INCOME TAX ACT, 1961

Section 153A Section 143 Section 132(4)

Search and seizure - Assessment under section 153A - Addition of undisclosed income merely relying on statement under section 132(4) - Statement subsequently retracted

A search and seizure action was carried out in assessee's case. Assessee stated before the AO that on the basis of reconciliation done by them the additions at best could be made only to the tune of Rs. 13,60,000 on account of unexplained cash, unexplained jewellery, foreign exchange and value of unexplained loose paper found during the search and the same they have disclosed in their revised return of income filed after the search pursuant to notice under section 142(1)/143(2) read with section 153A. The AO however, did not accept the assessee's contention that the undisclosed income was to the tune of Rs. 13,60,000 only, but he considered Rs. 1,50,00,000 at the assessee's undisclosed income, etc. CIT(A) vide his impugned order had dismissed the appeal of the assessee. Held: The submission of the assessee had force that the surrender of Rs. 1,50,00,000 made by the assessee was not free and fair voluntary surrender and it was under tremendous direct and indirect pressure and therefore, such alleged surrender cannot be used for making the addition. Statements were made under force, coercion and duress the same were made under mental tension and utter confusion. Copy of submission was filed before the CIT(A) reiterating that surrender made by assessee and her husband was not voluntary and was under undue pressure from the search officials with assurance to conclude search. The AO made an abrupt addition of Rs. 1,50,00,000 which was affirmed by CIT(A) as against amount of Rs. 15, 58,632 offered by the assessee suo moto before the CIT(A). Keeping in view of the facts and circumstances of the case and following precedents as well as the CBDT Instructions No. F.No. 286/2003 IT (Inv.II), dated 10-2-2003 the addition in dispute was deleted and the grounds raised by the assessee were allowed.

Followed:CIT v. Naresh Kumar Agarwal, (2014) 369 ITR 171 (AP-HC) : 2015 TaxPub(DT) 435 (AP-HC), Dy. CIT v. Pramukh Builders, (2008) 112 ITD 179 (Ahd-Trib) : 2008 TaxPub(DT) 800 (Ahd-Trib), Shree Ganesh Trading Co.v.CIT (2013) 257 CTR 159 (Jhar-HC) : 2013 TaxPub(DT) 964 (Jhar-HC), High Court of Jharkhand, Shree Ganesh Trading Co. v. CIT, (2013) 84 CCH 25, High Court of Jharkhand, Jyotichand Bhaichand Saraf & Sons (P) Ltd. v. Dy. CIT (2013) 154 TTJ 226 (Pune-Trib) : 2013 TaxPub(DT) 44 (Pune-Trib), Chetnaben J Shah Legal Ileir of Jagdish Chandra K. Shah v. ITO, (2016) 140 DTR 235 (Guj-HC) : 2016 TaxPub(DT) 3448 (Guj-HC), Kailashben Manharlal Chokshi v. CIT (2008) 220 CTR 138 (Guj-HC) : 2010 TaxPub(DT) 190 (Guj-HC), Deepchand& Co.v. ACIT, (1995) 51 TTJ 421 (Mum-Trib) : 1995 TaxPub(DT) 472 (Mum-Trib) and Asstt. CIT v. Anoop Kumar (2005) 147 Taxman 26, ITAT Amritsar Bench (SMC). Distinguished:Kishore Kumar v. CIT (62 taxmann.com 215), 234 Taxman 771, B. Kishore Kumar v. CIT (52 Taxmann.com 449) Mad-HC), Bhagirath Aggarwal v. CIT 31 Taxmann.com 274, 215 Taxman. 229, 351 ITR 143, CIT v. M.S. Aggarwal (2018) 93 Taxmann.com 247 Delhi, Smt. Dayawanti v. CIT (2016) 75 Taxmann.com 308, Peeble Investment and Finance Ltd. v. ITO, Raj Hans Towers (P) Ltd. v. CIT 56 Taxmann.com 67, Pr.CIT v. Avinash Kumar Setia (2017) 81taxmann.com 476 (Del), Asstt. CIT v. Hukum Chand Jain (2010) 191 Taxman 319 (Chhatisgarh) and Greenview Restaurant v. ACIT (2003) 133 Taxman 432 (Gau).

SUBSCRIBE FOR FULL CONTENT