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2010 (12) TMI 533 - AT - Income TaxAddition - Survey u/s 133A - A blue diary was found on which certain transactions were written - Assessee had declared income of Rs.39 lacs in the return on the basis of voluntary statement clearly shows that the assessee had also unaccounted income other than the income mentioned in the diary - In case the assessee later found that the income disclosed at the time of survey was more than the actual income the assessee could always file details to substantiate the claim which has not been done in this case - Therefore the claim of the assessee that disclosure was not based on any material cannot be accepted. It has also been argued that the diary had been illegally impounded under section 131 of the I.T. Act - The authorities had no power to remove any article or thing under section 133A and therefore impounding of diary was illegal - The power u/s 131 can be exercised by the authorities during the course of any proceedings under the Act - Conducting of survey was definitely a proceeding and therefore use of power u/s 131 to impound a document cannot be said to be wholly untenable though there are some contrary judgments - Moreover once the diary is impounded, may be illegally, the material in the diary can always be used for the purpose of proceedings under the Act - This view is supported by the judgment of Hon ble Supreme Court in case of Pooram Mal vs DI (1973 -TMI - 6422 - SUPREME Court) - The argument advanced is therefore of no help to the assessee - Decided against of assessee.
Issues Involved:
1. Addition of Rs. 6 lacs based on the disclosure made by the assessee during the survey. 2. Validity of the statement recorded under section 133A. 3. Legality of impounding the diary under section 131 during the survey. Issue-wise Detailed Analysis: 1. Addition of Rs. 6 lacs based on the disclosure made by the assessee during the survey: The main issue in this case revolves around the addition of Rs. 6 lacs made by the Assessing Officer (AO) based on the disclosure made by the assessee during a survey conducted under section 133A. The assessee initially disclosed a total income of Rs. 45 lacs during the survey but later declared only Rs. 39 lacs in the return of income. The AO did not accept the reduction and added the remaining Rs. 6 lacs to the total income. The CIT(A) upheld this addition, noting that the assessee did not raise any dispute regarding the additional income until the appellate proceedings and failed to substantiate the reduction from Rs. 45 lacs to Rs. 39 lacs. The Tribunal agreed with the CIT(A), emphasizing that the affidavit filed by the assessee alleging coercion and fabrication of the diary was an afterthought and lacked evidentiary value. The Tribunal concluded that the assessee's claim of reducing the disclosed income was not supported by any material evidence. 2. Validity of the statement recorded under section 133A: The assessee argued that the statement recorded under section 133A did not have evidentiary value as it was not given on oath. The Tribunal acknowledged that while the statement under section 133A does not have a binding evidentiary value, it can still be used by the department. The Tribunal referred to the Supreme Court's ruling in Pallangode Rubber Produce Co. Ltd. vs State of Kerala, which held that an admission is an important piece of evidence, though not conclusive. The Tribunal noted that the assessee did not retract from the statement made during the survey and even declared Rs. 39 lacs based on the same statement. The Tribunal found no material evidence from the assessee to show that the disclosed income of Rs. 45 lacs was incorrect and thus upheld the addition. 3. Legality of impounding the diary under section 131 during the survey: The assessee contended that the diary was illegally impounded under section 131, as the authorities have no power to remove any article or thing under section 133A. The Tribunal acknowledged the contrary judgments on this issue but held that conducting a survey is a proceeding under the Act, and thus, the use of power under section 131 to impound a document cannot be deemed wholly untenable. The Tribunal cited the Supreme Court's judgment in Pooram Mal vs DI, which supports the use of material from an impounded document for proceedings under the Act, even if the impoundment was illegal. Therefore, the Tribunal dismissed the assessee's argument on this ground. Conclusion: The Tribunal upheld the addition of Rs. 6 lacs made by the AO, confirming the CIT(A)'s order. The Tribunal found no merit in the assessee's claims regarding the reduction of disclosed income, the validity of the statement under section 133A, and the legality of impounding the diary. The appeal filed by the assessee was dismissed, and the decision was pronounced in the open court on 31.12.2010.
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