INCOME TAX ACT, 1961

Section 133A

Survey - Addition on strength of statement - Assessee retracted such statement - Absence of incriminating material

AO made addition alleging that assessee had offered additional income during survey under section 133A. Later on, assessee retracted its disclosure stating that it was purely ad hoc disclosure and the income and expenses relating to merchant trading as well as turbine project was properly recorded in the books of account and therefore, no further addition, in that respect was warranted. However, AO treated said explanation as merely an afterthought story created by the assessee. Held: Since no incriminating material was found during survey proceedings, no additions could be made merely on the basis of statement given by director, which was subsequently retracted, as such statement did not carry much evidentiary value unless supported by certain circumstantial evidences. Moreover, as the stated transactions were carried out through banking channels and were duly recorded in the books of accounts that were subject to Audit and as complete details of these transactions along with relevant documentary evidences were placed before AO, assessee had fully discharged the onus cast upon it. Hence, addition made by AO solely on the basis of income admitted in the statement recorded during survey was unsustainable.

Relied:CIT v. S. Khader Khan Son (2013) 352 ITR 480 (SC) : 2012 TaxPub(DT) 3088 (SC),CIT v. S. Khadar Khan Sons (2008) 300 ITR 157 (Mad) : 2008 TaxPub(DT) 790 (Mad-HC)

REFERRED : The Dy. CIT Range 16 (2), Mumbai v. M/s. Premsons (2010) 130 TTJ 159 (Mum) : 2010 TaxPub(DT) 300 (Mum-Trib)

FAVOUR : In assessee's favour

A.Y. : 2011-12

INCOME TAX ACT, 1961

Section 14A

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