Bannalal Jat Construction Pvt. Ltd. Vs ACIT (ITAT Jaipur)
Retraction of statement after inordinate delay without proving that same was obtained forcefully/by coercion/undue influence is clearly an after-thought and looses its significance.
It is relevant to note that during the intervening period i.e., the day the statement was recorded under section 132 (4) on 10-10-2014 and day the return of income was filed on 30-9-2015, almost a period of 11 months, there is no communication from the assessee company to the Revenue authorities retracting from the statement so made and recorded during the course of search proceedings. In fact, during the post search proceedings, the assessee again got an opportunity wherein he was called and his statement was recorded under section 131 on 4-12-2014 and therein, as well, he maintained his earlier stand and didn’t retract from the statement so recorded during the course of search. This also proves that the contention of the assessee company that the earlier surrender during the course of search was under pressure is totally unfounded. Therefore, AO was justified in making addition.
FULL TEXT OF THE ITAT JUDGMENT
This is an appeal filed by the assessee against the order of learned Commissioner (Appeals) -2, Udaipur dated 24-7-2017 wherein the assessee has taken following grounds of appeal:
“1. The learned Commissioner (Appeals) has erred on facts and in law in confirming the addition of Rs. 1,21,43,210 by treating the cash found in search as unexplained income of the assessee on the basis of statement of director under section 132 (4) by not accepting the contention of assessee that cash so found belong to its director Shri Banna Lal Jat in individual capacity which is duly verifiable from the withdrawals made from the bank account and recorded in the regular books of accounts maintained by him.
2. The learned Commissioner (Appeals) has erred on facts and in law in confirming the addition of Rs. 29,860 by considering the difference in the account statement with M/s Nahar Filling Station as undisclosed income of the assessee. He has further erred in not directing the assessing officer to exclude this alleged undisclosed income from the income of the next year when the same was offered for tax.
3. The learned Commissioner (Appeals) has erred on facts and in law in confirming the disallowance of Rs. 82,200 under section 40A (3). ”
2. Regarding the first ground of appeal, briefly the facts of the case are that search and seizure operations were carried out at residential and business premises of Shri Bannalal Jat in which he was operating his proprietary concern in name of M/s Bannalal Jat Contractor and also the assessee company by name of Bannalal Jat Construction Pvt ltd. During the course of search at the residential premises of shri Bannalal Jat, cash of Rs. 1,21,43,210 was found and inventorised as per Annexure CF of Panchnama dated 11-10-2014. In his statements recorded under section 132 (4) during the course of search and even subsequent statement recorded under section 131, Shri Bannalal Jat has admitted the same as undisclosed income of the assessee company. However, subsequently while filing the return of income for the impunged assessment year, the assessee company didn’t offer the said undisclosed income to tax. During the course of assessment proceedings, the assessee was asked to show-cause as to why it has failed to disclose the same and also to get the cash verified from the regular books of accounts.
3. In response to the show-cause notice, the assessee vide written submission dated 2-12-2016 submitted as under:-
“During the course of survey/search, the assessee has stated in reply to question No. 13 and 16 when question about cash of Rs. 70 Lacs found from the Car, he stated that the withdrawals were made from the bank account with bank of Baroda and SBBJ between 20-9-2014 to 30-9-2014 which was kept at residence and out of that amount he has kept Rs. 70 Lacs in the morning in the car for making payment to labour, tractor, material etc. Thus in survey assessee explained the amount of Rs. 98.92 Lacs (70+19.92+9) pertain to his business which is out of withdrawals from bank account. The same is evident from the extract from the accounts maintained in computer for the financial year 2014-15 was taken and marked as A-1 duly signed by the authorized officer. Copy of the same as Page No. 43 is enclosed for ready reference. Further, it is also submitted that the print out of incomplete books of account in computer was taken by the ADI (Investigation) team which was also part of Annexure A-1. Copy of these pages are enclosed and explained as under:-
