Biswanath Chhapolia, Cuttack V. ACIT, Cuttack

ITSSA 14/CTK/2010

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9160 (ITAT-CUTTACK)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 15-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K GAUTAM
• Assessee Lawyers: D K SETHM SETH
• Keywords: Search and seizure; Document seized; Corroborative evidences; Retraction

Judgement Text

( WORD TO PDF CONVERTER - UNREGISTERED ) HTTP://WWW.WORD-TO-PDF-CONVERTER.NET IN THE INCOME-TAX APPELLATE TRIBUNAL, CUTTACK BENCH; CUTTACK (BEFORE S/SHRI D.K.TYAGI, JM & K.K. GUPTA AM.) I.T.(SS)A.NO.14/CTK/2010 ASSESSMENT YEAR: 2005-06 BISWANATH CHHAPOLIA, V. THE A.C.I.T CIRCLE 1(1), NAYASARAK, CUTTACK-753 002. ARUNODAYA MARKET BUILDG., PA NO..ABHPC 8869 M LINK ROAD, CUTTACK (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI D.K.SETH/M.SETH RESPONDENT BY: SHRI A.K.GAUTAM ORDER PER D.K.TYAGI, JM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 17.5.2010 OF THE CIT (A)-CUTTACK AND RELATES TO THE ASSESSMENT YEAR 2005-06. THE ONLY GROUND RAISED BY THE ASSESSEE READS AS UNDER:- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION OF RS.5,00,000/- AS MADE BY THE AO UNDER HEAD UNDISCLOSED INCOME OFFERED FOR TAXATION IS UNWARRANTED AND UNCALLED FOR AND THE CONTENTION AND EXPLANATION OF THE APPELLANT SHOULD HAVE BEEN ACCEPTED. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL. IN THE RELEVANT ASSESSMENT YEAR, HE WAS ENGAGED IN THE BUSINESS OF COMMISSION AND SHARE DEALING. A SEARCH AND SEIZURE OPERATION U/S.132 OF THE I.T.ACT 1961 WAS CONDUCTED ON 28.3.2006 AT THE BUSINESS PREMISES OF THE ASSESSEE ALONGWITH HIS OTHER BROTHERS VIZ SHRI RAMESH KUMAR CHAPOLIA, PROP. OF M/S. MARUTI TRADING CO., SRI OM PRAKASH CHHAPOLIA, PROP. OF M/S. KONARK TRADING CO., GOURI SHANKAR CHHAPOLIA AND SMT SUNITA CHAPOLIA, PROP. KONARK SALES CORPORATION. DURING THE SEARCH OPERATION, JEWELLERY WORTH 164.250 GRAMS WAS SEIZED FROM BANK LOCKER NO.23 AT ALLAHABAD BANK, NAYA SARAK, LYING IN THE NAMES OF THE ABOVE PERSONS. APART FROM THAT, DOCUMENT SEIZED FROM THE BUSINESS PREMISES OF KONARK TRADING CO., NAYA SARAK, CUTTACK WAS IDENTIFIED AS GSC 3, REVEALED THE ( WORD TO PDF CONVERTER - UNREGISTERED ) HTTP://WWW.WORD-TO-PDF-CONVERTER.NET DETAILS OF PPF A/C BEARING NO.719 IN ASSESSEES NAME. ACCORDINGLY, NOTICE U/S.153 A WAS ISSUED ASKING THE ASSESSEE TO FILE THE RETURNS FOR SIX IMMEDIATE PRECEDING ASSESSMENT YEARS I.E. 2000-2001 TO 2006-07, RESPECTIVELY. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED RETURN DECLARING A TOTAL INCOME OF R.1,37,880/- ON 28.11.2007. AFTER CONSIDERING THE ASSESSEES SUBMISSIONS AND RELYING ON VARIOUS CASE LAWS, THE AO MADE AN ADDITION OF RS.5,00,000/- TREATING THE SAME AS UNDISCLOSED INCOME OBSERVING AS UNDER:- FURTHER DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, THE ASSESSEE IN A JOINT STATEMENT OF DISCLOSURE MADE ON 8.5.2007, DISCLOSED RS.5,00,000/- AS UNDISCLOSED INCOME WHICH WAS CLAIMED TO HAVE BEEN INVESTED IN SHORT TERM MONEY LENDING, SHARES AND SPECULATION BUSINESS AND CONSTRUCTION AND RENOVATION OF BUILDING AT NAYA SARAK, CUTTACK. WHEN THE ASSESSEE WAS CONFRONTED ON THIS ISSUE, THERE WAS RETRACTION FROM THE DECLARATION CITING ITS NON-ACCEPTANCE BY THE DEPARTMENT. THERE IS NOTHING ON THE RECORD TO SUGGEST THAT THE DECLARATION MADE BY THE ASSESSEE WAS NOT ACCEPTED. HAVING ACCEPTED TO HAVE UNDISCLOSED INCOME TO THE TUNE OF RS.5,00,000/- ON HIS VIOLATION DURING THE SEARCH OPERATION AND THE FACT THAT INCOME QUANTIFIED BY THE ASSESSEE IS ON ESTIMATE, THE EARNING OF UNDISCLOSED INCOME CANNOT BE RULED OUT AND IN ANY CASE RETRACTION OF SOME DECLARATION MADE DURING THE SEARCH AT THE TIME OF ASSESSMENT CANNOT BE DONE. THUS, RS.5,00,000.00 SHALL BE ADDED AS UNDISCLOSED INCOME OFFERED FOR TAXATION 3. BEFORE LD CIT (A), IT WAS SUBMITTED AS UNDER:- AS REGARDS THE ADDITION OF RS.5,00,000/- THE LD AO HAS MADE THE ADDITION ON THE BASIS OF A STATEMENT OF THE APPELLANT DECLARING UNDISCLOSED INCOME MERELY TO END LITIGATION AND TO BUY PEACE. THE DEPARTMENT DID NOT ACCEPT THE SAME AND THE APPELLANT ALSO SUBSEQUENTLY RETRACTED AS THE STATEMENT WAS CONDITIONAL AND WITHOUT ANY SUPPORTING EVIDENCE FOUND BY THE DEPARTMENT DURING SEARCH AND SEIZURE. THE CITATIONS RELIED UPON BY THE AO ARE NOT APPLICABLE TO THE INSTANT CASE. THE CENTRAL BOARD OF DIRECT TAXES HAVE ISSUED A CIRCULAR IN THE FORM OF INSTRUCTION TO THE DEPARTMENT NOT TO GIVE CREDIT TO SUCH STATEMENT WHEN NO SUPPORTING EVIDENCE ARE COLLECTED BY THE DEPARTMENT(CIRCULAR NO.286/2003 DT.10.3.2003). MUMBAI BENCH OF THE ITAT HAVE ALSO HELD IN THE CASE OF JAIN TRADING CO. V ITO, 17 SOT 574 THAT NO ADDITION SHOULD BE MADE ON THE BASIS OF SUCH STATEMENT WHICH ARE MADE MERELY TO END LITIGATION AND TO BUY PEACE BUT WITHOUT SUPPORT OF ANY EVIDENCE. ( WORD TO PDF CONVERTER - UNREGISTERED ) HTTP://WWW.WORD-TO-PDF-CONVERTER.NET 4. LD CIT (A) AFTER CONSIDERING THE ASSESSEES SUBMISSIONS, AND RELYING ON VARIOUS JUDICIAL PRONOUNCEMENTS, CONFIRMED THE ADDITION OF RS.5,00,000/-, INTER ALIA, OBSERVING THAT THE ASSESSEE HAD HIMSELF MADE A DECLARATION OF UNDISCLOSED INCOME OF RS.5,00,000/- BEFORE THE DIT (INV), BHUBANESWAR AFTER THE SEARCH. HENCE, THERE WAS NO OCCASION OF GIVING THE STATEMENT UNDER DURESS OR THREAT. FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, LD COUNSEL FOR THE ASSESSEE REITERATING THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW FURTHER SUBMITTED THAT THE CASE LAWS RELIED BY THE CIT (A) ARE NOT APPLICABLE TO THE FACTS OF THE CASE AS IN THOSE CASES, THE EVIDENCE OF CONCEALMENT EXISTED WHILE IN ASSESSEES CASE, NO SUCH CONCEALMENT WAS FOUND BY THE AO. 6. LD D.R., ON THE OTHER HAND, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 7. AFTER HEARING BOTH THE SIDES AND PERUSING THE RECORD, WE FIND THAT THERE WAS A SEARCH AND SEIZURE ACTION ON 28.3.2006. DURING THIS OPERATION, THE ASSESSEE, IN A JOINT STATEMENT OF DISCLOSURE MADE ON 8.5.2006 DISCLOSED RS.5 LAKHS AS UNDISCLOSED INCOME, WHICH WAS CLAIMED TO HAVE BEEN INVESTED IN SHORT TERM MONEY LENDING, SHARES AND SPECULATION BUSINESS AND CONSTRUCTION AND RENOVATION OF BUILDING AT NAYA SARAK, CUTTACK. HOWEVER, AT THE TIME OF FILING THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S.153A ON 28.11.2007, HE HAD NOT DISCLOSED THE SAME. WHEN THE ASSESSEE WAS CONFRONTED, THE ASSESSEES REPLY WAS THAT THERE IS NOTHING ON RECORD TO SUGGEST THAT THE DECLARATION MADE BY THE ASSESSEE DURING THE SEARCH OPERATION WAS ACCEPTED BY THE DEPARTMENT. THEREFORE, THERE IS A RETRACTION ON HIS PART. THIS EXPLANATION WAS NOT ACCEPTABLE TO THE AO. BEFORE THE CIT (A), THE ASSESSEES CONTENTION WAS THAT THE DECLARATION MADE BY HIM WAS UNDER DURESS AND THREAT AND SINCE NO EVIDENCE WAS FOUND FOR APPLICATION OF THIS AMOUNT, ADDITION CANNOT BE MADE. THE CIT (A) AFTER RELYING ON VARIOUS CASE LAWS HAS GIVEN A CLEAR FINDING THAT THE RETRACTION OF THE STATEMENT MADE BY THE ASSESSEE WAS NOT VALID AS THE DECLARATION WAS MADE BY HIM AFTER THE SEARCH AND SEIZURE OPERATION WAS OVER, HENCE, THERE WAS NO ( WORD TO PDF CONVERTER - UNREGISTERED ) HTTP://WWW.WORD-TO-PDF-CONVERTER.NET THREAT AND COERCION. FURTHER, IT WAS A JOINT STATEMENT CORROBORATED BY ALL THE BROTHERS. IN OUR CONSIDERED OPINION, IT IS NOT A SIMPLE CASE OF RETRACTION OF STATEMENT ON THE PART OF THE ASSESSEE AS WE FIND THAT THE ASSESSEE HAS DECLARED A SUM OF RS.5 LAKHS ON 8.5.2006 AND THE SAME WAS NOT REFLECTED IN THE RETURN OF INCOME FILED BY HIM ON 28.11.2007. THUS, WE SEE THAT FROM 8.5.2006 TO 28.11.2007, NO ACTION WAS TAKEN BY THE ASSESSEE IN CASE IT WAS CASE OF STATEMENT BEING MADE UNDER DURESS AND THREAT. HE SHOULD HAVE RETRACTED THE SAME AT THE FIRST AVAILABLE OPPORTUNITY BEFORE THE INCOME TAX AUTHORITY. NO SUCH STEP WAS TAKEN BY THE ASSESSEE. AS A MATTER OF FACT, THE ASSESSEE PREVENTED THE DEPARTMENT IN MAKING POST SEARCH ENQUIRIES BY MAKING THIS DECLARATION. THEREFORE, IN OUR CONSIDERED OPINION, IT IS NOT A CASE OF RETRACTION OF THE STATEMENT BUT NOT SHOWING THE INCOME IN HIS RETURN OF INCOME, WHICH WAS DULY DECLARED BY HIM AT THE TIME OF SEARCH & SEIZURE OPERATION. THEREFORE, THE CASE LAWS AND CBDT CIRCULAR RELIED BY THE ASSESSEE ARE NOT APPLICABLE TO THESE PECULIAR FACTS OF THE CASE. WE, THEREFORE, SEE NO INFIRMITY IN THE ORDER OF THE CIT (A) AND, ACCORDINGLY, UPHOLD THE SAME. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. PRONOUNCED ON THE OPEN COURT ON 23 RD JULY, 2010. SD/- SD/- (K.K.GUPTA) (D.K.TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23 RD JULY, 2010 PARIDA COPY TO : 1. ASSESSEE- 2. ASSESSING OFFICER 3. CIT, 4. D.R., ITAT, CUTTACK. TRUE COPY BY ORDER SR. PVT. SECRETARY ( WORD TO PDF CONVERTER - UNREGISTERED ) HTTP://WWW.WORD-TO-PDF-CONVERTER.NET