ORDER
Rajpal Yadav, J.M.
1. Out of the present five appeals, four are directed at the instance of the assessees and one by the Revenue in asst yrs. 1992-93 and 1993-94. The assessee, Amishkumar Mansukhlal Shah is aggrieved with the confirmation of additions of Rs. 50,000 and Rs. 3,78,200, in asst yrs 1992-93 and 1993-94, respectively, solely on the basis of disclosures obtained in his statement recorded under Section 132(4) of the IT Act during the search operation carried out at his residential premises Similarly, the assessee Ranjanben Shah is aggrieved with the confirmation of additions of Rs. 15,000 and Rs. 20,000 m asst yrs 1992-93 and 1993-94, respectively, on the basis of her statement recorded under Section 132(4) of the Act during the search. The Revenue in its appeal is aggrieved with the deletion of Rs. 53,500 added in the case of Amishkumar Shah by the AO m asst yr 1992-93 on the ground of unexplained investment m acquiring valuable household items Since the issues involved in all the appeals are common, we heard them together and deem it convenient to dispose of them together by this common order.
2. Before taking the matters, it is worth to decide M.A.No. 17/Rjt/2003 filed in ITA No. 690/Ahd/1996. This appeal was listed on 14th June, 2002. Notice sent to the assessee could not be served upon her for want of proper address. The appeal was dismissed on account of non-prosecution by our order dt 19th June, 2002. The assessee has submitted her application that there is no change of address. She might be out of station for some period when notices were sent to her and, therefore, service could not be effected upon her. She submitted that otherwise there is no wilful negligence on her part. She prayed that the order in ITA No. 602/Ahd/1996 be recalled and the appeal be heard and decided on merit. The learned Departmental Representative opposed the request of the assessee and relied upon our order.
3. On due consideration of facts and circumstances of the case, we are of the opinion that there is no wilful negligence on the part of the assessee in prosecuting her appeal. We deem it appropriate to recall our order dt. 29th June, 2002 and decide the appeal on merit.
4. Now we proceed to take up four appeals of the assessees. There is only one ground, which is common in all the appeals and it pertains to confirmation of additions of Rs. 50,000, Rs. 3,78.200, Rs. 15,000 and Rs. 20,000 in asst. yrs. 1992-93 and 1993-94 in the hands of Amishkumar Shah and Ranjnaben Shah, respectively. The brief facts of the case are that Smt. Ranjnaben Shah is the mother of Amishkumar Shah. They were residing together wherein a search operation under Section 132 of the IT Act was carried on 14th Oct., 1992, which continued upto 15th Oct., 1992, and during the search the following valuable assets were found:
Cash Rs. 7,600
Gold ornaments 2,313 gms.
Silver articles valued at Rs. 35,000 Jewellery valued at Rs. 30,000 and other assets as per Annex. P.
The appellant Amishkumar at the relevant time was a young boy of 21 years. The mother and the son were partners in certain firms at Jamnagar. Apart from the assets found during the search, statements under Section 132(4) of the IT Act were recorded on 15th Oct., 1992, Amishkumar, the assessee, in his statement admitted having earned unaccounted income at Rs. 50,000 in asst. yr. 1992-93 and Rs. 5 lacs in asst. yr. 1993-94. He also disclosed that these incomes were earned through dealings in forward trading in shares and other business. He also disclosed that income so earned has been invested in jeweleries of Rs. 2,70,000 and the balance has been advanced to various friends and acquaintances. However, while filing the return of income for asst. yr. 1992-93 on 19th Feb., 1993, he did not include the amount of Rs. 50,000 admitted as his undisclosed income of this year in a statement under Section 132(4) of the Act. Similarly, while filing the return of income for asst. yr. 1993-94 on 30th Nov., 1993, Shri Amishkumar disclosed additional income of Rs. 1,99,218 only and not the total of Rs. 5 lacs disclosed in his statement. The additional income shown in the return was disclosed as being the value of gold articles found during the search. On the same analogy, the assessee, Smt. Ranjnaben Shah disclosed unaccounted income of Rs. 50,000 each in both the assessment years. However, while filing her returns she has not included Rs. 15,000 and Rs. 20,000 in asst. yrs. 1992-93 and 1993-94. During the assessment proceedings, it was contended by the assessee, Shri Amishkumar that at the relevant time he was a young man 21 years of age. He had in fact not done any business activity in the shares and had not earned any income. The AO was not satisfied with the contention of the assessee and made an addition of Rs. 50,000 in asst. yr. 1992-93 and the difference of Rs. 3,78,200 between admitted income of Rs. 5 lacs and disclosed income of Rs. 1,99,218 in asst. yr. 1993-94. Similarly, the difference between the returned income and the income disclosed during the statement recorded in the case of Ranjnaben Shah had been added at Rs. 15,000 and Rs. 20,000 in both the assessment years, respectively.
5. Dissatisfied with the additions, both the assessees carried the matter in appeal before the learned CIT(A). It was contended that disclosure statements were extracted from the assessees under force and coercion. It was also contended that the assessee, Amishkumar had in fact not done any business in shares and no evidence whatsoever either relating to dealings in shares, or advance given to friends was found during the search. It was submitted that no credence be given to such confession and since there is no evidence in support of the confessions, additions solely on the basis of disclosure statement should not have been made and the same requires to be deleted.
6. The learned CIT(A) though decided the appeals of the assessee, Amishkumar by a common order and that of Ranjnaben Shah by separate orders, but rejected the contention of both the assessees on the ground that the statement recorded under Section 132(4) of the Act has considerable evidentiary value and it is for the assessee to establish that its contents do not reflect the correct state of affairs or were obtained in a legally untenable manner. The learned CIT(A) further recorded that retraction had come after a time-gap of almost a year. So, there is no denial in the eyes of law. Simply the assessees have disowned their statements recorded during the search, could not be given much weightage vis-a-vis the proceedings carried out according to law. On the basis of the above reasonings the learned CIT(A) rejected the prayers of the assessees and confirmed the additions in both the cases in both the years.
7. While impugning the findings of Revenue authorities below, the learned counsel submitted that no doubt disclosure of admission made under Section 132(4) of the Act during the search proceedings is an admissible evidence but not a conclusive one. This presumption of admissibility of evidence is a rebuttable one and if an assessee is able to demonstrate with the help of some material that such admission was either mistaken or untrue, then solely on the basis of such admission no addition should have been made. He further submitted that the Revenue did not find any material during the search indicating the unexplained investment in shares or advancing of money to the relatives or friends which can corroborate the disclosure. The learned counsel while impugning the finding of the learned CIT(A) that this retraction has come after more than a year has submitted that even in proceedings of 132(5) the assessees have disowned their statements and that was the first available opportunity to the assessees. The learned counsel took us through Sections 18, 24, 45, 47, 110 and 150 of the Evidence Act and apprised us with the terms “estoppel” and “admission”. He also highlighted the distinction between the two terms “estoppel” and “admission” as well as the evidentiary value of retraction of confession. According to the learned counsel, the difference between the admission and estoppel is a marked one. Admissions being declarations against an interest are good evidence but they are not conclusive and a party is always at liberty to withdraw admissions, by proving that they are either mistaken or untrue. On the strength of Hon’ble Supreme Court decision reported in 1963 AIR p. 1094, the learned counsel submitted that a retracted confession may form the legal basis of a conviction if the Court is satisfied that it was true and was voluntarily made. But it has been held that a Court shall not base a conviction on such a confession without corroboration. It is not a rule of law, but is only a rule of prudence. It cannot even be laid down as an inflexible rule of practice or prudence that under no circumstances such a conviction can be made without corroboration, for a Court may, in a particular case, be convinced of the absolute truth of a confession and prepared to act upon without corroborations; but it may be laid down as a general rule of practice that it is unsafe to rely upon a confession, much less on a retracted confession, unless the Court is satisfied that the retracted confession is true and voluntarily made and has been corroborated in material particulars. Further, in support of his contention, he relied upon the judgment of the Tribunal, Ahmebadad Bench, in the case of Asstt CIT v. Mrs. Sushiladevi S. Agarwal (1994) 49 TTJ (Ahd) 663 : (1994) 50 ITD 524 (Ahd). He further apprised us to the CBDT instructions issued ‘by the CBDT vide Circular No. 286/2/2003-IT, wherein the CBDT has directed the searching parties not to obtain confessions because after a long experience it has been realized by the Revenue Department that oftenly the official used to obtain confession from the assessee and stop further recovery of materials. Such confessions have been retracted and then the additions could not withstand the scrutiny of higher authorities because no material was found supporting such additions.
8. The learned Departmental Representative while controverting the contention of the learned counsel for the assessee relied upon the orders of the CIT(A) and contended that the learned CIT(A) has rightly confirmed the additions on the basis of confessions made by the assessees during the course of search. Their statements were not recorded under duress or threat. Disclosures were voluntarily made. Therefore, they cannot be allowed to retract the disclosures made during the search.
9. We have duly considered the rival contentions. It is an undisputed fact that during the search the raiding party did not find any evidence indicating that the assessees have earned unexplained income of Rs. 50,000, Rs. 3,78,200, Rs. 15,000 and Rs. 20,000 in asst. yrs. 1992-93 and 1993-94. No evidence regarding investment in the shares or advancement of money to relatives was found. The Revenue is only harping upon disclosure statements of the assessees for making these additions. However, during the proceedings of Section 132(5) the assessees have retracted from their statements The retraction has not been accepted by the Revenue on the ground that no evidence has been shown by the assessee in support of the retraction It is true that the simple denial cannot be considered as a denial in the eyes of law But when no activity has been undertaken by the assessee, how it can be proved by way of evidence that such activity has ever been undertaken by the assessee except simple denial what other evidence can be produced by the assessee. The evidence ought to have been collected by the Revenue during the search in support of the disclosure statements Had the Revenue found any material and then obtained a disclosure from the assessees, then the assessees might not have been able to retract from their disclosure statements. But additions made only on the basis of disclosure statements normally should not be confirmed in the absence of corroboration. In the eyes of law the general rule of practice is that it is unsafe to rely upon a confession only without any corroboration. Hence, we are of the opinion that the Revenue ought not to have made the additions. We allow these appeals of the assessees and delete the additions of Rs. 50,000, Rs. 3,78,000 in the case of Amishkumar N. Shah in asst. yr. 1992-93, and Rs. 15,000 and Rs. 20,000 in the case of Smt Ranjnaben Shah in asst. yr. 1992-93.
10. ITA No. 2046/Ahd/1996 In this appeal the Revenue is only disputing deletion of an addition of Rs. 53,500. This amount was added by the AO on the ground that the assessee had made unexplained investment in acquiring household items. The learned AO has taken note of these items at p 3 of his order, wherein 10 household items, such as AC, Kelvinator fridge, oven, cooking range, Godrej cupboard, Surya cooker, etc have been noticed. He made an addition of estimated value of these household articles at Rs. 53,500.
10.1 On appeal before the learned CIT(A) it was contended that the assessee at the relevant time was a young man of only 21 years. His father expired on 23rd May, 1986. All these articles have been received by the assessee from his father. It was also contended that these articles were purchased by Shri Mansukhlal Shah. It was also submitted that the AO had accepted his explanation qua number of articles found during the search, such as motor cars, etc. The learned first appellate authority was satisfied with the explanation of the assessee and recorded a finding that these articles are old articles for personal use, which belong to the assessee’s father. Hence, the estimated value of acquisition cannot be added in the hands of the assessee.
10.2 On due consideration of the facts and circumstances, we do not find any illegality in this finding of the learned first appellate authority. On perusal of the list of articles it reveals that they are articles of personal use. The AO has not held that these were acquired by the assessee during the accounting period relevant to this assessment year. Therefore, household articles of personal use received by the assessee from his father could not be considered as acquired from undisclosed sources of income. The learned CIT(A) has rightly deleted the addition. No interference is called for.
11. In the result, the appeal of the Revenue is dismissed.
12. We summarize the result as under:
M.A. No. 17/Rjt/2003 is allowed. ITA Nos. 2091, 2092, 2093 and 609/Ahd/1996 are allowed. ITA No. 2406/And/1996 (Departmental appeal) is dismissed.