A retracted statement cannot solely justify undisclosed income quantification without corroborating evidence, as substantiated by prior judgments and principles of tax law.

JUDGMENT:

(Per the Hon’ble Sri Justice Suddala Chalapathi Rao)

This appeal is filed aggrieved by the order of the Income Tax Appellate Tribunal, Hyderabad, ‘B’ Bench, Hyderabad (for short ‘the ITAT’) in IT(SS)A.No.79/HYD/2006, for the block period 1992-93 to 2000-01(up to 17.08.2000).

2. Heard Sri Y.Ratnakar, learned counsel for the appellant/assessee, Ms B.Sapna Reddy, learned Senior Standing Counsel for Income Tax Department for respondent/Revenue, and perused the record.

3. The brief facts of the case are that, the appellant/assessee is a property developer. On 17.08.2000, the respondent-authorities have conducted a search at the office premises of the appellant/assessee and also at the residential premises of its Managing Director and other directors. During search, no incriminating material relating to tax evasion was found, but, however, the statement of the Managing Director of the appellant/assessee was recorded under Section 132 (4) of the Income Tax Act, 1961 (for short ‘the Act’), who alleged to have disclosed an amount of Rs.1,50,00,000/- as undisclosed income in the return filed by the appellant/assessee for the disputed period, and the respondents-authorities basing on the same have quantified the income of the assessee for the block assessing period for 1992-93 to 2000- 01(up to 17.08.2000), as hereunder:

4. Aggrieved by the same, the appellant/assessee filed appeal before the Commissioner of Income Tax Appeals (for short ‘CIT(A)’), and the same was dismissed. Aggrieved by the same, the appellant filed second appeal before the ITAT, and that the learned ITAT also dismissed the said appeal. Aggrieved by the said order, the appellant/assessee has filed the present appeal before this Court.

5. The appeal was admitted on 05.07.2010 for hearing on the following substantial questions of law as raised by the appellant/assessee in the grounds of appeal:

“1. Whether on the facts and in the circumstances of the case, the transaction and income thereon which were processed in a regular assessment made u/s.143(1)/143(3) of the IT Act can again be the subject matter of block assessment u/s.158BC of the IT Act.

2. Whether on the facts and in the circumstances of the case, it was proper on the part of the Assessing Officer to consider the gross receipts of in the block assessment when the said amount was already considered during Rs.10,59,93,593 for the purpose of once again estimating the income thereon Whether on the facts and in the circumstances of the case, it was proper the course of regular assessment 3 Whether on the facts and in the circumstances of the case, the appellant is entitled to the deduction of Rs.78,23,552 being the income already Whether on the facts and in the circumstances of the case, the appellant computed in the regular assessment from the block assessment income and not merely Rs.59,50,905 which is a part of the income assessed in the regular assessments.

4. Whether on the facts and in the circumstances of the case, is the appellant liable to tax on receipt of Rs.2,53,48,067 when the said amount was processed for quantification of income up to the assessment year 1997-98 under the Mar Varad Samedhan Scheme. VDIS

5. Whether on the facts and in the circumstances of the case, it is open to the Income-tax Appellate Tribunal which is a fact finding authority to ignore the submissions advanced before it while dispose of the appeal.

6. Whether on the facts and in the circumstances of the case, the finding the Income-tax Appellate Tribunal that the statement of the appellant agreeing to disclose undisclosed income of Rs.1.5 Crores can be said to be voluntary and relevant when th