2010 (7) TMI 1032 - AT - Income Tax

Summary

Issues involved: The judgment involves the confirmation of addition on account of undisclosed income from discounting of cheques u/s.143(3) of the Income-tax Act, 1961 for the assessment year 2000-01.

Issue 1 - Undisclosed Income from Discounting of Cheques:
The assessee had surrendered an amount as current income during a survey u/s.133A, claiming inability to clarify the source immediately. The Assessing Officer added an amount as undisclosed income from discounting of cheques, based solely on the statement made during the survey. The CIT(A) upheld this addition, attributing the income to three concerns equally. The assessee challenged this in appeal.

Key Details:
- The assessee argued that the transactions were recorded in the books of account, and all relevant details were available in various records.
- The lower authorities did not consider the evidence provided by the assessee, including vouchers, registers, and statements.
- The addition was made solely on the basis of the statement recorded during the survey, without proper verification of the evidence.
- The assessee cited legal precedents to support the argument that additions cannot be made solely based on statements recorded during surveys.

Decision:
The Tribunal found that the addition was made solely on the basis of the statement recorded during the survey, without proper evidentiary support. Citing legal precedents, the Tribunal held that such statements during survey proceedings have no evidentiary value for assessment purposes. Consequently, the Tribunal allowed the appeals of the assessees, overturning the decisions of the lower authorities.

Conclusion:
The Tribunal ruled in favor of the assessees, highlighting the importance of proper evidence and legal principles in making additions to undisclosed income. The judgment emphasized the need for thorough verification and adherence to legal procedures in such cases.