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2024 Supreme(Online)(ITAT) 1207
INCOME TAX APPELLATE TRIBUNAL (BANGALORE BENCH)
Padmavathy S, ACM, Shri Prakash Chand Yadav, JM
Late Kari Thimmegowda Rajashekhara L/R by daughter Bangalore Rajashekhara Megha – Appellant
Versus
The Deputy Commissioner of Income-tax, Central Cir.1(1) Bengaluru – Respondent
ITA No.1489/Bang/2024 | ITA No.1490/Bang/2024 | ITA No.1491/Bang/2024 | ITA No.1492/Bang/2024 | ITA No.1493/Bang/2024 | ITA No.1494/Bang/2024
For the Appellants/Petitioners: Sri.V.Srinivasan
For the Respondents: Ms.Neha Sahay, JCIT-DR
Admissions made under pressure cannot validate the assessment of income without corroborating evidence, shifting the burden of proof to the revenue.
Headnote:(A) Income Tax Act, 1961 - Section 153A - Search and seizure action - Assessee made a surrender but later did not report complete income. The Assessing Officer (AO) disallowed expenses based on uncorroborated statements. The principle established indicates that admission does not render an unreportable amount taxable absent supportive evidence. (Paras 5, 10, 12)
(B) Assessees cannot be compelled to substantiate expenses with no corroborative materials post-search, solidifying the burden of proof on Revenue which must be demonstrable via tangible evidence rather than computational estimates. (Paras 12)
Facts of the case:
Multiple appeals arose from a search completed in 2017, leading to the disallowance of certain expenses and controversies over offered income by the taxpayer.
Findings of Court:
The Tribunal found that the AO’s findings lacked corroborative support from evidence obtained during the search, maintaining that the taxpayer was not liable for unreported amounts intended in coercive admissions.
Result: All additions were deleted, and taxpayer's appeals were consequently accepted.
| Table of Content |
|---|
| 1. search led to filings for multiple assessment years. (Para 2 , 3 , 4) |
| 2. disallowance of expenses based on inadequate evidence. (Para 5 , 6 , 10) |
| 3. court discusses the inadequacy of admissions without support. (Para 7 , 9) |
| 4. court emphasizes on corroborative evidence for tax assessments. (Para 12) |
| 5. final decision of the appeal based on findings. (Para 13) |
ORDER
Per Bench :
This is a bunch of six appeals arising out of the common order of the learned Commissioner of Income-tax (Appeals) dated 19th June, 2024 and relates to assessment years 2012-2013 to 2017-2018 having din numbers as mentioned herein below.
| Asst.Year | ITA No. | DIN & Date |
|---|---|---|
| 2012-2013 | 1489/Bang/2024 | ITBA/APL/M/250/2024-25/1065822522(1) |
| 2013-2014 | 1490/Bang/2024 | ITBA/APL/M/250/2024-25/1065823029(1) |
| 2014-2015 | 1491/Bang/2024 | ITBA/APL/M/250/2024-25/1065823355(1) |
| 2015-2016 | 1492/Bang/2024 | ITBA/APL/M/250/2024-25/1065823865(1) |
| 2016-2017 | 1493/Bang/2024 | ITBA/APL/M/250/2024-25/1065824289(1) |
| 2017-2018 | 1494/Bang/2024 | ITBA/APL/M/250/2024-25/1065824703(1) |
2.Since the facts and issues are common for all the years, we are adjudicating all these appeals by way of this consolidated order, taking assessment year 2012-2013 as a lead year.
3. The undisputed facts leading to the filing of the present appeals are like this. A search and seizure action was carried out on 19th July, 2017 in the case of the assessee and its business concerns. Thereafter, notices u/s.153A of the Income-tax Act, 1961, were issued to the assessee for filing the returns of Income covered by the provisions of section 153A of the Act. Accordingly, the assessee filed returns of income for all the years and thereafter the impugned assessments were framed.
4. Here it is pertinent to mention that at the time of search, the assessee has made a surrender of Rs.13 crores for all the years covered under search action.However, at the time of filing of the returns, the assessee has not obliged his surrender made at the time of search and has filed the returns of income by incorporating the additional income as mentioned herein below -
| Assessment Year | Offered during search | Offered in return u/s.153 |
|---|---|---|
| 2012-2013 | 1,00,00,000 | 50,00,000 |
| 2013-2014 | 2,00,00,000 | 50,00,000 |
| 2014-2015 | 2,00,00,000 | 50,00,000 |
| 2015-2016 | 2,50,00,000 | 50,00,000 |
| 2016-2017 | 2,50,00,000 | 50,00,000 |
| 2017-2018 | 3,00,00,000 | 50,00,000 |
5. During the course of assessment proceedings, the Assessing Officer(AO) observed that the assessee has incurred certain expenses pertaining to its transport business under the head “route expenses”. As per AO, during the course of search, the statement of the assessee was recorded by the department, in which statement it has alleged to have been conceded by the assessee that certain expenses were not supported by proper vouchers. Relying upon the statement of the assessee, the A.O. disallowed these “route expenses”, ignoring the explanation of the assessee that these expenses were duly recorded in the books of account and were properly supported by vouchers.
6. Aggrieved with the order of the A.O, the assessee filed appeal before the CIT(A) and assailed the order of the A.O. Before CIT(A) the assessee interalia contended that no material during the course of search, corroborating the surrender made, has been found on the basis of which it can be said that the expenses incurred by assessee were bogus. The assessee also asked relief for the additional amount offered by him in the return of Income, on the ground that since no material has been unearthed during search, no addition is sustainable for the years which were not pending on the date of search. The Ld CIT(A) discarded the submissions of the assessee vis- à-vis relief sought in respect of additional income offered by observing that though there was no material for the additions made yet there was some other material which has given jurisdiction to the AO to examine the matters a fresh. It is pertinent to observe here that the Ld AR of the assessee has also accepted that there was some material relatable to all years.
7.
