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Brij Kishore Kochar Vs ACIT (ITAT Delhi)
ITAT Delhi held that mere confession of accused cannot be a ground for conviction since the same is not supported by credible evidence on records. Accordingly, addition under section 69 of the Income Tax Act deleted.
Facts- A search action u/s 132 was conducted in the case of one Aerens Group on 17.08.2011. In response to notice u/s 153A of the Act, the assessee filed return of income declaring income of Rs. 26,69,140/-. An Hon’ble Co-ordinate Bench of this Tribunal, vide its order in ITA No.-1235 dated 12.05.2016, restored the matter to the file of AO for assessment denovo after giving due opportunity of being heard to the assessee. Pertinently, AO had passed order U/s 144 of the Act, and which was confirmed by First Appellate Authority. Vide his second order dated 18.12.2018, which is subject matter of the present appeal, AO made an addition of Rs. 1,33,37,120/- U/s 69 of the Act. The action of the AO was confirmed by the Ld. CIT(A), which is being contested by the assessee in the present appeal.
Conclusion- Held that it is an undisputed fact of the case that the addition has been made in respect of a document seized during search from the premises of Aerens Groups and not of the assessee. It is a settled principle of law enunciated by Hon’ble Apex Court that mere confession of accused cannot be a ground for conviction unless, the same is supported by credible evidence on records. Accordingly, and respectful compliance to the decision of Hon’ble Jurisdiction High Court in the case of Subhash Khattar, ITA 60/2017 dated 25.07.2017 and of Pilot Industries Ltd. 457 ITR 437 (supra), we are of the considered view, that no addition is required to be made in the present case. The order of lower authority is therefore, set aside and the Ld. AO is directed to delete the impugned addition of Rs. 1,33,37,120/-.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by Assessee is directed against the order of Commissioner of Income Tax (Appeals)-27, New Delhi [for short hereinafter referred to as the “(Ld. CIT(A)”] dated 18.12.2018 for Assessment Year 2006-07.
2. The first issue arising from the appeal of the assessee is regarding an addition of Rs. 1,33,37,120/- made by the AO u/s 69 of the Act. The Ld. Counsel for the assessee informed that this is the second round of appellate proceedings before this Tribunal. The Ld. Counsel explained following brief factual matrix of the case. A search action u/s 132 was conducted in the case of one Aerens Group on 17.08.2011. In response to notice u/s 153A of the Act, the assessee filed return of income declaring income of Rs. 26,69,140/-. An Hon’ble Co-ordinate Bench of this Tribunal, vide its order in ITA No.-1235 dated 12.05.2016, restored the matter to the file of the Ld. AO for assessment denovo after giving due opportunity of being heard to the assessee. Pertinently, the Ld. AO had passed order U/s 144 of the Act, and which was confirmed by the Ld. First Appellate Authority. Vide his second order dated 18.12.2018, which is subject matter of the present appeal, the Ld. AO made an addition of Rs. 1,33,37,120/- U/s 69 of the Act. The action of the AO was confirmed by the Ld. CIT(A), which is being contested by the assessee in the present appeal.
3. The Ld. Counsel for the assessee submitted that the addition made by the Ld. AO is, inter alia, resting upon statement of assessee recorded U/s 132 of the Act, on 10.02.2012, 04.04.2012, as well as documents seized from the premises of Aerens Groups during search proceedings in their case. The Ld. Counsel submitted that in his statement dated 10.02.2012, the assessee had admitted making cash investment of Rs. 1,77,50,000/- over a period of years, however, the said statement, reportedly recorded in duress, was retracted the very next day on 11.02.2012. The Ld. Counsel informed that the bank lockers etc. were opened and consequently another statement was recorded on 04.04.2012 forcing the assessee, under coercive influence with threats and intimidation, to reaffirm the impugned admission of making cash investment of Rs. 1,77,50,000/-. It is the case of the assessee that the said statement was also no given with any free will.
4. The Ld. Counsel argued that no case for any addition is made out and that the decision of Ld. First Appellate Authority deserves to be over- ruled. It is the case of the assessee that the statement relied upon by the Department has no evidentiary value firstly because it was retracted the very next day and secondly that an element of coercion, threat, undue influence were attached to the same. The assessee was placed under extreme mental pressure to make the said statement. The Ld. Counsel has placed reliance upon CBDT instruction number 286/2/2003 IT(INV) dated 10.03.2003 prohibiting forced confessions not supported by credible evidence. It was further argued that notwithstanding the fact that the assessee had retracted his statement in respect of cash payments of Rs. 1,77,50,000/- for making unaccounted investment in properties, the same pertained to a period of five to six years whereas the Ld. AO proceeded to make the addition in current year itself. The Ld. Counsel argued that it is trite law that addition u/s 153A of the Act, can only be made with reference to any incriminating document found from the premise of the assessee during a search. The Ld. Counsel submitted that no incriminating document was found from assessee premise and that the addition of Rs. 1.33 crores approximately was squarely resting upon documents seized, from the premises of Aerens Group, comprising an “Excel Sheet” and “New Sales File XLS”.
5. Placing reliance upon the judicial ratios on the subject, the Ld. Counsel drew strength from the decisions of Hon’ble Jurisdiction High Court in the case of Subhash Khattar, ITA 60/2017 dated 25.07.2017 and of Pilot Industries Ltd. 457 ITR 437. In the case of Pilot Industries (supra), Hon’ble Delhi High Court has held that addition U/s 153A can only be made in respect of documents seized during course of search proceedings. Hon’ble High Court has held that decision of Kabul Chawla case is relevant considering that no stay has been granted by the Hon’ble Apex Court. The Ld. Counsel for the assessee further relied upon the decision of Hon’ble Delhi High Court in the case of Subhash Khattar, ITA 60/2017 dated 25.07.2017. It was contended that the impugned decision is squarely covered with the present case. In the case of Subhash Khattar (supra), Revenue had made additions on the basis of document seized during search in Aerens Groups. Hon’ble High Court held that notice U/s 153A was misconceived as no incriminating material was found during the search of assessee premise. The Ld. DR relied upon the decision of lower authorities.
6. We have heard rival submissions in the light of the material available on record. It is an undisputed fact of the case that the addition has been made in respect of a document seized during search from the premises of Aerens Groups and not of the assessee. It is a settled principle of law enunciated by Hon’ble Apex Court that mere confession of accused cannot be a ground for conviction unless, the same is supported by credible evidence on records. Accordingly, and respectful compliance to the decision of Hon’ble Jurisdiction High Court in the case of Subhash Khattar, ITA 60/2017 dated 25.07.2017 and of Pilot Industries Ltd. 457 ITR 437 (supra), we are of the considered view, that no addition is required to be made in the present case. The order of lower authority is therefore, set aside and the Ld. AO is directed to delete the impugned addition of Rs. 1,33,37,120/-.
7. In the result, all the grounds of appeal raised by the assessee are allowed.
Order pronounced in the Open Court on 12.03.2025
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