2016 (4) TMI 479 - HC - Income Tax

Addition on voluntary disclosure made during the course of survey - Held that - The Assessing Officer made the addition on the basis of the statement made during the course of survey despite the fact that the addition was not based upon any material found during the course of survey. The Commissioner (Appeals) upon appreciation of the material on record found that the addition made by the Assessing Officer was not backed by any supporting material indicating any undisclosed income to the extent of the addition. The Tribunal upon re-appreciation of the evidence on record concurred with the findings of fact recorded by the Commissioner (Appeals). There was no evidence on record to establish that there was any other undisclosed income in support of the addition made by the Assessing Officer. Under the circumstances the conclusion arrived at by the Tribunal being based upon the findings of fact recorded by it upon appreciation of the evidence on record in the absence of any perversity being pointed out therein the impugned order does not give rise to any question of law - Decided in favour of assessee

Summary

Issues:
Challenge to deletion of addition of undisclosed income made by Assessing Officer based on voluntary disclosure during survey proceedings.

Analysis:
The appellant revenue challenged the order passed by the Income Tax Appellate Tribunal regarding the addition of undisclosed income. The assessee's statement during a survey declared unaccounted income, but later, after analyzing impounded material, the undisclosed income was found to be lower. The Assessing Officer relied on the initial statement and added a significant amount to the income. However, the Commissioner (Appeals) and the Tribunal found that the addition lacked supporting material and reduced the undisclosed income amount. The Tribunal upheld the findings of the Commissioner (Appeals) based on the lack of evidence supporting the addition beyond the initial statement made during the survey.

The key issue revolved around the discrepancy in the undisclosed income declared by the assessee during the survey and the actual undisclosed income as per the impounded material. The Assessing Officer added a substantial amount based on the initial statement, but the Commissioner (Appeals) and the Tribunal found no supporting evidence for such an addition. The Tribunal concluded that there was no other evidence to establish any further undisclosed income beyond the initial statement, leading to the dismissal of the appeal.

The Tribunal's decision was based on the lack of evidence supporting the addition made by the Assessing Officer beyond the initial statement recorded during the survey. The Tribunal found no other undisclosed income backed by material on record, leading to the dismissal of the appeal. The decision highlighted the importance of concrete evidence to support additions to undisclosed income, emphasizing the need for a strong factual basis for such tax assessments.