Statement Recorded under Sec 133A by Themselves have no Evidentiary Value: ITAT Upholds Deletion of Additional Income [Read Order]

The Indore Bench of The Income Tax Appellate Tribunal ( ITAT ) has held that statement recorded under section 133A of the Income Tax Act by themselves have no evidentiary value and upheld the deletion of additional income by CIT (A).

The assessee, an individual carrying on the business of real estate developers, under a sole proprietorship, in the name and style of ‘M/s. Royal Colonizers, Builders and Developers’. A Survey u/s.133A of the Act was carried out at the premises of the assessee on 21-09-2012. During the course of the Survey proceedings, the assessee admitted certain additional income for all the assessment years under consideration.

The assessee had admitted income amounting to Rs.30,00,000/-, Rs.60,00,000/- and Rs.2,25,00,000/- respectively for A.Y. 2011-12, A.Y. 2012-13 and A.Y. 2013-14. After survey, the assessee furnished his returns of income for the aforesaid three assessment years by showing taxable income of Rs.30,41,000/-, Rs.64,37,450/- and Rs.2,27,12,840/- respectively for the A.Y. 2011-12, A.Y. 2012-13 and A.Y. 2013-14. According to the AO, the aforesaid admitted incomes were taxable separately over and above that already shown by the assessee in his returns of income. Accordingly, AO made separate additions of Rs.30,00,000/-, Rs.50,00,000/- and Rs.1,40,04,961/- in the hands of the assessee on account of surrendered income not shown in ITR respectively for A.Y. 2011-12, A.Y. 2012-13 and A.Y. 2013-14.

Aggrieved with the Orders of Assessment, the assesse preferred appeals before the CIT (A).

However, while adjudicating the respective grounds on the subject issue of taxability of the additional income surrendered during the course of the survey over and above that already shown in the returns of income, the CIT (A) has granted full relief to the assessee for all the three assessment years. The CIT (A) held that it was not the allegation of the AO that besides carrying out the business of real estate, the assessee was carrying out any other business and since on the date of survey, the books of account of the assessee were not complete, the income surrendered were only the estimated business income of the assessee. The CIT (A) further found that the assessee did not retract from his statement made under s.133A of the Act and on the contrary, has shown more income in his returns of income than that admitted by him during the course of the survey. The CIT (A) further relying upon the decision of the  Honorable High Court of Madras in the case of S. Khader Khan Son (2008) 300 ITR 157 (Mad) held that any statement under s.133A which cannot be recorded on oath has no evidentiary value. Accordingly, the CIT (A) deleted the entire additions so made by the AO on account of the income admitted during the course of the survey u/s. 133A. Aggrieved with the Order of the CIT (A), the revenue filed appeal before ITAT.

The Tribunal has observed that from the letter of break-up that the assessee had admitted such additional income only for the reason that till the date of survey, his books of account were not complete and no return of income for earlier years could be filed by him and the assessee came forward to declare the aforesaid income as his business income for the assessment years under consideration. From such letter, it cannot be inferred that the assessee in any manner admitted the additional income over and above his regular business income.

The Coram of Sri Mahavir Prasad, Judicial Member and Sri Manish Borad, Accountant Member has held that “We find that in the instant cases, the AO based upon the material gathered during the course of the survey, has made separate additions and therefore, merely on the basis of the admission of the assessee, without having any other corroborative material on record, no addition could have been made. Accordingly, we find no infirmity in the findings of the CIT (A) in deleting the additions on this count for all the three assessment years viz. A.Y. 2011-12, A.Y. 2012-13 and A.Y. 2013-14 under appeal and the same are hereby upheld”.

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