Principal Commissioner of Income Tax - 6 V. Associated Plastic Indus

TAXAP/72/2018

AI Insights

The case revolves around an appeal by the Principal Commissioner of Income Tax against the judgment of the Income Tax Appellate Tribunal, which had deleted several additions made by the Assessing Officer regarding unexplained stock, investments, and expenditures of Associated Plastic Industries. The Revenue challenged the evidentiary value of statements made under section 132(4) of the Income Tax Act, 1961, which were later retracted by the assessee. The High Court examined whether the Tribunal erred in law and on facts in accepting the retraction of the statement and in deleting the additions made by the Assessing Officer. After reviewing the records and the arguments presented, the court found that the Tribunal's decisions were well-founded on the evidence and facts of the case, leading to the dismissal of the appeal.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 687805 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 28-02-2018
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NISARG VYAS
• Assessee Lawyers: MAUNA BHATT
• Keywords: Evidentiary value; Income Tax; Retraction of statement; Unexplained expenditure; Unexplained income; Unexplained investment; Unexplained Stock Fund
• Section: 132(4)

Judgement Text

"C/TAXAP/72/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 72 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX - 6 Versus ASSOCIATED PLASTIC INDUS. ========================================================== Appearance: MRS MAUNA M BHATT for the PETITIONER(s) No. 1 NISARG H VYAS for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE B.N. KARIA Date : 28/02/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal dated 21.10.2016 raising following questions for our consideration: “1. Whether the Hon'ble ITAT had erred in law in holding that the evidentiary value of the statement u/s. 132(4) of the Act is completely extinguished when the assessee has retracted his statement? 2. Whether the Hon'ble ITAT was right in law and on facts by accepting the retraction even when the assessee did not bring anything concrete to demonstrate that the said statement was not made voluntarily? 3. Whether the Hon'ble ITAT had erred in law and on facts by no appreciating that the probative value of the statement made u/s. 132(4) did not diminish on its retraction as it was based on material seized? Page 1 of 4 C/TAXAP/72/2018 ORDER 4. Whether decision of the Hon'ble ITAT is perverse as it has ignored relevant material in the form of seized documents and statement made u/s. 132(4) which is an admissible piece of evidence in all proceeding under the Act? 5. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 22 lacs made on account of unexplained stock fund from Vasai Godown? 6. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition o Rs. 18 lacs made on accountof unexplained investment in Ruvagam village? 7. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 50 lacs made on account of estimated profits and unaccounted initial investment recorded in the rough cash books as unaccounted business transactions? 8. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 10,00,000/-, Rs. 10,00,000/- and Rs. 14,95,500/- (Total Rs. 34,95,500/-) being unexplained expenditure noted on loose papers file? 9. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 52,54,859/-, Rs. 20,43,555/-, Rs. 4,67,690/-, Rs. 16,35,574/- and Rs. 1,75,353/- made on the basis of nothings? 10. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 2,78,875/- being unexplained expenditure? Page 2 of 4 C/TAXAP/72/2018 ORDER 11. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 6 lacs being unexplained expenditure? 12. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 1,82,350/- and Rs. 90,000/- being unexplained expenditure? 13. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 1,10,000/- being advance given to Nitin A Sanghvi? 14. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs. 4,35,125/- being unexplained income?” 2. First set of questions 1 to 4 pertains to evidentiary value of the statements during the search made by the partner of the firm under section 132(4) of the Income Tax Act, 1961 which were later on retracted. Revenue's contention is that the CIT (Appeals) and the Tribunal erred in not giving due weightage to such statements which were voluntarily made. The evidentiary value and the assessment of materials on record including the statements would essentially be a question of fact. Remaining questions pertain to individual additions made by the Assessing Officer but deleted by the CIT (Appeals) which was confirmed by the Tribunal. We have gone through the record. Counsel for the Revenue had painstakingly taken us through the finidngs of the Assessing Officer, of the CIT (Appeals) and the Tribunal on each individual issue. It is not necessary to discuss threadbare the observations and Page 3 of 4 C/TAXAP/72/2018 ORDER conclusions of the CIT (Appeals) and the Tribunal. Suffice it to record, upon perusal of the materials on record, we are satisfied that all deletions are based on evidence on record. CIT (Appeals) and the Tribunal were concurrent in their conclusions with respect to the assessment of such materials. Essentially all deletions are based on facts. 3. No question of law arises. Tax Appeal is dismissed. (AKIL KURESHI, J.) (B.N. KARIA, J.) JYOTI V. JANI Page 4 of 4 "