INCOME TAX ACT, 1961

Section 133A

Survey under section 133A - Addition on the basis of survey carried out at the premises of assessee - Assessee retracted from statement recorded during survey -

A survey action was carried out under section 133A and statement of assessee was recorded wherein total disclosure of Rs. 75,00,000 was made on account of various counts, i.e., excess cash found, excess stock found, unaccounted wages and renovation and addition in factory building and shed. However, assessee, later on, retracted its statement without filing any supporting documents into substantiate his retraction and did not include the disclosed income in his return for assessment year 2012-13. After considering the replies of assessee, AO held that assessee had filed retraction without any grounds and he failed to substantiate the same even during the assessment proceedings, hence, disclosure made by him during the survey proceedings was added to the total income of the assessee. Held: The entire addition was based on the surrender which stood retracted. Moreover, this surrender was not under oath. AO had not brought any material to rebut the explanation of assessee. Further, the issue was also covered by the judgment of Supreme Court in the case of CIT v. Khader Khan Son ((2012) 254 CTR 229 (SC) : 2012 TaxPub(DT) 3088 (SC)) wherein the Court held that section 133A does not empower any Income Tax Authority to examine any person on oath and therefore, any admission made in a statement recorded during survey could not by itself be made the basis of addition. The addition in dispute made by AO was not tenable in the eyes of law, hence, the same was deleted

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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