Bhagirath Aggarwal v. CIT - Taxpublishers.in

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The Tax Publishers2013 TaxPub(DT) 0672 (Del-HC) : (2013) 051 (I) ITCL 0591 : (2013) 351 ITR 0143 : (2013) 215 TAXMAN 0229 : (2013) 089 DTR 0362 INCOME TAX ACT, 1961 --Search and seizure--Statement recorded under section 132(4) Evidentary value--A search and seizure operation was carried out at assessee's premises, family members, companies, etc., under section 132(4) in statement recorded assessee disclosed an undisclosed income of Rs. 1.00 crore on 10/11.11.2005 and Rs. 75 lakhs on 21-11-2005. However, it would be noted that after a month and half assessee sent a letter dt. 9-1-2006 to department disclosing that Rs. 1.50 crores would be treated as undisclosed business income of assessee and Rs. 25 lakhs would be attributed to different family members or business concerns of assessee's group pending verification of such seized materials. Assessing officer made addition on the basis of statement recorded under section 132(4), Commissioner (Appeals) deleted addition which was reversed by Tribunal. *Held:* Rightly so. Assessee who had admitted and surrendered a sum of 1.75 crores as his undisclosed income under section 132(4) statement, it was incumbent upon him to show that he had made a mistake in making that admission and that admission was incorrect as such on the basis of this evidence addition was rightly sustained by Tribunal. In the present case no material has been produced by the appellant/assessee to show that the admission made by him was incorrect in any way. On the other hand, it is the assessee who is insisting that it is for the department to corroborate the statement of admission made by him and until and unless the department corroborates the same, the statement cannot be relied upon. Court is afraid that is not the correct position of law. The admission once made can certainly be retracted, if the circumstances permit, and it can also be shown to have been made under some mistake or to be otherwise incorrect. But, the onus would be on the maker of that admission. In this case it is the appellant/assessee who has admitted and surrendered a sum of Rs. 1.75 crores as his undisclosed income. It was incumbent upon him to show that he had made a mistake in making that admission and that the said admission was incorrect. He had access to all the documents which has been seized in as much as the copies had been supplied to him. However, he did not produce anything to establish that the admission was incorrect in any way. That being the position, the appellant/assessee cannot resile from his earlier statement made on 10-11/11-2005 and 21-11-2005. [Para 11] In the present case the appellant/assessee has not produced any material to show that the admissions made by him were incorrect. The statements recorded under section 132 (4) are clearly relevant and admissible and they can be used as evidence. In fact, once there is a clear admission, voluntarily made, on the part of the assessee, that would constitute a good piece of evidence at the hands of the revenue. [Para 12] Court does not see how Circular dt. 11-3-2003 would, in any way, come to the aid and assistance of the appellant. All that it shows is that the ITOs should not try to force a confession from an assessee. However, if an assessee voluntarily makes a surrender, the officials of the income tax department are bound to record that statement under section 132(4) and such a statement, voluntarily made, is relevant and admissible and is liable to be used as evidence. [Para 14] Letter dated 9.1.2006 was written one-and-a-half-months after the recording of the statement on 21-11-2005 and was clearly an afterthought. The letter dated 9-1-2006 cannot be treated as a statement under section 132 (4) and only the statements recorded on 10-11/11/2005 and 21-11-2005 which are statements under section 132(4) which have evidentiary value. [Para 15] There is no substantial question of law in this matter. The issues raised pertain merely to appreciation of evidence, which the Tribunal, has appreciated correctly. The appeal is dismissed. [Para 17] SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 0672 (Del-HC) : (2013) 051 (I) ITCL 0591 : (2013) 351 ITR 0143 : (2013) 215 TAXMAN 0229 : (2013) 089 DTR 0362

INCOME TAX ACT, 1961

--Search and seizure--Statement recorded under section 132(4) Evidentary value--A search and seizure operation was carried out at assessee's premises, family members, companies, etc., under section 132(4) in statement recorded assessee disclosed an undisclosed income of Rs. 1.00 crore on 10/11.11.2005 and Rs. 75 lakhs on 21-11-2005. However, it would be noted that after a month and half assessee sent a letter dt. 9-1-2006 to department disclosing that Rs. 1.50 crores would be treated as undisclosed business income of assessee and Rs. 25 lakhs would be attributed to different family members or business concerns of assessee's group pending verification of such seized materials. Assessing officer made addition on the basis of statement recorded under section 132(4), Commissioner (Appeals) deleted addition which was reversed by Tribunal. Held: Rightly so. Assessee who had admitted and surrendered a sum of 1.75 crores as his undisclosed income under section 132(4) statement, it was incumbent upon him to show that he had made a mistake in making that admission and that admission was incorrect as such on the basis of this evidence addition was rightly sustained by Tribunal.

In the present case no material has been produced by the appellant/assessee to show that the admission made by him was incorrect in any way. On the other hand, it is the assessee who is insisting that it is for the department to corroborate the statement of admission made by him and until and unless the department corroborates the same, the statement cannot be relied upon. Court is afraid that is not the correct position of law. The admission once made can certainly be retracted, if the circumstances permit, and it can also be shown to have been made under some mistake or to be otherwise incorrect. But, the onus would be on the maker of that admission. In this case it is the appellant/assessee who has admitted and surrendered a sum of Rs. 1.75 crores as his undisclosed income. It was incumbent upon him to show that he had made a mistake in making that admission and that the said admission was incorrect. He had access to all the documents which has been seized in as much as the copies had been supplied to him. However, he did not produce anything to establish that the admission was incorrect in any way. That being the position, the appellant/assessee cannot resile from his earlier statement made on 10-11/11-2005 and 21-11-2005. [Para 11] In the present case the appellant/assessee has not produced any material to show that the admissions made by him were incorrect. The statements recorded under section 132 (4) are clearly relevant and admissible and they can be used as evidence. In fact, once there is a clear admission, voluntarily made, on the part of the assessee, that would constitute a good piece of evidence at the hands of the revenue. [Para 12] Court does not see how Circular dt. 11-3-2003 would, in any way, come to the aid and assistance of the appellant. All that it shows is that the ITOs should not try to force a confession from an assessee. However, if an assessee voluntarily makes a surrender, the officials of the income tax department are bound to record that statement under section 132(4) and such a statement, voluntarily made, is relevant and admissible and is liable to be used as evidence. [Para 14] Letter dated 9.1.2006 was written one-and-a-half-months after the recording of the statement on 21-11-2005 and was clearly an afterthought. The letter dated 9-1-2006 cannot be treated as a statement under section 132 (4) and only the statements recorded on 10-11/11/2005 and 21-11-2005 which are statements under section 132(4) which have evidentiary value. [Para 15] There is no substantial question of law in this matter. The issues raised pertain merely to appreciation of evidence, which the Tribunal, has appreciated correctly. The appeal is dismissed. [Para 17]