IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE SHRI SAKTIJIT DEY(JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA No. 5360/MUM/2009 Assessment Year: 2006-07 ACIT, Tax 19|(3) Vs. Shri Sunil Kumar O Kochhar Mumbai 6, Geleki ONGC Building Opp. Lilawati Hospital, Bandra Kurla Reclamation, Bandra (West). Mumbai-400050 PAN No. AAOPK8359B ITA No. 5261/MUM/2009 Assessment Year: 2006-07 ITO 19(3)(2) Vs. Smt. Renu S. Kochhar R.No. 306, 3rd Floor 6, Geleki ONGC Building Piramal Chambers Opp. Lilawati Hospital, Mumbai- 400012 Bandra Kurla Reclamation, Bandra (West). Mumbai-400050 PAN No. AAPPK5797D (Appellant) (Respondent) Appellant by: Smt. Amrita Singh Respondent by: Shri. M. Subramaniam Date of Hearing: 10/08/2016 Date of pronouncement : 23/09/2016 ORDER PER N.K. PRADHAN, A.M captioned appeals have been filed by Revenue. relevant assessment year is 2006-07. appeals are directed against order of CIT(A)-XIX, Mumbai and these arise out of assessment completed under section 143(3) of Income ITA No. 5360/MUM/2009 & ITA No.5261/Mum/2009 2 Tax Act, 1961 (hereinafter Act ). In this batch of appeals, controversy raised being similar, they were heard analogously and are disposed of by common order. 2. first two grounds raised by Revenue in this appeal are that ld. CIT(A) erred in deleting addition of Rs.1,00,10,000/- made in case of Mr. Sunil Kumar O Kochhar and Rs.85,50,000/- in case of Mrs. Renu S Kochhar. 3. Briefly stated that facts are that survey action under section 133A of Act was carried out by Department at business premises of assessees on 23/09/2005. statement was recorded under section 133A on 23/09/2005 wherein disclosure of Rs. 1,00,10,000/- was made by Mr. Kochhar and Rs. 85,50,000/- by Mrs. Kochaar. Register Sunlife Account Book in case of Mr. Kochhar and Sunny Deluxe Accounts Book in case of Mrs. Kochhar were impounded during course of survey. Mr. Kochhar is engaged in business of recruitment of man power particularly to Gulf countries in name & style of Ambe Consultancy services, proprietary concern in which he is holding license issued by Ministry of Govt. of India . nature of business of Mrs. Kochhar is rendering services for tours and travels. AO during assessment proceedings asked assessees to explain as to why disclosure made during course of survey on 23/09/2005 should not be added back to their income. assesees submitted that disclosure was not voluntary but forced one which has been immediately retracted. 3.1 Mr. Kochhar referred to his affidavit dt. 27/09/2005 together with letter of same date. He also relied on affidavits of his three employees namely (i) Bhaskar P. Pawar, (ii) Anand M. Raorane, and (iii) Mr. Vikas Bapat, all filed before AO. It was also stated by him that entries from Sl. No. 1- 1400/- on page 1 to 43 showing names, pass port numbers, categories and amount in register were got written and entered in register by survey officers and same are therefore fabricated and false ones. AO however, relied on statement recorded on 23/09/2005 under section 133A. He came to finding that assessee had given declaration of additional income of Rs. 1,00,10,000/- o f income and cheques for paying tax on said income have also been given and therefore, made addition of above amount to total income of Mr. Kochhar during year under consideration. ITA No. 5360/MUM/2009 & ITA No.5261/Mum/2009 3 3.2 Mrs. Kochhar filed affidavit before AO on 26/09/2005 making retraction of disclosed income. She also filed another affidavit on 29/11/2008 stating that disclosure from her was forced one based on fabricated entries. AO came to finding that Mrs. Kochhar had offered Rs.85,50,000/- declared in course of survey and therefore, he made addition of above amount to total income of assessee during year under consideration. 3.3 While making above additions, AO has referred to decisions stating that statement given by assessee at time of survey / search action is binding on him and any retraction made by him has no meaning at all. In this regard he relied on decision in case of Hiralal Magan Lal and Co. vs. DCIT 96 ITD 113 (Mum); Ramesh Chandra and Co. vs. CIT 168 ITR 375(Bom), Hotel Kiran vs. ACIT 82 ITD 453 Pune; Video Master vs. JCIT 83 ITD 102 (Bom); Ramesh T. Salve vs. ACIT 75 ITD 75 (Mum); Smt. Basanti Sethi vs. ACIT ; Ram Jas Nawal vs. CIT 183 CTR (Raj) 144; Dr. S.C. Gupta vs. CIT 248 ITR 782 (All). 4. ld. CIT(A) noted following submission made by assessee before him. (i) survey u/s 133A was conducted in illegal and irregular manner. survey party resorted to brazen abuse of powers and acted in high-handed manner. (ii) survey party fabricated evidence in Sunlife Account Book and Sunny Deluxe Account by making bogus entries. statement recorded u/s 133A was forced one obtained under duress. (iii) statement recorded u/s 133A has no evidentiary value. (iv) statement recorded u/s 133A is uncorroborated, not credible and so cannot be treated as evidence. Moreover, appellant has filed two affidavits of retraction, which remain uncontroverted. Ld. CIT(A) found that assessees had written to then Chief Commissioner of Income Tax and sought redressal of their grievances. He came to finding that there is merit in contention of assessees that survey party fabricated evidence in form of entries in Sunlife Account Book and Sunny Deluxe Account Book . He has mentioned in his appellate order that there is truth in this charge if one peruses entries in Sunlife Account Book and Sunny Deluxe ITA No. 5360/MUM/2009 & ITA No.5261/Mum/2009 4 Account Book on basis of evidence. He has summed up his finding that not only statement has been recorded under duress but evidence has been planted. fact that cheques were obtained in pursuant to statement under section 133A also strengthens believe that it was obtained under duress and coercion. 4.1 ld. CIT(A) also found that certain portion of entries (981 to 1400) in Sunlife Account Book has been entered by survey party themselves. He also observed that entries in Sun Deluxe Account Book were entered by survey party. Thus, very basis on which confession was obtained gets knocked out. genuineness of entry in above book stands exposed. AO has simply gone by sanctity of statement recorded under section 133A which stands impeached. statement recorded in course of survey can be made basis of assessment only if it is linked to corroborative evidence. In present case, there is planted evidence which cannot be substitute for corroborative evidence. In view of above facts, ld. CIT(A) deleted addition of Rs. 1,00,10,000/- made by AO in case of Mr. Kochhar and Rs.85,50,000/- in case of Mrs. Kochhar for impugned assessment year. 5. ld. DR relied on assessment order passed by AO. She made specific reference to question no. 10 and its answer recorded from Mr. Kochhar u/s 133A during course of survey action on 23/09/2005. Also she made specific reference to question no. 7 and its answer recorded from Mrs. Kochhar u/s 133A during course of survey action on 23/9/2005. 6. ld. Counsel of assessee relied on affidavit of Mr. Kochhar filed on 27/09/2005 and letter of retraction filed on same date. Also he relied upon affidavit of three staff members namely (i) Bhaskar P. Pawar, (ii) Anand M. Raorane, and (iii) Mr. Vikas Bapat, filed on 27/09/2005 before AO . He also referred to affidavit dated 26/09/2005 and 29/11/2008 filed by Mrs. Kochhar before AO .He further stated that decisions referred to by AO in his assessment order relates to statement recorded under section132(4) of Act, not to section 133A . It was further stated by him that statement can be recorded under section 131 not under section 133A. ITA No. 5360/MUM/2009 & ITA No.5261/Mum/2009 5 6.1 ld. Counsel referred to application filed by assessee under Rule 27 of ITAT Rules 1963 defending order passed by ld. CIT(A) . 7. We have considered rival submissions carefully and also perused material placed on record before us. We find that assessees filed, immediately after survey action, retraction letter addressed to AO enclosing therewith affidavit. onus then shifted to Department. What we find here is that assessees simultaneously filed letter on 27/09/2005 addressed to CCIT-I , CCIT-X and CIT-19 Mumbai, addressing his/her grievances. CIT-19 sent letter to assessees on 28/09/2005 calling for meeting on 04/10/2005. cheques taken by survey officials were returned back to assessees. 7.1 Be it stated that decisions relied on by AO do not relate to import of statement recorded under section 133A of Act. 7.2 In present case statement has been recorded under section 133A of Act. In Paul Mathews & Sons vs. CIT (2003) 263 ITR 101, 108 (Ker.), it has been held that section 133A(3)(iii) enables authority to record statement of any person which may be useful for, or relevant to, any proceeding under Income-tax Act. Section 133A, however, enables Income-tax authority only to record any statement of any person which may be useful, but does not authorize taking any sworn statement. On other hand, one finds that such power to examine person on oath is specifically conferred on authorized officer only under section 132(4) in course of any search or seizure. Thus, Income-tax Act, whenever it thought fit and necessary to confer such power to examine person on oath, same has been expressly provided whereas section 133A does not empower any officer to examine any person on oath. Therefore whatever statement is recorded under section 133A is not given any evidentiary value obviously for reason that officer is not authorized to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law. Therefore case of assessee is distinguishable from decisions relied on by AO. ITA No. 5360/MUM/2009 & ITA No.5261/Mum/2009 6 7.3 assessee may tender affidavit before AO. It may point to some evidence. Such evidence can be acted upon by AO. Should AO regard same as not sufficient proof of contents thereof, then he should cross examine deponent and, if dissatisfied, call upon assessee to produce documentary evidence in support of contents of affidavit. If no such thing is done, affidavit by itself should be regarded as sufficient proof. This was so held by Hon ble Supreme Court in Mehta Parikh & Co. vs. CIT (1956) 30 ITR 181 (SC). We find that in present case deponent has not been subjected to cross examination for bringing out falsity of his statement. Therefore, we should not doubt correctness of statement made by deponent in affidavit in instant case. 7.4 To sum up, survey u/s 133A was carried out by Department at business premises of assessee on 23/09/2005. In statement recorded u/s 133A on same day disclosure of Rs.1,00,10,000/- was made by Mr. Kochhar and Rs. 85,50,000/- by Mrs. Kochhar. affidavit was filed by Mr. Kochhar on 27/9/2005 and by Mrs. Kochhar on 26/09/2005 before AO making retraction of declaration of above amount. assessees simultaneously filed letter on 27/09/2005 addressed to CCIT-I , CCIT-X and CIT-19 Mumbai, addressing his/her grievances. CIT-19 sent letter to assessees on 28/09/2005 calling for meeting on 04/10/2005. cheques taken by survey officials were returned back to assessees. ld. CIT(A) has observed that entries in Sunlife Account Book Sunny Deluxe Account Book were fabricated by survey team. ld. Dr has not produced any material to refute above findings of ld. CIT(A). survey proceedings in present case fall in realm of Illegality. 7.5 In view of above facts, we uphold deletion made by ld. CIT(A) of addition of Rs. 1,00,10,000/- made by AO in case of Mr Kochhar and Rs.85,50,000/- in case of Mrs. Kochhar. Thereby, we dismiss appeal filed by Revenue against order of Ld. CIT(A) on above two grounds. ITA No. 5360/MUM/2009 & ITA No.5261/Mum/2009 7 8. third ground raised by Revenue in case of Mr. Kochhar is that ld. CIT(A) erred in accepting argument of assessee regarding business receipt of Rs. 36,000/- which was never made before AO and which is in violation of Rule 46A of Income Tax Rule. 8.1. We find that ld. CIT(A) has come to finding that in present case business receipt of Rs. 36,000/- was earned and business is still going on as proprietary concern. Therefore, he was convinced that there is substance in argument of assessee that there is no legal case for any disallowance. We agree with above findings of ld. CIT(A) as it is based on facts and no interference is called for. 9. In view of above appeals filed by Revenue are dismissed. Order pronounced in open court on 23/09/2016. Sd/- Sd/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 23/09/2016 AKV(On Tour) Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai ACIT, Tax 19|(3), Mumbai v. Sunil Kumar O Kochhar