THE COMMISSIONER OF INCOME TAX-1, NASHIK vs. CHANDRAKANT K KELE (INDL)

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TA/51/2011HC BombayHCBM03021906201120 January 2014Author: HON'BLE SHRI JUSTICE S C DHARMADHIKARI,HON'BLE SHRI JUSTICE RAVINDRA V. GHUGE3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that there was no substantial question of law arising for determination in the appeal. It reasoned that while the Appellant argued that the retracted statement under Section 132(4) should be binding, the Income Tax Appellate Tribunal had, in its detailed order, considered all aspects of the matter. The Tribunal had scanned and appreciated the entire material, including instances of plots of land received after the dissolution of a firm and individual heads of income. The Tribunal accepted the assessee's version by applying correct legal principles. The Court distinguished the reliance on Nathoo Lal V. Durga Prasad, noting that the Supreme Court's decision was based on a clear admission in the witness box under Section 18 of the Evidence Act, which is binding and undisputed. In contrast, the admission in the present case was made through a counsel during proceedings and was later retracted. The Court found that the Revenue had offered its counter to the assessee's explanation, and the entire material was considered, meaning no perversity was committed by the Tribunal. Therefore, the appeal was dismissed.

What were the facts?

The appeal was filed by the Commissioner of Income Tax-I (Appellant) against Shri Chandrakant K. Kele (Respondent) concerning assessment year(s) not specified. The challenge was to the order passed by the Income Tax Appellate Tribunal, Pune Bench 'B', dated 28/02/2011, which upheld the order of the Commissioner of Income Tax (Appeals) Nashik dated 23/10/2002. The core of the dispute stemmed from a statement made by the assessee under Section 132(4) of the Income Tax Act, 1961, on 04/02/2000, wherein the assessee disclosed an income of Rs. 1 Crore in the presence of his counsel. Subsequently, the assessee retracted this statement. The Appellant argued that this retracted statement should be binding on the assessee.

What were the issues?

1. Whether a statement made by the assessee under Section 132(4) of the Income Tax Act, 1961, during a search and seizure operation, which was later retracted, is binding on the assessee, thereby constituting a substantial question of law for determination in the appeal? (Question of law) Assessee's Contention: Not recorded. Revenue's Contention: The statement made by the assessee under Section 132(4) on 04/02/2000, disclosing an income of Rs. 1 Crore in the presence of counsel, is binding on the assessee, even if subsequently retracted. The Appellant relied on the principle that a clear admission binds the party throughout, citing the Supreme Court judgment in Nathoo Lal V. Durga Prasad AIR 1954 S.C. 355, particularly paragraph 14 concerning admissions under Section 18 of the Evidence Act, 1872.

Which sections of the Income-tax Act were involved?

Section 132(4),Section 18

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
(1)                                                  TA. 51­2011                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD TAX APPEAL NO. 51 OF 2011  The Commissioner of Income Tax­I, Kendriya Rajaswa Bhavan, Gadkari Chowk, Old Agra Road, Nashik                  Appellant      Versus Shri Chandrakant K. Kele (Indl) Chandravel, Madhuban Colony, Wadi Borkar Road, Dhule            Respondent ..... Mr. D.V. Soman, Advocate for the Appellant. None present for the Respondent. .....  CORAM : S.C. DHARMADHIKARI AND RAVINDRA V. GHUGE, JJ.  DATED : 20TH JANUARY, 2014

ORAL ORDER:

1.

Heard Mr. Soman appearing on behalf of the appellant.   With his assistance we have perused the orders passed by Commissioner of Income Tax (Appeals) Nashik  dated  23/10/2002 and that of the Income Tax Appellate Tribunal, Pune Bench 'B', Pune.

2.

Mr.   Soman   would   urge   that   there   is   a substantial question of law arising for determination and consideration in this Appeal.  That is based on a statement which has been made by the assessee during the course of the proceeding.   It has been clearly set   out   by   the   authorities   that   in   the   statement under   section   132(4)   of   the   Income   Tax   Act,   1961, recorded   on   4/2/2000,   the   assessee   had   stated   that

(2)                                                  TA. 51­2011

the income disclosed is Rs.1 Crore.  That was in the presence of the Counsel.   Now that statement having been retracted does not mean that the assessee must gain   an   advantage.   That   declaration,   therefore,

therefore binds him throughout.

3.

It is not possible to accept this contention and for more than one reason.

4.

Assuming that the statement was made in the presence of the counsel and so recorded was retracted later on what the Tribunal has done in this case is that assuming that  the statement is not binding or not, on scanning and appreciating the entire material the   Judicial   and   Accountant   Member   in   the   detailed order   dated   28/2/2011   have   considered   all   aspects. They have looked into the instances of not only the plots   of   land   which   have   been   received   after dissolution of the firm but they also have gone into individual   heads   of   the   income.   The   version   of Assessee   was   accepted   by   applying   correct   legal principles.

5.

In the circumstances, and after appreciating the factual material placed on record, the findings of   facts   are   rendered   by   the   appellate   Tribunal. We do not see how that could be said to be vitiated in   law.   In   these   circumstances,   there   is   no substantial question of law arising for determination in this Appeal.

(3)                                                  TA. 51­2011

6.

Reliance   placed   on   the   judgment   of   the Hon'ble Supreme Court in  Nathoo Lal V. Durga Prasad AIR 1954 S.C. 355 is mis­placed.  Paragraph no.14 of the   judgment   refers   to   an   admission.     That   is   a admission under section 18 of the Evidence Act, 1872. What the Hon'ble Supreme Court has relied upon is a clear   admission   in   the   witness   box.   That   admission binds   the   party   throughout.     That   admission   is binding and in terms of the legal provision, is un­ disputed.     However,   application   of   the   principle would depend on the facts and circumstances of each case.

7.

The   admission   given   before   us   was   given through a counsel and in his presence.  That was made during   the   course   of   the   proceedings   but   later   on retracted.   To   the   explanation   of   the   Assessee   the Revenue has offered its counter.  The entire material in that behalf has been considered and therefore it is   not   as   if   any   perversity   is   committed   by   the appellate Tribunal in rendering the conclusions.

8.

In such circumstances, there is no merit in this Appeal and it is dismissed.  No costs. [RAVINDRA V. GHUGE]       [S.C. DHARMADHIKARI] JUDGE JUDGE arp/TA­51­2011

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