2016 (9) TMI 755 - AT - Income Tax

Addition made on the basis of the statement of the assessee recorded during the course of survey u/s.133A. - Held that - On appraisal of the finding of the CIT(A), it is quite clear that the assessee declared his approximate income for the A.Y.2007-08 to the tune of ₹ 50,00,000/-. The P & L Account of the assessee speaks about the profit to the tune of ₹ 54,83,851/- which is quite near to the assessment assessed by the assessee while making his statement. No discrepancies of any kind was found in the account maintained by the assessee either during the survey action u/s.133A of the Act and during the assessment proceedings. The submission made by the assessee vide his letter dated 15.01.2007 was found correct. The addition made by the Assessing Officer is based on surmises and conjectures and is not based upon any cogent and convincing evidence on record. No distinguishable facts of any kind have been placed on record before us. Therefore in view of the said circumstances we of the view that the CIT(A) has passed the order in question correctly and judiciously which does not require to be interfere with at this appellate stage. - Decided against revenue.

Summary

Issues involved: Deletion of addition of ?50 lakhs based on partner's statement during survey u/s.133A for A.Y.2007-08.

Analysis:
1. The case involved a challenge to the deletion of an addition of ?50 lakhs by the CIT(A) based on the statement of one of the partners during a survey u/s.133A. The Assessing Officer added this amount as additional income, leading to an assessment of ?77,63,940. The CIT(A) deleted this addition, prompting the revenue to file an appeal. The primary contention was whether the deletion of the addition was justified under the law.

2. The revenue argued that the CIT(A) erred in deleting the addition, while the assessee contended that the partner's statement only estimated the total income for A.Y.2007-08 at ?50 lakhs, which was reflected in the actual business results. The CIT(A) found that the accounts maintained by the assessee showed no discrepancies, and the addition lacked valid evidence, being based on surmise and suspicion. The CIT(A) directed the Assessing Officer to delete the addition of ?50 lakhs, which was upheld in the appellate stage.

3. The CIT(A) noted that the partner's statement during the survey indicated an estimated income of ?50 lakhs for the year, which was in line with the actual profit shown in the P&L account. The absence of discrepancies in the accounts and the correctness of the assessee's submission in a letter further supported the deletion of the addition. The Assessing Officer's decision was deemed speculative, lacking substantial evidence, and the CIT(A) rightly concluded that the addition could not be sustained.

4. Ultimately, the appellate tribunal dismissed the revenue's appeal, upholding the CIT(A)'s decision to delete the ?50 lakhs addition. The tribunal found no valid grounds to interfere with the CIT(A)'s order, considering the lack of concrete evidence supporting the Assessing Officer's addition. The judgment was pronounced on 10th August 2016, affirming the deletion of the disputed amount from the assessment for A.Y.2007-08.