DCIT, CC-1, NOIDA vs. AMIT MODI, DELHI

In view of search operation, the group cases were centralized to Central Circle, Noida. The jurisdiction order u/s 127 of the Income Tax Act, 1961, in this case, was passed by the Ld. Pr. Commissioner of Income Tax, Central, Kanpur communicated vide F. No. Pr. CIT- (C)/KNP/Decentralization/2017-18/1260 dated: 10/08/2018.

Consequently, for the purpose of assessment, a notice u/s 142(1) of the Act was issued dated 16/08/2018 & duly served upon the assessee. In response to the notice, the assessee has e-filed return of income on 26/11/2018 declaring total income of Rs. 2,07,74,494/-. Subsequently, notice u/s 143(2) of the Act was issued on 25/09/2018 and duly served upon the assessee. A notice u/s 142(1) of the Act along with detailed questionnaire was issued dated 14/09/2018 and the date of compliance was fixed on 28/09/2018. Again, a notice u/s 142(1) along with questionnaire was issued on 08/10/2018 and the assessee was asked to furnish the details/information ask called for.

In response to the said notices, Amit Bansal CA and Authorized Representative (AR) of the assessee appeared from time to time and during the course of hearing filed detailed submissions.

Appellant/assessee preferred appeal before Learned CIT(A) which was partly allowed and addition of Rs.15,16,000 instead of 13,50,000/- confirmed.

Being aggrieved appellant/assessee has challenged the confirmation of Rs.13,50,000/-. The Department of Revenue through separate cross appeal has challenged deletion of Rs.4,55,00,000/-, Rs.15,90,00,000/- and 1,50,000/-.

Learned Authorized Representative for assessee submitted that Ld. CIT(A) erred in giving partial relief of Rs.1,66,000/- and confirming the addition of Rs.13,50,000/- made by the AO on account of cash found during the search. The Hon’ble Supreme Court of India in case of Pullangade Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 (SC) has held as under: “An admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the person who made the admission to show that it is incorrect.”

Learned Department Representative of Department of Revenue submitted that Learned CIT(A) erred in deleting the addition of Rs. 4,55,00,000/- made by A.O. by relying on the statement of the assessee, recorded on oath during search and page no. 2 & 3 of /Del/2021 & Ors. annexure A-1 seized during search being the "cash to be received back against purchase bill to be discussed and reconcile with management", in view of the ratio of decision in case of B. Kishore Kumar Vs. Deputy Commissioner of Income Tax, Central Circle- IV(1), Chennai (2014) 52 taxmann.com 449 (Madras), Sterling Machine Tools V. CIT 122 ITR 926 and Bhagirath Aggarwal V. CIT 122 ITR 926. Learned CIT(A) erred in deleting the addition of Rs. 4,55,00,000/- made by A.O. Relying on page no. 2 & 3 of annexure A-1 seized during search and part of unaccounted cash of Rs. 1,45,00,000/- has been received by the assessee and deposited in its bank account. Learned CIT(A) also erred in holding that the retraction letter filed by the assessee after 110 days of search in view of the ratio of decision in the case of Bannalal Jat Constructions (P.) Ltd. v. ACIT (2019) 106 taxmann.com127/264 taxman 6 (Raj) (HC). Learned CIT(A) erred in holding that the page no. 1, 4 & 6 of annexure A-1 seized during search alongwith the retraction letter has not been examined by the AO whereas in page no. 35 to 40 of the assessment order for AY 2017-18, the same has been examined in details and natural justice has been done in the case. Learned CIT(A) erred in holding that unaccounted cash of Rs. 1,50,000/- related to the assessee and his spouse whereas assessee was not able to produce any documentary evidence in support of his claim. Learned CIT(A) erred in holding that the protective addition of Rs. 15,90,00,000/- in the case of the assessee is not real income of the assessee whereas assessee, being the director has given statement on behalf of the other directors and companies, /Del/2021 & Ors. wherein the same has been added on substantive basis and retraction have been filed by all the directors and companies including the assessee.

From examination of record in light of aforesaid rival contention, it is crystal clear that on 09/11/2016 from premises of assessee cash of Rs.15,16,000/- was recovered during the search proceedings. The appellant/assessee submitted that the cash found was belong to entire family and not to the assessee alone. Assessee and his spouse are regular income tax payer and assessee falls under the highest tax slab gross total income for Asst. Year 2017-18 ( of assessee was Rs.62.74 lacs and of spouse of assessee was Rs.11.65 lacs. The spouse of assessee earned income of Rs.3.60 lac of rental income and 5.61 Lac of other income in Cash during the year under consideration. As per general practice, the assessee family were having habit of withdrawing cash and keep the same in physically for liquidity purpose. Considering the above facts, the Learned CIT(A) allowed Rs.50,000/- in hands of assessee and Rs.1,16,000/- in hands of spouse which are not just, fair and reasonable. The Learned CIT(A) ought to have taken the entire amounts as explained. As such the addition of Rs.15,16,000/- deserves to be deleted.

Learned AO on basis of statement on oath u/s 132(4) of the Act explaining the entries made in seized document Annexure-A(1) referred to 6,00,00,000/- and deposited of Rs.1.45 lack in bank account No.1010010060000007 of Ratnakar Bank Ltd claiming to

Learned CIT(A) relied on submissions of assessee that surrender of Rs.32,00,00,000/- in hands Director of companies made by the assessee regarding seven pages of diary Annexure-1 was due to wrong impression and under coercion, assessee had made surrender on 10/11/2016 at 11.30 A.M. The assessee was not given enough time to consulting Sh. Sandeep Kumar Pandit (only five minutes time was allowed for the same) and statement of Sandeep Pandit who had written pages of Annexure-1 was not recorded. Entries made in seven pages of Annexure-1 were explained as mere projections and not the income. The detail in Annexure-A (1) were sought to be explained.

From perusal of record it is evident that Learned CIT(A) in para 6.12 had analyzed pages of spiral note book Annexure-A1 and in para 6.13 to 6.17 analyzed that the Explanation offered by the assessee was allowable. The act of assessee from his statement during search based on evidence found during the search was justified and upheld. Therefore, the arguments of Learned Authorized Representative for Department being devoid of merit are untenable and deserve dismissal. The grounds of appeal of department are dismissed.

As the facts and circumstances of the above mentioned appeal are admittedly mutatis mutandis similar to those discussed and disposed of in & 1352/Del/2021 hereinabove, we hold accordingly and allow the appeals of the assessee and dismissed the appeals of the department.

Learned Department Representative of Department of Revenue submitted that the Learned CIT(A) while deleting the addition of Rs. 6,00,00,000/- made by A.O. by relying on the statement of the assessee, recorded on oath during search and page no. 2 & 3 of annexure A-1 seized during search being the "cash to be received back against purchase bill to be discussed and reconcile with management", in view of the ratio of decision in case of B. Kishore Kumar Vs. Deputy Commissioner of Income Tax, Central Circle- IV(1), Chennai (2014) 52 taxmann.com 449 (Madras), Sterling Machine Tools V. CIT 122 ITR 926 and Bhagirath Aggarwal V. CIT 122 ITR 926. Learned CIT(A) also erred in holding that the /Del/2021 & Ors. retraction letter filed by the assessee after 110 days of search in view of the ratio of decision in the case of Bannalal Jat Constructions (P.) Ltd. vs. ACIT (2019) 106 taxmann.com127/264 taxman 6 (Raj) (HC). Learned CIT(A) erred in holding that the page no. 1, 4 & 6 of annexure A-1 seized during search alongwith the retraction letter has not been examined by the AO whereas in page no. 35 to 40 of the assessment order for AY 2017-18 in the of Amit Modi, one of the director who has accepted the unaccounted income in this statement recorded on oath during search. The same has been examined in details and natural justice has been done in the case.

From perusal of record it is evident that Learned CIT(A) in para 6.12 had analyzed pages of spiral note book Annexure-A1 and in para 6.13 to 6.17 analyzed that the Explanation offered by the assessee was allowable. The act of assessee from his statement during search based on evidence found during the search was justified and upheld. Therefore, the arguments of Learned Authorized Representative for Department being devoid of merit are untenable and deserve dismissal. The grounds of appeal of department are dismissed.

In the result, the appeal of Department of Revenue i.e., is dismissed.