The Income Tax Appellate Tribunal (ITAT), Cuttack Bench upheld the addition on the basis of Confession made at the time of survey.
The assessee, Sanjay Sultania submitted that a survey action under section 133A was conducted at the business premises of the assessee. During the course of the survey, certain documents were found and the statement of assessee was recorded wherein, he has admitted to be the same as undisclosed income and advance tax of Rs.6,00,000/- was paid.
Later on during the course of assessment proceedings, the assessee has stated that undisclosed income was made under duress and coercion and claimed refund of the same while filing the return of income. The Assessing Officer did not accept the contention of the assessee and observed that the statement during the assessment proceedings that the confession of undisclosed income is under duress is an afterthought. He, therefore, treated Rs.19,61,740/- as undisclosed income and added the same to the total income of the assessee.
The assessee urged that he is a contractor and even it assumes that Rs.19,41,740/- is treated as undisclosed receipts, any business receipts would be treated as contract receipt. Therefore, the entire receipt cannot be added to the total income of the assessee and income embedded therefrom can be added only.
On the other hand the department contended that during the survey action statement of the assessee was recorded on oath. The assessee admitted to have received Rs.19,41,740/- from three entities in the name of Shreshta Nirman, prop. Concern of the assessee. The statement was given voluntarily and binds the assessee. Section 31 of Evidence Act binds the persons who make statements. The onus was upon the assessee to prove that statement was obtained under any duress or presser. No such averment was ever made by the assessee.
The coram of Chandra Mohan Garg held that in absence of any evidence of coercion or undue influence the statements recorded during the survey are admissible evidence.
The ITAT highlighted that the CBDT in the circular has directed the revenue authorities that if confessions not based upon credible evidence, are later retracted by the concerned assesses while filing the returns of income, such confessions do not serve any useful purpose.
“Statements recorded by the survey team on the basis of such receipts cannot be alleged as not based upon credible evidence. I may point out that in the present case, no retraction was filed by the assessee before the authorities below nor during the course of survey proceedings and also during the course of assessment proceedings by way of any plausible evidence or by any other mode. Therefore, the statements recorded by the survey team based on credible evidence without any retraction by the assessee has to be accepted and thus the findings recorded by the AO as well as ld CIT(A) deserves to be upheld being sustainable and based on reasonable basis and evidence,” the ITAT said.
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