2013 (4) TMI 777 - HC - Income Tax

Summary

Issues involved: Challenge to the order of the Income Tax Appellate Tribunal regarding the evidentiary value of statements recorded u/s 133A of the Income Tax Act and deletion of addition made on undisclosed income during survey.

Issue 1: Evidentiary value of statements recorded u/s 133A:
The revenue challenged the ITAT's decision regarding the evidentiary value of statements recorded u/s 133A of the Act. The son of the assessee had his statement recorded during a survey conducted u/s 133A. The revenue contended that even though the son's statement was retracted after three years, it should still be considered as material evidence. However, the Tribunal found that there was no corroborative evidence to support the statement obtained from the son. The Tribunal emphasized the importance of independent evidence and the risks associated with relying solely on statements without corroboration. The Tribunal also referred to a circular by the CBDT which supports the requirement of independent evidence during surveys.

Issue 2: Deletion of addition on undisclosed income during survey:
The revenue had made an addition of Rs. 36 lacs based on the son's statement recorded during the survey. However, the Tribunal, after considering the lack of corroborative evidence and the circular emphasizing the need for independent evidence, decided in favor of the assessee and deleted the addition. The Tribunal highlighted that the statement alone, without any other supporting evidence, cannot be the basis for making additions. The Tribunal also referred to a decision by the Madras High Court which emphasized that statements recorded during surveys do not have conclusive evidentiary value by themselves.

Conclusion:
The High Court upheld the Tribunal's decision, stating that the reliance on the son's statement without independent corroboration was not justified. The Court agreed with the Tribunal's interpretation of the law and the emphasis on the need for independent evidence during surveys. As a result, the tax appeal by the revenue was dismissed, and the deletion of the addition on undisclosed income during the survey was upheld.