Statements obtained under duress during tax surveys lack conclusive evidentiary value if not corroborated by clear evidence.

ORDER

PER: SANDEEP GOSAIN, JM

This appeal filed by the Revenue is directed against order of the ld. CIT(A), Udaipur-2 dated 29-01-2024 for the assessment year 2017-18 raising therein following grounds of appeal.

‘’1. Whether on facts and in circumstances of the case the CIT (A) is justified in not appreciating the incriminating documents found and impounded during the survey having all the incriminating information of incriminating transactions recorded therein and supported by the explanation and acceptance of Shri Naresh Jain in his statement recorded on oath u/s 131 during survey, as to be unaccounted transactions and those were the basis taken for making additions of Rs.72,00,000/- deposited in cash in SBN in one instance.

2. Whether on facts and in circumstances of the case the CIT (A) is justified in deleting the addition of Rs 35,550/- appreciating the reply of the assessee which was only an after thought arrangement and not appreciating the overall facts and record of the case which should be taken all together ab initio from survey.

2.1 It may be noted that the present appeal is preferred by the Revenue against the order of CIT(A) dt. 29.01.2024. Since the ld. CIT(A) has already stated the relevant facts hence, the same are not being repeated here. During the course of hearing the parties were directed to file detailed written submissions in support of their oral arguments, if so desired. However, the ld.DR supported the order of the AO. To this effect, the ld. AR of the assessee has filed the following written submissions countering the grounds of appeal raised by the Revenue.

‘’ Submission:

1. At the outset we strongly place reliance upon our detailed submissions made before AO as also before the CIT(A).

2. We also place strong reliance upon the order of the CIT(A) to the extent (Pg.36, Para. 5.6) his findings and observations are given in the favour of the assessee.

3. In the Grounds of Appeal No.1 taken by the Revenue, their allegation that:

“Whether on facts and circumstances of the CIT(A) is justified in not appreciating the incriminating documents found and impounded during the survey having all the incriminating information of incriminating transaction recorded therein and supported by the explanation and acceptance of Shri Naresh Jain, in his statement recorded on oath u/s 131 during survey, as to be unaccounted transactions and those were the basis taken for making additions of Rs. 72,00,000/- deposited in case in SBN in one instance.”

In this regard it is submitted that firstly, self-contradictory and apart from being based on misconception of law and facts. It was nothing incriminating found during survey neither any incriminating document nor any incriminating information, as was rightly held by the CIT(A). Hence, we respectfully submit that the Revenue's grounds lack merit for the following reasons:

4. AO cannot blindly rely upon a statement alone:

4.1 During survey the physical cash in hand on 02.02.2017 was found at Rs. 2,08,000/- whereas as per tally printout it was alleged that the cash in hand as per books of accounts of M/s Quick Advertising Co was Rs. 90,67,052.91. Also an incriminating document was seized and inventoried by Party no -22 as Annexure A, Exhibit 8, Pg No. 1 to 50 (APB 54-104). Further during survey action a sum of Rs. 72,00,000/- was deposited in bank account during demonetization i.e. during 09-11-2016 to 30-12-2016. Shri Naresh Kumar vide reply to Q no. 9 explained that the expenses of M/s Quick Advertising co had not yet been posted, and when he was asked to produce bills, vouches etc for un-posted expenditure, he submitted that no such documents could be made available as no such records were maintained. The ld. AO at pg. 3 alleged that :

“Vide reply to Q no. 30 he (Shri Naresh Kumar) admitted that Rs. 72,00,000/- deposited in bank account is out of cash in hand of Rs. 90.67 lacs and was earned from un-disclosed sources and offered the same for taxation.”

Our submission in this regard are foll