2016 (11) TMI 948 - AT - Income Tax

Addition based on mere survey statement - non availability of incriminating document found - Held that - not a single incriminating document or evidence or loose sheet has been found. We put a specific query to the learned departmental representative to place on record any evidence or material other than statements of assessee s partners supportive of the impugned addition. He replied in negative. We are of the opinion in these peculiar facts and circumstances that the impugned addition based on mere survey statement is not sustainable - Decided against revenue

Summary

Issues:
Appeal against deletion of unaccounted income addition based on partners' statements during survey for A.Y. 2008-09.

Analysis:
1. The appeal arose from the CIT(A)'s decision to delete the unaccounted income addition of ?1,59,17,275 made by the Assessing Officer based on the partners' statements during a survey. The partners had initially disclosed unaccounted income of ?2,35,27,525 during the survey, but the assessee later retracted part of this disclosure, claiming it was based on estimation and incorrect expenditure calculations.

2. The Assessing Officer rejected the retraction, stating that the partners' statements were voluntary, exclusive knowledge about the income, and lacked evidence of incorrectness. The CIT(A) disagreed with this assessment, highlighting that the retraction was justified due to unconsidered expenses from the previous financial year and the lack of incriminating evidence found during the survey.

3. The CIT(A) emphasized that the survey did not yield any incriminating documents and that the retraction was made within a reasonable time after the survey. It was noted that the Assessing Officer failed to gather additional evidence to support the unaccounted income addition beyond the partners' statements, which were retracted with valid reasons.

4. The Tribunal concurred with the CIT(A)'s decision, stating that the addition based solely on the partners' statements without corroborating evidence was not sustainable. Citing relevant case law and board instructions, the Tribunal upheld the deletion of the unaccounted income addition, as the Revenue could not provide any additional material to support the Assessing Officer's decision.

5. Ultimately, the Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision to delete the unaccounted income addition. The judgment was pronounced on 09-06-2016, emphasizing the importance of substantiating additions with concrete evidence beyond mere statements.