CIT, Jaipur v. Vijendra Kumar Kankaria
[Citation -2017-LL-0529-80]

Citation 2017-LL-0529-80
Appellant Name CIT, Jaipur
Respondent Name Vijendra Kumar Kankaria
Court HIGH COURT OF RAJASTHAN
Relevant Act Income-tax
Date of Order 29/05/2017
Judgment View Judgment
Keyword Tags incriminating document • surrendered income • undisclosed income • books of account • concealed income • vdis
Bot Summary: Statement of Sh. Vijendra Kankariya, the assessee was again recorded on 24.8.2004 and he was examined with reference to his earlier statement and retraction of his disclosure. Assessee admitted the fact of recommendation entries which is not the issue of the assessee. Regarding purchases from NM/s Bhagwati Jewellers, he has confirmed the purchases and also produced copy of account of the assessee in his books though books of account of M/s Bhagwati Jewellers were never produced. All the purchases made by the assessee are supported by purchase vouchers and payments have been made by account payee cheques. Counsel for the assessee draws attention to Office Note dated 26.12.2008, wherein, the Deputy Commissioner of Income Tax has recorded that no other incriminating document except the slip pad has been recovered by the revenue. Counsel for the assessee submits that though an admission is the best evidence of a fact but where an admission is made under coercion and pressure and is retracted, the revenue cannot place reliance upon such an admission and must look for other evidence to prove its case. The absence of any other evidence renders the impugned orders which are based upon retracted statements made by the assessee null and void.


HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 175 / 2010 C I T Jaipur ----Appellant Versus Vijendra Kumar Kankaria ----Respondent Connected With S.B. Income Tax Appeal No. 50 / 2011 C I T Jaipur ----Appellant Versus Vijendra Kumar Kankaria ----Respondent For Appellant(s) : Mr. Aditya Vijay for Mr. Anuroop Singhi For Respondent(s) : Mr. Raj Kumar Yadav HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE DR. JUSTICE VIRENDRA KUMAR MATHUR Judgment 29/05/2017 In both these appeals, common questions of law and facts are involved and appeals relate to same assessee therefore, they are decided by this common judgment. 1. By way of these appeals, appellant has assailed judgment and order of Tribunal whereby Tribunal has dismissed appeal of department and confirmed order of CIT(A) and cross objection filed by assessee were partly (2 of 7) [ ITA-175/2010] allowed. 2. This court while admitting matters dated 8th November, 2010 & 14th November, 2011 framed following questions of law:- i) Whether in view of statement of assessee, findings recorded by CIT(A) and ITAT that there was income of 2 or 1% from accommodation entries, can be said to be correct? ii) Whether Tribunal was justified in confirming finding recorded by CIT(A) that purchases are not expenditure and thereby deleting addition of Rs. 27,17,692/- made under section 69C and equal addition under proviso to section 69C of Act? 3. Counsel for appellant has taken us to order of AO and contended that AO while considering in para 3.6 observed as under:- 3.6. Thus, in statement, assessee admitted fact of concealed income to tune of Rs. 83,50,000/- and agreed to pay advance tax on it, and in fact made payment of Rs. 26,30,250/- as follows:- Advance tax paid on 12/12/2002 Rs. 200000/- Advance tax paid on 26/03/2003 Rs.1500000/- Advance tax paid on 29/03/2003 Rs. 930250/- 4. However, AO in para 7 observed as under:- 7. Statement of Sh. Vijendra Kankariya, assessee was again recorded on 24.8.2004 and he was examined with reference to his earlier statement and retraction of his disclosure. He stated as under:- a) I signed statements under pressure and without reading statements; b) I signed bank cheques for tax purposes; (3 of 7) [ ITA-175/2010] c) I retracted from earlier disclosure of undisclosed income for reasons that I consulted my CA and after study of books of accounts, I found that there was no discrepancies in books of accounts, hence I did not surrender income in return; d) I do not have complete knowledge of accounts. I was confused during survey about cheques received from some parties and admitted these deposits as accommodation entries, total of which comes to Rs. 1.50 crores. This was due to single entry system. e) affidavit was also filed alongwith return of income affirming that on a/c of being not well and other pressures etc., assessee admitted fact of recommendation entries which is not issue of assessee. 5. Taking into consideration, he contended that view taken by AO is just and proper. However, CIT(A) has seriously committed error in observing as under in para 3.2:- 3.2.The A/R in his rejoinder has further submitted that surrender was not voluntary and he retracted his statements at earliest opportunities he got even before obtaining copy of statements. If there is any delay in retraction it was due to failure of department in providing copy of statements to appellant. Further that earning of profits of about 56% on alleged accommodation entries, entry which is not known in this case even to AO, is highly improbable. His trading margin at rate of 8% was accepted by AO. Copies of statements of appellant recorded during course of survey were supplied as late as on 20/5/2004 during assessment proceedings and only copies of books of account were provided before that date. That cheques issued for payment of advance tax on surrendered income were taken by department officials during survey and same were cleared in view of pressure and duress from department and also due to legal advice and to buy mental peace and avoid any further dispute. (4 of 7) [ ITA-175/2010] 6. Taking into consideration income only 2% is on lower side and Tribunal has also seriously committed error in dismissing appeal of department in para 5 observing as under:- 5. We have perused facts of case. We concur with findings of ld. CIT(A) which appears to be reasoned one that purchases of Rs. 3,08,150/- made from Smt. Usha Papriwal, Smt. Anu Papriwal, Ms. Manjula Mehta and Ms. Sunita Surana was considered as bogus based on their statement recorded by AO. However, immediately statements were retracted and confirmation letters alongwith affidavits were filed. Smt. Usha Papriwal and Anju Papriwal subsequently filed VDIS declarations. Payments were made though account payee cheque. It were reflected in their capital accounts filed with their returns of income. As per their affidavits ladies could not remember as transactions were entered into by their family member. Regarding purchases from NM/s Bhagwati Jewellers, he has confirmed purchases and also produced copy of account of assessee in his books though books of account of M/s Bhagwati Jewellers were never produced. Here also by producing M/s Bhagwati Jewellers before AO who has also confirmed purchases, assessee had discharged its onus. Why Bhagwati Jewellers is not producing books of account of his business may not be concern of assessee. In circumstance and facts of case, both additions i.e. u/s 69 and proviso to Section 69C are wrongly made and therefore same have rightly been deleted. All purchases made by assessee are supported by purchase vouchers and payments have been made by account payee cheques. On merit also, purchases remain verified and hence no addition on this account can be made. In circumstances and facts of case, we find no infirmity in order of ld. CIT(A) who has rightly deleted addition made by AO. Thus ground no. 2 of revenue is dismissed. 7. He has also taken us to judgment of Punjab and Haryana High Court in case of Navdeep Dhingra vs. Commissioner of Income Tax reported in [2015] 232 Taxman 0425 (P & H) wherein in para 3 & 4 held as under:- (5 of 7) [ ITA-175/2010] 3. Aggrieved by this order, assessee filed appeal, which was dismissed by CIT(A). assessee thereafter filed appeal before ITAT which was also dismissed. 4. Counsel for assessee submits that as admittedly appellant retracted his admissions, retracted admissions/statement could not form basis of additions without any corroborative evidence. Counsel for assessee draws attention to Office Note (Annexure-A6) dated 26.12.2008, wherein, Deputy Commissioner of Income Tax has recorded that no other incriminating document except slip pad has been recovered by revenue. Counsel for assessee submits that though admission is best evidence of fact but where admission is made under coercion and pressure and is retracted, revenue cannot place reliance upon such admission and must, therefore, look for other evidence to prove its case. absence of any other evidence renders impugned orders which are based upon retracted statements made by assessee null and void. 8. However, counsel for respondent contended that view has been taken by Supreme Court in recent judgment in case of M/s Andaman Timber Industries vs. Commissioner of Central Excise, Kolkata-II reported in [2015] 281 CTR 241 (SC) wherein it has been held as under:- As mentioned above, appellant had contested truthfulness of statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail opportunity of cross-examination. That apart, Adjudicating Authority simply relied upon price list as maintained at depot to determine price for purpose of levy of excise duty. Whether goods were, in fact, sold to said dealers/witnesses at price which is mentioned in price list itself could be subject matter of cross-examination. Therefore, it was not for Adjudicating Authority to presuppose as to what could be subject matter of cross-examination and make remarks as mentioned above. We may also point out that on earlier occasion when matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 (6 of 7) [ ITA-175/2010] was passed remitting case back to Tribunal with directions to decide appeal on merits giving its reasons for accepting or rejecting submissions. In view of above, we are of opinion that if testimony of these two witnesses is discredited, there was no material with Department on basis of which it could justify its action, as statement of aforesaid two witnesses was only basis of issuing Show Cause Notice. We, thus, set aside impugned order as passed by Tribunal and allow this appeal. 9. He has also relied upon another decision in case of Gopal Saran vs. Satyanarayan reported in AIR 1989 Supreme Court 1141 wherein in para 5 it has been held as under:- 5. On basis of aforesaid, it was contended that it was definite case of defendant in Examination-in-chief, that board belonged to him and that defendant was carrying on his own business and that there was no dispute as to same by plaintiff. It may be mentioned that plaintiff had not subjected himself to cross- examination in spite of order of Court after remand, therefore, it would not be safe to rely on examination-in-chief recorded which was not subjected to cross-examination before remand was made. If that is so, it will appear that there is no evidence of plaintiff in respect of allegations in plaint. This position appears established from facts on record. When plaintiff appeared for evidence in rebuttal he could have been cross- examined on these points. It was submitted that in rebuttal plaintiff had stated only with regard to default in payment of rent but plaintiff had not chosen to support his plaint case. Before defendant went to witness box. There was no question of cross-examining plaintiff travelling beyond evidence of plaintiff given in examination-in-chief and thereby giving opportunity to made out case in cross- examination. It, therefore, appears from pleadings and evidence that respondent did not make out any case of appellant parting with possession by putting up hoarding. In examination-in-chief also he did not make out such case and on contrary his case was that it was (7 of 7) [ ITA-175/2010] defendant-appellant who had put up hoarding. plaintiff has made evidence in examination-in-chief non est. It was case of defendant that he was carrying on business of advertisement by putting up hoardings of different parties. board was made by him, paintings and writings were also done by him and for putting hoarding he charged from his customers. Therefore, it appears to us that there are no clear findings that anybody was given lease or anybody was given right to put up hoarding and there was parting of possession in favour of anyone else. It was, however, argued that even if appellant had put advertisement board hoarding he was earning huge amount by same and this was factor which would indicate that there was parting of possession by him. It was, however, submitted on behalf of appellant that when shop had been let out to defendant- appellant for carrying on business it was right of defendant-appellant to carry on business. It was legally permissible to use said shop room and also use roof thereof and earn as much as could be done and as such it is not parting with possession. 10. In view of above, view taken by CIT(A) which was confirmed by Tribunal is just and proper though amount which has taken as income from commission is taken on reasonable side. 11. In that view of factual finding, both issues are required to be answered in favour of assessee against department. 12. appeals stand dismissed. (VIRENDRA KUMAR MATHUR),J. (K.S. JHAVERI),J. A.Sharma/67-68 CIT, Jaipur v. Vijendra Kumar Kankaria
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