2021 (7) TMI 130 - AT - Income Tax

Addition on the basis of material found during the course of survey - HELD THAT - We satisfied that there was substantial evidence in the hands of survey team in the form of receipts. Therefore statements recorded by the survey team on the basis of such receipts cannot be alleged as not based upon credible evidence. We may point out that in the present case no retraction was filed by the assessee before the authorities below nor during the course of survey proceedings and also during the course of assessment proceedings by way of any plausible evidence or by any other mode. The statements recorded by the survey team based on credible evidence without any retraction by the assessee has to be accepted and thus the findings recorded by the AO as well as ld CIT(A) deserves to be upheld being sustainable and based on reasonable basis and evidence. Appeal of the assessee is dismissed.

Issues:
Appeal against CIT(A) order for assessment year 2012-13; Addition of undisclosed income based on survey findings; Allegation of coercion and duress during survey proceedings; Challenge to the validity of survey proceedings; Application of section 44AD of the Income Tax Act; Admissibility of statements made during survey proceedings; Compliance with CBDT circular on confessions during surveys.

Analysis:
1. The appeal was filed against the CIT(A) order for the assessment year 2012-13, challenging the addition of undisclosed income amounting to Rs. 19,41,740 based on survey findings. The assessee contested that the addition was arbitrary and lacked substantial evidence to prove the nature and source of the receipts.

2. During the survey action conducted under section 133A of the Income Tax Act, certain documents indicated that the assessee received amounts from various entities, which were treated as undisclosed income. The assessee initially admitted to this undisclosed income during the survey, but later claimed it was made under duress and coercion, seeking a refund. The Assessing Officer rejected this claim, treating the amount as undisclosed income and adding it to the total income.

3. The assessee argued that the survey proceedings were conducted improperly, violating CBDT circulars, and the confession of undisclosed income was obtained under coercion. The assessee contended that if the receipts were contract-related, only the income derived from them should be added to the total income, not the entire receipts.

4. The Revenue maintained that the statement made during the survey was voluntary and binding on the assessee. The burden of proof to show coercion was on the assessee, which was not substantiated. The Revenue argued that since the assessee paid advance tax on the undisclosed receipts, the addition was justified.

5. The Tribunal upheld the lower authorities' decision, emphasizing that the evidence from the survey team, in the form of receipts, was substantial and credible. The Tribunal noted that the assessee failed to provide any retraction or evidence of coercion during the proceedings. Citing precedents and the CBDT circular, the Tribunal concluded that the addition of undisclosed income was valid and based on reasonable evidence.

6. Ultimately, the Tribunal dismissed the appeal, affirming the addition of undisclosed income and rejecting the assessee's claims of coercion and duress during the survey proceedings. The decision was based on the lack of retraction or credible evidence provided by the assessee, in line with established legal principles and precedents.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision in the case.

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