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2014 (10) TMI 486 - AT - Income TaxAddition on the basis of Statements recorded during the survey u/s 133A - statement was retracted later - Addition to be made on substantive basis or not Held that - No incriminating documents were found by the survey team relying upon CBDT vide Circular F. No.286/2/2003 dated 10-03-2003 and CIT Vs. Dhingra Metal Works 2010 (10) TMI 29 - DELHI HIGH COURT - the addition was made on the basis of statement recorded during the course of survey which was subsequently retracted and since no corroborative evidence was found either during the course of survey or during the course of assessment proceedings, addition cannot be made thus, the order of the CIT(A) is upheld Decided against revenue. Claim of deduction u/s 80IB(10) Calculation of minimum 1 acre of area - Whether CIT(A) erred in holding that the road acquisition area is to be considerate as part of area of the plot for calculation of minimum 1 acre of area for claiming deduction u/s 80IB(10) - Held that - As decided in assessee s own case for the earlier assessment year, it has been held that CIT(A) rightly allowed the deduction the order of the CIT(A) is upheld - Decided against revenue.
Issues Involved:
1. Validity of retracted statements and the evidentiary value of statements recorded under Section 133A of the Income Tax Act. 2. Eligibility for deduction under Section 80IB(10) of the Income Tax Act concerning the area of the plot. Issue-Wise Detailed Analysis: 1. Validity of Retracted Statements and Evidentiary Value of Statements Recorded Under Section 133A: The primary issue revolves around the addition of Rs. 2.5 crores based on a statement recorded during a survey under Section 133A of the Income Tax Act. The statement was later retracted by the declarant, Shri Shailesh Shah, who claimed that the declaration was made under duress. The Assessing Officer (AO) treated the retraction as an afterthought and made the addition on a substantive basis in the case of M/s. Sarjan Construction, while making protective additions in the cases of M/s. Namrata Construction Company and M/s. Namrata Developers. The CIT(A) deleted the addition, observing that the statement recorded under Section 133A lacked evidentiary value since it was not supported by any incriminating evidence. The CIT(A) noted that the statement was recorded on oath, which is not permissible under Section 133A. The CIT(A) relied on the decision of the Hon'ble Kerala High Court in Paul Mathews and Sons Vs. CIT and the Hon'ble Delhi High Court in CIT Vs. Dhingra Metal Works, which held that statements recorded under Section 133A cannot be used as conclusive evidence and can be retracted. The Tribunal upheld the CIT(A)'s decision, emphasizing that the addition was not supported by any corroborative evidence gathered during the survey or assessment proceedings. The Tribunal also referred to the CBDT Circular F. No.286/2/2003 dated 10-03-2003, which advises against making assessments solely based on confessions obtained during surveys. The Hon'ble Supreme Court's decision in Khadar Khan Sons and the Hon'ble Delhi High Court's decision in Dhingra Metal Works were cited to reinforce that statements recorded under Section 133A do not hold evidentiary value and cannot be the sole basis for additions. 2. Eligibility for Deduction Under Section 80IB(10): The second issue pertains to the eligibility for deduction under Section 80IB(10) of the Income Tax Act, where the AO disallowed the deduction on the grounds that the area of different parts of the project was less than one acre after excluding the area of the road. The AO contended that each building was a separate project, and since the area of each was less than one acre, the deduction was not allowable. The CIT(A) allowed the deduction, following the orders for earlier assessment years, which had been upheld by the Tribunal. The Tribunal reiterated that the road acquisition area should be considered as part of the plot for calculating the minimum area required for claiming the deduction under Section 80IB(10). The Tribunal found no infirmity in the CIT(A)'s order, as it was consistent with the decisions in earlier years. Conclusion: The Tribunal dismissed all the appeals filed by the Revenue, upholding the CIT(A)'s orders. The Tribunal emphasized that statements recorded under Section 133A, which were later retracted, could not form the basis for additions without corroborative evidence. Additionally, the Tribunal confirmed that the road acquisition area should be included in the plot area for the purpose of claiming deductions under Section 80IB(10). The judgment underscores the importance of corroborative evidence in making additions and the correct interpretation of plot area for tax deductions.
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