2015 (8) TMI 1270 - AT - Income Tax

Unaccounted income addition - CIT(A) deleted the addition - Held that - CIT(A) has given a finding of fact holding assessee s unaccounted income to be ₹ 1,43,68,982/- disclosed in its individual capacity to the tune of ₹ 1,04,11,752/- and the balance sum of ₹ 42,15,000/- in the HUF s hands. The Revenue s reliance is only upon the assessee s bald statement. The lower appellate order considers a catena of case law holding therein that such a statement recorded in the course of survey does not form the sole basis for making additions in absence of supportive evidence. A more recent one we find is CIT vs. Golden Finance, (2012 (9) TMI 952 - GUJARAT HIGH COURT ) echoing the very principle. The Revenue fails to point out any exception on facts or law to the contrary. We uphold the CIT(A) order in these circumstances and reject the Revenue s sole substantive ground. - Decided against revenue

Summary

Issues:
Appeal against deletion of addition of undisclosed income made by Assessing Officer.

Analysis:
1. The appeal pertains to the assessment year 2007-08, where the Revenue challenged the deletion of an addition of undisclosed income by the CIT(A)-I, Surat. The primary issue was the difference of Rs. 1,71,92,996/- between an undisclosed amount admitted during a survey and income credited by the assessee in the Profit & Loss Account.

2. The department conducted a survey in the group of concerns of the individual assessee, who allegedly admitted total unaccounted income of Rs. 3.12 crores during the survey. However, the assessee filed a return admitting a lower income. The Assessing Officer, after scrutiny, made an addition of Rs. 2,75,89,768/-, reducing it to Rs. 1,71,92,996/-.

3. The CIT(A) accepted the assessee's contentions, emphasizing that the Assessing Officer failed to provide material evidence to counter the factual statements made by the assessee regarding the total receipts. The CIT(A) noted that the impounded material indicated additional income of Rs. 1,43,68,982/-, not the higher amount admitted during the survey.

4. The CIT(A) further highlighted that the Assessing Officer did not provide any cogent material or evidence to show that the appellant's submissions were factually incorrect. The CIT(A) relied on various case laws to support the contention that a statement recorded during a survey cannot be the sole basis for making additions without corroborative evidence.

5. The Tribunal upheld the CIT(A) order, emphasizing that the Revenue solely relied on the assessee's survey statement without providing any specific evidence to support the addition of undisclosed income. The Tribunal noted that the CIT(A) correctly applied the legal principle that mere statements during a survey cannot be the sole basis for additions without supporting evidence.

6. In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision to delete the addition of undisclosed income. The judgment highlighted the importance of corroborative evidence and legal precedents in determining the validity of additions based on survey statements.

7. The order was pronounced on 5th August 2015 at Ahmedabad, with the Tribunal upholding the CIT(A)'s decision, thereby dismissing the Revenue's appeal.