Chowdadenahally Rangaswamy Manohar Vs DCIT (ITAT Bangalore)
Voluntary Concession Binds Assessee: ITAT Bangalore Rejects Attempt to Retract in appeal – CBDT Circular 14 No Shield—Assessee’s Own Letter Sinks Appeal
Assessee, a film producer & partner in a real-estate firm, filed return declaring Rs.13,49,557/-. Search u/s 132 took place on 15.03.2016. Assessment was completed u/s 143(3) r.w.s. 153A on 29.12.2017 at Rs.5,14,90,650/-, wherein AO noted large cash payments supported only by self-made vouchers. During assessment, Assessee voluntarily accepted that 20% of cash expenses were unverifiable & offered that amount as income. Later, vide detailed letter dated 22.12.2017, Assessee further conceded that there was no distinguishing factor between the 20% already offered & the balance 80%, & therefore agreed for full disallowance of Rs.8.97 crore across AYs 2014-15 to 2016-17.
Another search occurred on 01.01.2019 followed by fresh notice u/s 153A. Assessee filed return replicating the same concessions. CIT(A) dismissed appeal by relying on Sun Engineering Works & holding that Assessee cannot retract from voluntarily conceded income.
Before Tribunal, Assessee argued that earlier concessions were inadvertent mistakes without legal guidance, that second search produced no incriminating material, that CBDT Circular 14/1955 obliged AO not to exploit ignorance, & that additions in 2nd 153A return could not be sustained. Tribunal examined the search letters, concession letter (page 10), vouchers, statements & submissions.
