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2020 (4) TMI 704 - AT - Income TaxDifference in stock found during the course the survey - admission recorded by the department u/s. 133A - assessee has categorically stated that during the course of assessment proceedings, the audited books of account were produced by the assessee and also placed on record copy of audited report - HELD THAT - No addition can be made only on the basis of admission recorded by the department u/s. 133A - we find support from the CBDT Circular No. 286/2/2003 dated 10-03-2003 as well as the decision of Hon ble Supreme Court in the case of CIT vs. Khader Khan Son 2013 (6) TMI 305 - SC ORDER in which it has been categorically held that addition on the basis of statements recorded during the survey u/s.133A does not empower any IT authority to examine on oath and therefore any admission made in a statement recorded during the survey cannot by itself, be made the basis for addition and therefore considering the totality of the facts as narrated and discussed above, we are of the view that addition made by the assessing officer and upheld by the ld. CIT(A) are not sustainable in the eyes of law and we direct the ld.AO to delete the additions. - Decided in favour of assessee.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Addition of ?3,28,300/- as unaccounted investment in stock under Section 69 of the Income Tax Act. Issue-wise Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The appeal was filed with a delay of 6 days. The assessee's representative sought condonation of the delay, citing the serious illness of the C.A.'s close relative, which caused the C.A. to be unavailable. The Tribunal reviewed the application and affidavit provided by the assessee and found the reasons satisfactory, thus condoning the delay and admitting the appeal for hearing on its merits. 2. Addition of ?3,28,300/- as Unaccounted Investment in Stock: The core issue was the addition of ?3,28,300/- by the Assessing Officer (AO), which was sustained by the CIT(A). This addition was based on the difference in stock found during a survey conducted on 14-03-2008. The AO treated this difference as unexplained investment under Section 69 of the Income Tax Act, relying on the statement of a key person involved in the firm's affairs. The assessee argued that the addition was solely based on the admission made during the survey, without corroborative evidence. The assessee cited the CBDT Circular No. 286/2/2003 and the Supreme Court decision in CIT vs. Khader Khan Son, which state that admissions made during surveys cannot be the sole basis for additions unless supported by evidence. The assessee also provided audited books of accounts showing that the alleged unaccounted purchase was already included in the total purchases and sales figures. The Tribunal noted that the AO had relied heavily on the statement made during the survey, which was retracted by the assessee with supporting evidence. The Tribunal also observed that the assessee had sufficient cash balance as per the books to account for the purchases, and the AO had not rejected the books of accounts during the assessment proceedings. Consequently, the Tribunal concluded that the addition made by the AO and upheld by the CIT(A) was not sustainable in law. The Tribunal directed the AO to delete the addition of ?3,28,300/-. Conclusion: The Tribunal allowed the appeal, condoning the delay and directing the deletion of the addition of ?3,28,300/- made under Section 69 of the Income Tax Act, based on the lack of corroborative evidence and reliance on statements made during the survey. The judgment emphasized the importance of supporting evidence for additions and adherence to legal precedents and circulars.
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