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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI MANJUNATHA G & SHRI MANOMOHAN DAS
PER MANOMOHAN DAS, J.M: This appeal filed by the assessee is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-1, Coimbatore dated 23-03-2016 and pertains to Assessment Year 2011- 12.
The facts of the case are that on 27-01-2011 there was a survey in the business premises of the firm M/s Tejas in which the assessee, Shri D. Senthil Kumar is one of the partners. During the course of survey, an MOU pertaining to sale transaction of an immovable property of 59.5 Cents of lands at Avinashi Road, Peelambedu, Coimbator was found and impounded by the survey team. On 07-02- 2011 the assessee given a statement on oath which is read as under:
The above piece of land was entered into for purchase for an amount of Rs. 7.71 Crore as per the agreement dated 03-07-2008 entered by Shri D. Srinivasan. Later the following persons namely, Myself, D. Senthilkumar (2) V.R. Gunasekaran (3) John Antony (4) Shri Anand (5) Shri T.K.V. Palanisamy, Mettuplayam (6) Trans Venture BPO Solutions Private Ltd (7) C.R. Vasudevan routed amounts to Shri D. Srinivasan for this project. Since the hotel project could not be commenced, the land was sold to Shri Nagendran and his son Shri Sivakumar and wife Smt. Vijayalakshmi for a consideration of Rs. 4 Crore as per the deed and Rs. 6 Crore received as on-money. This is evidenced by the pencil notings in the unsigned MOU found during the survey. I have signed today page No. 3 on the MOU. The details of amount shared by all of us are mentioned therein
The assessee vide another sworn statement offered Rs.
1,00,000,00/- for taxation the contents of which read as under:
“I wish to state that the land transactions regarding the Peelamedu land property was done as a joint venture by seven of us together as stated in my Q. No. 16. Considering the joint venture transactions, I would like to offer an amount of Rs. 1 Crore (Rupees One Crore) for taxation for the assessment year 2011-12 in the hands of the joint venture treating it as an Association of Persons (AOP)….” 4. However, the assessee on 12-09-2011 retracted his statement stating that he had not received any on-money. The Ld. AO, however, based on the impounded MOU and sworn statement of the assessee completed the assessment by adding Rs. 1 Crore to the total income of the assessee.
Aggrieved, the assessee filed 1st appeal before the Ld. CIT(A). 5.
The Ld. CIT(A) vide order dated 23-03-2016 dismissed the appeal of the assessee.
Aggrieved further, the assessee filed the present appeal before the Tribunal.
Heard representatives of the both the parties and perused the materials on record.
The Ld. AR reiterated the stand taken before the Ld. CIT(A). On the other hand, the Ld. DR is in support of the orders of the lower authorities.
We carefully considered the submissions of the parties and perused the materials on record. We observe that the Ld. CIT(A) dismissed the appeal of the assessee by observing-
(i) There was an incriminating material found during the course of search. (ii) The assessee admitted the acceptance of on-money vide sworn statement. (iii) The assessee offered Rs.1,00,00,000/- for taxation. (iv) The retraction of statement was not immediate. Assessee retracted the statement after seven months. (v) Same incriminating material was found during the search operation in the premises of M/s Annapoorna. (vi) Statement given on oath by the Account Manager of M/s Annapoorna that the purchaser of the land distributed Rs. 6 lakhs to the seller of the land. (vii) The land has been sold at the lower price than the purchase price. (viii) The Ld. AO relied on the case laws while rejecting the retraction statement of the assessee.
We observe that the assessee had given the statement on oath on 27-02-2011 vide which he accepted that Rs. 6 crores were received from the sellers of the land as on-money. Whereas, the survey was conducted on 27-01-2011. Again, at the same time, the assessee had offered Rs.1,00,00,000/- for taxation. We observe that, although the assessee retracted his statement, he took more than seven months in retracting his statement on oath. Therefore, retraction made after seven months has no value. A statement given on oath is an important piece of evidence. Such a statement has a great value although rebuttable. The assessee simply rebutted that he had not received any on-money. No supporting material was furnished by the assessee. The sale consideration of the property is lower than the purchase price.
The sale consideration is Rs. 4 crores (as per the sale deed) whereas the purchase price of that land was Rs. 6.40 crores. The selling of the said land at lower value than the purchased value is not believable.
Again, the Department found the same impounded material from M/s Annapoorna Sree Group of assessees while conducting a search on 25-09-2015 wherein the Account Manager given a statement on oath that sale amount was Rs. 10 Crores and out of which Rs. 6 crores were distributed among the persons mentioned in the list. The Account Manager also stated that that sheet was given to him by D. Srinivasn for safe keeping. The assessee failed to furnish any evidence against that statement made by the Account Manager of M/s Annapoorna. The assessee simply assailed the impugned order saying that the Ld. CIT(A) did not allow cross-examination of the account manager. Also, we observe that a retraction of statement to be effective has to be made at the earliest. [2016] 387 ITR (P&H). Whereas in the instant case, the retraction was after seven months. So, such a retraction of statement is not acceptable.
We find from the financial statements filed by the assessee for the A.Y 2011-12 that additional income offered during the course of survey towards on-money received from sale of property amounting to Rs. 1,00,00,000/- has been offered to tax and credited to profit and loss account under the head “other income business”. Further, the appellant has filed an affidavit and confirmed income offered during the survey is subjected to tax. From the details filed by the assessee, we find that the appellant has declared amount of Rs. 1,00,00,000/- offered as additional income during the course of survey and paid necessary taxes. In fact, the A.O and Ld. CIT(A) are also not disputed the fact that the assessee has offered Rs.1,00,00,000/- for tax which is evident from the findings of the Ld. CIT(A) in their order dated 23.03.2016. Since, the appellant has already offered and paid taxes additional income of Rs. 1,00,00,000/- declared during the course of survey, further addition on very same amount by the A.O amount should double additional which is not permissible under the law.
Therefore, we are of the considered view that the A.O is erred in making separate addition of Rs.1,00,00,000/-, even though the appellant has already credited said additional income in the profit and loss account and paid taxes. The Ld. CIT(A) without appreciating the facts simply sustained the additions made by the A.O. Thus, we set aside the order of the Ld. CIT(A) and direct the A.O to delete additions of Rs. 1,00,00,000/- made towards on-money received towards sale of property and offered during the course of survey. Order passed accordingly.
In the result, the appeal of the assessee is allowed. Order pronounced on 27th September, 2023.