Case Law Details
Case Name : Sudharshan P Amin Vs Assistant Commissioner of Income Tax (Gujarat High Court)
Appeal Number : Tax Appeal No. 386 of 2012
Date of Judgement/Order : 08/01/2013
Related Assessment Year :
Courts :
All High Courts Gujarat High Court
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For several months, this statement was not retracted. It was only on 26.9.07, during the course of the assessment proceedings that the assessee wrote a letter retracting the statement. There is some discrepancy about the date of the letter whether it was written on 26.9.07 or on 26.9.06. Be that it it may, the fact remains that initial statement was not retracted for several months. In his retraction statement, the assessee made out a ground that the search had started at 8.30 in the morning and ended on the next day and thus it continued for a period of nearly 24 hours. In short, he suggested mental harassment and fatigue for having made such a disclosure. He did not suggest any undue pressure or allurement.
It is noteworthy that quite apart from such statement dated 19.1.06, at the time of search, the assessee had made yet another confessional statement on 28th March 2006. He had never referred to such a statement in his retraction. He did not offer any explanation why quite apart from the statement made at the time of search operation, he had two months later repeated his offer. The authorities have further recorded that both the statements were made in presence of the Chartered Accountant of the assessee. In addition to such circumstances, the Commissioner (Appeals) noted that the appellant was not maintaining personal books of accounts. The assessee’s contention was that source of investment in furniture and fixtures was withdrawal from the firm, but the books of accounts of the firm were rejected under section 145 of the Act due to specific defects found by the Assessing Officer.
In short, the Revenue authorities and the Tribunal on the basis of evidence on record came to the conclusion that the addition of Rs.50 lacs was justified.
IN THE HIGH COURT OF GUJARAT
AT AHMEDABAD
Tax Appeal No.386 of 2012
SUDHARSHAN P AMIN
Vs
ASSTT COMMISSIONER OF INCOME TAX
Dated: January 8, 2013
JUDGEMENT
Per: Akil Kureshi:
1. The assessee is in appeal against the judgment of the Income Tax Appellate Tribunal (‘the Tribunal’ for short) dated 23.3.2012 raising following question for our consideration :
“Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in confirming addition of Rs.50,00,000/- merely on the basis of statement u/s. 132(4) of the Act which was retracted thereafter?”
2. In short, the issue is that during search operations, the assessee made a detailed statement on 19.1.2006 in which he admitted of having invested unaccounted income of Rs.50 lacs. He offered to surrender such income which he had invested in construction and furnishing of bungalow. The assessee, however, did not file any such return offering such additional income to tax. The Assessing Officer, therefore, framed assessment and computed the total income of the assessee at Rs.50.36 lacs (rounded off) after making addition of Rs.50 lacs towards investment in the bungalow.
3. The assessee carried the matter in appeal. CIT (Appeals) confirmed the view of the Assessing Officer. In the said appellate order, he recorded as under :
“3.2 I have carefully considered the contentions of the learned counsel as well as gone through the records. The appellant had disclosed Rs.50 lakhs as undeclared income in his statement recorded u/s 132(4) initially recorded on 19.01.2006 on account or renovation of Nistha Bungalow stated to be constructed in July 1999 in its furniture and fixtures. The appellant again admitted the same undeclared income of Rs.50 lakhs on 28.03.2006 (i.e. two months later) in his reply to question No.25 which means no undue pressure or coercion was exercised by the Department. Both the times, the Chartered Accountant was present on behalf of the appellant and both these statements were also endorsed by him as well. In other words, the disclosure of undisclosed income was made by the Appellant out of his free will in the presence of his Chartered Accountant. However, the appellant remained silent for about 19 months about undue pressure alleged to be exercised by the Department and during assessment proceedings only, the appellant had chosen to retract the statements on 24.9.06 which were recorded about 19 months earlier. Further, the appellant admitted on 22.11.2007 that he is not maintaining any personal books of accounts, then the entires in the balance sheet filed by the appellant cannot be relied upon in the absence of any personal books of accounts. Also, it was claimed by the appellant that source of investment in furniture and fixtures was withdrawal from the firm M/s.Chemfilt but it may be mentioned here that book of the firm were reject u/s.145 due to specific defects found by the Assessing Officer during its assessment proceedings. Hence, the appellant has failed to explain the sources of investment in furniture and fixtures. Further, the appellant has also failed to explain the sources of renovation of Nistha Bungalow stated to be constructed in July 1999. However, the appellant still maintains that there was undisclosed investment to the extent of Rs.5 lakhs which itself is evident that there was not true and full discloser of the investment in the renovation, furniture and fixtures. Hence, the contentions of learned counsel cannot be acceded to which are hereby rejected. Keeping in view of above facts and circumstances of the case, no interference is called for in the additions made in the present case. Hence, the first ground of appeal is hereby dismissed.”
4. The assessee carried the matter in further appeal before the Tribunal. The Tribunal by the impugned order, confirmed the view of the CIT (Appeals), making following observations :
“The retraction was made after 19 months, the admission was without any undue influence, coercion and mis-conception of the facts which was endorses by the CA of the assessee. The assessee confirmed this admission even after two months of his statement and promised to pay tax on it. He had not maintained personal books of account for expenditure of furniture. The assessee himself disclosed additional income of AY 2006-07. The Department had evidence of Videography of all decoration of the bungalow of the assessee. He estopped the Investigation Authority to probe or investigate the investments in Bungalow by surrendering an additional income of Rs.50 lacs. The retraction letter was not signed by the assessee himself which was not before the DDIT or no intimation for retraction was sent to higher authority of Investigation Wing as well as regular CIT. The evidences were submitted by the assessee during the course of hearing before the learned CIT(A) and not before the AO at the time of assessment. The discussion was made to cover the additional investment made by the assessee in additional furniture and fixtures, renovation and other thing. Thus the order of the learned CIT(A) is confirmed. The assessee’s appeal is dismissed.
5. The assessee is, therefore, in appeal before us.
6. Counsel for the appellant vehemently contended that the Revenue authorities as well as the Tribunal committed serious error in making addition only on the statement of the assessee recorded in the search operations. Counsel further submitted that the Tribunal committed various factual errors, that the retraction of the statement was made after nine months and not after 19 months and that reconciliation of the expenditure was produced before the Assessing Officer at the time of assessment. It was submitted that merely on the basis of the admission recorded at the time of search, additions could not have been made.
7. From the record, however, we notice that not only that the initial confessional statement made by the assessee on 19.1.2006 was not retracted for months together, in between also he made one such similar statement. In his statement dated 19.1.2006, he stated as under :
“After taking into consideration the documents found and confronted to me and in the totality of the situation especially with regard to my resident, I would like to state that about Rs.50 lacs of my undisclosed income which has gone into renovation, addition of furniture and fixture at my residence and other things is hereby being offered for taxation for which I am prepared to pay due taxes thereon in the due course of time. This observation has also been reinforced by the opinion given by my C.A. Shri Kiran M. Patel. Therefore, I offer the above stated income of Rs.50 lacs to taxation.The above above statement is given without any coercion. The statement is true to the best of knowledge and it is regally bound to me.”
8. For several months, this statement was not retracted. It was only on 26.9.07, during the course of the assessment proceedings that the assessee wrote a letter retracting the statement. There is some discrepancy about the date of the letter whether it was written on 26.9.07 or on 26.9.06. Be that it it may, the fact remains that initial statement was not retracted for several months. In his retraction statement, the assessee made out a ground that the search had started at 8.30 in the morning and ended on the next day and thus it continued for a period of nearly 24 hours. In short, he suggested mental harassment and fatigue for having made such a disclosure. He did not suggest any undue pressure or allurement.
9. It is noteworthy that quite apart from such statement dated 19.1.06, at the time of search, the assessee had made yet another confessional statement on 28th March 2006. He had never referred to such a statement in his retraction. He did not offer any explanation why quite apart from the statement made at the time of search operation, he had two months later repeated his offer. The authorities have further recorded that both the statements were made in presence of the Chartered Accountant of the assessee. In addition to such circumstances, the Commissioner (Appeals) noted that the appellant was not maintaining personal books of accounts. The assessee’s contention was that source of investment in furniture and fixtures was withdrawal from the firm, but the books of accounts of the firm were rejected under section 145 of the Act due to specific defects found by the Assessing Officer.
10. In short, the Revenue authorities and the Tribunal on the basis of evidence on record came to the conclusion that the addition of Rs.50 lacs was justified. We do not find any question of law arising. The entire issue rests solely on appreciation of evidence on record. Particularly when the assessee having made such a statement and repeated the same two months later and in the letter retracting the statement never offered any explanation as to the reason why he made a confessional statement two months after the search, we do not find any reason to interfere with the concurrent findings of facts of two Revenue authorities and the Tribunal.
In the result, the Tax Appeal is dismissed.
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