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Issues:
Deletion of additional income offered voluntarily during a survey and the validity of reassessment proceedings based on the same. Analysis: The appeal involved a single issue regarding the deletion of Rs. 9 lakhs, additional income voluntarily offered by the assessee during a survey, and the validity of reassessment proceedings. The survey was conducted under section 133A of the Income Tax Act, where the assessee agreed to offer additional income due to observations regarding the maintenance of accounts and understated receipts. The CIT(A) held the reassessment proceedings invalid, stating that the AO could not resort to section 147 based on the same material gathered during the survey, as it amounted to a change of opinion. However, the Tribunal disagreed, emphasizing that section 147 allows reassessment if income has escaped assessment, which was the case here. The AO correctly concluded that the income had escaped assessment as the agreed amount was not reflected in the return without any retraction or valid reason provided by the assessee. The Tribunal found no force in the argument of implied retraction and supported the AO's decision that the income had indeed escaped assessment. The AO satisfied the conditions for issuing a notice under section 148, and the Tribunal set aside the CIT(A)'s decision, restoring the AO's order. However, the Tribunal noted that the CIT(A) did not decide the issue on merits and referred to a High Court decision stating that statements made during a survey have no evidentiary value for additions. Therefore, the Tribunal set aside the order on this ground and directed the CIT(A) to decide the merits issue after providing the assessee with a fair opportunity to be heard. Ultimately, the appeal of the Revenue was allowed for statistical purposes, upholding the addition of the voluntarily offered income and validating the reassessment proceedings based on the escape of assessment criteria under section 147.
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