Allahabad High Court
Sanjeev Agarwal vs Income Tax Settlement Commission And ... on 16 February, 2015
Bench: Tarun Agarwala, Dinesh Gupta
HIGH COURT OF JUDICATURE AT ALLAHABAD (Per: Hon'ble Tarun Agarwala,J.) The petitioner is carrying on the business of plying trucks and transport business on commission basis in the name and style of M/s Data Carriers and Ayush Carrying Corporation. For the assessment year 2007-08, the petitioner also carried on the business of purchase and sale of betel nuts and catechu.
The income tax department carried out a survey under Section 133A of the Income Tax Act (hereinafter referred to as the Act) on 07.11.2006 at the business premises and godown of the petitioner. During the survey, the income tax department found the stock of betel nuts and catechu to the value of Rs.66,08,000/- and unexplained cash of Rs.3,37,000/-. The petitioner was not maintaining any books of account. Loose papers were impounded by the surveying party showing an investment of Rs.40,55,500/- outside the books of accounts. Based on the loose papers found during the survey, the petitioner gave his statement and offered to surrender the following amount for imposition of tax for the assessment year 2007-08:
S.No. Nature of item offered Amount in (Rs.)
1.
Stock 66,08,000
2. As per seized documents 40,55,500
3. Out of cash found 3,37,000 Total 1,10,00,500 Based on the aforesaid survey, a notice under Section 142(1) of the Act was issued to the petitioner. Instead of filing his return, the petitioner approached the Settlement Commission under Section 245C of the Act for settlement of his dispute. The Settlement Commission invited a report from the Commissioner of Income Tax under Section 245D(3) of the Act and, based on the perusal of the record and report and after hearing the parties, the Settlement Commission computed the income of the petitioner at Rs.1,67,23,180/-and agricultural income at Rs. 68,000/-. The Settlement Commission, consequently, directed the Assessing Officer to compute the tax and charge penalty and interest as per the provisions of the Act. Based on the aforesaid order, a demand notice was issued. The petitioner, being aggrieved by the order of the Settlement Commission and notice of demand has filed the present writ petition.
Heard Sri Rakesh Ranjan Agrawal, the learned Senior Counsel for the petitioner along with Sri Suyash Agrawal and Sri Shambhu Chopra for the department.
The learned Senior Counsel for the petitioner has made three submissions. The learned counsel contended that even though the petitioner, in the survey made under Section 133A of the Act surrendered for tax a sum of Rs. 1,10,00,500/-, the same was erroneous and was liable to be rectified, inasmuch as the income offered as per the seized document amounting to Rs.40,55,500/- was nothing else but the amount used for the purchase of betel nuts and catechu, which was reflected in the stocks amounting to Rs. 66,08,000/- and, therefore, this error made by the petitioner at the time of giving his statement under Section 133A of the Act should be rectified.
The learned counsel submitted that this contention did not find favour with the Settlement Commission, inasmuch as the Commissioner of Income Tax in his report contended that the statement given by the petitioner under Section 133A of the Act was a statement on oath which has evidentiary value and cannot be resiled by the petitioner. The learned counsel submitted that the report of the Commissioner on this aspect was patently erroneous in as much as only a statement was given by the petitioner under Section 133A of the Act, which was not a statement given on oath. The learned counsel submitted that a statement given by an assessee under Section 133A of the Act is different and distinct with a statement given by an assessee under Section 132(4) of the Act. In support of his submission the learned counsel for the petitioner has relied upon the judgments of Paul Mathews And Sons Vs. Commissioner of Income Tax, (2003) 263 ITR 101 (Ker) and Commissioner of Income Tax Vs. S.Khader Khan Son, (2008) 300 ITR 157 (Mad), which was affirmed by the Supreme Court in Commissioner of Income Tax Vs. S.Khader Khan Son, (2013) 357 ITR 480 (SC).
The learned counsel further submitted that the Commission while computing the income of betel nuts and catechu had taken the price @ 82/- per kg., whereas it should be @ Rs. 45/- per kg. The learned counsel submitted that the price was taken from the internet, which was not reliable and was based on no evidence. In the end, the learned counsel for the petitioner submitted that the interest under Section 234B of the Act is chargeable till the date of entertaining the application under Section 245D (1) of the Act and that the interest cannot be charged under Section 234B of the Act upto the date of the order passed by the Settlement Commission. In support of his submission, the learned counsel has placed reliance upon a decision of the Supreme Court in Brij Lal and others Vs. Commissioner of Income Tax, (2010) 328 ITR 477 (SC).
Having heard the learned counsel for the parties, we find that admittedly, the petitioner's main income is generated from transport business. The income from loose papers, so seized, indicated that certain payments were made to Tarachand Munim from transport business. This statement is now being rescinded by the petitioner and a new stand is being taken indicating that this money was used by the petitioner through Tarachand Munim for buying betel nuts and, therefore, there is duplication of this income since this value was already shown in the stock of betel nuts. We find that no documents has been placed before the Commission nor before this Court to show that there has been duplication of the income on purchase or sale of betel nuts.
We are of the opinion that a statement made voluntarily by the petitioner under Section 133A of the Act can form the basis of assessment. The mere fact that the petitioner retracts his statement could not make his statement unacceptable. The burden lay upon the petitioner to establish that the statement made by him at the time of survey was wrong and in fact there was no additional income. In our opinion, this burden has not been discharged since no cogent evidence has been brought on record.
In Pullangode Rubber Produce Co. Ltd. Vs. State of Kerala, (1973) 91 ITR 18, the Supreme Court held that an admission is a piece of evidence though it is not conclusive. Consequently, a statement made voluntary under Section 133A of the Act cannot be retracted unless the assessee files evidence to show that the admission made in the statement at the time of survey was wrong and against the material on record. The mere fact that the Commissioner of Income Tax in his report has held that the statement given by the petitioner was on oath and therefore, it cannot be retracted is immaterial in the context of what we have said aforesaid.
No doubt, Sections 132(4) and 133A of the Act are distinct and different. Under Section 133A of the Act, there is no provision to administer oath and to take a sworn statement whereas under Section 132(4) of the Act there is no provision to examine a person on oath. But it does not mean that a statement under Section 133A of the Act can be retracted at the whim and fancy of the assessee. In the light of the aforesaid, the assertions made by the learned counsel for the petitioner cannot be accepted.
On the question of charging Rs. 82/- per kg. on betel nuts we find from a perusal of the record that the price of betel nuts ranged from Rs. 25/- to Rs. 192/- per kg.. The Commission has taken an average of Rs. 82/- per kg., in which we do not find any error. Further, no evidence has been filed by the petitioner to indicate that he had purchased the betel nuts at the rate of Rs. 45/- per kg.. This being a pure finding of fact, no interference can be made by this Court in a writ jurisdiction.
In view of the decision of the Supreme Court in Brij Lal (Supra) interest is chargeable till the date of entertaining the application for settlement under Section 245D(1) of the Act and not till the date of the order passed by the Settlement Commission. However, the contention of the learned counsel for the petitioner cannot be accepted. In the instant case, we find that no such assertion has been made in the writ petition. Only a bald assertion has been made that the interest under Section 234(B) of the Act cannot be charged. We are of the opinion that in the absence of a specific assertion being made on this issue no relief can be granted to the petitioner. However, in the event, the principle enunciated by the Supreme Court in Brij Lal (Supra) is applicable in the petitioner's case, it would be open to the petitioner to move a rectification application before the assessing authority.
For the reasons stated aforesaid, we do not find any merit in the writ petition and is dismissed.
Dated: 16.02.2015/-MAA/-
(Dinesh Gupta,J.) (Tarun Agarwala,J.)