RAMCHANDRA MARUTI MOHITE,KOLHAPUR vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, KOLHAPUR

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ITA 461/PUN/2022Status: FixedITAT Pune23 August 2023AY 2012-134 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that a statement recorded under Section 132(4) has binding force and can be treated as evidence. Since the assessee surrendered the amount and did not include it in the return, the addition was justified.

What were the facts?

During a search operation, the assessee surrendered Rs. 3.89 crore to cover discrepancies. However, this income was not offered for taxation in the return. The Assessing Officer made an addition, which the CIT(A) sustained.

What were the issues?

Whether the CIT(A) has the power to remand the matter back to the AO, and whether an addition based on a surrender during a search is justified when not offered in the return.

Which sections of the Income-tax Act were involved?

Section 132,Section 132(4),Section 250,Section 251(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH, ‘B’ PUNE

Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY

For Respondent: Shri Ajay Kumar Kesari

आदेश / ORDER

PER R.S. SYAL, VP :

1.

This appeal by the assessee is directed against the order dt. 09-03-2022 passed by the CIT(A), Pune-11 u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2012-13.

2.

There is no appearance from the assessee despite numerous opportunities granted. As such, we are, proceeding to dispose of the appeal ex parte qua the assessee.

3.

Ground No.1 is against not allowing set off of business loss amounting to Rs.58,19,713/-.

4.

After hearing the ld. DR and perusing the relevant material on record, it appears that the Assessing Officer (AO) did not grant the set off of the loss against the addition of Rs.3.89 crore. The ld. CIT(A) directed the AO to verify the assessment record and allow the set off as per the provisions of the Act. Section 251(1) of the Act does not empower the CIT(A) to send the matter back to the AO for reconsideration. He can only confirm, reduce, enhance or annul the assessment. In the light of this statutory position, the impugned order, sending the matter back to the AO, cannot be countenanced. We, therefore, set aside the impugned order and direct the ld. CIT(A) to decide this issue himself. He is at liberty to call for any remand report from the AO in this regard, if warranted.

5.

The only other ground is against the confirmation of addition of Rs.3.89 crore. Briefly stated, the facts of the case are that the assessee was subjected to search operation u/s.132 of the Act on 25-08-2011. During the course of search, the assessee surrendered a sum of Rs.3.89 crore to cover up the discrepancies in the seized papers etc. However, while filing the return, the said income was not offered for taxation. The AO made the addition, which came to be sustained in the appeal. Aggrieved thereby, the assessee has approached the Tribunal.

6.

Having regard to the facts of the case, it is seen that the assessee himself made a surrender of Rs.3.89 crore during the course of search. In the statement recorded u/s.132(4), the assessee offered the amount in question: “To cover up the discrepancies noticed in the sized papers, i.e. on account of excess/bogus claim of work expenditure etc.” Statement u/s.132(4) has a binding force and can be treated as an evidence in the assessment proceedings.

Since the assessee surrendered such an amount in his statement u/s.132(4) but did not include in the return of income, in our considered opinion, the ld. CIT(A) was justified in upholding the addition made on this score. We, therefore, countenance the impugned order on this score.

7.

In the result, the appeal is partly allowed for statistical purposes. Order pronounced in the Open Court on 23rd August, 2023.

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