C I T JODHPUR vs. ASHOK KUMAR SONI

ITA/90/2001HC RajasthanRJHC01025729200128 July 2006Author: RAJESH BALIA,GOPAL KRISHAN VYAS12 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal did not err in law by considering the assessee's retraction and subsequent statements. The Tribunal correctly applied the principle that admissions are relevant but not conclusive proof and can be explained. The Tribunal's decision was based on a holistic evaluation of all available material, including the statements of the assessee and his father, the assessee's note on his father's statement, disclosures in books of accounts, investment estimates, and valuation reports from both the assessee's valuer and the Departmental Valuation Officer. The Court found that the assessee's own statement under Section 132(4) did not contain an admission of investing Rs. 14,50,000/- from undisclosed sources. The statement of the father could not be considered the assessee's admission. Therefore, the finding of the Tribunal, being a finding of fact based on the entire record, was not vitiated. Question (i) was decided against the Revenue and in favour of the assessee. Question (ii) was considered ancillary to question (i) and did not require independent consideration. The appeal was dismissed.

What were the facts?

The Revenue (Commissioner of Income Tax-II) appealed an order of the Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, concerning assessment years 1987-88 to 1997-98. The dispute arose from additions made by the Assessing Officer (AO) to the assessee's (Shri Ashok Kumar Soni) income as undisclosed income, based on investments in house property construction. A search was conducted on the assessee's father, Shrichand Soni, on January 3, 1997. During the search, statements were recorded from both Shrichand Soni and the assessee. The AO, relying on Shrichand Soni's statement and the assessee's alleged ratification, determined an undisclosed investment of Rs. 14,50,000/-. The assessee had disclosed Rs. 7,50,000/- as investment from undisclosed sources in his block assessment return. The CIT(Appeals) upheld the AO's addition. The ITAT, however, restricted the addition to Rs. 7,50,000/-, the amount declared by the assessee.

What were the issues?

1. Whether the Tribunal was justified in ignoring the admission made by the assessee, merely on the basis of a later retraction, despite concluding that no coercion or duress by search officials was established? 2. Whether there was any material on record to hold that the admission made by the assessee during the search statement was clarified and the presumption arising therefrom was rebutted? Assessee's Contention (implied from Tribunal's finding): The assessee contended that his total investment in the house construction was Rs. 14,50,000/-, out of which Rs. 7,50,000/- was disclosed from undisclosed sources, and this disclosure was acceptable. The Tribunal considered the assessee's subsequent statement, valuation reports, and the explanation for any earlier admission. Revenue's Contention: The Revenue argued that the Tribunal erred in law by ignoring the admission made by the assessee under Section 132(4) of the Income Tax Act, 1961, as it was not under coercion. The Revenue contended that the admission, allegedly ratified by the assessee from his father's statement, should be brought to tax, and the Tribunal's finding was vitiated by ignoring this admission.

Which sections of the Income-tax Act were involved?

Section 132(4),Section 158 BC,Section 158 BD

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1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR JUDGMENT Commissioner of Income Tax-II VS. Shri Ashok Kumar Soni. Jodhpur. D.B. INCOME TAX APPEAL NO.90/2001 against the order dated 31.5.2001 passed by Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur in ITA No.478/JDPR/99 for Assessment Year 1987-88 to 1997-98 Date of judgment : 28th July, 2006 PRESENT HON'BLE MR. JUSTICE RAJESH BALIA HON'BLE MR. JUSTICE GOPAL KRISHAN VYAS Mr. Sangeet Lodha for the petitioner. Mr. Rajendra Mehta for the respondent. ------- BY THE COURT:- (Per Hon'ble Mr. Rajesh Balia, J.) This appeal is directed against the order of the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur dated 31st May, 2001. At the time of admission, following two questions were framed as substantial questions of law arising for consideration in this 2 appeal:- (i) Whether the Tribunal was justified in ignoring the admission merely on the basis of later retraction in spite of its coming to the conclusion that any exercise of coercion or duress or threat by the search officials on the assessee or assessee's father, has not been established or proved in the instant

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