INCOME TAX ACT, 1961

Section 132(4)

Survey - Statement recorded during survey - Evidentiary value - No corroborative evidence

AO based on statement recorded during survey, doubted manufacturing activity with respect to products namely. Current tranformers (CT) and potential transformers (PT) and accordingly, held that assessee was not eligible for deduction under section 10B.Held: Regarding the use of the machineries in the manufacturing of CT/PT products, AO had not brought anything on record to prove that assessee was not in possession of requisite machineries. Assessee had also filed certificates of independent qualified engineers in support of his contention that it was engaged in manufacturing of alleged product, but no defect, whatsoever, was pointed out by AO, . Also, list of APG machines and vacuum casting machines used for manufacture of alleged products was appearing in its financial statement of assessee. Therefore, statements recorded during search and survey could not be the basis of disallowance of deduction under section 10B merely on the basis of the statement obtained under section 132(2)/133A which was immediately retracted after survey could not be sustained especially when AO had accepted assessee's books of account and financial statement as such.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09

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