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Sanjay Sultania Vs. Income Tax Officer - (Income Tax Appellate Tribunal) (17 May 2021)

In absence of any evidence of coercion or undue influence the statements recorded during the survey are admissible evidence


Direct Taxation

Facts of the case are that a survey action under Section 133A of the Income Tax Act, 1961 (IT Act) was conducted at the business premises of the assessee. During the course of survey, certain documents were found that the assessee has received Rs. 7,23,452, from Maa Ambe Enterprises, Jharsuguda, Rs. 5,76,291 from Unicon Tech Co. Jharkhand and Rs. 6,41,997 from Sundaram Technical Services, Barpali totaling to Rs. 19,41,740 in the name of Shreshta Nirman, prop. Concern of the assessee. During the course of survey, statement of assessee was recorded wherein, he has admitted to be the same as undisclosed income and advance tax of Rs. 6,00,000 was paid. Later on during the course of assessment proceedings, the assessee has stated that undisclosed income was made under duress and coercion and claimed refund of the same while filing the return of income.

The Assessing Officer did not accept the contention of the assessee and observed that, the statement during the assessment proceedings that the confession of undisclosed income is under duress is an afterthought. He, therefore, treated Rs. 19,61,740 as undisclosed income and added the same to the total income of the assessee. In first appeal, the action of the AO was confirmed.

The assessee submitted that, during the course of assessment proceedings, books of account alongwith bills and vouchers were produced and same were test checked. He submitted that, the assessee has not made any transaction with the three parties as claimed by the department. He submitted that, during survey proceedings, income tax officers all of a sudden entered the business premises and made enquiries and compelled the assessee make statement that Rs. 19,61,740 as his undisclosed income and statement was given under duress.

In the case of Raj Hans Towers Pvt. Ltd., and PCIT, New Delhi vs Avinash Kumar Setia, it is held that, in absence of any evidence of coercion or undue influence the statements recorded during the survey are admissible evidence. Further, the CBDT in the circular dated 10th March, 2003 has directed the revenue authorities that if confession not based upon credible evidence, are later retracted by the concerned assesses while filing the returns of income, such confessions do not serve any useful purpose.

In the present case, there was substantial evidence in the hands of survey team in the form of receipts. Therefore, statements recorded by the survey team on the basis of such receipts cannot be alleged as not based upon credible evidence. In the present case, no retraction was filed by the assessee before the authorities below nor during the course of survey proceedings and also during the course of assessment proceedings by way of any plausible evidence or by any other mode. Therefore, the statements recorded by the survey team based on credible evidence without any retraction by the assessee has to be accepted and thus the findings recorded by the AO as well as learned CIT(A) deserves to be upheld being sustainable and based on reasonable basis and evidence. Appeal of the assessee is dismissed.


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