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2023 (3) TMI 547 - AT - Income TaxUnexplained investment - addition made on the basis of surrender/admission made by the assessee in his statement recorded during the course of survey - Whether addition to the income of the assessee cannot be made in the absence of any positive evidence solely on the basis of confessional statement recorded during the survey proceedings? - HELD THAT - In the present case, the assessee has, with evidence demonstrated actual investment made in the impugned property. No infirmity has been pointed out by the Revenue in the said documents. Therefore, statement recorded during survey can safely be stated to be retracted duly evidenced with documentary evidence, and in such circumstances, the statement of the assessee recorded u/s 133A of the Act carries no evidentiary value. The Hon ble apex court in the case of CIT, Salem vs S. Kader Khan 2013 (6) TMI 305 - SC ORDER has held that statement recorded u/s 133A of the Act has no evidentiary value and cannot be made basis of addition. Hon ble jurisdictional High Court in series of decisions has held that solely on the basis of statement recorded which was subsequently retracted with evidence, no addition could be made in the absence of any other corroborative material with the Revenue. That such addition was simply on the basis of surmises and conjectures and thus unsustainable in law. Thus we hold that addition made of unexplained investment solely on the basis of admission of the assessee is unwarranted and direct the same to be deleted. Appeal of the assessee is allowed.
Issues Involved:
1. Addition of Rs. 3,76,670/- to the income of the assessee as unexplained investment. 2. Validity of addition based solely on a confessional statement recorded during survey proceedings. Issue-wise Detailed Analysis: 1. Addition of Rs. 3,76,670/- to the income of the assessee as unexplained investment: The assessee challenged the addition of Rs. 3,76,670/- made by the CIT(A) to his income as unexplained investment. The background of the case involves a survey conducted on 03.02.2014, during which the assessee voluntarily disclosed unaccounted income of Rs. 4,52,224/- as investment in property but later filed a return declaring only Rs. 3,01,960/-. The AO noted discrepancies between the disclosed amount and the actual return filed, leading to the addition of Rs. 3,76,667/- as unexplained investment. The assessee contended that the quantum of investment admitted during the survey was a mistake made under stress and duress, and provided documents showing the actual investment was Rs. 2,26,670/-, not Rs. 13,56,670/- as admitted. The AO rejected this contention, relying on the initial statement made during the survey. 2. Validity of addition based solely on a confessional statement recorded during survey proceedings: The assessee argued that the addition based solely on the confessional statement recorded during the survey was invalid, citing multiple judicial precedents. The assessee referred to decisions by the Hon. Supreme Court and Hon. Gujarat High Court, which held that statements recorded under section 133A of the Act have no evidentiary value and cannot be the sole basis for additions if retracted and unsupported by corroborative evidence. The CIT(A) upheld the addition, stating that the surrender was voluntary and there was no proof of stress or duress. The CIT(A) also noted that the documents presented by the assessee were not impounded during the survey, thus not subject to verification. Upon appeal, the Tribunal disagreed with the CIT(A). It was observed that the addition was solely based on the assessee's statement during the survey, which was later contradicted by documentary evidence showing a lower investment. The Tribunal emphasized that no evidence was presented by the Revenue to prove the documents false or fake. The Tribunal held that relying on the statement while rejecting documentary evidence was against legal principles. The Tribunal cited the apex court's decision in CIT, Salem vs S. Kader Khan (2012) and other jurisdictional High Court decisions, which supported the view that statements recorded under section 133A have no evidentiary value if retracted with evidence. Conclusion: The Tribunal concluded that the addition of Rs. 3,76,667/- as unexplained investment was unwarranted and directed its deletion, allowing the appeal of the assessee. The judgment reinforces the principle that additions cannot be made solely based on survey statements without corroborative evidence.
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