BACHITTAR SINGH vs. CIT KURUKSHETRA AND ANR.

ITA/220/2010HC Punjab & HaryanaPHHC01093132201021 July 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the submissions made by the assessee lacked merit. The Tribunal had categorically held that the retraction from the statement had to be at the earliest opportunity. In the absence of an earliest retraction, the voluntary statement recorded in the presence of family members was considered important material that could be acted upon. The assessee failed to produce books of account or contemporaneous records of the period when agricultural income was allegedly earned. The Court noted that while it may be open to show an earlier statement to be erroneous, in this case, the Tribunal was justified in holding that the earlier statement was not proved to be incorrect. Regarding the distinction between statements under section 133A and 132(4), the Court held that even if a section 133A statement did not have the same evidentiary value as a section 132(4) statement, it could not be considered irrelevant material, especially in the absence of regular books of account. The Tribunal rightly followed observations in Dr. S.C. Gupta and Surinder Kumar Charanjit Kumar. The view taken by the Tribunal was not perverse or illegal. No substantial question of law arose. The appeal was dismissed.

What were the facts?

The assessee, an individual, made a statement during a survey under section 133A of the Income Tax Act, 1961, on March 21, 2003, surrendering Rs. 19 lacs for taxation. He stated this amount was for an investment in a shop made jointly with his brother, and the source was not reflected in his books. Subsequently, the assessee retracted this statement on May 28, 2003, claiming agricultural income and potato business, evidenced by a diary seized during the survey. The Assessing Officer rejected the retraction, deeming it an afterthought. The CIT(A) initially accepted the assessee's plea, but the Income Tax Appellate Tribunal (ITAT) reversed this, holding the assessee failed to prove the initial admission was wrong and that the retraction was not at the earliest opportunity.

What were the issues?

1. Whether, in the facts and circumstances, the ITAT was correct in law in sustaining the addition of Rs. 19 lacs based solely on the assessee's statement recorded on March 21, 2003, which was retracted on May 28, 2003, and allegedly corroborated by evidence collected during the survey, contrary to the Supreme Court's ratio in Pullungode Rubber Product Company v. State of Kerala? (Question of law) 2. Whether, in the facts and circumstances, the ITAT was correct in law in sustaining the addition of Rs. 19 lacs when the assessee was able to explain the source of investment through entries in his gatta diary seized during the survey, which could not be fabricated? (Question of mixed law and fact) 3. Whether, in the facts and circumstances, the ITAT was correct in law in ignoring a decision of its Coordinate Bench in identical circumstances arising from the same survey conducted on March 21, 2003? (Question of law) Assessee's contentions: The statement made during survey under section 133A is not on oath and can be retracted and proven wrong, unlike a statement under section 132(4). Reliance was placed on Pullangode Rubber Produce Co. Limited v. State of Kerala and Ester Industries Limited v. CIT for the principle that wrongly made admissions can be withdrawn. The statement under section 133A has no per se evidentiary value, citing CIT v. S. Khader Khan Son. The diary seized during the survey provided corroboration for the source of investment. Revenue's contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 133A,Section 260A,Section 132(4)

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No.220 of 2010 Date of decision: 21.7.2010 Bachittar Singh -----Appellant Vs. The Commissioner of Income Tax, Kurukshetra and another ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Ms. Radhika Suri, Advocate for the appellant. Adarsh Kumar Goel,J.

1.

This appeal has been preferred by assessee under section 260A of the Income Tax Act, 1961 (for short, ‘the Act’) against order dated 18.6.2008 passed by the Income Tax Appellate Tribunal, Chandigarh Bench in ITA No.224/Chd/2007, for assessment year 2003-04, proposing to raise following substantial questions of law:- “i) Whether in the facts and circumstances of the case, the ITAT was correct in law in sustaining the addition of Rs.19 lacs made solely on the basis of statement of the assessee recorded on 21.3.2003 which was retracted on 28.5.2003 which was recorroborated by evidence collected during the course of survey, contrary to the ratio of the SC in 91 ITR Page 18 in case of Pullungode Rubber Product Company v. State of Kerala? ii) Whether the Hon’ble ITAT was correct in law in sustaining the addition of Rs.

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