RAJINDER SINGH BHASIN, RAIPUR,RAIPUR vs. DCIT-1(1), RAIPUR, RAIPUR

At the very outset, the Ld. Counsel for the assessee submitted that he is not pressing Ground of appeal No.2. Having heard the submissions of the Ld. Counsel for the assessee, Ground of appeal No.2 is dismissed as not pressed.

Ground of appeal No.3 is general.

The only effective ground is Ground of appeal No.1 which pertains to the addition of Rs.37,20,800/- confirmed by the Ld. CIT(Appeals) on account of stock found during survey treating the same as undisclosed.

The brief facts in this case are that survey u/s.133A of the Income Tax Act, 1961 (for short ‘the Act’) was conducted on 25.01.2011 in the premises of the assessee. During the course of survey, it was noticed by the survey team that the assessee had not maintained proper register, bills & vouchers etc. in support of his stock and business. The assessee subsequently, surrendered on the excess stock and cash found on the premises and in his statement committed to pay taxes on the surrendered amount of Rs.37,20,800/-. The assessee filed return of income on 02.12.2011 declaring total income at Rs.11,11,690/- and the case was selected through manual scrutiny. That on perusal of the ITR, it was noticed that the assessee while filing his return of income retracted on the excess amount of income and stock. That in the given facts and circumstances, the A.O completed the assessment making various additions/disallowances as appearing in the assessment order. That further, the undisclosed income as admitted during the survey, was not based on the statement of the assessee alone but it was based on material evidence in the form of excess cash and stock found during the course of survey. In fact, physical verification of the stock and cash was done in the presence of the assessee and employees. They were fully in agreement with the quantitative details of stock mentioned in the inventory made by the survey team. The relevant portion of the questions asked by the survey

Thereafter, the A.O held as follows: “From the above discussion, it is clearly established that the assessee did not have any outstanding bills for entry or otherwise as stated by the assessee himself. Even at the time of survey he clarified this point in the excerpts above that all the stock belonged.to him and he did not have any other bills that needed to be entered. Till ten months, the assessee kept silent and did not retract the admission made during the Survey deliberately with an intention to obviate the enquires that would have been initiated by the A.O. He did note complain to the Higher Authorities. He even paid a part of the taxes due on the undisclosed income admitted during the Survey. After an expiry of ten months when the time of filing the return of income came, he did not offer the undisclosed income admitted during the Survey for taxation. Thus, the retraction has not been made within a reasonable time. During the assessment proceedings, the assessee has failed to discharge the onus of proving, with positive evidence, that confession made by him during the Survey was either as a result of intimidation, duress and coercion or that the same was made as a result of mistaken belief of law or facts. 3. As discussed above, the assessee himself had agreed for this addition though subsequently he has retracted the statement through his reply submitted on 17.01.2014. Wherein he has stated that the "certain goods before survey were accounted for on receipts of bills after the survey. This is an afterthought of the assessee , as in the statement recorded whilst the survey proceedings ,the assessee had clarified on both the counts that the entire stock belonged to him and there were no pending bills that needed to be entered in the accounts. His submission is clearly a retraction of his earlier statement which is discussed in the earlier paragraphs. Further the bills produced by the assessee in support of his submission of 17.1.2014 has bills of Ravindra Auto Distributors Pvt. Ltd. and Rason Auto Products which are both related to the assessee's firm Bhasin Automobiles and he has also admitted the same on vide note Sheet entry 30.1.2014. It clearly shows that these bills produced on 17.1.2014 are an afterthought of the assessee and it is to misguide the revenue authorities in order to retract his earlier statement. It is also observed the chart submitted by the

The Ld. CIT(Appeals) had upheld the said findings of the A.O observing as follows: “The appellant had in spite of admitting excess stock and making declaration did not pay additional tax on account of such declaration at the time of filing ITR of the relevant AY and had retracted from the admission made at the time of assessment proceeding. It is incorrect and unfair on the part of the appellant to claim that the excess stock was without verification of accounts working in survey. The extract of the statement shown in the part of the order clearly shows that the appellant himself had claimed the stock as on that date to be of value Rs.21236413/-and he himself admitted the difference. Had it been made under duress then he could have retracted immediately within a reasonable period which is not the case here. Once the department had carried out the survey proceedings then the onus was on the appellant to explain his statement of affairs tallying with the books of accounts and documents maintained while doing the business activity. Even in case the appellant had made some Bonafide error then he could have approached the authorities with reason and credible evidences. However it is very clear that he only raised the issue at the time of assessment proceedings which clearly indicate that it is an attempt to misguide the authorities to get relief. The case citation relied by the appellant- Dhakeswari cotton mills v CIT, 26 ITR 775 is not applicable

This is a case where during survey proceedings, excess stock and cash was found in the premises of the assesse and admittedly, physical verification of such stock and cash was done in presence of the assessee and his employees. That also, it is fact that the assessee himself has admitted that an amount of Rs.37,20,800/- is his excess stock outside the books of account, for which, he had stated to pay the income tax. However, at the time of filing return of income, he has not paid such taxes, in fact, retracted from his earlier statement by saying that it was due to fear, pressure and duress, he had made the earlier statement. It is a matter of fact that there is no evidence on record to even suggest that the assessee had acted in fear or pressure while making declaration. In fact, he was present at time of physical verification of stock valuation and he himself

Reverting to the facts of the present case, the assessee himself admitted that such excess stock found was his undisclosed stock outside the books of account and he had admitted to pay taxes. But subsequently, he retracted saying that he made statement due to fear and coercion, for which, there is no evidence on record. When the return was filed, he had not paid taxes on the excess stock that was found during survey, for which, he had himself admitted that such stock was unaccounted in his books of account. In the case of the assessee it is not only statement based on which addition is made but it is on the basis of the physical verification of excess stock found and after proper questioning, the assessee gave his admission on record. The assessee by not paying taxes in the return filed and making retraction after 10 months, is nothing but the malafide intention to defraud the Revenue. That on the similar facts and circumstances, the Co-ordinate Bench of the Tribunal, Pune had dismissed the appeals of the assessee in the case of Sanjeev Kumar Manchand Rajput Vs. ITO, Nashik, ITA Nos. 612 & 613/RPR/2023 for A.Y.2017-18 & 2018-19, dated 13.07.2023.

This Bench at the time of hearing had asked the Ld. Counsel that what is the genuineness of such retraction by the assessee, he could not furnish any reply to the question.

That on careful examination of the facts on record, it is held that such retraction is nothing but an afterthought of the assessee and this kind of conduct should be nipped in the bud itself since addition made by the Department is not only on the basis of statement but on the basis of physical excess stock/cash which was available in the premises of the assessee hence backed by corroborative evidences. Therefore, the assessee cannot escape by merely retracting his statement, when of course, there is no ground for such retraction. At the same time, since he has not paid due taxes regarding the excess undisclosed stock and cash found, the addition made by the A.O and same being sustained by the Ld. CIT(Appeals) is absolutely correct in law and facts. Accordingly, we do not find any infirmity in the findings of the Ld. CIT(Appeals) and the same is upheld. Thus, the Ground of appeal No.1 is dismissed.

That as per above terms, the appeal of the assessee is dismissed.

The CIT(Appeals)-1, Raipur (C.G.) 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, रायपुर ब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड� फ़ाइल / Guard File. Samiran आदेशानुसार / BY ORDER, Bera, Sr. PS, // True Copy // Senior Private Secretary ITAT, Raipur आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur. Digitally signed by Samiran Bera, Sr. PS, ITAT, Raipur Date: 2026.05.22 16:03:11 +05'30'