2015 (5) TMI 1043 - AT - Income Tax

Addition u/s 69 - assessee was recorded u/s.133A as well as u/s.131 - value of the statement recorded during the survey - Held that - Hon ble Madras High Court in the case of CIT Vs. S.Khader Khan Son (2007 (7) TMI 182 - MADRAS HIGH COURT ) has considered the evidentiary value of the statement recorded during the survey and held that on the basis of the statement addition cannot be made. Kerala High Court in the case of Paul Mathews & Sons Vs. CIT reported in (2003 (2) TMI 25 - KERALA High Court ) has held that section 133A empowers the authority to record the statement of any person, which may be useful for, or relevant to any proceeding under the Act. This section only enables the authority to record any statement of any person, which may be useful, but does not authorise for taking any sworn statement. On the other hand, such power to examine a person on oath is specifically conferred on the authorized officer u/s. 132(4) of the I.T Act, 1961. The statement recorded by an officer on oath will be used as evidence in any proceeding, whereas statement recorded u/s. 133A has not given any evidentiary value because it was recorded by the authority, which has not been empowered to administer the oath to the assessee and take sworn statement. We are of the view that the 1st appellate authority has not committed any error while deleting the addition. The ld.DR was also unable to point out any other corroborative evidence. In view of the above discussion, we dismiss the appeal of the revenue. - Decided in favour of assessee

Summary

Issues:
Appeal against deletion of addition under section 69 of the Income Tax Act 1961 based on disclosure during survey operation.

Analysis:
The Appellate Tribunal ITAT Kolkata heard an appeal by the revenue against the deletion of an addition of Rs. 23 lakhs made by the Assessing Officer under section 69 of the Income Tax Act 1961. The assessee, engaged in petrol pump and rice trading business, had disclosed this income during a survey under section 133A but did not include it in the return. The CIT(A) deleted the addition, noting that the appellant's return was supported by audited accounts and no adverse remarks were made by the AO on the books. The CIT(A) found the addition to be unjustified solely based on the unsworn disclosure obtained during the survey. The Tribunal considered the evidentiary value of statements recorded under section 133A, citing judgments by the Madras High Court, Kerala High Court, and the Supreme Court. These judgments established that statements under section 133A lack evidentiary value as they are not recorded on oath, unlike statements under section 132(4) which can be used as evidence. The Tribunal upheld the CIT(A)'s decision, emphasizing the absence of corroborative evidence and dismissed the revenue's appeal.

In conclusion, the Tribunal dismissed the revenue's appeal, affirming the deletion of the addition under section 69 of the Income Tax Act 1961. The decision was based on the lack of evidentiary value of the unsworn disclosure obtained during the survey operation, in line with legal precedents regarding statements recorded under section 133A. The Tribunal found no error in the CIT(A)'s decision, as it was supported by audited accounts and lacked corroborative evidence to justify the addition.