The Madras High Court has held that the statement made during a survey under Section 133A of the Income Tax Act has evidentiary value if the same is supported by corroborative evidence.
In the instant case, the department detected certain loose slips which showed several entries pertaining to cash and cheque transactions were recovered during the course of the search. The Assessing Officer noted that the entries show some specific details about the payments being made in cash and cheque and the entries are in evidence in support of the purchase of a property. Further, the Assessing Officer noted that there is also an entry with regard to Tax Deduction at Source, by giving the short form TDS. Accordingly, the assessment was completed against the assessee on the basis of the statements made by the assessee during the course of the survey.
The assessee later submitted that the earlier statement was given by him before the Assessing Officer was under mental tension and without understanding the full implications of the statement.
Before the High Court, the assessee contended that there should be corroborative evidence to sustain the entries to link the same and treat it as an unexplained investment to bring the case under Section 69 of the Act.
The bench comprising Justice T.S.Sivagnanam and Justice V.Bhavani Subbaroyan observed “nothing more is required than the facts, which were considered by the Assessing Officer as well as the Commissioner of Income Tax (Appeals) and the Tribunal. The notings are clear and it is not any scribbling, which shows the figures and also shows whether the payments were in cash or in cheque. The retraction made by the assessee, after a period of two years, was rightly rejected as an afterthought.”
It was further noted that the Circular of the Central Board of Direct Taxes, dated 10.3.2003 at best be the guidelines to be followed by the Department.
“In the instant case, the retraction made by the assessee is stated to be on 11.06.2002, whereas, the statements were given by the assessee in January 2001 and the Statements were not one but three. The statement which has been extracted by the Commissioner of Income Tax (Appeals) shows that it was cogent and clear,” the bench said.
It was, therefore, held that “We find that the case on hand is not a simple case of relying upon some scribbling and notings, but a case where the entries, which were clear and legible, were taken into consideration by the Assessing Officer. The correctness of which was examined by the Commissioner of Income Tax (Appeals) and further examined by the Tribunal. Thus, we find the assessee has not made out any good ground to interfere with the order of the Tribunal.”
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