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TMI Blog2018 (1) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... answered are hereunder :- "(A) Whether in the facts and circumstances of the case, the learned ITAT was justified in law by upholding the addition of Rs. 1,31,00,000/- made by the Assessing Officer but simultaneously allowing exemption under Section 10A to the assessee on additional income surrendered by the assessee during the course of survey proceedings ? (B) Whether in facts and circumstances of the case, the learned ITAT was justified in law by without considering the fact that the impugned stock was kept outside books, as it cannot be denied that bringing it into books; would have meant an increase closing stock and an increased income, all of which would not eligible for exemption under Section 10A because such deemed increased i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The net profit had been earned to the tune of Rs. 3,33,48,394.00 from 100% Export sales. Since the unit is located at NSEZ, the profit shown was 100% exempt from tax under the provisions of Section 10A/10AA of the Act. A survey under Section 133A of the Act was carried out on 03.08.2006 and during the course of survey physical stock of gold was taken. A list of which was given to the assessee and a difference of 12 kgs. gold was found. Apart from the said excess gold recovered/found some loose papers were also found which did not tally with the books of account available. The statement of the working partner had been recorded at the time of survey. During the survey proceedings unaccounted stock on account of wastage suppression was found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad filed an appeal before the ITAT and the ITAT vide order impugned dated 18.12.2015 had upheld the addition of Rs. 1,31,00,000/- made by the Assessing Officer and confirmed the order of the Commissioner of Income Tax (Appeals) on account of suppression of stock and difference in books of account and had further observed that the surrendered amount related to the regular business of the assessee and it is not brought on record that the assessee earned the said income from any other sources. The Tribunal wrongly held that the deduction u/s 10A was allowable to the assessee being 100% Export sales unit established in NSEZ. The Tribunal has wrongly directed the AO to allow the deduction under Section 10A of the Act. The department has now com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 0.6% to 0.85% and recovered gold accumulated to that extent of 12 kg. The gold recovered by the assessee from the wastage was in its regular course of business of manufacturing and export of gold jewellery and "there was no local sale." The AO accepted that the assessee was eligible for deduction u/s 10A of the Act being 100% Export Oriented Unit established in Noida Special Economic Zone. The assessee disclosed the gold recovered from the wastage in its books of accounts after the survey and the same was sold which was also entered in the stock register. The department had accepted the books of accounts maintained by the assessee in its regular course of business. The assessee disclosed the sale of the gold weighing 12 kg which was rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is recorded under Section 133A, the officer recording statement is not authorized to administer oath or to take any sworn statement, which alone would have evidentiary value as contemplated under the law or become admissible under the law. It is clear, therefore, that any material collected and any statement recorded during a survey under Section 133A could not be said to be a conclusive piece of evidence itself or that it would led to the inevitable conclusion that any such disclosure made by way of statement would be the lawful statement of the assessee. It appears that the assessee had served a sum of Rs. 11 lacs merely to cover up the irregularities of his business and shortcomings found during the course of survey. Having considere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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