Appeal Details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 1787 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-12-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Assessment Year
2015-2016
Appeal Filed On
25-09-2017
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.720/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2015-16 M/S BANNALAL JAT CONSTRUCTION PVT. LTD., BUS STAND, JAHAJPUR, DISTRICT BHILWARA CUKE VS. ACIT, CENTRAL CIRCLE-2 AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACCB9357J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI A.S.NEHARA (ADDL.CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27.10.2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 29.12.2017 VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD CIT(A)-2, UDAIPUR DATED 24.07.2017 WHEREIN THE ASSESSEE HAS T AKEN FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 1,21,43,210/- BY TREATING THE CASH FOUND IN SEARCH AS UNEXPLAINED INCOME OF THE ASSESSEE ON THE BASIS OF STATEMENT OF DIRECTOR U/S 132(4) BY NOT ACCEPTING THE CONTENTION OF ASSESSEE THAT CASH SO FOUND BELONG TO ITS DIRECTOR SHRI BANNA LAL JAT IN INDIVIDUAL CAPACITY WHICH IS DULY VERIFIABLE FROM THE WITHDRAW ALS MADE FROM THE BANK ACCOUNT AND RECORDED IN THE REGULAR BOOKS OF A CCOUNTS MAINTAINED BY HIM. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 29,860/- BY CONSIDERING THE DIFFERE NCE IN THE ACCOUNT ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 2 STATEMENT WITH M/S NAHAR FILLING STATION AS UNDISCL OSED INCOME OF THE ASSESSEE. HE HAS FURTHER ERRED IN NOT DIRECTING THE AO TO EXCLUDE THIS ALLEGED UNDISCLOSED INCOME FROM THE INCOME OF THE N EXT YEAR WHEN THE SAME WAS OFFERED FOR TAX. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 82,200/- U/S 40A(3). 2. REGARDING THE FIRST GROUND OF APPEAL, BRIEFLY T HE FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT AT RESIDENTIAL AND BUSINESS PREMISES OF SHRI BANNALAL JAT IN WHICH HE WAS OPERATING HIS PROPRIETARY CONCERN IN NAME OF M/S BANNALAL JAT CON TRACTOR AND ALSO THE ASSESSEE COMPANY BY NAME OF BANNALAL JAT CONSTRUCTI ON PVT LTD. DURING THE COURSE OF SEARCH AT THE RESIDENTIAL PREMISES OF SHR I BANNALAL JAT, CASH OF RS 1,21,43,210 WAS FOUND AND INVENTORISED AS PER AN NEXURE CF OF PANCHNAMA DATED 11.10.2014. IN HIS STATEMENTS RECORDED U/S 1 32(4) DURING THE COURSE OF SEARCH AND EVEN SUBSEQUENT STATEMENT RECORDED U/ S 131, SHRI BANNALAL JAT HAS ADMITTED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE COMPANY. HOWEVER, SUBSEQUENTLY WHILE FILING THE RETURN OF IN COME FOR THE IMPUNGED ASSESSMENT YEAR, THE ASSESSEE COMPANY DIDNT OFFER THE SAID UNDISCLOSED INCOME TO TAX. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSEE WAS ASKED TO SHOW-CAUSE AS TO WHY IT HAS FAILED TO DISCLOSE THE SAME AND ALSO TO GET THE CASH VERIFIED FROM THE REGULAR BOOKS OF ACCOUNTS. 3. IN RESPONSE TO THE SHOW-CAUSE NOTICE, THE ASSES SEE VIDE WRITTEN SUBMISSION DATED 02.12.2016 SUBMITTED AS UNDER:- DURING THE COURSE OF SURVEY/SEARCH, THE ASSESSEE H AS STATED IN REPLY TO QUESTION NO. 13 AND 16 WHEN QUESTION ABOUT CASH OF RS. 70 LACS FOUND FROM THE CAR, HE STATED THAT THE WITHDRA WALS WERE MADE FROM THE BANK ACCOUNT WITH BANK OF BARODA AND SBBJ BETWEEN 20.09.2014 TO 30.09.2014 WHICH WAS KEPT AT RESIDENC E AND OUT OF THAT ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 3 AMOUNT HE HAS KEPT RS. 70 LACS IN THE MORNING IN TH E CAR FOR MAKING PAYMENT TO LABOUR, TRACTOR, MATERIAL ETC. THUS IN S URVEY ASSESSEE EXPLAINED THE AMOUNT OF RS. 98.92 LACS (70+19.92+9) PERTAIN TO HIS BUSINESS WHICH IS OUT OF WITHDRAWALS FROM BANK ACCO UNT. THE SAME IS EVIDENT FROM THE EXTRACT FROM THE ACCOUNTS MAINTAIN ED IN COMPUTER FOR THE F.Y. 2014-15 WAS TAKEN AND MARKED AS A-1 DULY S IGNED BY THE AUTHORIZED OFFICER. COPY OF THE SAME AS PAGE NO. 43 IS ENCLOSED FOR READY REFERENCE. FURTHER, IT IS ALSO SUBMITTED THAT THE PRINT OUT OF INCOMPLETE BOOKS OF ACCOUNT IN COMPUTER WAS TAKEN B Y THE ADI (INVESTIGATION) TEAM WHICH WAS ALSO PART OF ANNEXUR E A-1. COPY OF THESE PAGES ARE ENCLOSED AND EXPLAINED AS UNDER:- PAGE NO. PARTICULARS JUSTIFICATION 30 TRIAL BALANCE OF SHRI BANNA LAL JAT FOR THE PERIOD 01.04.2014 TO 09.10.2014 SHOWING CASH BALANCE OF RS. 1,06,76,390.67 33 BALANCE SHEET OF M/S BANNA LAL JAT ON 09.10.2014 RS. 1,06,76,390.67 40 BALANCE SHEET OF M/S BANNA LAL JAT CONSTRUCTION PVT. LTD. AS ON 09.10.2014 SHOWING CASH BALANCE OF RS. 4,21,691/- ONLY NOW THE SURVEY WAS CONVERTED INTO SEARCH AND THE ST ATEMENT OF THE ASSESSEE U/S 132(4) WAS RECORDED AT 10.15 PM ON 10.10.2014 A ND THEREAFTER SEARCH ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 4 WAS CONCLUDED ON 11.10.2014 MORNING AND THE ASSESSE E SO UNDER PRESSURE AS STATED THAT SUCH CASH BELONG TO COMPANY AS UNDISCLO SED INCOME. THE SUBSEQUENT STATEMENT OF THE ASSESSEE U/S 132(4) WHE REBY CASH WAS SURRENDERED, IS THUS, INCORRECT AND UNDER PRESSURE. WHEREAS FROM THE ABOVE SAID FACTS, IT IS CLEAR AND EVIDENT THAT CASH BALAN CE FOUND AND SEIZED FROM SHRI BANNA LAL JAT BELONGS TO HIS PROPRIETARY CONCERN AN D CASH BALANCE OF COMPANY WAS ONLY RS 421,691 ON THE DATE OF SURVEY/SEARCH. HENCE, KINDLY ACCEPT CASH SO FOUND ACCEPTED. 4. AFTER TAKING INTO CONSIDERATION THE ASSESSEE COM PANYS SUBMISSION, MATERIAL GATHERED DURING THE COURSE OF SEARCH AS WE LL AS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO REJECTED T HE CONTENTION OF ASSESSEE FOR THE FOLLOWING REASONS:- (I) DURING THE COURSE OF POST SEARCH PROCEEDINGS, THE B OOKS OF ACCOUNT WERE EXAMINED AND IT WAS FOUND THAT AT SEVERAL PLAC ES THERE ARE INSTANCES OF UNACCOUNTED INCOMES/PROFIT, SOME OF WH ICH WERE EVEN SURRENDERED BY THE ASSESSEE DURING THE POST SEARCH PROCEEDINGS. (II) IN STATEMENT RECORDED ON 10.10.2014, IN REPLY TO QU ESTION NO. 6, SHRI BANNALAL JAT ADMITTED THAT THE BOOKS OF ACCOUN T OF M/S. BANNALAL JAT CONSTRUCTION PVT. LTD. HAS BEEN WRITTE N UPTO 09.10.2014 BUT EXPENSES FOR LAST 3-4 MONTHS ARE YET TO BE ENTERED. FROM THIS IT IS GATHERED THAT THE ASSESSEE INDULGED IN NON- MAINTENANCE OF PROPER BOOKS OF ACCOUNT AND AS ON TH E DATE OF SEARCH IT WAS FOUND INCOMPLETE. THE ASSESSEE INDULG ED IN MAINTAINING TRANSACTION ON DIARIES AND LOOSE PAPERS WHICH IS NOT PERMISSIBLE IN ANY OF THE METHOD OF ACCOUNTING. ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 5 (III) WHILE FILING THE RETURN OF INCOME THE ASSESSEE HAS NOT DISCLOSED ANY UNDISCLOSED INCOME AND HENCE, RETRACTED FROM THE AD MISSION MADE BY HIM DURING THE COURSE OF SEARCH. THE SUBSEQUENT RETRACTION FROM THE SURRENDER WITHOUT HAVING EVIDENCE IN PROOF OF R ETRACTION IS NOT PERMISSIBLE IN THE EYES OF LAW. THE STATEMENT RECOR DED DURING THE COURSE OF SEARCH ACTION WHICH WAS IN PRESENCE OF IN DEPENDENT WITNESSES HAS OVERRIDING EFFECT OVER THE SUBSEQUENT RETRACTION. (IV) IN STATEMENT RECORDED ON 10.10.2014, IN REPLY TO QU ESTION NO. 8, SHRI BANNALAL JAT ADMITTED THAT IN HIS BUSINESS OF CIVIL CONSTRUCTION, HE HAS INFLATED VARIOUS EXPENDITURE AND INCOME SO G ENERATED BY INFLATING THE EXPENDITURE IS IN FORM OF CASH WHICH IS FOUND AT HIS RESIDENCE AND THE SAME IS NOT RECORDED IN HIS BOOKS OF ACCOUNTS AND HE SURRENDERED THE CASH SO FOUND AMOUNTING TO RS.1, 21,43,210/- AS UNDISCLOSED INCOME OF M/S. BANNALAL JAT CONSTRUCTIO N PVT. LTD. (V) DURING THE COURSE OF POST SEARCH PROCEEDINGS AND AF TER THREE MONTHS OF SEARCH ACTION, SHRI BANNALAL JAT VIDE STA TEMENT RECORDED U/S 131 ON 04.12.2014 AGAIN CONFIRMED THE ADMISSION OF UNDISCLOSED CASH OF RS.1,21,43,210/- AS HAS ALREADY BEEN OFFERED U/S 132(4) OF THE ACT. (VI) THE CONTENTION OF BANNALAL JAT REGARDING CASH WITHD RAWALS BETWEEN 20.09.2014 TO 30.09.2014 IS NOT ACCEPTABLE AS THE A SSESSEE HAS FAILED TO PROVE/NEXUS BETWEEN CASH FOUND AND WITHDR AWALS WITH DOCUMENTARY EVIDENCES. ACCORDINGLY, THE AO MADE ADDITION OF RS.1,21,43,210 /- AS UNACCOUNTED INCOME OF THE ASSESSEE COMPANY. ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 6 5. ON APPEAL, THE LD. CIT(A) HELD THAT ASSESSEE HAS NOT CORROBORATED THE AVAILABILITY OF CASH FROM THE CASH BOOK OF SHRI BANNALAL JAT AND THE RELEVANT COPY OF THE BANK STATEMENT. IN THE CASH BOOK PREPARED AFTER SEARCH, NUMBER OF ENTRIES WERE INCOR PORATED AND THEREFORE, THE CASH BALANCE WORKED OUT AT RS. 1,21, 47,528/- IS AN AFTERTHOUGHT AND MAKE BELIEVE PICTURE. THERE IS A G AP OF 10-15 DAYS BETWEEN THE DATE OF WITHDRAWAL FROM BANK AND THE DA TE OF SEARCH WHICH DEFIES ANY ACCEPTANCE THAT THE CASH WITHDRAWN FROM THE BANK WAS FOUND IN SEARCH. THIS RULES OUT THE PREPONDERANCE OF PROB ABILITY THAT THE CASH WITHDRAWN FROM THE BANK IS FOUND IN SEARCH. EVEN TH OUGH THE PANCHAMA OF THE CASH FOUND AND SEIZED IS IN THE NAME OF SHRI BANNALAL JAT BUT IN THE STATEMENT U/S 132(4), HE ADMITTED THAT THE CASH BELONGED TO THE ASSESSEE COMPANY. HENCE, IN THE ABSENCE OF ANY CONC RETE CIRCUMSTANTIAL EVIDENCE AND CONSIDERING THE SILENCE OF THE ASSESSE E ON THIS ISSUE TILL THE DATE OF FILING OF RETURN U/S 153A, THE AO RIGHTLY I GNORED THE MAKE BELIEVE DOCUMENTS. HE ACCORDINGLY CONFIRMED THE ADDITION. 6. THE RELEVANT FINDINGS OF THE LD CIT(A) IS REPROD UCED AS UNDER:- 4. I HAVE CONSIDERED THE FACTS OF THE CASE, GONE T HROUGH THE ASSESSMENT ORDER AND SUBMISSION OF THE APPELLANT. 4.1 THERE IS NO DISPUTE ABOUT THE RELIABILITY, IMPO RTANCE AND SANCTITY OF ADMISSION MADE DURING SEARCH AND SAME COULD BE R EFUTED UNDER COMPELLING AND PLUSSIBLE EVIDENCE AS GUIDED BY THE SUPREME COURT IN CASE OF PULLANGODE RUBBER PRODUCE COMPANY LTD. V. S TATE OF KERALA AND ANOTHER 91 ITR 0018. IT IS HELD THAT ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANT BE SAID TH AT IT IS CONCLUSIVE. IT IS OPEN TO THE ASSESSEE WHO MADE ADMISSION TO SHOW THA T IT IS INCORRECT AND THE ASSESSEE SHOULD BE GIVEN PROPER OPPORTUNITY TO SHOW THE ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 7 CORRECT STATE OF AFFAIRS. SIMILARLY, THE HONBLE RA JASTHAN HIGH COURT IN CASE OF CIT VS. ASHOK KUMAR SONI 291 ITR 172 HELD T HAT ADMISSIONS ARE RELEVANT & STRONG PIECE OF EVIDENCE THAT MAY BE USE D AGAINST THE PERSON MAKING SUCH ADMISSION BUT THEY ARE NOT CONCL USIVE PROOF OF THE STATEMENT CONTAINED IN THE ADMISSION & CAN ALWAYS B E EXPLAINED. 4.2 IT IS SEEN THAT IN THE INITIAL STATEMENT BANNA LAL JAT, DIRECTOR OF THE COMPANY RECORDED ON 09/10/2014, IN REPLY TO Q.N O. 14, 15 & 16 ADMITTED THAT THE CASH BELONGS TO HIM AND THE SOURC E OF SUCH CASH WAS CLAIMED AS WITHDRAWALS FROM BANK ACCOUNT BETWEEN 20 -09-2014 TO 30- 09-2014. HOWEVER, THE SAME WAS NOT CORROBORATED DUR ING THE SEARCH FROM THE CASH BOOK OF M/S BANNA LAL JAT CONTRACTOR, A PROPRIETARY CONCERN AND RELEVANT COPY OF BANK STATEMENT. MOREOV ER, THOUGH AS PER THE CASH BOOK OF M/S BANNA LAL JAT CONTRACTOR, THE CASH BALANCE OF RS. 1,06,76,390/- IS CLAIMED BEFORE THE AO IN ASSESSMEN T PROCEEDING, THE COPY OF THE CASH BOOK OF SHRI BANNA LAI JAT FILED B Y THE APPELLANT IS AFTER INCORPORATING NUMBER OF PENDING ENTRIES, WHIC H ITSELF PROVES THAT THE CASH BOOK AND BOOKS OF ACCOUNTS OF SHRI BANNA L AI JAT WERE INCOMPLETE ON THE DATE OF SEARCH AND CORRECTNESS AN D COMPLETENESS OF SUCH CASHBOOK IS NOT ACCEPTED BY THE AO. THEREFORE, THE CASH BALANCE WORKED OUT AT RS. 1,21,47,528/- OF SHRI BANNA LAI J AT IS NOTHING BUT AN AFTERTHOUGHT AND MAKE BELIEVE PICTURE. 4.3 NOTHING TURNS OUT OF THE SO CALLED BANK WITHDRA WALS BY SH. BANNA LAL JAT OF RS. 89,50,000/- FROM HIS BANK ACCOUNT BE TWEEN 23-09-2014 TO 30-09-2014 AS THE DATE OF SEARCH IS 09-10-2014 A ND THERE IS A GAP OF MORE THAN 10/15 DAYS FROM THE RESPECTIVE DATE OF WITHDRAWAL AND DATE OF SEARCH. THE LONG GAP DEFIES ANY ACCEPTANCE OF APPELLANTS ARGUMENTS THAT SAME CASH WITHDRAWN FROM BANK WAS FO UND DURING THE SEARCH. LOOKING IN JUXTAPOSITION OF THE APPELLANTS EXPLANATION THAT CASH ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 8 WITHDRAWN FROM BANK WAS FOUND DURING THE SEARCH WIT H THE FACT THAT AS MUCH AS CASH OF RS. 70,00,000/- WAS FOUND FROM THE HIS CAR AND THE CASH ABOUT RS. 30,00,000/- WAS FOUND FROM THE RESID ENCE OF BANNA LAL JAT RULES OUT THE PREPONDERANCE OF PROBABILITY THAT SAME CASH WITHDRAWN FROM BANK COULD HAVE BEEN FOUND DURING TH E SEARCH. 4.4 IT IS TRUE THAT AS PER THE PANCHNAMA OF CASH FO UND & SEIZED IN THE NAME OF BANNA LAL JAT. HOWEVER, THE SAME WAS AD MITTED VOLUNTARILY U/S 132(4) BY SHRI BANNA LAL JAT AS BEL ONGING TO THE ASSESSEE COMPANY. THE AO HAS RIGHTLY RELIED ON THE SAID VOLUNTARILY STATEMENT U/S 132(4) OF SHRI BANNA LAL JAT THAT THE CASH IS BELONGING TO ASSESSEE COMPANY AND SURRENDERED IN THE HANDS OF TH E COMPANY. THERE IS NO CONCRETE CIRCUMSTANTIAL EVIDENCE IN THE FORM OF APPELLANTS REPRESENTATION/RETRACTION WITH SUPPORTING EVIDENCE BEFORE ANY AUTHORITIES IN INVESTIGATION WING SUCH AS; ADIT/DDI T, ADDL/JDIT, DIT, DGIT OR ASSESSMENT UNITS SUCH AS ASSESSING OFFICER, RANGE HEAD, M/S BANNALAL JAT CONSTRUCTION PVT. LTD. ASSESSMENT YEAR 2015-16 ITA NO. 594258981/16 -17 CIT/PR. CIT, CCIT/PR. CCIT OR EVEN THE CBDT. SINCE THE DATE OF SEARCH TO DATE OF FILING THE RETURN U/S 153A, THE APPELLANT HAS NOT GIVEN SLIGHTEST SIGNAL THAT HIS STATEMENT U /S 132 (4) IS INCORRECT AND HE IS WILLING TO UNDERGO ANY VERIFICATION/ INVE STIGATION. BY KEEPING SILENCE OVER THE ISSUE DURING SUCH A LONG SPELL OF TIME DENIED BOTH THE REVENUE AUTHORITIES- THE INVESTIGATION WING AS WELL AS ASSESSMENT UNITS AND THEREFORE SUCH PLEAS AT THE FAG END OF AS SESSMENT PROCEEDING CAN NOT ACCEPTED. 4.5 I AGREE WITH THE FINDING OF THE ASSESSING OFFIC ER AND CONCUR IN MAKING STATEMENT U/S 132(4) AS BASIS FOR MAKING THE ADDITION AND HAS RIGHTLY IGNORED THE MAKE BELIEVE DOCUMENTS. 4.6 I ALSO CONCURRED FOR THE SEVERAL DECISIONS APPL IED BY THE AO TO THE FACTS OF THE PRESENT CASE TO CLEARLY ESTABLISH THAT THE CASH FOUND ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 9 RELATES TO THE ASSESSEE COMPANY. AT THE COST OF REP ETITION FOLLOWING CITATION WITH RELEVANT EXCERPTS ARE REFERRED AGAIN TO SUPPLY THE EMPHASIS. (1) KANTI LAI PARBHU DA PATEL V/S DCIT (2005) 93 IT D 117 (INDORE) HELD THAT THE ASSESSEE HAVING OWNED UP CASH MONEY I NITIALLY IN HIS STATEMENT U/S 132(4) AS ALSO CONFIRMING HIS ADM ISSION WHILE HIS STATEMENT RECORDED U/S 131 OF IT. ACT HIS ATTEMPT TO EXPLAIN IT BY WAY OF AGRICULTURE INCOME LATER ON WA S UNTENABLE FOR IS LATER RETRACTION HAD NO CORROBORATIVE BACKIN G. (4) DR. S.C.GUPTA VS. CIT (2001) ITR 782 (ALL) IN DR. S.C. GUPTA V/S CIT (2001) 248 ITR 782 (ALL), IT WAS HELD THAT A STATEMENT MADE VOLUNTARILY BY THE ASSESSEE C OULD FORM THE BASIS OF ASSESSMENT. THE MERE FACT THAT THE ASSESSE E RETRACTED THE STATEMENT COULD NOT MAKE THE STATEMENT UNACCEPT ABLE. THE BURDEN LAY ON THE ASSESSEE TO ESTABLISH THAT THE AD MISSION MADE IN THE STATEMENT EARLIER AT THE TIME OF SURVEY WAS WRONG AND INFACT THERE WAS NO ADDITIONAL INCOME. THE BURDEN D OES NOT SEEM TO HAVE BEEN ATTEMPTED TO BE DISCHARGED BY THE ASSE SSEE. (6) KANTILAL C. SHAH VS. ASSTT. CIT (2011) 133 ITD 57/14 TAXMAN.COM ASSESSING OFFICER MADE ADDITIONS IN RESPECT OF UNA CCOUNTED INCOME ADMITTED UNDER SECTION 132(4). HOWEVER, AFTE R LAPS OF ABOUT NINE MONTHS FROM DATE OF ADMISSION, ASSESSEE THROUGH AN AFFIDAVIT SOUGHT TO RETRACT FROM STATEMENT MADE UND ER SECTION 132(4). IT WAS HELD THAT STATEMENT RECORDED UNDER S ECTION 132(4) ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 10 IS AN EVIDENCE BY ITSELF AND ANY RETRACTION CONTRAR Y TO THAT SHOULD BE SUPPORTED BY STRONG EVIDENCE FOR DEMONSTRATING T HAT EARLIER EVIDENCE RECORDED WAS UNDER COERCION. SINCE ASSESSE E RETRACTED FROM HIS EARLIER STATEMENT WITHOUT DEMONSTRATING AN Y EVIDENCE TO ESTABLISH THAT STATEMENT RECORDED EARLIER WAS INCOR RECT, AN ALLEGATION OF COMPULSION OR COERCION EARLIER WAS IN CORRECT, AN ALLEGATION OF COMPULSION OR COERCION MUST NOT BE AC CEPTED MERELY ON A STATEMENT IN REMAINED UNSUBSTANTIATED. THEREFO RE, ADDITION MADE ON BASIS OF STATEMENT RECORDED UNDER SECTION 1 32(4) WAS TO BE UPHELD. 4.7 IN VIEW OF ABOVE DISCUSSION AND UNDER THE FACTS DISCUSSED ABOVE THE ADDITION OF RS. 1,21,43,210/- MADE BY THE ASSESSING OFFICER IS CONFIRMED. 7. DURING THE COURSE OF HEARING, LD. AR SUBMITTED T HAT A SURVEY U/S 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF M/S BAN NALAL JAT CONTRACTOR, A PROPRIETARY CONCERN OF SHRI BANNALAL JAT ON 09.10.2 014. IN CONTINUATION TO THIS SURVEY, SURVEY WAS ALSO CONDUCTED AT RESIDENTIAL PR EMISES OF SHRI BANNALAL JAT AT VILLAGE PANDER, TEHSIL JAHAJPUR WHERE THE BOOKS OF ACCOUNTS OF THIS CONCERN WERE KEPT. IN SURVEY, CASH OF RS. 28,92,500/- WAS F OUND FROM THE RESIDENCE AND RS. 70,00,000/- IN THE CAR PARKED AT THE RESIDE NCE. SHRI BANNALAL JAT IN HIS STATEMENT U/S 133A DATED 09.10.2014 IN REPLY TO QUE STION NO. 11 EXPLAINED THAT CASH FOUND AT THE RESIDENCE IS OUT OF THE AMOU NT WITHDRAWN FROM THE BANK WHICH CAN BE VERIFIED AT HIS MAIN OFFICE PREMI SES AT JAHAJPUR. AGAIN IN REPLY TO QUESTION NOS. 14, 15 & 16 HE EXPLAINED THAT THE CASH FOUND AT RESIDENCE AND IN HIS CAR IS OUT OF THE WITHDRAWALS MADE FROM HIS BANK ACCOUNT BETWEEN 20.09.2014 TO 30.09.2014. HE ALSO STATED TH AT HE HAD KEPT THE AMOUNT OF RS. 70 LAKHS IN HIS CAR IN THE MORNING IT SELF SINCE HE WAS TO GO TO ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 11 SITE FOR MAKING PAYMENT OF VARIOUS EXPENSES LIKE LA BOUR, TRACTOR, STONE, SOIL ETC. 8. IT WAS SUBMITTED THAT THE SURVEY WAS CONVERTED I NTO SEARCH ON 10.10.2014. STATEMENT OF THE ASSESSEE U/S 132(4) WA S RECORDED AT THE OFFICE PREMISES ON 10.10.2014 AND ALSO AT THE RESIDENCE ON 11.10.2014. IN THE STATEMENT RECORDED AT OFFICE U/S 132(4) DATED 10.10 .2014, SHRI BANNALAL JAT IN REPLY TO QUESTION NO. 6 STATED THAT BOOKS OF ACCOUN TS OF M/S BANNALAL JAT CONSTRUCTION PRIVATE LIMITED IS WRITTEN UP TO 09.10 .2014 BUT EXPENDITURE FOR LAST THREE TO FOUR MONTHS ARE NOT YET RECORDED. IN RESPECT OF M/S BANNALAL JAT, HE STATED THAT BOOKS OF ACCOUNTS ARE WRITTEN UP TO 31.03.2014. A PRINTOUT OF THE PROVISIONAL/INCOMPLETE BALANCE SHEET, PROFIT & LOSS ACCOUNT AND TRIAL BALANCE WAS PROVIDED. AS PER THESE ACCOUNTS, THE PO SITION OF CASH BALANCE WAS AS UNDER:- PARTICULARS CASH BALANCE (RS) TRIAL BALANCE OF SH. BANNALAL JAT FOR THE PERIOD 01 .04.14 TO 09.10.14 RS.1,06,76,390/- BALANCE SHEET OF M/S BANNALAL JAT AS ON 09.10.2014 RS.1,06,76,390/- BALANCE SHEET OF M/S BANNALAL JAT CONSTRUCTION PVT. LTD. AS ON 09.10.2014 RS.4,21,691/- 9. IT WAS SUBMITTED THAT IN SEARCH CASH OF RS.1,21, 43,210/- WAS FOUND AT THE RESIDENCE AND RS.3,380/- AT THE PREMISES OF M/S BAN NALAL JAT CONSTRUCTION PRIVATE LIMITED. THIS CASH WAS INVENTORIED AS ANNEX URE CF OF PANCHNAMA DATED 11.10.2014 . OUT OF IT, CASH OF RS.1,17,43,210/- WAS SEIZED. TH E PANCHNAMA OF CASH FOUND & SEIZED WAS PREPARED IN TH E NAME OF BANNALAL JAT. THEREAFTER, IN STATEMENT U/S 132(4) DATED 10.10.201 4 RECORDED AT THE OFFICE, ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 12 SHRI BANNALAL JAT IN REPLY TO QUESTION NO. 8 STATED THAT HE IS NOT IN A POSITION TO EXPLAIN THE SOURCE OF CASH FOUND AT RESIDENCE WH ICH IS GENERATED BY INFLATING EXPENSES IN THE BOOKS OF ACCOUNTS. HE SUR RENDERED THIS AMOUNT IN THE HANDS OF M/S BANNALAL JAT CONSTRUCTION PVT. LTD . HE REITERATED THE SAME IN REPLY TO QUESTION NO. 11 OF THE STATEMENT RECORDED AT RESIDENCE. AGAIN, THE SURRENDER OF CASH IN THE HANDS OF THE ASSESSEE COMP ANY WAS REITERATED IN REPLY TO QUESTION NO. 40 IN STATEMENT DATED 04.12.2 014 RECORDED IN POST SEARCH PROCEEDINGS. 10. IT WAS SUBMITTED THAT AFTER THE SEARCH, THE BOO KS OF ACCOUNTS OF M/S BANNALAL JAT (PROPRIETARY CONCERN OF SHRI BANNALAL JAT) AND ASSESSEE COMPANY WERE COMPLETED. AS PER THE COMPLETED BOOKS OF ACCOU NTS, THERE IS A CASH BALANCE OF RS. 1,21,41,528/- IN THE BOOKS OF M/S BA NNALAL JAT. ACCORDINGLY WHILE FILING THE RETURN, NO INCOME WAS OFFERED BY T HE ASSESSEE. 11. IT WAS SUBMITTED THAT IN LIGHT OF ABOVE FACTS, THE ISSUE INVOLVED IN THIS GROUND IS WHETHER THE CASH FOUND AT THE RESIDENCE O F BANNALAL JAT PERTAINS TO ASSESSEE COMPANY AND WHETHER THE SOURCE OF CASH FOU ND AT RESIDENCE IS VERIFIABLE FROM THE BOOKS OF ACCOUNTS OF M/S BANNAL AL JAT OR NOT. THE FACT THAT CASH FOUND IN SEARCH AT THE RESIDENCE OF SHRI BANNA LAL JAT PERTAINS TO M/S BANNALAL JAT IS EVIDENT FROM THE FOLLOWING FACT S:- (I) IN THE INITIAL STATEMENT DATED 09.10.2014, SHRI BAN NALAL JAT IN REPLY TO QUESTION NOS. 14, 15 & 16 HAS CATEGORICALLY STATED THAT CASH FOUND IN THE CAR IN HIS NAME WHICH IS USED FOR HIS CONTRACT BUSINESS IS OUT OF THE WITHDRAWALS MADE FROM THE BANK ACCOUN TS MAINTAINED WITH BANK OF BARODA AND SBBJ BETWEEN 20.09.2014 TO 30.09.2014. THIS FACT IS VERIFIABLE FROM THE BANK ACCOUNT OF SH RI BANNALAL JAT. ACCORDING TO WHICH WITHDRAWAL OF RS. 89,50,000/- IS MADE BETWEEN ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 13 23.09.2014 TO 30.09.2014. IT IS A ADMITTED POSITION OF LAW THAT THE PRELIMINARY STATEMENT HAS MORE EVIDENTIARY VALUE TH EN THE SUBSEQUENT STATEMENT. (II) IN SURVEY, CASH BOOK OF M/S BANNALAL JAT WAS FOUND. EVEN AS PER THIS CASH BOOK M/S BANNALAL JAT WAS HAVING CASH BAL ANCE OF RS.1,06,76,390/-. OF COURSE THIS CASH BOOK WAS NOT COMPLETE BUT SUBSEQUENTLY, IT WAS COMPLETED AND AS PER THE COMPL ETED CASH BOOK, CASH BALANCE ON THE DATE OF SEARCH IS RS. 1,2 7,47,528/- WHICH IS ALMOST THE SAME AS FOUND IN SEARCH. (III) THE AO IN THE ASSESSMENT PROCEEDING HAS NOT FOUND A NY DISCREPANCY IN THE CASH BOOK OF M/S BANNALAL JAT. I N FACT IN CASE OF BANNALAL JAT, HE HAS ACCEPTED THIS CASH BOOK AND BA SED ON THE ACCOUNTS PREPARED ON THE BASIS OF THIS CASH BOOK H AS ADOPTED THE INCOME DECLARED BY HIM AND ACCEPTED THAT CASH BALAN CE AS ON 31.03.2015. THUS, WHEN THIS CASH BOOKS IS ACCEPTED IN CASE OF BANNALAL JAT, THE SAME CANNOT BE IGNORED FOR VERIFI CATION OF THE CASH FOUND ON THE DATE OF SEARCH. (IV) THE PANCHNAMA OF CASH FOUND AND SEIZED IS IN THE NA ME OF SHRI BANNALAL JAT AND NOT IN THE NAME OF THE ASSESSEE CO MPANY. THUS, WHEN THE CASH IS FOUND FROM THE POSSESSION AND CONT ROL OF SHRI BANNALAL JAT, IT CAN ONLY BE CONSIDERED IN HIS CASE IN VIEW OF THE PRESUMPTION LAID DOWN U/S 292C. IN VIEW OF THE ABOVE EVIDENCE AND THE LEGAL POSITIO N, THE CASH FOUND IN COURSE OF SEARCH CANNOT BE CONSIDERED IN THE HANDS OF THE ASSESSEE COMPANY. ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 14 12. IT WAS SUBMITTED THAT THE LOWER AUTHORITIES HAV E CONFIRMED THE ADDITION ONLY BY RELYING ON THE STATEMENT OF THE SH RI BANNALAL JAT RECORDED U/S 132(4) AND BY DRAWING INCORRECT INFERE NCE FROM THE FACTS ON RECORD. THE ASSESSEES SUBMISSION IN THIS CONNECTIO N IS AS UNDER: A) IT IS STATED THAT ASSESSEE HAS NOT CORROBORATED THE CASH FOUND IN SEARCH WITH THE CASH BOOK OF M/S BANNALAL JAT AND T HE RELEVANT COPY OF THE BANK STATEMENT. THIS HAS NO RELEVANCE WHEN A SSESSEE IN HIS STATEMENT DATED 09.10.2014 HAS SPECIFICALLY POINTED OUT THAT THE CASH FOUND IS OUT OF THE WITHDRAWAL MADE FROM THE B ANK ACCOUNT BETWEEN 20.09.2014 TO 30.09.2014 AND THIS FACT IS V ERIFIABLE FROM THE BANK STATEMENT AND ALSO FROM THE COMPLETED CASH BOOK PRODUCED IN COURSE OF ASSESSMENT PROCEEDINGS. HENCE , THE CASH BOOK SO PREPARED AFTER INCORPORATING THE PENDING EN TRIES IN WHICH NO DISCREPANCY IS FOUND CANNOT BE SAID TO BE AN AFT ERTHOUGHT, MORE PARTICULARLY NO DISCREPANCY IS FOUND BY THE AO IN S UCH CASH BOOK. B) THE TIME LAG OF WITHDRAWAL FROM BANK ACCOUNT FROM 2 3.09.2014 TO 30.09.2014 TILL THE DATE OF SEARCH IS OF 10-15 DAYS . THIS TIME LAG CANNOT BE CONSIDERED AS A LONG GAP SPECIFICALLY WHE N THE FACT OF THE CASH WITHDRAWAL FROM THE BANK ACCOUNT IS STATED BY THE ASSESSEE IN HIS STATEMENT DATED 09.10.2014. THEREFORE, THE OBSE RVATION OF THE LD. CIT(A) AS TO THE PREPONDERANCE OF PROBABILITY I S IN FAVOUR OF THE ASSESSEE. C) THE LD. CIT(A) HAS ACCEPTED THAT CASH IS FOUND AND SEIZED IN THE NAME OF SHRI BANNALAL JAT. IN SPITE OF THIS, HE REL IED ON THE STATEMENT U/S 132(4) OF SHRI BANNALAL JAT ON THE GR OUND THAT HE HAS ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 15 NOT FILED ANY REPRESENTATION/RETRACTION WITH SUPPOR TING EVIDENCE BEFORE FILING THE RETURN. IN HOLDING SO, HE IGNORED THE PRESUMPTION LAID DOWN U/S 292C WHICH PROVIDES THAT WHERE ANY MO NEY, BULLION, ETC IS FOUND IN POSSESSION OR CONTROL OF A PERSON U /S 132 OR U/S 133A, IT SHALL BE PRESUMED THAT SUCH MONEY, BULLION , ETC BELONGS TO SUCH PERSON. WITH THIS PRESUMPTION IN LAW, IT WAS T HE ONUS OF THE DEPARTMENT TO PROVE OTHERWISE WITH CONCRETE EVIDENC E. NO SUCH EVIDENCE IS BROUGHT ON RECORD. AS AGAINST THIS, ASS ESSEE HAS BROUGHT ON RECORD EVIDENCE IN FORM OF THE BANK STATEMENT AN D THE CASH BOOK OF M/S BANNALAL JAT TO SUPPORT THE FACT THAT T HE CASH BELONGS TO SHRI BANNALAL JAT. D) THE LD. CIT(A) HAS REFERRED TO CERTAIN DECISIONS AS TO THE EVIDENTIARY VALUE OF THE STATEMENT U/S 132(4). IN A LL THESE DECISIONS, IT HAS BEEN HELD THAT THOUGH SUCH STATEMENT HAS A E VIDENTIARY VALUE BUT WITH APPROPRIATE EVIDENCE THE SAME CAN BE RETRA CTED. THE HONBLE SUPREME COURT IN CASE OF PULLANGODE RUBBER PRODUCE COMPANY LTD. V. STATE OF KERALA AND ANOTHER 91 ITR 0018 (SC) HAS HELD THAT ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANT BE SAID THAT IT IS CONCLUSIVE. IT IS OPEN TO THE ASSESSEE WHO MADE ADMISSION TO SHOW THAT IT IS INCORRECT AND THE ASSESSEE SHOULD BE GIVEN PROPER OPPORTUNITY TO SHOW THE CORRECT STA TE OF AFFAIRS. IN THE PRESENT CASE, THE ASSESSEE HAS ESTABLISHED THAT THE CASH FOUND FROM THE RESIDENCE OF SHRI BANNALAL JAT DOES NOT BE LONG TO IT AND THEREFORE, ONLY ON THE BASIS OF THE STATEMENT U/S 1 32(4) ADDITION CANNOT BE MADE. IN THIS CONNECTION THE VARIOUS CASE S RELIED BY THE ASSESSEE AS REPRODUCED AT PAGES 13-14 OF THE CIT(A) ORDER MAY BE CONSIDERED. ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 16 E) THE HONBLE ITAT, JAIPUR BENCH IN CASE OF ACIT VS. DEVENDRA KUMAR CHOUDHARY IN ITA NO. 828/JP/2016 ORDER DATED 30.06. 2017 (COPY ENCLOSED) WHERE ALSO THE ASSESSEE SURRENDERED CERTA IN JEWELLERY AS UNEXPLAINED IN HIS STATEMENT U/S 132(4) BUT DID NOT INCLUDE THE SAME WHILE FILING THE RETURN OF INCOME, DELETED THE ADDITION MADE BY THE AO WHERE ASSESSEE FILED DETAILED EXPLANATION SU PPORTED BY EVIDENCE AS TO HOW THE STATEMENT U/S 132(4) WAS NOT CORRECT AND THE JEWELLERY IS FULLY DISCLOSED. IN VIEW OF THE ABOVE, THE ADDITION OF RS.1,21,43,21 0/- CONFIRMED BY LD. CIT(A) BY TREATING THE CASH FOUND IN SEARCH AS BELO NGING TO THE ASSESSEE COMPANY BE DIRECTED TO BE DELETED. 13. THE LD DR IS HEARD WHO HAS VEHEMENTLY ARGUED TH E MATTER, TOOK US THROUGH THE FINDINGS OF THE LOWER AUTHORITIES AND R ELIED ON THE SAID ORDERS. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE UNDER CONSIDERATION, RELATES TO WHETHER THE CASH FOUND AT THE RESIDENCE OF SHRI BANNALAL JAT PERTAINS TO T HE ASSESSEE COMPANY I.E. M/S BANNALAL JAT CONSTRUCTION PVT. LTD. OR IT BELON GS TO M/S BANNALAL JAT CONTRACTOR, THE PROPRIETARY CONCERN OF SHRI BANNALA L JAT. A SURVEY WAS INITIALLY CONDUCTED AT THE RESIDENTIAL AND BUSINESS PREMISES OF SHRI BANNALAL JAT AND SUBSEQUENTLY, THE SAME WAS CONVERTED INTO SEARCH OP ERATIONS. HERE IT IS RELEVANT TO NOTE THAT THE ASSESSEE CARRIES OUT HIS BUSINESS ACTIVITIES FROM BOTH HIS RESIDENCE AS WELL AS THE OFFICIAL PREMISES AND THESE BUSINESS ACTIVITIES PERTAINS TO BOTH OF HIS CONCERN NAMELY BANNALAL JAT CONSTRUCTION PVT. LTD AND BANNALAL JAT CONTRACTOR. THE FACT THAT THE SEARCH W ARRANT HAS BEEN EXECUTED ON HIM IN RESPECT OF BOTH HIS CONCERNS IN RESPECT O F BOTH HIS RESIDENCE AND OFFICE PREMISES HAS NOT BEEN DISPUTED. THEREFORE, T HE CONTENTION OF THE LD AR ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 17 REGARDING PRESUMPTION U/S 292C THAT CASH SO FOUND A T THE RESIDENCE BELONGS TO HIM AND NOT TO THE ASSESSEE COMPANY IS NOT CORRE CT AND CANNOT BE ACCEPTED. 15. IN THE STATEMENT RECORDED U/S 133A DURING THE C OURSE OF SURVEY, IN REPLY TO QUESTION NO. 11, WHERE THE SOURCE OF CASH AMOUNTING TO RS. 28,92,500/- FOUND AT HIS RESIDENCE WAS ASKED, SHRI BANNALAL JAT SUBMITTED THAT THE SAME BELONGS TO HIS BUSINESS AND THE SAME CAN BE VERIFIED FROM THE BOOKS OF ACCOUNTS MAINTAINED AT HIS HEAD OFFICE AT JAHAJPUR. IN REPLY TO QUESTION NO. 14, WHERE SOURCE OF RS. 70,00,000/- FO UND IN THE CAR, REGISTERED IN THE NAME OF SHRI BANNALAL JAT WAS SOUGHT, HE SUB MITTED THAT HE USES THE CAR FOR HIS BUSINESS PURPOSES AND HE HAS WITHDRAWN THIS AMOUNT FROM THE BANK OF BARODA BRANCH SITUATED AT JAHAJPUR AND SBBJ BRANCH SITUATED AT JAHAJPUR BETWEEN 20.09.2014 AND 30.09.2014 AND THE SAME CAN BE VERIFIED FROM THE RECORDS MAINTAINED AT HIS HEAD OFFICE AT J AHAJPUR. FURTHER IN QUESTION NO. 16, FURTHER EXPLANATION OF SHRI BANNAL AL JAT WAS SOUGHT REGARDING THE CASH OF RS 70,00,000, RS 19,92,500, A ND RS 9,00,000 FOUND AT HIS RESIDENCE AND HE SUBMITTED THAT RS. 70,000,00/- HAS BEEN WITHDRAWN BY HIS MUNSI AND HIS SONS FROM THE BANK ACCOUNT AND GI VEN TO HIM, HOWEVER, FROM WHICH PARTICULAR BANK WITHDRAWAL, THIS AMOUNT HAS BEEN GIVEN TO HIM IS NOT CLEAR TO HIM. REGARDING RS. 19,92,500/- WHICH IS GIVEN BY SHRI SATYA NARAYAIN, IT WAS STATED THAT THERE IS NO SUPPORTING EVIDENCE AVAILABLE WITH HIM. IN RESPECT OF RS. 9,00,000/-, HE STATED THE S AME TO BE HIS BUSINESS RECEIPTS. IN QUESTION NO. 22, SHRI BANNALAL JAT WA S SPECIFICALLY ASKED AS TO WHETHER HE MAINTAINS INDIVIDUAL CASH BOOK GIVEN THA T HE IS THE PROPRIETOR OF BANNALAL JAT CONTRACTOR AND ALSO THE DIRECTOR IN M/ S BANNALAL JAT CONSTRUCTION PVT. LTD. IN RESPONSE, HE SUBMITTED THAT HE DOES NO T MAINTAINED INDIVIDUAL CASH BOOKS. ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 18 16. ON PERUSAL OF THE ABOVE STATEMENT OF SHRI BANNA LAL JAT RECORDED U/S 133A DURING THE COURSE OF SURVEY, IT IS CLEAR THAT HE IS MANAGING HIS BUSINESS AFFAIRS OF BOTH HIS PROPRIETARY CONCERN AS WELL AS THE ASSESSEE COMPANY FROM HIS RESIDENCE. FURTHER, IT IS ALSO CLEAR THAT THE C ASH SO FOUND AT HIS RESIDENCE PERTAINS TO HIS BUSINESS. HOWEVER, IN ABSENCE OF IN DIVIDUAL CASH BOOK OF RESPECTIVE CONCERNS AND OTHER DETAILS MAINTAINED BY HIM, IT IS NOT POSSIBLE TO IDENTIFY WHETHER THE CASH SO FOUND BELONGS TO THE P ROPRIETARY CONCERN OR TO THE ASSESSEE COMPANY. AT THE SAME TIME, HE HAS OFFE RED AN EXPLANATION THAT THE SAME HAS BEEN WITHDRAWN FROM HIS BANK ACCOUNTS AND CAN BE VERIFIED FROM THE RECORDS MAINTAINED AT HIS MAIN OFFICE SITU ATED AT JAHAJPUR WHICH IS AGAIN USED BY BOTH HIS PROPRIETARY CONCERN AS WELL AS THE ASSESSEE COMPANY, HOWEVER, WE FIND THAT THERE IS NO CORROBORATION OF THE SAME DURING THE SURVEY OR SUBSEQUENT SEARCH PROCEEDINGS. 17. SUBSEQUENTLY, A STATEMENT OF SHRI BANNALAL JAT WAS AGAIN RECORDED ON OATH U/S 132(4) ON 10.10.2014 (CONCLUDED ON 11.10.2 014) AT HIS RESIDENTIAL PREMISES. IN QUESTION NO. 11, HE WAS ASKED TO EXPL AIN THE SOURCE OF CASH AMOUNTING TO RS. 1,21,43,210/- FOUND AT HIS RESIDEN CE AND DETAILS THEREOF CONTAINED IN ANNEXURE- CF. IN RESPONSE, SHRI BANNAL AL JAT STATED THAT THE SAID CASH BELONGS TO HIS COMPANY M/S BANNALAL JAT CONSTR UCTION COMPANY AND THE SAME IS ITS UNDISCLOSED INCOME AND THE SAME IS SURR ENDERED IN THE NAME OF M/S BANNALAL JAT CONSTRUCTION PVT. LTD. THEREAFTER ANOTHER STATEMENT U/S 132(4) WAS RECORDED AT HIS BUSINESS PREMISES ON 10. 11.2014 (CONCLUDED ON 11.11.2014. IN QUESTION NO. 8, HE WAS ASKED TO EXP LAIN THE SOURCE OF CASH AMOUNTING TO RS. 3,380/- FOUND AT HIS OFFICE AND RS . 1,21,43,210/- AT HIS RESIDENCE. IN RESPONSE, HE SUBMITTED THAT REGARDING RS. 1,21,43,210/- WHICH HAS BEEN FOUND AT HIS RESIDENCE, HE IS UNABLE TO GI VE ANY EXPLANATION. HE SUBMITTED THAT HE IS IN THE BUSINESS OF CIVIL CONST RUCTION AND IN SUCH BUSINESS, VARIOUS EXPENSES HAVE BEEN INFLATED AND SHOWN IN TH E BOOKS OF ACCOUNTS, AND ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 19 INCOME SO GENERATED ON ACCOUNT OF SUCH INFLATION IN EXPENSES IS REPRESENTED IN THE FORM OF CASH WHICH HAS BEEN FOUND AT HIS RES IDENCE. THIS INCOME IS NOT REPRESENTED IN HIS BOOKS OF ACCOUNTS AND HE SURREND ERED THE SAID AMOUNT AS HIS UNDISCLOSED INCOME AND WILLING TO PAY APPROPRIA TE TAX ON THE SAME. HE ALSO CATEGORICALLY STATED THAT THIS UNDISCLOSED INC OME BELONGS TO HIS COMPANY M/S BANNALAL JAT CONSTRUCTION PVT. LTD. IN RESPONSE TO QUESTION NO. 11 WHEREIN HE WAS ASKED TO PROVIDE ANY OTHER EXPLANATI ON WHICH HE WISHES TO PROVIDE, HE SUBMITTED THAT PURSUANT TO SEARCH OPERA TIONS WHERE VARIOUS DOCUMENTS, LOOSE PAPERS, ENTRIES, CASH, INVESTMENT, ADVANCES AND INDIVIDUAL EXPENDITURE DETAILS HAVE BEEN FOUND AND TAKING ALL THAT INTO CONSIDERATION, HE SURRENDERS RS. 4,01,43,210/- AS HIS UNDISCLOSED INC OME. HE ALSO CATEGORICALLY STATED THAT THE SAID DISCLOSURE IS IN THE HANDS OF M/S BANNALAL JAT CONSTRUCTION PVT. COMPANY IN RESPECT OF UNEXPLAINED CASH AMOUNTI NG TO RS. 1,21,43,210/- AND RS. 2,50,00,000 AND RS. 30,00,000/- TOTALLING T O RS. 2,80,00,000 IN HIS INDIVIDUAL CAPACITY. HE ALSO REQUESTED THAT THE CAS H SO FOUND AT HIS RESIDENCE MAY BE ADJUSTED AGAINST THE TAX WHICH WOULD BE DETE RMINED BASED ON THE SAID SURRENDER OF UNDISCLOSED INCOME. 18. ON PERUSAL OF THE ABOVE TWO STATEMENTS OF SHRI BANNALAL JAT RECORDED U/S 132(4) AT HIS RESIDENCE AND BUSINESS PREMISES DURIN G THE COURSE OF SEARCH PROCEEDINGS, WHAT HAS CLEARLY EMERGED IS THAT HE HA S MADE SPECIFIC DISCLOSURE OF UNDISCLOSED INCOME IN THE FORM OF CASH AMOUNTING TO RS 1.21 CRORES FOUND AT HIS RESIDENCE IN THE HANDS OF M/S BANNALAL JAT C ONSTRUCTION PVT. LTD. AND SIMILARLY, HE HAS MADE SPECIFIC DISCLOSURE OF OTHER UNDISCLOSED INCOME BASED ON SEIZED DOCUMENTS FOUND DURING THE COURSE OF SEAR CH AMOUNTING TO RS. 2.8 CRORES IN HIS INDIVIDUAL HANDS I.E, IN HANDS OF HIS PROPRIETARY CONCERN BANNALAL JAT CONTRACTOR. WE DO NOT SEE ANY AMBIGUITY IN BOT H HIS STATEMENTS RECORDED U/S 132(4) OF THE ACT. FURTHER IN BOTH THE STATEMEN TS, HE HAS SAID IN CLEAR ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 20 TERMS THAT THE SAID STATEMENT HAS BEEN GIVEN IN HIS FULLY CONSCIOUSNESS WITHOUT ANY FEAR OR PRESSURE OR UNDUE INFLUENCE FRO M THE REVENUE AUTHORITIES. 19. SUBSEQUENTLY, ON 04.12.2014 DURING THE POST-SEA RCH PROCEEDINGS, STATEMENT OF SHRI BANNALAL JAT WAS AGAIN RECORDED U /S 131 OF THE ACT WHEREIN HE WAS AGAIN CONFRONTED WITH THE VARIOUS DOCUMENTS SEIZED AND CASH FOUND DURING THE COURSE OF SEARCH AND THE CONSEQUENT SURR ENDER MADE BY HIM IN RESPECT OF HIS TWO CONCERNS. IN RESPONSE, HE AGAIN CONFIRMED THE SURRENDER OF UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE COM PANY IN RESPECT OF THE CASH WHICH HAS BEEN FOUND AT HIS RESIDENCE AMOUNTIN G TO RS. 1,21,43,210/- AND RS 1,35,00,000 AS HIS UNDISCLOSED INCOME AS PER ANNEXURE 1 TO 6 FOUND AND SEIZED AT HIS RESIDENCE, UNDISCLOSED INVESTMENT IN PROPERTIES AMOUNTING TO RS 1,87,00,000 BASED ON ANNEXURE 2 FOUND AND SEI ZED FROM HIS OFFICE AND BASED ON OTHER DOCUMENTS SEIZED, ANOTHER AMOUNT OF RS 93,00,000. INFACT, HE HAS AGREED FOR AN ADDITIONAL SURRENDER OF RS 25, 00,000 DURING THE POST SEARCH PROCEEDINGS IN HANDS OF HIS PROPRIETARY CONC ERN BUT AT THE SAME TIME, HAS MAINTAINED THE CONSISTENT STAND TAKEN EARLIER D URING THE COURSE OF SEARCH, IN TERMS OF SURRENDER OF UNDISCLOSED INCOME IN THE FORM OF CASH OF RS. 1,21,43,210/- FOUND AT HIS RESIDENCE IN THE HAN DS OF THE ASSESSEE COMPANY. 20. IN VIEW OF THE ABOVE DISCUSSIONS, IT IS CRYSTAL CLEAR THAT SHRI BANNLAL JAT HAS BEEN MANAGING THE AFFAIRS OF BOTH HIS CONCERNS FROM HIS RESIDENCE AS WELL AS HIS OFFICE AT JAHAJPUR. IN HIS STATEMENT RECORDE D DURING THE COURSE OF SURVEY U/S 133A, HE HAS STATED THAT THE CASH FOUND AT HIS RESIDENCE BELONGS TO HIS BUSINESS AND HE WAS NOT CLEAR AS TO WHICH PA RTICULAR BUSINESS CONCERN HE WAS REFERRING TO. IN HIS SUBSEQUENT STATEMENT R ECORDED ON OATH U/S 132(4) DURING THE COURSE OF SEARCH, HE HAS CATEGORI CALLY ADMITTED THAT THE CASH SO FOUND AT HIS RESIDENCE ARISES OUT OF INFLAT ED BUSINESS EXPENSES AND ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 21 BELONGS TO HIS BUSINESS CONCERN RUN IN NAME OF BANN ALAL JAT CONSTRUCTION PVT LTD AND HAS THUS BEEN SURRENDERED AS ITS UNDISCLOSE D INCOME. THE SAID ADMISSION HAS BEEN REITERATED IN NOT JUST ONE STATE MENT BUT TWO SUBSEQUENT STATEMENTS - ONE RECORDED U/S 132(4) AND SECOND REC ORDED U/S 131 DURING POST SEARCH PROCEEDINGS. WE THEREFORE DONOT SEE A NY INCONSISTENCY IN ASSESSEES STATEMENTS, RATHER THE LATTER STATEMENTS HAVE BEEN MADE MORE CLEARLY AND GIVEN THAT THESE SUBSEQUENT STATEMENTS HAVE BEEN RECORDED ON OATH U/S 132(4) WILL THUS HAVE A GREAT EVIDENTIARY VALUE. 21. THEREAFTER, THE ASSESSEE COMPANY FILED ITS RETU RN OF INCOME ON 30.09.2015 WHEREIN SUCH SURRENDER WAS NOT HONOURED BY THE ASSE SSEE COMPANY AND THE UNDISCLOSED INCOME IN FORM OF CASH FOUND AT THE RES IDENCE WAS NOT OFFERED TO TAX, EFFECTIVELY RETRACTING FROM THE STATEMENT RECO RDED ON OATH U/S 132(4) OF THE ACT. IT IS RELEVANT TO NOTE THAT DURING THE IN TERVENING PERIOD I.E, THE DAY THE STATEMENT WAS RECORDED U/S 132(4) ON 10.10.2014 AND DAY THE RETURN OF INCOME WAS FILED ON 30.09.2015, ALMOST A PERIOD OF 11 MONTHS, THERE IS NO COMMUNICATION FROM THE ASSESSEE COMPANY TO THE REVE NUE AUTHORITIES RETRACTING FROM THE STATEMENT SO MADE AND RECORDED DURING THE COURSE OF SEARCH PROCEEDINGS. IN FACT, DURING THE POST SEARCH PROCEEDINGS, THE ASSESSEE AGAIN GOT AN OPPORTUNITY WHEREIN HE WAS CALLED AND HIS STATEMENT WAS RECORDED U/S 131 ON 4.12.2014 AND THEREIN, AS WELL, HE MAINTAINED HIS EARLIER STAND AND DIDNT RETRACT FROM THE STATEMENT SO RECO RDED DURING THE COURSE OF SEARCH. THIS ALSO PROVES THAT THE CONTENTION OF TH E ASSESSEE COMPANY THAT THE EARLIER SURRENDER DURING THE COURSE OF SEARCH W AS UNDER PRESSURE IS TOTALLY UNFOUNDED. 22. FURTHER, IT IS THE CONTENTION OF THE LD AR THAT AFTER THE SEARCH, THE BOOKS OF ACCOUNTS OF M/S BANNALAL JAT (PROPRIETARY CONCER N OF SHRI BANNALAL JAT) AND ASSESSEE COMPANY WERE COMPLETED AND AS PER THE COMP LETED BOOKS OF ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 22 ACCOUNTS, THERE IS A CASH BALANCE OF RS. 1,21,41,52 8/- IN THE BOOKS OF M/S BANNALAL JAT. ACCORDINGLY WHILE FILING THE RETURN, NO INCOME WAS OFFERED BY THE ASSESSEE COMPANY. THE BOOKS OF ACCOUNT UNDER CONSI DERATION RELATES TO FINANCIAL YEAR ENDING ON 31 MARCH 2015 AND BY NO ST RETCH OF IMAGINATION, IT CAN BE HELD THAT BOOKS OF ACCOUNTS WERE NOT FINALIS ED TILL THE TIME THE RETURN OF INCOME WAS FILED ON 30.9.2015. ONE CAN POSSIBLY UNDERSTAND THAT THE AUDITORS WHILE REVIEWING THE BOOKS OF ACCOUNTS MAY SUGGEST CERTAIN MODIFICATIONS IN THE TREATMENT OF VARIOUS TRANSACTI ONS ESPECIALLY AS TO HOW THE SAME WOULD BE REFLECTED IN THE FINANCIAL STATEMENTS IN ACCORDANCE WITH THE ACCEPTED ACCOUNTING PRACTICES AND STANDARDS PRESCRI BED. BUT AT THE SAME TIME, AS FAR AS THE CASH TRANSACTIONS ARE CONCERNED , IT CANNOT BE ACCEPTED THAT SUCH TRANSACTIONS COULD NOT BE RECORDED WELL I N TIME BEFORE THE CLOSE OF THE FINANCIAL YEAR ENDED ON 31 MARCH 2015 AND POSIT ION REGARDING AVAILABILITY OF CASH IN HANDS WAS NOT KNOWN TILL THE TIME ASSESS EE COMPANY FILES ITS RETURN OF INCOME. 23. HERE, WE REFER TO THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN CASE OF RAVI MATHUR & OTHERS (D.B APPEAL NO. 67/ 2002 & OTHERS) VIDE ITS ORDER DATED 13.05.2016 WHERE HONBLE HIGH COURT HAS LAID DOWN THE FOLLOWING PROPOSITION IN LAW IN RESPECT OF RETRACTI ON OF STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT: 14. HAVING NOTICED THE ARGUMENTS OF THE LEARNED CO UNSEL FOR THE PARTIES, WE DEEM IT PROPER AT THE OUTSET TO TAKE IN TO CONSIDERATION THE FINDING OF THE TRIBUNAL ABOUT RETRACTION/RESILING O F THE STATEMENTS RECORDED UNDER SECTION 132(4) AS THE TRIBUNAL HAS P RIMARILY COME TO A FINDING THAT RETRACTION IS PROPER. WE WOULD ALSO DE AL WITH THE JUDGMENTS RELIED ON BY THE LEARNED COUNSEL WHICH HAS A BEARIN G ON THE ISSUES AND WOULD THEN GIVE OUR OWN VIEW ON QUESTIONS POSED BY THE REVENUE. 15. IN OUR VIEW, THE STATEMENTS RECORDED UNDER SECT ION 132(4) HAVE GREAT EVIDENTIARY VALUE AND IT CANNOT BE DISCARDED AS IN THE INSTANT CASE ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 23 BY THE TRIBUNAL IN A SUMMARY OR IN A CRYPTIC MANNER . STATEMENTS RECORDED UNDER SECTION 132(4) CANNOT BE DISCARDED B Y SIMPLY OBSERVING THAT THE ASSESSEE RETRACTED THE STATEMENTS. ONE HAS TO COME TO A DEFINITE FINDING AS TO THE MANNER IN WHICH RETRACTI ON TAKES PLACE. ON PERUSAL OF THE FACTS NOTICED HEREINBEFORE, WE HAVE NOTICED THAT WHILE THE STATEMENTS WERE RECORDED AT THE TIME OF SEARCH ON 9.11.1995 AND ONWARDS BUT RETRACTION, IS ALMOST AFTER AN YEAR AND THAT TOO WHEN THE ASSESSMENT PROCEEDINGS WERE BEING TAKEN UP IN NOVEM BER 1996. WE MAY OBSERVE THAT RETRACTION SHOULD BE MADE AS SOON AS POSSIBLE AND IMMEDIATELY AFTER SUCH A STATEMENT HAS BEEN RECORDED, EITHER BY FILING A COMPLAINT TO THE HIGHE R OFFICIALS OR OTHERWISE BROUGHT TO THE NOTICE OF THE HIGHER OFFIC IALS, EITHER BY WAY OF A DULY SWORN AFFIDAVIT OR STATEMENTS SUPP ORTED BY CONVINCING EVIDENCE THROUGH WHICH AN ASSESSEE COULD DEMONSTRATE THAT THE STATEMENTS INITIALLY RECORDED WERE UNDER PRESSURE/COERCION AND FACTUALLY INCORRECT. IN OUR V IEW, RETRACTION AFTER A SUFFICIENT LONG GAP OR POINT OF TIME, AS IN THE INSTANT CASE, LOSES ITS SIGNIFICANCE AND IS AN AFTE RTHOUGHT. ONCE STATEMENTS HAVE BEEN RECORDED ON OATH, DULY SIGNED, IT HAS A GREAT EVIDENTIARY VALUE AND IT IS NORMALLY PRESUMED THAT WHATEVER STATED AT THE TIME OF RECORDING OF STATEME NTS UNDER SECTION 132(4), ARE TRUE AND CORRECT AND BRINGS OUT THE CORRECT PICTURE, AS BY THAT TIME THE ASSESSEE IS UNINFLUENC ED BY EXTERNAL AGENCIES. THUS, WHENEVER AN ASSESSEE PLEAD S THAT THE STATEMENTS HAVE BEEN OBTAINED FORCEFULLY/BY COERCIO N/UNDUE INFLUENCE WITHOUT MATERIAL/CONTRARY TO THE MATERIAL , THEN IT SHOULD BE SUPPORTED BY STRONG EVIDENCE WHICH WE HAV E OBSERVED HEREINBEFORE. ONCE A STATEMENT IS RECORDED UNDER SECTION 132(4), SUCH A STATEMENT CAN BE USED AS A S TRONG EVIDENCE AGAINST THE ASSESSEE IN ASSESSING THE INCO ME, THE BURDEN LIES ON THE ASSESSEE TO ESTABLISH THAT THE A DMISSION MADE IN THE STATEMENTS ARE INCORRECT/WRONG AND THAT BURDEN HAS TO BE DISCHARGED BY AN ASSESSEE AT THE EARLIEST POINT OF TIME AND IN THE INSTANT CASE WE NOTICE THAT THE AO IN T HE ASSESSMENT ORDER OBSERVES:- REGARDING THE AMOUNT OF RS. 44.285 LAKHS, IT IS NO W CONTENDED THAT THE STATEMENT U/S 132(4) WAS NOT CORRECT AND THESE AMOUNTS ARE IN ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 24 THOUSANDS, NOT LAKHS I.E. IT IS NOW ATTEMPTED TO RE TRACT FROM THE STATEMENTS MADE AT THE TIME OF S & S OPERATIONS. THEREFORE, WHAT WE GATHER FROM THE ASSESSMENT ORDER AND ON PERUSAL OF THE ABOVE FINDING THAT THE RETRACTION WAS AT THE STAGE WHEN THE ASSESSMENT PROCEEDINGS WERE BEING FINALIZED I.E. AL MOST AFTER A GAP OF MORE THAN AN YEAR. SUCH A SO-CALLED RETRACTION IN O UR VIEW IS NO RETRACTION IN LAW AND IS SIMPLY A SELF-SERVING STAT EMENT WITHOUT ANY MATERIAL. 15.1 THUS, IN OUR VIEW, THE TRIBUNAL IN A SUMMARY M ANNER HAS HELD THAT RETRACTION IS PROPER, WITHOUT GOING IN DETAIL AND MANNER, TIME OF RETRACTION, THE ADDITION DELETED, IS WHOLLY ON A PE RVERSE FINDING. 15.2 THIS COURT IN RAJ KUMAR SODHANI VS THE CIT (D. B ITA NO. 15/2015 DECIDED ON 28.4.2016) HAS TAKEN THIS VERY VIEW THAT RETRACTION AFTER A SUFFICIENT LONG GAP LOSES ITS SANCTITY. 24. IN LIGHT OF LEGAL PROPOSITION LAID DOWN BY THE HONBLE RAJASTHAN HIGH COURT, THERE IS CLEARLY AN INORDINATE DELAY IN RETR ACTION AND NO JUSTIFIABLE EXPLANATION HAS BEEN GIVEN BY THE ASSESSEE COMPANY FOR SUCH DELAY. IT IS CLEARLY AN AFTERTHOUGHT AND LOSES ITS SIGNIFANCE. T HE STATEMENT RECORDED U/S 132(4) HAS GREAT EVIDENTIARY VALUE AND THERE IS NO MATERIAL WHICH HAS BEEN BROUGHT ON RECORD THAT SUCH STATEMENT HAS BEEN RECO RDED AND OBTAINED FORCEFULLY/BY COERCION/UNDUE INFLUENCE. FURTHER, T HE ASSESSEE HAS BEEN CONSISTENT IN HIS STATEMENTS SO RECORDED EVEN DURIN G THE POST SEARCH PROCEEDINGS WHEN HIS STATEMENT WAS RECORDED UNDER S ECTION 131. HENCE, IN LIGHT OF ABOVE DISCUSSIONS, THE RETRACTION OF THE S TATEMENT RECORDED U/S 132(4) CANNOT BE ACCEPTED IN THE INSTANT CASE. 25. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF T HE CASES AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE RAJASTHAN HIG H COURT (SUPRA), THE ADDITION TOWARDS THE UNDISCLOSED INCOME IN FORM OF CASH FOUND DURING THE COURSE OF SEARCH AMOUNTING TO RS 1,21,43,210 IS CON FIRMED IN THE HANDS OF THE ASSESSEE COMPANY. ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 25 26. BEFORE PARTING, WE MAY ADD THAT WE HAVE GONE T HROUGH ALL THE CONTENTIONS RAISED BY THE LD AR AND THE SAME HAVE B EEN APPROPRIATELY DEALT WITH SUPRA AND ALSO VARIOUS LEGAL AUTHORTIES WHICH HAVE BEEN BROUGHT TO OUR NOTICE EACH ONE OF WHICH HAS BEEN RENDERED IN THE C ONTEXT OF PECULIAR FACTS AND CIRCUMSTANCES OF THE CASES . 27. IN THE RESULT, GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED. 28. REGARDING THE 2 RD GROUND OF APPEAL, BRIEFLY THE FACTS OF THE CASE AR E THAT IN THE ASSESSMENT PROCEEDING, THE AO CALLED THE ACC OUNT STATEMENT OF THE ASSESSEE IN THE BOOKS OF M/S NAHAR FILLING STATION. ON PERUSAL OF THE SAME, HE OBSERVED THAT THERE IS A DIFFERENCE OF RS.29,860/- IN CLOSING BALANCE AS ON 31.03.2015. HE THEREFORE, MADE ADDITION AN OF RS.29 ,860/-. 29. ON APPEAL, THE LD CIT(A) CONFIRMED THE SAID ADD ITION AND HIS FINDINGS ARE REPRODUCED AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE AND GONE T HROUGH THE ASSESSMENT ORDER AND SUBMISSION OF THE APPELLANT. IT IS SEEN T HAT THERE IS DIFFERENCE OF RS. 29,860/- IN THE ACCOUNT OF THE ASSESSEE IN THE BOOKS OF SUPPLIER AND SUPPLIER ACCOUNT IN THE BOOKS OF ASSESSEE. THE CLAI M OF A/R THAT IT HAS TRANSFERRED THE DIFFERENCE IN INCOME IN A.Y.2016-17 CANT BE ACCEPTED AS THAT YEAR IS NOT UNDER APPEAL. FURTHER NO SPECIFIC REASO N FOR TRANSFERRING THE INCOME IN A.Y. 2016-17 AS AGAINST A.Y. 2014-15 WAS GIVEN. THEREFORE, THE ADDITION OF RS. 29,860/- MADE BY THE AO IS CONFIRME D. 30. DURING THE COURSE OF HEARING, THE LD AR SUBMITT ED THAT THE DIFFERENCE HAS ARISEN SINCE THE PARTY HAS INITIALLY DEBITED CHARGE S OF RS.29,860/- TO THE ACCOUNT OF THE ASSESSEE FOR WHICH ENTRY WAS MADE IN THE BOOKS OF ACCOUNTS. THEREAFTER, THE PARTY REVERSED THE SAME WITHOUT INT IMATION TO THE ASSESSEE RESULTING INTO DIFFERENCE. WHEN THIS FACT CAME TO T HE NOTICE OF THE ASSESSEE, ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 26 REVERSE ENTRY OF THE SAME WAS PASSED IN THE SUBSEQU ENT YEARS WHERE THE AMOUNT OF RS.29,860/- IS OFFERED FOR TAX. THUS, WHE N THE AMOUNT IS ALREADY OFFERED FOR TAX IN AY 2016-17, THE ADDITION MADE BE DELETED FOR WHICH RELIANCE IS PLACED IN CASE OF THE DECISION OF HONBLE SUPREM E COURT IN CIT VS. EXCEL INDUSTRIES LTD. 358 ITR 295 IN WHICH IT WAS HELD TH AT WHEN THE RATE OF TAX REMAINED THE SAME IN PRESENT A.Y. AS WELL AS IN SUB SEQUENT A.Y., THE DISPUTE RAISED BY THE REVENUE IS ENTIRELY ACADEMIC OR AT BE ST MAY HAVE A MINOR TAX EFFECT, THERE IS NO NEED FOR THE REVENUE TO CONTIN UE WITH THE LITIGATION WHEN IT WAS QUITE CLEAR THAT NOT ONLY WAS IT FRUITLESS ( ON MERITS) BUT ALSO THAT IT MAY NOT HAVE ADDED ANYTHING MUCH TO THE PUBLIC COFFERS. IN VIEW OF THE ABOVE, ADDITION CONFIRMED BY THE LD. CIT(A) BE DIRECTED TO BE DELETED. 31. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE LD AR HAS CONTENDED THAT THE AMOUNT OF RS.29,860/- HAS BEEN REVERSED AND OFFERED TO TAX IN AY 2016-17. WHERE T HE AMOUNT HAS BEEN OFFERED TO TAX IN THE SUBSEQUENT YEAR, THE SAME AMO UNT CANNOT BE BROUGHT TO TAX IN THE IMPUNGED ASSESSMENT YEAR. HENCE, THE AD DITION IS DELETED AND GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE ASSESS EE. 32. REGARDING THE 3 RD GROUND OF APPEAL, BRIEFLY THE FACTS OF THE CASE AR E THAT THE AO, BASED ON REVIEW OF THE SEIZED DOCUMENTS, OB SERVED THAT THE ASSESSEE MADE CERTAIN PAYMENT EXCEEDING RS. 20,000/- IN CASH AS MENTIONED AT PAGE 12 OF THE ASSESSMENT ORDER AND ACCORDINGLY, DISALLO WED THE SAME U/S 40A(3). 33. THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATIO N OF THE ASSESSEE AND THE EVIDENCE FILED RESTRICTED THE DISALLOWANCE U/S 40A(3) TO RS. 82,200/- IN RESPECT OF 3 PAYMENTS OF RS.25,000/-, RS. 28,000/- AND RS. 29,200/-. THE RELEVANT FINDING OF THE LD CIT(A) WHICH IS REPRODU CED AS UNDER:- ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 27 13. I HAVE CONSIDERED THE FACTS OF THE CASE, GONE THROUGH ASSESSMENT ORDER AND SUBMISSION OF THE APPELLANT. IT IS SEEN THAT TH E AO MADE THE DISALLOWANCE ONLY ON THE BASIS OF THE VOUCHERS WHICH INDICATES T HAT PAYMENT IS MORE THAN RS. 20,000/- PER DAY. HE IGNORED THE FACT THAT THIS PAYMENT IS MADE TO VARIOUS LABOURS WORKING AT SITE AND COMPLETE DETAIL S OF THE PAYMENT TO EACH LABOUR IS MENTIONED IN THE SUPPORTING DETAILS. FROM THE SUPPORTING DETAILS IT IS FOUND THAT PAYMENT TO INDIVIDUAL PERSON IS LESS THA N RS. 20,000/- EXCEPT IN THREE CASES I.E. RS. 25,000/-, RS. 28,000/- AND RS. 29,200/-. THE PROVISIONS OF SECTION 40A(3) IS NOT APPLICABLE WHERE THE PAYMENT IS LESS THAN RS. 20,000/- AND THEREFORE THE DISALLOWANCE MADE BY THE AO TO TH E EXTENT OF RS. 4,60,000/- (542200-25000-28000-29200) IS DELETED AN D THE ADDITION TO THE EXTENT OF RS. 82,200/- IS CONFIRMED. 34. DURING THE COURSE OF HEARING, THE LD AR SUBMIT TED THAT THOUGH THE PAYMENT IN THE ABOVE 3 CASES IS MADE EXCEEDING RS. 20,000/- BUT THE SAME IS MADE UNDER EXCEPTIONAL CIRCUMSTANCES AS MENTIONED A T PAGE 25 OF THE ORDER OF CIT(A). HENCE, THE DISALLOWANCE SO CONFIRMED BY THE LD. CIT(A) BE DIRECTED TO BE DELETED. 35. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF THE ORDER OF THE LD CIT(A ), IN RESPECT OF PAYMENT OF RS 25,000, IT HAS BEEN STATED BY THE ASSESSEE THAT THE SAME WAS PAID TO GIKRU GADIWALA FOR LABOUR PAYMENT AND SINCE HE CAME TO OF FICE AFTER BANKING HOURS AND WAS IN URGENT NEED OF FUNDS, CASH WAS PAID TO H IM. REGARDING PAYMENT OF RS 28,000, IT HAS BEEN STATED THAT THE SAME WAS PAID TO SAIJANI MOTORS TOWARDS REPAIR OF MACHINE BREAKDOWN AT SITE. REGAR DING RS 29,200, IT WAS STATED THAT THE SAME WAS PAID TO TWO INDIVIDUAL LAB OURERS AND PAYMENT TO EACH LABOURER IS LESS THAN RS 20,000. THE FACT TH AT THE PAYMENTS HAVE BEEN MADE FOR THE PURPOSES OF THE ASSESSEES BUSINESS HA VE NOT BEEN DOUBTED BY THE AO. REGARDING THE BUSINESS EXIGENCY OF MAKING P AYMENT IN CASH, IT HAS ITA NO.720/JP/2017 M/S BANNALAL JAT CONSTRUCTION PV T. LTD., BHILWARA VS. ACIT, CENTRAL CIRCLE-AJMER 28 BEEN STATED THAT FIRST PAYMENT HAS BEEN MADE AFTER THE BANKING HOURS FOR MAKING LABOUR PAYMENT, THE SECOND PAYMENT WAS NECES SITATED ON ACCOUNT OF MACHINE BREAK DOWN AT SITE. REGARDING THE THIRD PA YMENT, IT HAS BEEN STATED THAT THE SAID WAS PAID TO TWO LABOURERS AND PAYMENT TO EACH IS LESS THAN RS 20,000 AND IN THIS REGARD, WE FIND THAT THE LD CIT( A) HAS IN SIMILAR CIRCUMSTANCES ALLOWED THE PAYMENT IN CASH TO THE LA BOURERS NOT EXCEEDING RS 20,000. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE DISALLOWANCE MADE BY THE AO AMOUNTING TO RS 82,200 IS HEREBY DELETED. IN THE RESULT, GROUND OF APPEAL IS ALLOWED. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/12/2017. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 29/12/2017 *GANESH KR VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S BANNALAL JAT CONSTRUCTIONS PVT. LTD., BHILWARA, 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-2, AJMER 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.720 /JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR
