Pr. CIT Vs. Parshwa Enterprises (Gujarat High Court)
Revenue is in appeal against the judgment of ITAT dated 9-6-2016, raising following questions for consideration :–
“(A) Whether on the facts and in the circumstances of the case and in law, the decision of ITAT in deleting the addition made on the basis of statements of the partners of the firm quantifying the unaccounted expenditure in land development is justified ignoring that the statements were recorded on oath without any coercion, harassment or threat and the disclosure was made on voluntary basis.
(B) Whether on the facts and in the circumstances of the case and in law, the decision of Hon’ble ITAT in deleting the addition on the basis of the retraction by the assessee after a gap of 26 months is justified ignoring that the retraction filed is an after though to deprive the revenue from due amount of tax.”
2. From the documents on record, it emerges that in a statement of the partner of the assessee firm during survey proceedings disclosure of unaccounted income of Rs. 2.35 crores was made. This statement was, however, retracted to the extent of unaccounted income of Rs. 1.59 crores. Rest of the disclosure was maintained. The reasons were also cited for retraction. The assessee firm filed the return admitting an income of Rs. 89.13 lacs, which included unaccounted income of Rs. 76.10 lacs.
3. The assessing officer, despite such developments proceeded to make addition of the entire sum of Rs. 2.35 crores admitted by the partner in a survey statement, which was later on retracted. In appeal, the Commissioner (Appeals) deleted the addition primarily on the ground that no addition can be made solely on the basis of a retracted statement made during the survey operation, particularly, when proper justification for retraction was also offered. It is this view, which the Tribunal confirmed in the impugned judgement. We see no error. No question of law arises. Tax appeal is dismissed.