No retractions by assessee post survey tantamount to acceptance of undisclosed income: Seized documents & Statement together must be read as a whole
Here was an interesting case before ITAT, Indore wherein the issue involved was whether seized documents along with statement recorded u/s 133A constitute valid piece of evidence, which can be used in assessing undisclosed income. The ITAT held it in favour of the revenue by holding that seized documents along with statement recorded u/s 133A constitute a valid piece of evidence for assessing undisclosed income.
Short overview of the case:
Apex Realities Vs ITO
ITA No. 899/Ind/2018
During the course of assessment proceedings it was found that survey u/s 133A had been carried out at assessee’s business premises, wherein, it was found that assessee had made cash payment of Rs. 70,00,000/- to land owners against purchase of their land.
Date of registration was 22.01.2015 but during the course of the survey it was found that there was no cash available on the date.
Besides, the statement of Shri R. C. Mittal, Partner of Firm was recorded, wherein he admitted additional income of Rs. 70,00,000/- on this account.
Thus, AO made an addition of Rs. 70,00,000/- to assessee’s income that was confirmed by CIT(A. Thereafter, both, assessee and Revenue filed present cross appeals.
On Appeal before ITAT, the issue was whether seized documents along with statements recorded u/s 133A constitute valid pieces of evidence, which can be used in assessing undisclosed income?
ITAT holding it in favour of revenue made following observation:
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Seized documents along with statements recorded u/s 133A constituted valid piece of evidence, which could be used in assessing undisclosed income.
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The two taken together must be read as a whole.
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Admission by a person was good piece of evidence though not conclusive and the same could be used against person who made it.
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In instant case, assessee had clearly linked non-availability of cash of concern to undisclosed income in statement u/s 133A.
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Hence, the statement was binding on assessee.
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Besides, assessee did not retract from his statement given during course of survey.
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During assessment proceedings, detailed questionnaire was issued u/s 142(1) to assessee on 13.11.2017.
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Assessee submitted vide reply dated 08.12.2017 that during post-survey proceedings, sum of Rs. 70 lakhs was offered and tax due thereon had already been paid and challan already submitted.
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CIT(A) had discussed evidentiary value as per Indian Evidence Act and concluded that no retraction was communicated to Revenue Authorities.
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It was evident from record available that no threat or coercion had been exerted during assessee’s confession statement.
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Assessee did not controvert CIT(A)’s finding by bringing any contrary material on record.
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Thus, evidence of testimony could not be wiped out and did not become non-existent.
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The evidence could well be utilised to frame assessment.
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Thus, CIT(A)’s findings were confirmed.
