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2014 (7) TMI 561 - HC - Income TaxUnexplained investment in stock - Whether the Tribunal is justified in coming to the conclusion that retraction made by the assessee from the statement u/s 133(A) of the Act is legal and proper Held that - The AO solely relied upon the statement of Shri Kishorbhai Mohanlal Karia recorded at the time of search on 4.1.2007 which subsequently came to be retracted and / or explained within the period of 19 days i.e. 23.01.2007 - as such except statement recorded at the time of search which was subsequently retracted, there was no other material and / or corroborative material with the AO, on which, the addition of ₹ 6 lacs in the hands of Shri Kishorbhai Karia and ₹ 7,00,500/cash in hand and ₹ 25,50,320/as unexplained investment in stock in the hands of the assesse M/ s. M.P. Scrap Traders can be justified. Tribunal was of the view that in the case of CIT Vs. S. Khader Khan Sons 2013 (6) TMI 305 - SUPREME COURT it has been held that the principle that Section 133A of the Act does not empower any I.T. authority to examine any person on oath and therefore any admission made in survey cannot by itself be made a basis for addition - the AO had no other material and / or corroborative material to justify the additions except the confessional statement of Shri Kishorbhai Karia recorded on 4.1.2007 which was subsequently retracted within a period 19 days and the same came to be explained with respect to additions there was no reasons to interfere with the judgment and order passed by the Tribunal Decided against Revenue.
Issues:
1. Amendment of proposed question 2. Common question of law and facts in both appeals 3. Impugned judgment by Tribunal for AY 2007-08 4. Surrendered income and additions made by Assessing Officer 5. Appeal by Revenue against Tribunal's decision 6. Consideration of material and retraction of statement 7. Tribunal's reasoning for deleting additions 8. Agreement with Tribunal's view and dismissal of appeals Analysis: 1. The High Court allowed the amendment of a proposed question by correcting a figure in the amount mentioned. 2. Both appeals were decided together as they involved common questions of law and facts arising from the same impugned judgment by the Income Tax Appellate Tribunal (Tribunal). 3. The Tribunal's judgment for Assessment Year (AY) 2007-08 was challenged by the Revenue, questioning the Tribunal's decision to delete certain additions made by the Assessing Officer. 4. The case involved a survey at a business premises leading to the surrender of undisclosed income by the assessee, which was disclosed in the returns for previous assessment years. The Assessing Officer made additions based on unexplained investments and cash in hand. 5. The Revenue filed appeals against the Tribunal's decision to delete the additions, raising substantial questions of law regarding the retraction of statements and the justification for the additions. 6. The Court considered the lack of corroborative material to support the additions besides the retracted statement of the assessee. The retraction was made within a short period, and explanations were provided for the surrendered income. 7. The Tribunal's decision to delete the additions was based on the assessee's explanations and actions, including the application of surrendered income towards various investments and payments. The Tribunal found no contrary material to warrant the additions. 8. The Court agreed with the Tribunal's reasoning, emphasizing the lack of additional evidence supporting the additions and upheld the decision to dismiss the Revenue's appeals based on the factual aspects and legal principles involved. This comprehensive analysis covers the issues raised in the judgment, detailing the background, arguments, and final decision rendered by the High Court in response to the appeals filed by the Revenue.
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