Sh. Navdeep Dhingra, Yamunanagar v. DCIT, Yamunanagar

ITA 697/CHANDI/2011 | 2006-2007
Pronouncement Date: 31-07-2012 | Result: Partly Allowed

Appeal Details

RSA Number 69721514 RSA 2011
Assessee PAN NUARY2006A
Bench Chandigarh
Appeal Number ITA 697/CHANDI/2011
Duration Of Justice 1 year(s) 1 month(s) 16 day(s)
Appellant Sh. Navdeep Dhingra, Yamunanagar
Respondent DCIT, Yamunanagar
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2012
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 31-07-2012
Date Of Final Hearing 19-07-2012
Next Hearing Date 19-07-2012
Assessment Year 2006-2007
Appeal Filed On 14-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE MS.SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO. 691/CHD/2011 ASSESSMENT YEAR : 2006-07 ACIT V SHRI NAVDEEP DHINGRA YAMUNA NAGAR. C/O OSCAR REMEDIES PVT.LTD. VILLAGE BADDI MAJRA YAMUNA NAGAR. PAN: AAWPD-3237A & ITA NO. 697/CHD/2011 ASSESSMENT YEAR : 2006-07 SHRI NAVDEEP DHINGRA V DCIT C/O OSCAR REMEDIES PVT.LTD. YAMUNA NAGAR. VILLAGE BADDI MAJRA YAMUNA NAGAR. PAN: AAWPD-3237A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.R.SHARMA RESPONDENT : SMT.JAISHREE SHARMA DATE OF HEARING : 19.07.2012 DATE OF PRONOUNCEMENT : 31.07.2012 ORDER PER MEHAR SINGH AM THESE ARE CROSS-APPEALS BY THE REVENUE AND THE ASSESSEE RESPECTIVELY AGAINST THE ORDER DATED 07.0 3.2011 PASSED BY THE LD. CIT(A) KARNAL U/S 250(6) OF THE I NCOME- TAX ACT 1961 (IN SHORT 'THE ACT'). THESE APPEALS AR E BEING TAKEN UP TOGETHER FOR THE SAKE OF CONVENIENCE AND B REVITY. 2 2. IN ITA NO. 691/CHD/2011 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS RIGHT IN DELETING THE ADDITION OF RS. 14.40 LACS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED ACCRETION IN THE CAPITAL ACCOUNT IN RESPECT OF WHIC H NO EVIDENCE WAS EVER FURNISHED BY THE ASSESSEE DURING THE COURS E OF ASSESSMENT PROCEEDINGS DESPITE THE SAME HAVING BEEN REQUISITIO NED BY THE A.O. ? 2.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(A) IS RGHT IN DELETING THE ADDITION OF R S. 14.40 LACS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED ACCRETION IN THE CAPITAL ACCOUNT BY ADMITTING THE FRESH DETAILS & E VIDENCES FURNISHED DURING THE COURSE OF APPELLATE PROCEEDINGS WHICH WE RE NOT FURNISHED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS WITHOUT RECORDING THE REASONS FOR ADMITTING THE SAM E ? 3. IT IS PRAYED THAT THE ORDER OF LD. CIT( A) BE SET ASIDE AND THAT OF THE AO MAY BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND T HE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. IN ITA NO. 697/CHD/2011 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN CONFIRMING THE ADDITION OF RS.9.00 LACS ON ACCOUNT OF CREDIT OF RS.5.00 LACS FROM M/S GLOBAL MED. SURG. (P) LTD. AND RS.4.0 0 LACS FROM M/S PHYTHOCHEM HEALTHCARE PHARMACEUTICALS PANCHKULA WI THOUT ANY BASIS OR FACTS ON RECORD. 2 THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) HAS ALSO ERRED IN LAW AS WELL AS FACTS IN REJECTING THE REQUEST OF THE A PPELLANT FOR ADMISSION OF ADDITIONAL EVIDENCE. 3 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ALSO ERRED IN CONFIRMING THE ADDITION OF RS.30.00 LACS ON ACCOUNT OF ADDITIONAL INCOME U/S 69B WITHOUT ANY FACTS AND CORROBORATED EVIDENCE ON RECORD. 4. THE APPELLANT MAY BE ALLOWED TO ADD/AMEND ANY O F THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 4. THE REVENUE ( IN ITA 691/CHD/2011) IN THE GROUNDS OF APPEAL BEARING NO. 1 & 2 CONTENDED THAT CIT(A) IS RIGHT (NOT IS MISSING BEING TYPOGRAPHICAL ERROR) IN DE LETING ADDITION OF RS.14 40 000/- MADE BY AO ON ACCOUNT O F UNEXPLAINED ACCRETION IN THE CAPITAL ACCOUNT AS NO EVIDENCES WERE FURNISHED. REVENUE FURTHER CONTENDE D THAT FRESH EVIDENCES WERE ADMITTED BY THE CIT(A) WITHOU T RECORDING REASONS. 5. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS LD. 'DR' REFERRED TO THE FINDINGS RECORDED BY AO IN PARA 1.0 5 AND 1.06. LD. 'DR' PLACED RELIANCE ON THE ASSESSMENT OR DER PASSED BY AO. 6. LD. 'AR' ON THE CONTRARY SUPPORTED THE WELL RE ASONED AND DETAILED ORDER PASSED BY THE CIT(A). LD. 'AR' REFERRED TO PAGE NO. 32 34 & 35 OF THE PAPER BOOK WHICH ARE I N THE FORM OF COPY OF ACCOUNTS OF THE ASSESSEE AND M/S OS CAR REMEDIES PVT. LTD. 7. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS FACTS OF THE CASE AND THE RELEVANT RECORD. THE ADDITION WAS MADE BY THE AO ON ACCOUNT OF ACCRETION IN THE ASSESSEE'S ACCOUNT WITH M/S OSCAR REMEDIES KALA AMB ON THE GROUND TH AT NO EVIDENCES FOR SUCH ACCRETION WAS FILED BY THE ASSES SEE. IN VIEW OF THIS THE AO INVOKED THE PROVISIONS OF SECT ION 68 AND 4 MADE IMPUGNED ADDITION OF RS.14 40 000/-. THE LD. CIT(A) ON APPRECIATION OF EVIDENCES FILED BY THE ASSESSEE DELETED THE IMPUGNED ADDITION. LD. CIT(A) SOUGHT COMMENTS O F THE AO ON THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AND SUBSEQUENTLY SUBMITTED THE COMMENTS OF THE AO TO TH E ASSESSEE FOR HIS COMMENTS. LD. CIT(A) RECORDED HIS FINDINGS IN PARA 1.05 AND 1.06 WHICH ARE SELF-EXPLANATORY I N NATURE HENCE THE SAME ARE REPRODUCED HEREUNDER : 1.05 THE ISSUE IS CONSIDERED. THERE WAS ADDITION OF RS. 14 40 OOO/- IN THE ACCOUNT OF THE APPELLANT WITH M/S OSCAR REMEDIES KALA AMB. THE AO NOTED IN HIS ORDER THAT T HE ASSESSEE DID NOT ADDUCE ANY EVIDENCE REGARDING ACCR ETION OF RS. 14 40 OOO/- IN HIS CAPITAL ACCOUNT WITH M/S OSC AR REMEDIES. IN THE ABSENCE OF ANY EXPLANATION AND SUP PORTING EVIDENCE THE SAID ADDITION WAS HELD BY THE AO AS U NEXPLAINED AND ADDED TO THE INCOME OF THE APPELLANT U/S 68 OF THE ACT WHICH IS CHALLENGED VIDE GROUND NO. 1 OF APPEAL. 1.06 IN THE WRITTEN SUBMISSIONS THE COUNSEL OF TH E APPELLANT EXPLAINED THE SOURCE OF CREDIT IN THE CAP ITAL ACCOUNT OF THE APPELLANT MAINTAINED WITH M/S OSCAR REMEDIES KALA AMB AS IS NOTED FROM THE EXTRACTS OF THE WRITTEN S UBMISSIONS W.R.T THIS GROUND OF APPEAL REPRODUCED ABOVE AND E NCLOSED THE RELEVANT COPIES OF ACCOUNT FROM WHERE FUNDS WERE TR ANSFERRED. THE RELEVANT COPIES OF ACCOUNTS FROM THE BOOKS OF M /S OSCAR REMEDIES OSCAR REMEDIES PVT. LTD. AND OF BANK ACCO UNT ARE EXAMINED FROM WHICH MOVEMENT OF FUNDS ARE VERIFIAB LE AND HENCE ADDITION OF RS. 14.40 LAKH MADE BY THE AO BY HOLDING THE ACCRETION IN THE CAPITAL ACCOUNT OF THE APPELLA NT MAINTAINED WITH M/S OSCAR REMEDIES KALA AMB UNEXPLAINED CAN NOT BE SUSTAINED AND HENCE IS HEREBY DELETED. 8. FINDINGS OF THE CIT(A) CLEARLY DEMONSTRATE THAT REQUISITE EVIDENCES WERE FILED BY THE ASSESSEE IN T HE FORM OF COPIES OF ACCOUNT AND THE MOVEMENT OF FUNDS. THE L D. 5 CIT(A) HAS EXAMINED THE COPIES OF ACCOUNT AND RELEV ANT BANK ACCOUNTS AND DELETED THE ADDITION. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE CI T(A) AND HENCE THE SAME ARE UPHELD. THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED 9. GROUND NOS. 3 & 4 ARE GENERAL IN NATURE AND NEED NO SEPARATE ADJUDICATION. HENCE THE SAME ARE DISMISSE D. 10. IN THE RESULT APPEAL OF THE REVENUE IS DISMISS ED. ITA NO. 697/CHD/2011 (ASSESSEE'S APPEAL) 11. GROUND NO.1 AND 2 ARE INTER-LINKED AND THE SAME ARE ADJUDICATED TOGETHER HEREINAFTER. THE ASSESSEE CONT ENDED THAT CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 9 LACS ON ACCOUNT OF CREDIT OF RS.5 00 000/- FROM M/S GLOBAL MED. SURG. (P) LTD. AND RS.4.00 LACS FROM M/S PHYTHOCHEM HEALTHCARE PHARMACEUTICALS PANCHKULA WITHOUT ANY B ASIS OR FACTS ON RECORD. LD. 'AR' REFERRED TO PAGE NO. 30 31 55 60 AND 61 OF THE PAPER BOOK. SIMILARLY LD. CIT(A) REF ERRED TO PAGE 9 OF THE ORDER OF THE CIT(A). 12. LD. 'DR' PLACED RELIANCE ON THE ORDER PASSED BY THE CIT(A) AND REFERRED TO PARA 2.16 AND 2.17 OF THE AP PELLATE ORDER. 13. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS FACTS OF THE CASE AND THE RELEVANT RECORD. THE AO SOUGHT EXPLANATION OF THE ASSESSEE IN RESPECT OF ACCRETION OF RS. 21 LACS IN THE UNSECURED LOAN AS PER THE FOLLOWING DE TAILS : 1. GLOBAL MED SURG PANCHKULA RS. 5 00 000/- 2. LAW MEDBROS PVT.LTD. RS.2 00 000/- 6 3. SMT. CHARANJIT KAUR KALA AMB RS.5 00 000/- 4. SHRI SUBHASH CHANDER GARG RS.5 00 000/- YAMUNANAGAR 14. ON EXAMINATION OF THE SUBMISSION AND EXPLANATIO N FILED BY THE ASSESSEE THE AO ACCEPTED THE UNSECSUR ED LOAN OF RS.5 LACS FROM SHRI SUBHASH CHANDER GARG AS EXP LAINED. HOWEVER AO MADE AN ADDITION OF RS.16 LACS IN RESPE CT OF REMAINING UNSECURED LOANS AS EXPLAINED CASH CREDIT U/S 68 OF THE ACT. LD. CIT(A) GRANTED RELIEF IN RESPECT OF CASH CREDIT FROM LAW MEDBROS DELHI OF RS.2 LACS AND SMT. CHARA NJEET KAUR OF RS. 5 LACS. LD. CIT(A) CONSIDERED THE EXPL ANATION FILED BY THE ASSESSEE THAT LOAN OF RS.2 LACS FROM L AW MEDBROS PVT.LTD. WAS TAKEN IN THE FINANCIAL YEAR 2 004-05 AND NOT IN THE YEAR UNDER CONSIDERATION. THIS PLEA OF THE ASSESSEE WAS ACCEPTED BY THE CIT(A). REGARDING LOA N OF RS.5 LACS FROM SMT.CHARANJEET KAUR REGARDING LOAN FROM S HRI JAGDEEP SINGH U/G SMT. CHARANJEET KAUR IT WAS SUBM ITTED THAT THE DRAFT WAS RECEIVED FROM MOTHER OF SHRI JAG DEEP SINGH THE SAME WAS WRONGLY CREDITED IN HER ACCOUNT WHEREAS THE LOAN WAS TAKEN FROM SHRI JAGDEEP SINGH AND THE REPAYMENT WAS ALSO MADE THROUGH BANK DRAFT IN H IS FAVOUR. APPELLANT FURTHER SUBMITTED THAT STATEMENT OF SHRI JAGDEEP SINGH WAS ALSO RECORDED IN THE COURSE OF ASSESSMENT PROCEEDINGS BY THE AO IN WHICH HE CONFI RMED THE TRANSACTION. IN VIEW OF THIS TRANSACTION WAS TREATED AS EXPLAINED. HOWEVER CIT(A) UPHELD THE ADDITION OF RS.9 LACS IN VIEW OF THE FINDINGS RECORDED IN PARA 2.16 AND 2.17. 7 15. THE RELEVANT FINDINGS ARE REPRODUCED HEREUNDER : 2.16 FROM THE ABOVE IT IS NOTED THAT THE LETTER IS UNDATED AND EVEN WITHOUT COMPLETE PAN NO. A COPY OF THIS LE TTER IS MADE PART OF THIS ORDER AS ANNEXURE'A' FROM THIS LE TTER GENUINENESS OF THIS CREDIT CAN NOT BE SAID TO BE ES TABLISHED SINCE FROM THIS LETTER EVEN THE IDENTITY OF THE CREDI TOR CAN NOT BE SAID TO BE ESTABLISHED IN VIEW OF THE FACT THAT THE CREDITOR DID NOT EVEN KNOW ITS PAN NUMBER WHAT TO SPEAK OF ESTABLISH ING THE CAPACITY OF THE CREDITOR AND GENUINENESS OF THE TRAN SACTION. IT IS THEREFORE HELD THAT THE APPELLANT FAILED TO ESTABLI SH THE GENUINENESS OF THIS CREDIT AND HENCE ADDITION OF RS. 4 LAKH MADE BY THE AO IS HEREBY CONFIRMED. 2.17 SIMILAR IS THE POSITION IN THE CASE OF LOAN OF RS .5 LAKH FROM M/S GLOBAL MEDICAL SURGICAL PVT. LTD. THE APPELLANT F ILED XEROX COPY OF CONFIRMATION OF ACCOUNT AS APPEARED IN HIS BOOKS. FROM THIS NEITHER THE IDENTITY OF THE CREDITOR CAN BE S AID TO BE ESTABLISHED NOR ITS CAPACITY OF ADVANCING THE SAID L OAN BESIDES THE GENUINENESS OF THE TRANSACTION IS ESTABLISHED. IT IS THEREFORE HELD THAT THE APPELLANT FAILED TO ESTABLISH THE GENU INENESS OF THIS CREDIT ALSO AND HENCE ADDITION MADE BY THE AO ON TH IS ACCOUNT IS ALSO CONFIRMED. 16. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSION FACTS OF THE CASE AND RELEVANT RECORDS. WE ARE OF THE CO NSIDERED OPINION THAT THE EVIDENCES UNDER RULE 46A FILED BY THE ASSESSEE DESERVE TO BE ADMITTED WITH A VIEW TO FU RTHER THE CAUSE OF JUSTICE AND HENCE THE SAME ARE ADMITTED. FURTHER THE SUBMISSION FILED BY THE APPELLANT THAT THE PARTIES ARE EXISTING ASSESSEE AND EVIDENCES FILED B Y THE APPELLANT ARE SUFFICIENT TO PROVE THE CASE WITHIN THE MEANING OF SECTION 68 OF THE ACT ARE TO BE LOOKED INTO BY THE CIT(A). IN VIEW OF THE ABOVE WE ARE OF THE OP INION THAT THE CASE BE RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION IN THE LIGHT OF FRESH EVIDENCES AND I N ACCORDANCE WITH THE RELEVANT PROVISIONS OF THE ACT. THE 8 CIT(A) SHOULD AFFORD PROPER AND REASONABLE OPPORTUN ITY TO BOTH THE PARTIES. 17. IN GROUND NO.3 IT WAS CONTENDED THAT THE CIT(A ) ERRED IN CONFIRMING THE ADDITION OF RS.30 LACS ON ACCOUNT OF ADDITIONAL INCOME U/S 69B OF THE ACT WITHOUT ANY F ACTS AND CORROBORATIVE EVIDENCES ON RECORD. 18. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS LD. 'AR' STATED THAT A SURVEY WAS CONDUCTED ON THE BUSINESS PREMISES OF M/S OSCAR REMEDIES PVT. LTD. ON 18.01.2 006. THE ASSESSEE DECLARED ADDITIONAL INCOME OF RS.50 LA CS; ON ACCOUNT OF EXCESS CASH OF RS.25 LACS UNACCOUNTED INVESTMENT IN BUILDING OF RS.10 LACS AND UNACCOUNTE D INVESTMENT IN MACHINERY RS.15 LACS WAS DECLARED IN THE CASE OF M/S OSCAR REMEDIES PVT.LTD. BY THE APPELLAN T BEING A DIRECTOR OF THE COMPANY. THE APPELLANT FURTHER D ECLARED ADDITIONAL INCOME OF RS.30 LACS ON ACCOUNT OF UNEXP LAINED INVESTMENT IN THE CONSTRUCTION OF BUILDING OF OSCAR REMEDIES KALA AMB OF WHICH ASSESSEE IS A PROPRIET OR. 19. LD. 'AR' REFERRED TO PAGE NO.39 OF THE PAPER BO OK WHICH IS A SELF-EXPLANATORY SURRENDER LETTER OF DATED 19. 01.2006 SIGNED BY SHRI NAVDEEP DHINGRA DECLARING RS.30 LAC S AS ADDITIONAL INCOME ON THE GROUND OF USING SUCH INCOM E FOR CONSTRUCTION OF FACTORY BUILDING. IT WAS FURTHER STATED THEREIN THAT SURRENDER HAS BEEN MADE VOLUNTARILY SU BJECT TO NO PENAL ACTION. LD. 'AR' PLACED RELIANCE ON THE D ECISION REPORTED IN KEWAL CHAND NEM CHAND MEHTA V CIT 67 IT R 804. THE CASE RELIED UPON BY THE ASSESSEE AND THE RATIO LAID 9 DOWN THEREIN IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE BEING DIFFERENT AND DISTINGUISHABLE VIZ-A-VIS THE FACTS OF THE CASE RELIED UPON BY THE ASSESSEE. 20. LD. 'AR' FURTHER PLACED RELIANCE ON THE DECISIO N IN THE CASE OF CIT V RADHA DEVELOPERS INDIA LTD. & ANOTHER (2010) 329 ITR 1 (GUJ). IT IS A CASE OF SEARCH & SEIZURE ASSESSMENT WHEREIN DEDUCTION FOR EXPENSES WAS HELD ADMISSIBLE IN RESPECT OF UNEXPLAINED INVESTMENT. THE FACTS OF TH E PRESENT CASE AND THE CASE LAW RELIED UPON BY THE ASSESSEE A RE DIFFERENT AND DISTINGUISHABLE AND HENCE THIS DECI SION IS NOT APPLICABLE TO THE PRESENT CASE. 21. LD. 'AR' FURTHER REFERRED TO THE DECISION OF FA KIR MOHD HAJI HASAN V CIT 247 ITR 290 (GUJ) WHEREIN IT HAS B EEN CLEARLY HELD THAT NO DEDUCTION IS ALLOWABLE IN RESP ECT OF DEEMED INCOME ADDED U/S 69 TO 69C OF THE ACT. THIS DECISION WAS ALSO RELIED UPON BY THE REVENUE AND WE ARE OF THE OPINION THAT CASE OF THE REVENUE IS COVERED BY THE DECISION AND NOT THAT OF THE ASSESSEE. 22. LD. 'DR' ON THE OTHER HAND PLACED RELIANCE ON THE ORDER PASSED BY CIT(A) AND PLACED RELIANCE ON THE D ECISION IN THE CASE OF FAKIR MOHD HAJI HASAN V CIT 247 ITR 290 (GUJ). 23. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS FACTS OF THE CASE AND FOUND THAT THE ASSESSEE HAS VOLUNTA RILY MADE A SURRENDER OF THE IMPUGNED AMOUNT DECLARED A S ADDITIONAL INCOME OF RS.30 LACS USED FOR THE PURPO SE OF 10 CONSTRUCTION OF FACTORY AS INDICATED IN THE LETTER OF SURRENDER DISCUSSED EARLIER. IT IS PERTINENT TO M ENTION HERE THAT NO RETRACTION HAS BEEN MADE BY THE ASSESSEE IN RESPECT OF SUCH SURRENDERED AMOUNT AS ADDITIONAL INCOME IN THE COURSE OF SURVEY AND OPERATION. HOWEVER SUCH SURR ENDER AMOUNT WAS NOT REFLECTED IN HIS RETURN OF INCOME F ILED ON 18/19.01.2006. LD. CIT(A) HAS CONSIDERED THE SUBMI SSIONS OF THE APPELLANT AND ADJUDICATED THE ISSUE BY WAY O F SPEAKING AND DETAILED ORDER. LD. CIT(A) HAS SUCCES SFULLY DISTINGUISHED NUMEROUS CASE LAWS CITED BY THE ASSES SEE. IT IS FURTHER MENTIONED THAT THE RETRACTION OF THE IMP UGNED ADDITIONAL SURRENDER MADE BY THE ASSESSEE HAS NOT B EEN CORROBORATED BY THE ASSESSEE BY WAY OF COGENT AND C REDIBLE EVIDENCE. IN VIEW OF THIS ANY RETRACTION WITHOUT ANY CORROBORATIVE EVIDENCE CANNOT BE ACCEPTED AS GENU INE AND BONAFIDE RETRACTION. IN VIEW OF THIS FINDINGS OF T HE CIT(A) WHICH ARE REPRODUCED HEREUNDER ARE UPHELD AND THIS GROUND OF THE ASSESSEE IS DISMISSED. THE RELEVANT F INDINGS OF THE CIT(A) ARE REPRODUCED HEREUNDER: 3.04 THE ISSUE IS CONSIDERED. THE FACTS IN BRIE F ARE THAT A SURVEY U/S 133 A(I) OF THE ACT WAS CARRIED OUT AT THE BUSI NESS PREMISES OF M/S OSCAR REMEDIES PVT. LTD. THE APPELLANT SHRI NAVDEE P DHINGRA WHO IS A DIRECTOR OF THE COMPANY BESIDES DECLARING ADDITIONA L INCOME OF RS.50/- LAKHS ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CASH PLANT & MACHINERY AND BUILDING IN THE CASE OF THE COMPANY DECLARED A DDITIONAL INCOME OF RS.30 LAKH IN HIS CASE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF BUILDING OF M/S OSCAR REMEDIES- KAL A AMB OF WHICH HE WAS THE PROPRIETOR. RELEVANT QUESTION 19 AND 20 AND ANSWERS THERETO FROM THE STATEMENT OF APPELLANT SHRI NAVDEEP DHINGR A RECORDED DURING SURVEY IS REPRODUCED BELOW: 11 'QUES.19. IT HAS COME TO OUR NOTICE THERE IS SOME CONSTRUCTION IS GOING ON AT KA/A AMB IN HIMACHA/ PRADESH. ANS. CONSTRUCTION IS GOING ON AT KA/A AMB. I AM INSTATING A UNIT FOR MANUFACTURING OF MEDICINES AT KA/A AMB (H.P.). SEPARATE BOOKS FOR THE UNIT ARE BEING MAINT AINED. QUES. 20 I AM SHOWING YOU A SLIP PAD OF NEELGAGAN IN WHICH FEW ENTRIES PERTAINING TO KA/A AMB ALE APPEARS. PLEASE EXPLAIN THE SAME. AS PER PAGE I TO 5 THE TOTAL OF AMOUNTS APPEARING I N THESE PAGES COMES TO RS.30 LACS. EXPLAIN THESE ENTRIES AN D SOURCES THEREOF. ANS. THIS AMOUNT WAS USED BY ME FOR CONSTRUCTION OF BUILDING AT 0KALA AMB. THIS IS MY INDIVIDUAL INCOME AND THE SAM E WILL BE ADDED IN MY INCOME FROM MY SALARY AND INTEREST FOR THE F.Y. 2005-06. THIS SURRENDER IS MADE TO BUY MENTAL PEACE AND IS MADE VOLUNTARILY WITHOUT ANY PRESSURE AND IS SUBJECT TO NO PENAL ACTION. SEPARATE LETTER FOR SURRENDER IS BEING SUBMITTED.' 3.05 IN VIEW OF THIS STATEMENT THE APPELLANT FILED A LETTER ALSO TO THE ADDL. CIT YAMUNA NAGAR WHEREIN HE INTER ALIA STAT ED AS UNDER: 'DURING THE COURSE OF SURVEY OPERATION AT THE PREMI SES OF OSCAR REMEDIES (P) LTD. CERTAIN DOCUMENTS RELATING TO CONSTRUCTION AT KALA AMB FACTORY PREMISES HAVE BEEN FOUND. I HEREBY OFFER TO SURREN DER A SUM OF RS.30 00 000/- AS ADDITIONAL INCOME FOR FINANCIAL YEAR 2005-06 AS MY INCOME. THE AMOUNT WAS USED FOR CONSTRUCTION OF FACTORY BUILDING. THIS SURRENDER HAS BEEN MADE VOLUNTARILY SUBJECT TO NO PENAL ACTION.' 3.06 IN VIEW OF THE CATEGORICAL ADMISSION OF THE APPELLANT OF UNEXPLAINED INVESTMENT IN THE CONSTRUCTION OF THE F ACTORY BUILDING OF HIS PROPERTIROSHIP CONCERN M/S OSCAR REMEDIES WHICH WA S ALSO CONFIRMED IN THE LETTER WRITTEN TO THE ADDL. CIT YAMUNA NAGAR P LEA OF THE APPELLANT THAT ADDITIONAL INCOME/SURRENDER WAS MADE UNDER COE RCION/PRESSURE OF THE SURVEY PARTY IS NOT TENABLE. THE APPELLANT COU LD NOT BRING ON RECORD ANY EVIDENCE IN SUPPORT OF THIS CLAIM SPECIFICALLY IN VIEW OF THE FACT THAT THE SURVEY WAS CARRIED OUT ON 18-19 JANUARY 2006 AND TH E RETURN WAS FILED ON 31.3.2007 AND NO SUCH FACT WAS BROUGHT IN THE NOTIC E OF THE DEPARTMENT DURING THIS PERIOD. HAD THE PLEA OF THE APPELLANT B EEN CORRECT THE SAME WOULD HAVE BEEN BROUGHT IN THE NOTICE OF THE DEPART MENT IMMEDIATELY 12 AFTER SURVEY. EVEN IN THE RETURN OF INCOME NO INDIC ATION IN THIS REGARD WAS GIVEN. THIS CAN ONLY BE SAID TO BE AN ATTEMPT SO TH AT THIS FACT WOULD NOT COME IN THE NOTICE OF THE DEPARTMENT. THE PLEA OF T HE APPELLANT THAT MOST OF THE INVESTMENT WAS MADE SUBSEQUENT TO THE SURVEY IS NOT TENABLE IN VIEW OF THE FACT THAT BOOKS OF THE ACCOUNTS OF M/S OSCAR REMEDIES WERE NOT PRODUCED DURING SURVEY AND THE SAME WERE OPEN T O MAKE ENTRIES AS PER HIS CONVENIENCE . 3.07 AS PER AMENDED PROVISIONS OF LAW EFFECTIVE FR OM 1.6.02 I.T. AUTHORITIES CONDUCTING SURVEY WERE SPECIFICALL Y EMPOWERED TO USEFUL FOR OR RELEVANT TO ANY PROCEEDINGS UNDER THE ACT. IT GO ES WITHOUT SAYING THAT THE INFORMATION GATHERED BY THE AUTHORITY IN THE COURSE OF SURVEY PROCEEDINGS WILL HAVE TO BE RECORDED IN SOME FORM OR OTHER. ONCE SUC H INFORMATION IS SO GATHERED AND RECORDED EVEN IF IT IS CONSIDERED THA T SINCE NO OATH WAS ADMINISTERED AND IT WILL NOT BE A STATEMENT ON OATH BUT WOULD NEVERTHELESS BE INFORMATION AND MATERIAL AVAILABLE ON RECORD. FURTH ER IF SUCH INFORMATION AND PARTICULARS GATHERED ARE CORROBORATED BY OTHER MATE RIALS DOCUMENTS AND EVIDENCES THEY HAVE TO BE NECESSARILY UTILIZED IN COURSE OF PROCEEDINGS UNDER THIS ACT. OTHERWISE THE VERY PURPOSE OF LEGISLATIVE MANDATE GIVEN IN GETTING SUCH INFORMATION IN COURSE OF SURVEY OPERATION WOUL D STAND DEFEATED OR NULLIFIED. 3.08 FURTHER REFERENCE CAN ALSO BE MAD E TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASES OF POORANMAL V. DIRECTOR OF INSPECTION 93 ITR 5050 (SC) AND DR. PRATAP SINGH V. DIRECTOR OF ENFOR CEMENT 155 ITR 166 (SC) WHEREIN IT HAS BEEN HELD THAT: 'THE ILLEGALITY IN THE METHOD MANNER OR INITIATION OF A SEARCH DOES NOT NECESSARILY MEAN THAT ANYTHING SEIZED DURING THE SE ARCH HAS TO BE RETURNED. AFTER ALL IN THE COURSE OF A SEARCH THINGS OR DOC UMENTS ARE REQUIRED TO BE SEIZED AND SUCH THINGS AND DOCUMENTS WHEN SEIZED MAY FURNI SH EVIDENCE. ILLEGALITY OF THE SEARCH DOES NOT VITIATE THE EVIDENCE COLLECTED DURING SUCH ILLEGAL SEARCH. THE ONLY REQUIREMENT IS THAT THE COURT OR THE AUTHORITY BEFORE WHICH SUCH MATERIAL OR EVIDENCE SEIZED DURING THE SEARCH SHOWN TO BE ILLEG AL IS PLACED HAS TO BE CAUTIOUS AND CIRCUMSPECT IN DEALING WITH SUCH EVIDENCE OR MA TERIAL.' 3.09 THUS IN THE LIGHT OF AUTHORITATIVE PREPOSITIO N OF LAW LAID DOWN BY HON'BLE SUPREME COURT APPLYING THE SAME TO THE FAC TS OF THE CASE IT HAS TO BE HELD THAT THE INFORMATION AVAILABLE FROM SUCH ST ATEMENT I.E. THE FACTUAL 13 POSITION STATED BY THE DEPONENT IF FOUND TO BE BRO ADLY CORROBORATED BY OTHER AVAILABLE MATERIAL CAN ALWAYS BE USED IN THE INCOM E TAX PROCEEDINGS AGAINST THE DEPONENT. THE ASSESSEE/APPELLANT CANNOT BE PERM ITTED TO RAISE THE PLEA ABOUT THE LEGAL VALIDITY OF SUCH STATEMENT. 3.10 FURTHER IT HAS BEEN JUDICIALLY HELD THAT ASS ESSMENT BASED ON ADMISSION OF ASSESSEE TO THE EFFECT THAT PARTICULAR AMOUNT IS LIABLE TO BE INCLUDED IN HIS TOTAL INCOME WOULD BE A VALID ASSES SMENT IN THE CASE OF RATANCHAND BHOLANATH (SS) V. CIT 210 ITR 682 (MP). FURTHER HON'BLE SUPREME COURT IN THE CASE OF PULLANGODE RUBBER PRODUCE CO. LTD. V. STATE OF KERALA (1973) 91 ITR 18 (SC) HAS HELD THAT: 'AN ADMISSION MADE BY THE ASSESSEE IS A GOOD RELEV ANT AND SUBSTANTIAL PIECE OF EVIDENCE THAT CAN BE USED AGAINST HIM AND IS VERY OFTEN THE BEST EVIDENCE THAT CAN BE AVAILABLE AGAINST HIM.' 3.11 THE APPELLANT HAS PLACED RE LIANCE ON VARIOUS JUDICIAL DECISIONS TO SUPPORT HIS CONTENTIONS BUT IT IS SETTLED POSITION OF LAW THAT DECISION RENDERED IN A PARTICULAR CASE CANNOT BE APPLIED TO THE FACTS OF ANOTHER CASE UNLESS BOTH FACTS AND ISSUES INVOLVED IN THE REPORTED DECI SION VIS-A-VIS THE CASE OF THE ASSESSEE/APPELLANT ARE EITHER IDENTICAL OR WERE CLOSE RESEMBLANCE WITH EACH OTHER. THERE ARE SERIES OF OTHER DECISIONS WHE THER IN THE FACTUAL SETTINGS OF THOSE CASES IT HAS BEEN HELD THAT THE RETRACTIO N MADE BY THE ASSESSEE TO THE FACTUAL POSITION ADMITTED IN THE STATEMENT RECO RDED U/S!3L(3) AND 132(4) ETC. CANNOT BE PERMITTED UNLESS HE SUCCESSFULLY ES TABLISHES THAT SUCH ADMISSION WAS WRONGLY MADE ON FACTS. FURTHER ALLEGA TION THAT SUCH ADMISSION WAS UNDER COERCION INTIMIDATION DURESS OR COMPULS ION CANNOT BE ACCEPTED UNLESS THE SAME IS ESTABLISHED AS A FACT WITH COGEN T AND RELIABLE EVIDENCES. REFERENCE CAN BE MADE TO THE FOLLOWING DECISIONS: I. DR. S.C.GUPTA V. CIT 248 ITR 782 (ALL.) II. MAHESH B. SHAH V. ACIT 238 ITR 130 (KER.) III. V. KUMHAMBU & SONS V. CIT 219 ITR 235 (KER) IV. MANMOHAN SINGH VIJ V. DCIT 6 SOT 18 (MUM) V. RAMJAS NAVAL V. CIT 131 TAXMAN 525 (RAJ) VI. ACIT V. JAGAT EXPLOSIVES 98 ITD 50 (JODH.) (THI RD MEMBER) VII. HOTEL KIRAN V. ACIT 82 ITD 453 (PUNE) VIII. PRANAV CONSTRUCTION CO. V. ACIT 61 TTJ (MUM) 145 IX. RAMESH SALVE V. ACIT 71 ITD 75 (MUM)S 14 X. SMT. VASANTI SETHI V. ACIT 45 TTJ 503 (DEL) XI. HIRALAL MAGANLAL & CO. V. DCIT 96 ITD I 13 (MUM ) XII. DCIT V. BHOGILAL MOOLCHAND KANDOI 96 ITR 344 ( AHD.) 3.12 RELIANCE CAN BE MADE TO THE VERY PERTINENT OB SERVATION OF HON'BLE IT AT JABALPUR BENCH IN THE CASE OF ITO V. B.D.DAL & OIL IND. (1992) 40 ITD 180 (JP.) AS UNDER: 'IF AT THE TIME OF SURVEY AN ASSESSEE HIMSELF CONCE DES THAT THE STOCKS ARE SHORT AND EVEN COMES TO AN AGREEMENT REGARDING THE EXTENT OF SHORTAGE UNLESS IT CAN BE ESTABLISHED THAT SUCH CONSENTS OR AGREEMENT WAS GIVEN OR ARRIVED AT UNDER THREAT COERCION UNDUE INFLUENCE MISREPRESENTATION OR WRO NG UNDERSTANDING OF FACTS OR LAW IT WOULD BRING ALL EFFORTS PUT IN SURVEY OPERATIONS TO NOUGHT IF THE ASSESSEES ARE ALLOWED TO RETRACT FROM WHATEVER THEY HAD STATED OR AGREED TO AT THE TIME OF SURVEY.' 3.13 IN VIEW OF THE FACTUAL AND LEGAL POSITION DISC USSED ABOVE IT IS HELD THAT THE ADDITIONAL INCOME OF RS.30 LAKH DECLA RED BY THE APPELLANT ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF FACTOR Y BUILDING OF M/S OSCAR REMEDIES IS TO BE TAKEN AS UNEXPLAINED INVESTMENT A ND ACCORDINGLY IS TO BE ADDED TO THE INCOME OF THE APPELLANT. THE CASE LAWS RELIE D UPON BY THE APPELLANT ARE OF NO HELP BEING DISTINGUISHABLE ON FACTS OF THE CASE OF THE APPELLANT AS DISCUSSED ABOVE. THE ACTION OF THE AO IS THEREFORE CONFIRME D AND GROUND OF APPEAL NO. 3 IS AS SUCH REJECTED. 24. IN THE RESULT APPEAL FILED BY THE REVENUE IS D ISMISSED AND THAT OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY 2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31 ST JULY 2012. POONAM COPY TO: THE APPELLANT THE RESPONDENT THE CIT(A) THE CIT DR ASSISTANT REGISTRAR ITAT CHANDIGARH