Thaackur Singlaa, Dehradun V. DCIT, Central Circle, Dehradun

ITA 8328/DEL/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 9259 (ITAT-DEHRADUN)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 30-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income; Retraction
• Section: 142(1); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH, DEHRADUN Before Sh. Amit Shukla, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 8328/Del/2018 : Asstt. Year : 2016-17 Thaackur Singlaa, C/o Matta Garg & Co., 15, Astley Hall, Dehradun Vs DCIT, Central Circle, Dehradun (APPELLANT) (RESPONDENT) PAN No. ADWPS5500Q Assessee by : Sh. S. K. Matta, CA Revenue by : Smt. Poonam Sharma, Sr. DR Date of Hearing: 10.11.2021 Date of Pronouncement: 08.02.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of ld. CIT(A)-IV, Kanpur dated 05.10.2018. 2. The assessee is an individual assessee. The assessee derives income from Salary, Business & Profession, Capital Gain and Other Sources. A search & seizure operation was conducted in Golden Manor Group of cases on 22.07.2015. During the course of search, certain information/documents belonging to the assessee were also found. Accordingly, notice u/s 142(1) was issued on 30.03.2017 for furnishing the return of Income on or before 01.05.2017. The assessee filed return of income on 14.08.2017 declaring total income of Rs. 11,06,220/-. 3. The assessee has declared taxable income of Rs. 11,06,220/- for the assessment under consideration. The assessee has shown Business income and income from other ITA No.8328/Del/2018 Thaakur Singlaa 2 sources. The assessee has also shown exempt profit from M/s. Golden Manor of Rs. 58,40,480/-, in his Capital Account where the assessee is a partner having 20% of share. 4. During the course of search operation, the assessee has surrendered Rs. 50,00,000/- vide the statement recorded u/s 132(4) on 22.07.2015. Since, the assessee has not offered the same to tax in his ITR, the AO vide order sheet entry dated 07.10.2017, asked the assessee to explain and also to show cause as to why this surrendered income should not be added to her total income. 5. In response to this the assessee vide her reply dated 27.11.2017 stated as under: " As regards your query related to surrender of Rs. 1 crore and the same not being reflected in the ITR filed for AY 2016-17, it is submitted that you have purposely it seems, omitted to mention that just after the purported surrender the assessee along with his wife Mrs. Madhu Singla and son Mr. Yogesh Singla vide letters dated 23.07.2015 addressed to Joint Director of Income Tax (Inv.) and which as reported by postal website as having been received on 24.07.2015 had retracted the surrender as soon as relieved of the oppressive conditions which were made to bear on them by the Department parties at the time of search to induce the surrender by coercion and undue influence. The assessee along with Mr. Amarnath Ahuja and Mr. Yogesh Singla had again issued a letter dated 03.08.2015 for seeking confirmation of the earlier letter dated 23.07.2015 been placed on relevant records. Copies of letters dated 23.07.2015 and 03.08.2015 along with details of delivery of letter taken from postal website is attached herewith as Annexure D for your perusal. Record bears testimony that the said retractions went unchallenged by the Department and are taken to have been accepted. The purported surrender was induced by tiring out the assessee by dragging the search operations to the wee hours of the day after the date of their commencement making it clear to them that the search parties will not leave till the object of 'surrender' is achieved. The assessee realizing it ITA No.8328/Del/2018 Thaakur Singlaa 3 signed the statements at relevant places recording words put in their mouth by the interrogators and surrendered a total amount of Rs. 1 crore of which Rs. 20 lakhs was surrendered on behalf of his son Mr. Yogesh Singla, Rs. 30 lakhs on behalf of his wife Mrs. Madhu Singla and balance Rs. 50 lakhs was surrendered by the assessee himself. The amount surrendered had no logical explanation nor was assigned to any specific assessment year clearly suggesting that the whole purpose of surrender was to escape himself and his family from the torture which they were being subjected to and put an end to the ongoing turmoil. Further, what is to be realized at this juncture is the absolute dearth of any significant incriminating material found in the course of search and the assessee’s confrontation with it. No documentary record of any allegedly undisclosed income has been found in the course of search and none has been admitted by the assessee. 6. The assessee submitted that his case is squarely covered by the decision of the Hon'ble High Court of Andhra Pradesh in Gajjam Chinna Yellappa Vs. ITO [(2015) 370 ITR 0671 (AP)] and is further supported by the decision of the Hon’ble High Court of Gujarat in Chetnaben J Shah legal heir of Jagdishchandra K Shah in Tax Appeal No. 1437 of 2007 delivered on 14.07.2016 and also on CBDT direction F.No.286/98/2013-IT (lnv.ll) dated 18.12.2014. 7. The AO held that on perusal of reply of the assessee, the reply of the assessee falls flat as the surrender was made by the assessee himself in his statements on oath recorded u/s 132(4) of the I.T. Act. The assessee while making surrender in his hand also made surrender in the hands of his wife Smt. Madhu Singla and his son Shri Yogesh Singla and both his wife and his son acknowledged the surrender made by the assessee which proves that this surrender was done after consulting each of the family members. The AO held that this itself proves that the search team had not adopted any oppressive and ITA No.8328/Del/2018 Thaakur Singlaa 4 coercive practices during the search operation. The search team allowed the assessee and his family members to consult each other before making the surrender. As such, the contention of the assessee that the surrender was made under pressure, cannot be accepted and is not a bonafide on his part. 8. The AO held that in answer to Question No. 56 of his statement the assessee said that he is surrendering additional income of Rs. 50 Lacs in his hands. The assessee had tendered three cheques No. 004850, 004851 and 004852 of Rs. 5 lacs each in lieu of payment of tax on income surrendered. Since, the assessee had presented these cheques for three installments of advance tax which can only belong to the current financial year in which the surrender was made, it was held that these cheques were meant for the current financial year which is relevant to AY 2016-17. 9. The AO held that when the assessee was confronted about the difference between the income declared by him and his family members and the investment made by him and his family members. It was held that the retraction is not supported with any evidence to prove contrary to what was admitted by the assessee in his statement recorded u/s 132(4). The AO relied on the decision of the Hon’ble Supreme Court in the case of B. Kishore Kumar vs. DCIT, Central Circle, Chennai has held that “ since the assessee himself had stated in sworn statement during the search/seizure about his undisclosed income, tax was to be levied on the basis of admission without scrutinizing documents”. Accordingly, the surrendered income of Rs. 50,00,000/- was added to the income of the assessee for the AY 2016-17. ITA No.8328/Del/2018 Thaakur Singlaa 5 10. The ld. CIT(A) considered the arguments of the assessee and choose to reaffirm the decision of the Assessing Officer. The ld. CIT(A) while doing so held that in last part of the statement, assessee also stated that he has signed the statement after reading, understanding and without any pressure. The ld. CIT(A) held that all the circumstances show that there was no indication of undue pressure upon the assessee. The ld. CIT(A) placed reliance on the following judicial pronouncements:  Greenview restaurant vs. AC IT 263 ITR 169 Guwahati High Court  Bhagirath Agarwal vs. CTT Delhi High Court 215 taxman 229  Suresh Kumar vs. DCIT-SC(2014) 11. Wherein the Hon'ble Courts has held that an addition in assessee's income relying upon statement recorded during search operation cannot be deleted without proving statements to be incorrect. 12. It was held that neither, any of the witnesses came out with the any comment or objection in this regard, either during the course of search or at later stage. Since the statement given by appellant is statement on oath, therefore, it has evidentiary value for the statute. Any statement or disclosure given therein, cannot be withdrawn or changed only by putting any argument to nullify the conclusion drawn from the statement. Though, statement u/s 132(4) is rebuttable, but it is incumbent upon the appellant to substantiate his contention that there was really any pressure and oppressive condition before him with evidence. At this score, appellant has been found completely unable to give any evidence regarding undue ITA No.8328/Del/2018 Thaakur Singlaa 6 pressure and oppressive condition, therefore, it was held that this argument doesn't have any merit. 13. Heard the arguments of both the parties and perused the material available on record. 14. We find that the statement has been recorded on 23.07.2015 and the same has been retracted on 23.07.2015 and on 03.08.2015 vide letters addressed and posted to Joint Direct(Inv.), Dehradun. Further, we find that the assessment has been completed summarily without any reference to the incriminating material or documents which indicate concealment of income. The CBDT circular directs the field authorities that no assessment or surrender be extracted without having any relevance to the material found and seized during the search. In the instant case, there was no material to connect the undisclosed income to the assessee. Similarly, the additions made in the case of Yogesh Singla and Mahdu Singla which is a part of the statement given by the assessee with regard to the surrender has been deleted by the Co- ordinate Bench of the Tribunal in ITA No. 8329 & 30/Del/2018 for the A.Y. 2016-17 vide order dated 13.05.2020. Since, there was no material before the revenue to attribute undisclosed income, the facts and circumstances of the instant case, we hereby allow the appeal of the assessee. 15. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 08/02/2022. Sd/- Sd/- (Amit Shukla) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 08/02/2022 *Subodh Kumar, Sr. PS*