BACHITTAR SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This appeal has been preferred by the Assessee under Section 260A of the Income-tax Act, 1961 (for short, "the Act") against the order dated June 18, 2008 passed by the Income-tax Appellate Tribunal, Chandigarh Bench in I.T.A. No. 224/Chd/2007, for the assessment year 2003-04, proposing to raise the following substantial questions of law:

(2.) The Assessee is an individual. In the course of survey under Section 133A of the Act, he gave a statement on March 21, 2003 surrendering for taxation a sum of Rs. 19 lakhs. He stated that he had purchased Shop No. 5-A, New Cloth Market, Ambala City for Rs. 24 lakhs jointly with his brother and source of investment was not reflected in the books of account. Later, the Assessee sought to resile from the said statement by taking a stand that he had agricultural income to that effect and investment was from that source. He had done potato business which was evidenced by entries in a diary found during the survey. He also produced other evidence in support of his claim. The Assessing Officer rejected this stand holding that there was a long gap between the statement made originally on March 21, 2003 and retraction of the said statement on May 28, 2003, and the stand taken was an afterthought. Reliance was placed on the judgment of the Allahabad High Court in Dr. S.C. Gupta v. CIT, 2001 248 ITR 782 On appeal, the Commissioner of Income-tax (Appeals) upheld the plea of the Assessee that earlier statement was incorrect and the resiled statement was supported by diary recovered during the survey. On further appeal, the Tribunal reversed the view taken by the Commissioner of Income-tax (Appeals). It was held that the burden was on the Assessee to establish that the admission made by him during the survey was wrong. The Assessee had failed to produce the books of account or contemporaneous record of the period during which agricultural income was earned. The statement having not been retracted at the earliest opportunity, voluntary statement made in the presence of family members was an important piece of evidence which could not be brushed aside. It was held that the statement of the Assessee was material during survey and could be basis of assessment when the Assessee had not maintained regular books of account, as held by this Court in Surinder Kumar Charanjit Kumar v. CIT, 2006 282 ITR 78

(3.) We have heard learned Counsel for the Appellant-Assessee.