVERMENT BEFORE THE JUDICIAL AUTHORITIES THAT THE SURRENDER HAD BEE N SECURED BY THE DEPARTMENT UNDER COERCION, ON THE BASIS OF A BALD STATEMENT OF THE ASSESSEE CORROBORATING NEITHER BY ANY EVIDENCE OR NARRATION OF CIRCUMSTANC ES OR THE MANNER IN WHICH COERCION WAS EXERTED, RETRACTION CANNOT BE ALLOWED. ( IV ) THE ASSESSEE'S ALLEGATION OF COERCION OR PRESSURE COULD BE MADE BY THE ASSESSEE ONLY AFTER ABANDONING HIS REGULAR COUNSELS AND ENGAGING A NEW COUNSEL BEFORE THE AO AND THE CIT(A) AND ALSO BEFO RE THE HON'BLE ITAT. THE REASON FOR CHANGING THE COUNSEL IS TOO OBVIOUS AND IT IS NONE OF THEM MUST HAVE COME FORWARD TO SUPPORT THE ASSESSEE'S FALSE ALLEGA TION OF COERCION. THAT THE ASSESSEE MUST HAVE TRIED HARD TO SECURE THEIR SUPPO RT AS IN THAT SITUATION, THE ASSESSEE'S ALLEGATION WOULD HAVE CARRIED SOME SUBST ANCE IN HIS ALLEGATIONS. THUS, REFUSAL OF ALL THE THREE COUNSELS NAMELY SHRI GAURAV SHARMA, CA, SHRI VINOD MAHAJAN, ADVOCATE AND SHRI SURINDER MAHAJAN A DVOCATE TO SUPPORT THE CASE OF THE ASSESSEE CLEARLY PROVES THAT THE ASSESS EE'S ALLEGATION IS FALSE, MALICIOUS AND BASELESS AND HAS BEEN MADE SQUARELY W ITH A VIEW TO ESCAPING THE TAX LIABILITY. ( V) AFTER A PERUSAL OF THE WHOLE STATEMENT RE CORDED AT THE TIME OF SURVEY ONE FINDS NO STREAK OF COERCION. THERE IS NOT A WHISPER IN THE ENTIRE STATEMENT THAT ANY OF THE QUESTIONS PUT A THE ASSESSEE AT THE TIME SURVEY WAS IN THE NATURE O F 'INTERROGATION' WHICH MAY PARTAKE THE CHARACTER OF COERCION. THUS, IT EMINENTLY EMERGES THAT THE SURVEY HAD BEEN CONDUCTED IN A VER Y CORDIAL ATMOSPHERE WHICH HAD BEEN STUDIOUSLY CREATED BY THE RESPONSIBLE OFFI CERS OF THE DEPARTMENT AND ALSO BY THE COOPERATION OF THE ASSESSEE AT THE TIME OF SURVEY. A CONFESSION OF THIS 22. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 FACT IS EMINENTLY EMANATING FROM THE ASSESSEE'S REP LY TO QUESTION NO.13 (PAGE 6 OF APB). (VI) THE ALLEGATION OF COERCION AND EVENTUALLY RETRACTIORHAD BEEN MADE BY THE ASSESSEE AFTER A LAPSE OF04~DAYS) AND NOT IMMEDIATE LY AFTER THE CONCLUSION OF THE SURVEY OR WITHIN A DAY OR COUPLE OF DAYS. IT SEEMS THAT SOME OTHER COUNSEL HAD MISGUIDED THE ASSESSEE TO RETRACT ON THE GROUND OF COERCION WHICH BECOMES OBVIOUS FROM THE TECHNICAL LANGUAGE OF THE LETTER O F RETRACTION DATED 23.02.2009 ADDRESSED TO THE WORTHY CCIT, CIT, ADDL. CIT AND TH E ITO. THE TONE AND TENOR OF THIS LETTER DOES NOT REVEAL ANY GENUINE GRIEF OR AN GUISH OR ANY DETAIL OF ANY ACT OF ANY MISDEMEANOR OR MISFEASANCE ON THE PART OF THE O FFICERS CONDUCTING THE SURVEY. ( VII) THE ASSESSEE HAS CONTENDED THAT THE SU RVEY HAD STARTED AT 1 PM AND CONCLUDED AT 6 AM AND THE TIME SPENT SPEAKS ABOUT T HE IRREGULARITIES COMMITTED BY THE OFFICERS. IT IS PERTINENT TO POINT OUT HERE THAT IF TRULY COERCION HAD BEEN EXERTED THEN THE OFFICERS WOULD HAVE HASTENED TO CO NCLUDE THE SURVEY IN THE SHORTEST POSSIBLE TIME AND NOT ALLOWED THE PROCEEDI NGS LAST TILL 6 AM WHICH WERE PROLONGED OWING TO REASONS ALL ATTRIBUTABLE TO THE ASSESSEE. IT HAS BEEN LEARNT BY THE UNDERSINGED FROM THE OFFICERS THAT TIME HAD BEEN TAKEN IN RECORDING INV ENTORY OF THE HUGE STOCK AND FURTHER THAT MUCH OF THE TIME WAS TAKEN BY SHR I RAVI SHANKER SINGH IN CONSULTING HIS FATHER AND OTHER MEMBERS OF THE FAM ILY AGAIN AND AGAIN TIL L THE SURVEY WAS CONCLUDED. THE OTHER MAJOR REASON DUE TO WHICH SURVEY WAS PROLONGED WAS RECORDING OF THE INVENTORY OF HUGE STOCK. ( VIII ) IT IS FURTHER PERTINENT TO MENTION HERE THAT AFTER THE ASSESSEE HAD BEEN MISGUIDED BY SOME OTHER COUNSEL AND AFTER FILING TH E LETTER OF RETRACTION DATED 23.02.2012 (SUPRA), THE ASSESSEE HAD ONCE AGAIN CON FESSED THAT THE SURVEY HAD BEEN CONDUCTED IN A CORDIAL ATMOSPHERE IN HIS STATEMEN T RECORDED ON 25.02.2012 IN THE PRESEN CE OF SHRI GAURAV ARORA, CA. THIS CLEARLY SHOWS THA T THE LETTER OF RETRACTION DATED 23.2.2012 WAS NOT A BONAFIDE AND H AD BEEN WRITTEN AT THE INSTANCE OF SOME COUNSEL OTHER THAN THOSE WHO WERE WITNESS TO THE SURVEY PROCEEDINGS. ( IX) THE ASSESSEE AGAIN FELL TO THE ADVICE O F THE COUNSEL WO HAD MISGUIDED ON 23.02.2015 WHILE WRITING THE IETTER OF RETRACTION A ND AGAIN SENT A LETTER 26.02.2009. IN THIS LETTER, IT HAS BEEN ALLEGED THA T SHRI GAURAV ARORA, CA HAD DURING THE COURSE OF RECORDING THE STATEMENT ON 25. 02.2015 TRIED TO INTERVENE TO PROTEST AGAINST SOMETHING NOT LEGAL, HE WAS ASKED T O KEEP SILENT. THIS ALLEGATION IDEALLY SHOULD HAVE COME FROM SHRI GAURAV ARORA, CA OR SEPARATELY SUPPORTED BY SHRI ARORA BUT IT IS NOT SO AS DURING THE RECORDING OF THIS STATEMENT ALSO, THERE WAS NO COERCION AND IT IS ONLY THAT AFTER 25.02.201 5 AGAIN, SOME OTHER COUNSEL HAD PREVAILED UPON THE ASSESSEE AND THE ASSESSEE WR OTE LETTER DATED 26.02.2015. (X ) IT IS PERTINENT TO MENTION HERE THAT AFTER HAVING WRITTEN LETTER OF RETRACTION ON 23.02.2015, THERE WAS ABSOLUTELY NO REASON WITH THE ASSESSEE TO ADMIT IN HIS STATEMENT RECORDED ON 25.2.2015 THAT THE SURVEY HAD BEEN CONDUCTED IN A CORDIAL ATMOSPHERE AND RATHER HE WAS SUPPOSED TO SHOW HIS V EHEMENCE AS REGARDS HIS 23. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 ALLEGATIONS MADE IN THE LETTER DATED 23.02.2015 BUT HE INSTEAD CONCEDED THAT THE SURVEY HAD BEEN CONDUCTED IN A CORDIAL ATMOSPHERE. THIS SPEAKS VOLUME OF THE FALSITY OF THE ALLEGATIONS. (XI ) IT NEEDS TO BE APPRECIATED THAT ALL THAT THE ASSESSEE HAS ALLEGED IS THAT FOR INITIAL TWO HOURS, THE OFFICERS ASKED THEM TO HUDDL E IN A CORNER AND DID NOT ALLOW TO MAKE MOBILE PHONE CALLS. THIS IS WHOLLY DENIED A ND IT IS AT BEST A BALD STATEMEN T WITHOUT ANY EVIDENCE. NONETHELESS, THIS IN ITSELF IS A SUFFICIENT PROOF AGAINST THE ASSESSEE THAT COERCION OR PRESSURE, IF ANY, WAS ONLY FOR THE INITIAL TWO HOURS AND THUS THEREAFTER THE CONDUCT HAD BEEN DONE IN A VERY CONGENIAL AND CORDIAL MANNER. ALL THE ABOVE SUBMISSIONS CUMULATIVELY SUGGEST THAT THE ASSESSEE IS MAKING FALSE ALLEGATION OF COERCION OR PRESSURE EXE RTED BY THE OFFICERS AT THE TIME OF SURVEY. CLAIM REGARDING IMPOUNDED DOCUMENTS: IT IS THE CONTENTION ASSESSEE THAT IMPOUNDED DOCUME NTS WERE PREPARED BY SHRI GAURAV SHARMA, CA, ASSESSEE'S ONE OF THE COUNS ELS ASSISTING THE ASSESSEE AT THE TIME OF SURVEY AND ARE DUMB DOCUMENTS. THIS CONTENTION OF THE ASSESSEE IS PATENTLY FALSE AND MISCHEVIOUS FOR THE FOLLOWING RE ASONS: A) THERE IS NO SUCH AFFIRMATION OF THE SHRI GAURAV SH ARMA, CA THAT HE HAD BEEN COERCED TO PREPARE SUCH PAPERS OR HE PREPARED THE DOCUMENTS. B) SHRI GAURAV SHARMA, CA WAS WITNESSING THE SURVEY P ROCEEDINGS AS A COUNSEL FOR THE ASSESSEE AND HOW IT COULD BE EXPECT ED THAT HE WOULD DO SOMETHING PREJUDICIAL TO THE INTERESTS OF THE ASSES SEE. (VIII ) IT IS FURTHER PERTINENT TO MENTION HERE THAT AFTER THE ASSESSEE HAD BEEN MISGUIDED BY SOME OTHER COUNSEL AND AFTER FILING TH E LETTER OF RETRACTION DATED 23.02.2015 (SUPRA), THE ASSESSEE HAD ONCE AGAIN CON FESSED THAT THE SURVEY HAD BEEN CONDUCTED IN A CORDIAL ATMOSPHERE IN HIS STATE MENT RECORDED ON 25.02.2015 IN THE PRESENCE OF SHRI GAURAV ARORA, CA. (IX ) THE ASSESSEE AGAIN FELL TO THE ADVICE O F THE COUNSEL WO HAD MISGUIDED ON 23.02.2015 WHILE WRITING THE LETTER OF RETRACTION A ND AGAIN SENT A LETTER 26.02.2009. IN THIS LETTER, IT HAS BEEN ALLEGED THA T SHRI GAURAV ARORA, CA HAD DURING THE COURSE OF RECORDING THE STATEMENT ON 25. 02.2015 TRIED TO INTERVENE TO PROTEST AGAINST SOMETHING NOT LEGAL, HE WAS ASKED T O KEEPS' SILENT. THIS ALLEGATION IDEALLY SHOULD HAVE COME FROM SHRI GAURA V ARORA, CA OR SEPARATELY SUPPORTED BY SHRI ARORA BUT IT IS NOT SO AS DURING THE RECORDING OF THIS STATEMENT ALSO, THERE WAS NO COERCION AND IT IS ONLY THAT AFT ER 25.02.2015 AGAIN, SOME OTHER COUNSEL HAD PREVAILED UPON THE ASSESSEE AND THE ASS ESSEE WROTE LETTER DATED 26.02.2015. (X ) IT IS PERTINENT TO MENTION HERE THAT AFTER HAVING WRITTEN LETTER OF RETRACTION ON 23.02.2015, THERE WAS ABSOLUTELY NO REASON WITH THE ASSESSEE TO ADMIT IN HIS STATEMENT RECORDED ON 25.2.2015 THAT THE SURVEY HAD BEEN CONDUCTED IN A CORDIAL 24. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 ATMOSPHERE AND RATHER HE WAS SUPPOSED TO SHOW HIS V EHEMENCE AS REGARDS HIS ALLEGATIONS BUT HE INSTEAD CONCEDED THAT THE SURVEY HAD BEEN CONDUCTED IN A CORDIAL ATMOSPHERE. THIS SPEAKS VOLUME OF THE FALSI TY OF THE ALLEGATIONS. IT IS FURTHER SUBMITTED THAT SHRI THAKUR PASS, ITO AND SHRI SUBASH SINEHAL. ITO WHO WERE PRESENT DURING THE COURSE OF SURVEY OPERATION HAVE GIVEN SOLEMN AFFIRMATION BY WAY OF AN AFFIDAVIT THAT THE SURVEY WERE CONDUCTED IN A VERY CONGENIAL ATMOSPHERE. THEIR AFFIDAVITS DULY AT TESTED ARE ENCLOSED HEREWITH. ALL THE ABOVE SUBMISSIONS CUMULATIVELY SUGGEST THAT THE ASSESSEE IS MAKING FALSE ALLEGATION OF COERCION OR PRESSURE EXERTED BY THE O FFICERS AT THE TIME OF SURVEY. RELIANCE IN THIS CASE IS PLACED ON THE JUDGEMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI NAVDEEP DHIN GRA VS CIT REPORTED AT 232 TAXMAN 0425 ( COPY ENCLOSED) IN VIEW OF THE ABOVE ARGUMENTS AND THE FACTS AND C IRCUMSTANCES THE LEARNED DR SUBMITTED THAT ADDITION CONFIRMED BY THE LEARNED CIT(A) NEEDS TO BE CONFIRMED. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GO NE THROUGH THE MATERIAL PLACED ON RECORD. IT IS UNDISPUTED FACT THAT THE SU RVEY WAS CONDUCTED ON THE FIRM M/S SHREE DHANWANTRI PHARMACY AND THE SURRENDE R HAS BEEN MADE IN THE HANDS OF PARTNERS OF THE FIRM. IT IS ALSO AN UNDISP UTED FACT THAT THE SURRENDER WAS MADE ON THE BASIS OF STATEMENT OF ONE OF THE PA RTNERS DR. RAVI SHANKAR SINGH WHO HAD MADE THE SURRENDER ON BEHALF OF HIMSE LF AND ON BEHALF OF OTHER PARTNERS OF THE FIRM. IT IS ALSO UNDISPUTED FACT TH AT THE STATEMENT OF SURRENDER MADE BY DR. RAVI SHANKAR SINGH WAS NEVER CONFRONTED TO OTHER PARTNERS. IT IS ALSO A FACT THAT SURVEY WAS CONDUCTED ON 10/11 FEBR UARY, 2009 WHEREAS IT WAS RETRACTED ON 23 RD FEBRUARY,2009 VIDE LETTER DATED 23.02.2009 BY THE ASSESSEE AND OTHER PARTNERS. THE SURRENDER WAS OBTAINED BY T HE DEPARTMENT ON THE BASIS OF CERTAIN DOCUMENTS IMPOUNDED DURING THE SUR VEY PROCEEDINGS. THE PHOTO COPIES OF SUCH DOCUMENTS IMPOUNDED ARE MADE P ART OF THIS ORDER AND HAS BEEN ANNEXED HEREWITH. THESE IMPOUNDED DOCUMENT S CONTAIN THE SIGNATURE OF DR. RAVI SHANKAR SINGH WHICH SEEM TO H AVE BEEN TAKEN ON 11.2.2009 I.E. ON THE DAY OF CONCLUSION OF SURVEY. THESE DOCUMENTS FURTHER CONTAIN THE NAME OF VARIOUS ASSESSEES UNDER WHOSE N AME THE VARIOUS AMOUNTS HAS BEEN SURRENDERED. 25. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 26. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 27. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 28. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 29. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 8. THE ASSESSING OFFICER HAD MADE THE ADDITION ON THE BASIS OF ABOVE DOCUMENTS OBSERVING THAT THESE ASSESSEES ENTRIES NOTED ON PAP ERS REFLECTS VARIOUS INVESTMENTS WHICH THE ASSESSEE MUST HAVE IN VESTED AS CAPITAL IN THE NEW BUSINESS. IN THIS RESPECT, THE ASSESSING OFFICE R OBSERVED SIMILAR FINDINGS IN RESPECT OF ALL ASSESSEES THE FINDINGS AS CONTAINED IN THE ASSESSMENT ORDER OF DR. RAVI SHANKAR SING ARE REPRODUCED BELOW. SURRENDER OF RS.20 LAKH DURING SURVEY UNDER SECTI ON 133:- AS PER REPLY FILED ON 20.12.2011 IN THE CASE OF M/ S SHREE DHANWANTRI HERBALS, AMRITSAR, THE ASSESSEE STATED THAT THE PAR TNERS OF SO CALLED FIRM M/S SHREE DHANWANTRI HERBALS AMRITSAR WERE EXPLORING TH E POSSIBILITY AND FEASIBILITY OF STARTING THE BUSINESS OF PURCHASE AND SALES OF H ERBS OF THE NEW BUSINESS DURING THE FINANCIAL YEAR 2008-09 DURING WHICH THE SURVEY OPERATION UNDER SECTION 133A WAS CONDUCTED. 10.2.2009 AND THE IMPOU NDING OF THE DOCUMENT SHOWING THE CAS TRANSACTIONS OF 20 LAKH IN THE NAME OF THE ASSESSEE OUT OF 65 LAKH DECLARED IN THE HANDS OF 4 PERSONS SH. JAGDISH PARSAD SINGH RS. 20,00,000/-, SH. RAVI SHANKAR SINGH 20,00,000/-, SH . UMA SHANKAR SINGH RS.20,00,000/- AND SMT.SHANKUNTLA DEVI RS. 5,00,000 /- REPRESENT THE UNDISCLOSED INVESTMENT TO BE MADE IN THE BUSINESS W HICH THE ASSESSEE COULD NOT START DURING THE YEAR UNDER CONSIDERATION. THE INTENTION OF THE ASSESSEE IS THAT HE WAS THE EX PLORING THE NEW AVENUES FOR CARRYING A BUSINESS WHICH CANNOT BE DONE WITHOUT AN Y INVESTMENT AND THE PAPERS IMPOUNDED AT THE TIME OF SURVEY UNDER SECTIO N 133A REPRESENT THE CASH TRANSACTIONS OF RS.20 LAKHS IS MEANT FOR NEW BUSINE SS AND IT IS THEREFORE ASSESSED AS INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE INCOME TAX ACT. ACCORDINGLY THE ADDITION OF RS.20 LAKHS IS MADE TO THE TAXABLE INCOME. 30. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 FROM THE FINDINGS OF ASSESSING OFFICER WE OBSERVED THAT ASSESSING OFFICER HAS MADE ADDITION UNDER SECTION 69 OF THE ACT. FOR THE SAKE OF COMPLETENESS LET US EXAMINE THE PROVISIONS OF SECTION 69. THE SECTION 6 9 STATES AS UNDER. WHERE IN THE FINANCIAL YEAR IMMEDIATELY PROCEEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT RECORDE D IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVE STMENTS OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE OFFICE R, SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE A SSESSEE OF SUCH FINANCIAL YEAR. FROM THE ABOVE READING OF PROVISIONS OF SECTION 69, WE FIND THAT WHERE THE ASSESSEE HAD MADE CERTAIN INVESTMENTS WHICH WERE NO T RECORDED IN THE BOOKS OF ACCOUNT AND WHICH ARE NOT EXPLAINED TO THE ASSES SING OFFICER TO HIS SATISFACTION THE VALUE OF SUCH INVESTMENT IS DEEMED TO BE THE INCOME OF ASSESSEE. NOW COMING TO THE PRESENT CASES WE FIND THAT THERE ARE CERTAIN ENTRIES UNDER THE NAMES OF DIFFERENT PARTNERS REPRESENTING DIFFERENT ASSESSEES UNDER APPEAL, SHOWING THEREIN CERTAIN AMOUNTS ON CERTAIN DATES. THE DOCUMENTS DO NOT MENTION ANY YEAR. THE FINDINGS OF LEARNED CIT(A ) THAT THE DATE MENTIONED IN THESE DOCUMENTS RUN FROM THE MONTH OF APRIL 2008 TO 11.2.2009 IS NOT CORRECT, IN VIEW OF THE FACT THAT THE VARIOUS DATES DO NOT M ENTION ANY YEAR AND THE DATE MENTIONED AS 11.2.2009 IS THE DATE MENTIONED BY DR. RAVI SHANKAR SINGH WHICH IS THE DATE OF RECORDING OF STATEMENT. THE LE ARNED CIT(A) HAS MISGUIDED HIMSELF BY ASSUMING THAT THE ENTRIES RELATE TO PERI OD APRIL 2008 TO 11.2.2009. 31. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 WE FURTHER OBSERVE THAT THESE DOCUMENTS DO NOT MENT ION AS TO WHETHER THESE WERE WITHDRAWALS FROM BANK, OR DEPOSITS IN BANK OR INVESTMENTS IN A NEW BUSINESS. THE ASSESSING OFFICER HAS ASSUMED BY HIMS ELF THAT THESE ENTRIES RELATE TO SOME INVESTMENT IN A NEW BUSINESS BY RELY ING UPON SOME LETTER DATED 20.12.2011 FILED IN ASSESSMENT PROCEEDINGS OF THE F IRM SHREE DHANWANTRI HERBALS, AMRITSAR. THE ABOVE ASSUMED INVESTMENTS IN SOME NEW BUSINESS ARE NOT SUPPORTED BY ANY CORROBORATIVE MATERIAL. EVEN T HE STATEMENT RECORDED DURING THE SURVEY PROCEEDINGS DO NOT INDICATE THAT THESE ENTRIES RELATE TO CERTAIN INVESTMENTS IN NEW BUSINESS. IN THIS RESPEC T, THE REPLY TO QUESTION NO.10 IS IMPORTANT WHICH IS REPRODUCED BELOW. QUESTION 10 :- DURING THE COURSE OF SURVEY OPERATIO N SOME HOLES HAVE BEEN IMPOUNDED AS PER ANNEXURE-4. I AM SHOWING YOU PAGE NUMBER 5,7,12 & 13 OF ANNEXURE-A VIDE WHICH THE FOLLOWING HELSOME HAVE ALONE SOME DEALINGS/TRAN SACTIONS FOR WHICH NO RECORDS ARE AVAILABLE WITH YOU:- 1 DR R.S. SINGS (PAGE-5) RS.20,00,000/- 2. DR J.P. SINGH (PAGE-7) RS.20,00,000/- 3. SMT. SHAKUNTLA DEVI (PAGE 2) RS. 50,00,00O/- 4. DR. W.S. SINGH (PAGE-13) RS. 20,00,000/- PLEASE STATE/EXPLAIN THESE TRANSACTIONS ? ANS:- THE ABOVE PERSONS ARE MY FAMILY MEMBERS AND AR E RESIDING IN THE SAME HOUSE AS ONE FAMILY I HAVE SPOKEN TO THEM AND OUR FAMILY ACC OUNTANT AND LEGAL COUNSEL CA SH. GAURAV ARORA, SH. SURINDER MAHAJAN ADVOCATE AND SH. VINOD MAHAJAN ADVOCATE. SINCE, I AM UNABLE TO EXPLAIN THESE ENTRIES, THEREFORE, I ON MY OWN BEHALF AND ON BEHALF OF MY FAMILY MEMBERS AS MENTIONED ABOVE SURRENDER THE SAI D AMOUNTS AS NOT ADDITIONAL INCOME FOR THE F.Y.2008-09 RELEVANT TO ASSESSMENT Y EAR 2009-10 SUBJECT TO NO PENAL ACTION FOR THE PURPOSE TO PURCHASE PEACE OF MIND. T HE SURRENDER IS MADE AS UNDER. 1 DR R.S. SINGS (PAGE-5) RS.20,00,000/- 2. DR J.P. SINGH (PAGE-7) RS.20,00,000/- 3. SMT. SHAKUNTLA DEVI (PAGE 2) RS. 50,00,00O/- 4. DR. W.S. SINGH (PAGE-13) RS. 20,00,000/- 32. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 NECESSARY CHAQUES TO PROVE BONAFIDE ON MY BEHALF AN D ON BEHALF OF ABOVE FAMILY MEMBERS TENDERING YOU THE CHARGES FOR RS.19. 50 LAKHS AS AN ESTIMATED ADVANCE TAX FACTULTY ON THE ADDITIONAL IN COME. THE BALANCE TAX WILL BE PAID BY 15.03.2009. IN THE ABOVE ANSWER TO QUESTION NO.10 THERE IS NO M ENTION OF ANY INVESTMENT IN NEW BUSINESS. WE FURTHER FIND THAT THESE PAPERS DO NOT BEAR ANY SIGNATURES AND MOREOVER, THESE PAPERS DO NOT CARRY ANY REFEREN CE AS TO WHETHER THE FIGURES MENTION ARE SOME AMOUNT OR QUANTITY OR ANYT HING ELSE. FURTHER THESE PAPERS DO NOT INDICATE AS TO WHETHER THESE ENTRIES RELATE TO AMOUNT PAID OR AMOUNT RECEIVED OR WHO IS THE PAYEE OR WHO IS RECIP IENT. THE ASSESSEE HAS BEEN ALLEGING SINCE THE TIME OF RETRACTION TILL THE PROC EEDINGS, BEFORE THE CIT(A) THAT THE HANDWRITING IS NOT OF ANY OF THE FOUR ASSESSEE S OR EMPLOYEES OF THE FIRM. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE HOLD T HAT THESE DOCUMENTS ARE DUMB DOCUMENTS AND CANNOT BE RELIED FOR MAKING ADDI TION IN THE HANDS OF ASSESSEES AND MOREOVER THESE DOCUMENTS DO NOT INDIC ATE ANY EVIDENCE OF INCOME OF THE ASSESSEE AS THE ENTRIES RECORDED THER EIN ARE NOT BACKED BY ACTUAL INVESTMENT IN ANY ASSETS OR IN CAPITAL OF A BUSINES S. THE CBDT UNDER THE INSTRUCTION NO. F. NO.286/2/2003 DATED 10.3.2003 HA S OBSERVED AS UNDER: INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHE RE ASSESSEE HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOS ED INCOME DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATIONS. SUCH CONFE SSION, IF NOT PASSED UPON CREDIBLE EVIDENCE ARE LETTER RETRACTED BY THE CONCE RNED ASSESSEE WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, CONFESSI ONS DURING THE COURSE OF 33. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 SEARCH AND SEIZURE AND SURVEY OPERATIONS DO NOT SER VE ANY USEFUL PURPOSES. IT IS THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND C ONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON BU T HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE INCOME TAX DEPART MENT. SIMILARLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH IT SEIZURES AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS T O THE UNDISCLOSED INCOME. THE CBDT CIRCULAR ITSELF CLARIFIES THAT SURRENDER O BTAINED DURING SURVEY SHOULD BE BACKED BY SOME EVIDENCE OF INCOME WHICH IS NOT T HE CASE IN THE PRESENT APPEALS. 9. WE HAVE CONCLUDED THAT SINCE THE ENTRIES ARE NOT BACKED BY CORROBORATIVE MATERIAL AND HENCE THESE DOCUMENTS ARE DUMB DOCUMEN TS AND ARE THEREFORE, NOT RELIABLE FOR MAKING ADDITIONS. THE HONBLE MADR AS HIGH COURT IN THE CASE OF CIT VS. S. KADAR KHAN & SONS. 300 ITR 157 (MAD) HAS HELD THAT MATERIALS COLLECTED AND STATEMENTS RECORDED DURING THE SURVEY ARE NOT CONCLUSIVE PIECE OF EVIDENCE BY ITSELF. THE BRIEF FACTS OF THE JUDGMENT OF HONBLE MADRAS HIGH COURT ARE REPRODUCED BELOW. THE PRINCIPAL RELATING TO SECTION 133A OF THE INC OME TAX ACT, 1961, ARE AS FOLLOWS: (I) AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT AND THAT THE ASSESSEE SHOULD BE GIVEN A PROPER OPPORTUNITY TO SHOW THAT THE BOOKS OF ACCOUNT DO NO T CORRECTLY DISCLOSE THE CORRECT STATE OF FACTS; (II) IN CONTRADISTINCTION TO THE PO WER UNDER SECTION 133A, SECTION 132(4) ENABLES THE AUTHORIZED OFFICER TO EXAMINE A PERSON ON OATH AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATI ON CAN ALSO BE USED IN EVIDENCE UNDER THE ACT. ON THE OTHER HAND, WHATEVER STATEMENT IS RECORDED UNDER SECTION 133A IS NOT GIVEN ANY EVIDENTIARY VALUE OBV IOUSLY FOR THE REASON THAT THE 34. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 OFFICER IS NOT AUTHORIZED TO ADMINISTER OATH AND TO TAKE ANY SWORN STATEMENT WHICH ALONE HAS EVIDENTIARY VALUE AS CONTEMPLATED U NDER LAW; 9III) THE EXPRESSION SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER CONTAINED IN SECTION 158BB WOULD INCLUDE THE MATERIALS GATHERED DURING THE SURVEY OPERATION UNDER SECTION 133A; (IV) THE MATERIAL OR INFORMATION FOUND IN THE COURSE OF SURVEY PROCEEDIN G COULD NOT BE A BASIS FOR MAKING ANY ADDITION IN THE BLOCK ASSESSMENT; AND (V ) THE WORD MAY USED IN SECTION 133A(3) (III) OF THE ACT, VIZ., RECORD THE STATEMENT OF ANY PERSON WHICH MAY BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING U NDER THIS ACT MAKES IT CLEAR THAT THE MATERIALS COLLECTED AND THE STATEMENT RECO RDED DURING THE SURVEY UNDER SECTION 133A ARE NOT CONCLUSIVE PIECE OF EVIDENCE B Y ITSELF. A SURVEY WAS CONDUCTED IN THE PREMISES OF THE ASSE SSEE-FIRM. ONE OF THE PARTNERS IN HIS SWORN STATEMENT OFFERED AN ADDITION AL INCOME OF RS.20 LAKHS FOR THE ASSESSMENT YEAR 2001-02 AND RS.30 LAKHS FOR THE ASSESSMENT YEAR 2002-03. HOWEVER, THE SAID STATEMENT WAS RETRACTED BY THE AS SESSEE THROUGH IT LETTER DATED AUGUST 3,2001, STATING THAT THE PARTNER FROM WHO A STATEMENT WAS RECORDED DURING THE SURVEY OPERATION UNDER SECTION 133A, WAS NEW TO THE MANAGEMENT AND HE COULD NOT ANSWER THE ENQUIRIES MA DE AND AS SUCH, HE AGREED TO AN AD HOC ADDITION. THE ASSESSING OFFICER BASED ON THE ADMISSIONS MADE BY THE ASSESSEE, WHICH WERE DIRECTLY RELATABLE TO THE DEFECTS NOTICED DURING THE ACTION UNDER SECTION 133A OF THE ACT, RECOMPUTE D THE ASSESSMENT. THE ORDER WAS SET ASIDE BY THE COMMISSIONER OF INCOME-TAX(APP EALS) AND THIS ORDER WAS UPHELD BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT . HELD, DISMISSING THE APPEAL, THAT IN VIEW OF THE SCOPE A ND AMBIT OF THE MATERIALS COLLECTED DURING THE COURSE OF SURVEY ACTION UNDER SECTION 133A SHALL NOT HAVE ANY EVIDENTIARY VALUE. IT COULD NOT BE SAID SOLELY ON THE BASIS OF THE STATEMENT GIVEN BY ONE OF THE PARTNERS OF THE ASSESSEE FIRM T HAT THE DISCLOSED INCOME WAS ASSESSABLE AS LAWFUL INCOME OF THE ASSESSEE. THE ABOVE JUDGMENT OF HONBLE MADRAS HIGH COURT HAS BEEN UPHELD BY HONBLE SUPREME COURT WHICH HAS DISMISSED THE APPEAL FILED BY REVENUE AND IT IS REPORTED IN 200 TAXMAN SC 248. THEREFORE, IN VIEW O F THE ABOVE WE HOLD THAT 35. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 THE ADDITIONS MADE IN THESE CASES IS BASED UPON DUM B DOCUMENTS WHICH IS NOT TENABLE UNDER LAW. THE LEARNED CIT(A) HAS RELIED UP ON THE CASE LAW OF BACHITTAR SINGH VS. CIT 328 ITR 400 FOR THE PROPOSITION THAT THE STATEMENT RECORDED UNDER SECTION 133 A HAS EVIDENTIARY VALUE. HOWEVER, WHILE GOING THOROUGH THIS CASE LAW, WE FIND THAT THE ASSESSEE IN THIS CA SE DURING THE SURVEY PROCEEDINGS UNDER SECTION 133A HAD GIVEN A STATEMEN T THAT HE IN THIS CASE PURCHASED SAME SHOP IN AMBALA CITY FOR RS. 24 LAC A ND SOURCE OF INVESTMENT WAS NOT REFLECTED IN THE BOOKS OF ACCOUNT. THEREFOR E, HE HAD SURRENDERED AN AMOUNT OF RS. 19 LAC FOR THE INVESTMENT IN SHOP. IN THIS CASE, THERE WAS EVIDENCE REGARDING INVESTMENT IN A SHOP AND THEREFO RE, THE HONBLE PUNJAB & HARYANA HIGH COURT HAD RIGHTLY ARRIVED AT THE CONCL USION THAT THE STATEMENT MADE BY ASSESSEE DURING THE SURVEY EVEN IF RETRACTE D CANNOT BE TOTALLY IGNORED. WHEREAS IN THE PRESENT APPEALS THERE IS NO EVIDENCE OF PHYSICAL INVESTMENT IN THE FORM OF ANY CAPITAL IN THE BUSINESS OR IN ANY F INANCIAL ASSETS, THEREFORE, THE CASE LAW OF BACHITTAR SINGH VS. CIT 328 ITR 400 IS DISTINGUISHABLE FROM THE FACTS OF THE PRESENT APPEALS AND LEARNED CIT(A) HAS WRONGLY RELIED ON THIS CASE LAW. SIMILARLY, THE LEARNED CIT(A) HAS RELIED UPON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. BALA SUBRA MANIAM 215 TAXMAN 288, HOWEVER, WE OBSERVE THAT LEARNED CIT(A) HIMSELF HAS WRITTEN THAT THE MADRAS HIGH COURT HAD HELD THAT ADDITION ON THE BASIS OF S TATEMENT IN SURVEY CAN BE MADE IF IT IS SUPPORTED BY RELEVANT MATERIAL WHICH IS NOT THE CASE IN PRESENT APPEALS AS IN THE PRESENT APPEALS THE STATEMENTS AR E NOT BACKED BY RELEVANT MATERIAL. AS REGARDS RELIANCE PLACED BY LEARNED DR IN THE CASE LAW OF NAVDEEP 36. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 DHINGRA VS. CIT 232 TAXMAN 425 (P&H), WE FIND THAT IN THAT CASE THE STATEMENT RECORDED DURING SURVEY WAS RETRACTED AFTE R TWO YEARS AND THEREFORE, THE HONBLE COURT HAD HELD THAT ADMISSION WAS SUBST ANTIAL EVIDENCE OF FACT IF NOT RETRACTED WITHIN A REASONABLE TIME. HOWEVER, IN THE PRESENT APPEALS THE RETRACTION WAS MADE WITHIN A PERIOD OF 12 DAYS WHIC H IS QUITE A REASONABLE PERIOD AND MOREOVER IN THE CASE LAW OF NAVDEEP DHIN GRA, THE HONBLE COURT HAD CONFIRMED THE ADDITIONS ON THE BASIS OF ENTRIES NOTED IN THE SLIP PAD AS THE ASSESSEE IN THE COURSE OF SURVEY PROCEEDINGS HAD AD MITTED THAT ENTRIES NOTED IN SLIP PAD REFLECTED ADDITIONS MADE TO BUILDING AND M ACHINERY WHEREAS IN THE PRESENT APPEALS THE ENTRIES NOTED ON SHEETS ARE NOT BACKED BY ANY INVESTMENT IN ANY OF THE ASSETS. THE ASSESSING OFFICER HAD MAD E ADDITIONS ASSUMING THAT ASSESSEES MUST HAVE MADE INVESTMENT IN NEW BUSINESS WITHOUT SPECIFYING ANY THING. THEREFORE, THIS CASE LAW RELIED UPON BY LEAR NED DR IS ALSO NOT HELPFUL TO ASSESSEE AS IT IS DISTINGUISHABLE. WE FURTHER OBSE RVE THAT ADDITIONS MADE IN THE CASES OF OTHER ASSESSEES WERE ALSO MADE ON THE BASIS OF STATEMENT OF DR. RAVI SHANKAR SINGH WHICH WERE NOT CONFRONTED TO THE M. 10. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AN D JUDICIAL PRECEDENTS WE SEE MERIT IN THE ARGUMENTS OF LEARNED AR AND THEREF ORE, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. 37. ITA NOS. 361,360,359,358 (ASR)/2014 S.A. NOS.6 2,61,64,63(ASR)/2014 ASST. YE AR 2009-10 11. AS REGARDS STAY APPLICATIONS THE SAME HAS BECOM E INFRUCTUOUS AND HENCE DISMISSED. 12. IN NUTSHELL THE APPEALS OF THE ASSESSEES AR E ALLOWED WHEREAS THE STAY APPLICATIONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER, 2015. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 22.12.2015. /PK/ PS. COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.
