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TMI Blog2023 (3) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... tly deleted by the CIT (A). Director of PL Raju Constructions (P) Ltd Shri P. Venkatapati Raju in his statement u/s 132(4) during the course of search on 22.4.2019 in his reply to question No.6 has specifically stated to cover up any deficiencies in the matter of DCS Ltd and any other deficiencies that may arise to give quietus to the litigation that may emerge in the matter of DCS Ltd, the company has admitted the additional income of Rs.32.00 crores out of which Rs.5,57,65,000/-relates to the impugned A.Y. In view of the above and in view of the detailed reasoning given by the CIT (A) we do not find any infirmity in the order of the CIT (A) deleting the addition.Grounds raised by the Revenue are dismissed. - ITA No.445/Hyd/2021 - - - Dated:- 14-3-2023 - Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member For the Assessee : Advocate Mohd Afzal For the Revenue : Shri KPRR Murthy,DR ORDER PER R.K. PANDA, A.M This appeal filed by the assessee is directed against the order dated 22.07.2021 of the learned CIT (A)-12, Hyderabad, relating to A.Y.2017-18. 2. Facts of the case, in brief, are that the assessee is a company engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and bills in the subcontract work from M/s PL Raju Constructions (P) Ltd. 5. However, the Assessing Officer was not satisfied with the arguments advanced by the assessee. He noted that the assessee has not filed any affidavit as claimed. Further, the additional income of Rs.2.00 crores was admitted by Shri P. Satya Prasad, Director of the assessee company during the course of survey. He, therefore, made addition of Rs.2.00 crores to the total income of the assessee. 6. Before the CIT (A) it was submitted that during the course of search u/s 132 in the case of M/s. PL Raju Constructions (P) Ltd the Income Tax Authorities had noticed that the said concern is resorting to issue of bogus subcontract work orders, bogus R.A Bills and release payment to the assessee company and the same amount was paid back in cash to M/s. PL Raju Constructions (P) Ltd by the assessee company to the extent of Rs.4,51,71,428/-. Basing on the above information, the Income Tax Authorities questioned the assessee company during the course of survey operation u/s 133A. Because of lack of proper information on hand at the time of survey and because of non-availability of proper Accountant at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. and a survey operation u/s. 133A was conducted in the case of the assessee on 26.02.2019. The appellant is a sub-contractor of M/s. PL Raju Constructions Pvt. Ltd. and the appellant has undertaken sub-contract works for M/s. PL Raju Constructions Pvt.Ltd. It was found during survey that the company has issued bogus RA bills and no work was undertaken by the appellant. On account of the discrepancies found during the survey, the Director of the appellant company Sri P. Satya Prasad has admitted additional income of Rs. 2 crores in the current year. During assessment proceedings, the appellant claimed that subsequent to survey, it was found that there was no evidence in respect of suppression of income or discrepancy in vouchers found at the time of survey operations and that they have filed affidavit confirming that the assessee has not suppressed any income and does not have any discrepancy of vouchers and bills in the subcontract work with M/s. PL Raju Constructions Pvt. Ltd. The assessee's contentions did not find favour with the AO and has made an addition of Rs. 2 crores in line with the declaration given by the appellant during survey. 5.5.1 During the appellate proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave perused the submissions of the appellant and the report of the AO. It is seen that during the current year, the appellant has entered into transactions with M/s. PL Raju Constructions Pvt. Lt. to the extent of Rs. 5,57,60,934/, The Director of M/s. PL Raju Constructions Pvt. Ltd., Sri P. Venkatapathi Raju in his statement recorded u/s. 132(4) of the IT Act, during the course of search on 22.04.2019, in reply to question No.6, has specifically stated that to cover up any deficiencies in the matter of DCS Limited and any other deficiencies that may arise and to give quietus to the litigation, that may emerge in the matter of DCS Limited, the company has admitted an additional income of Rs. 35 crores. This additional income was summarized below: A.Ys Addl. Income admitted over and above regular income 2016-17 16,80,15,000 2017-18 5,57,65,000 2018-19 12,62,20,000 5.5.3 The AO was specifically asked whether M/s. PL Raju Constructions Pvt. Ltd. has offered additional income over and above the regular income in its retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry. 10. The learned DR strongly challenged the order of the CIT (A) in deleting the addition made by the Assessing Officer. He submitted that when the assessee has admitted during the course of survey regarding the additional income, the learned CIT (A) should not have deleted the same merely on the ground that the additional income towards discrepancies was offered by M/s. PL Raju Constructions (P) Ltd and therefore, it amounts to double taxation of the same amount. He submitted that M/s. PL Raju Constructions (P) Ltd and the assessee are separate and unrelated entities and therefore, the additional income admitted by the assessee during the course of survey should not have been telescoped into additional income admitted by M/s. PL Raju Constructions (P) Ltd. He accordingly submitted that the order of the CIT(A) be reversed and that of the Assessing Officer be restored. 11. The learned Counsel for the assessee, on the other hand, strongly supported the order of the CIT (A). Referring to page 16 to 18 of the Paper Book, he drew the attention of the Bench to the affidavit filed by the assessee before the DDIT(Inv.) Unit-I Hyderabad wherein the assessee has retracted from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced in the preceding paragraphs. 14. We do not find any infirmity in the order of the CIT (A) deleting the addition made by the Assessing Officer. Admittedly Shri P. Satya Prasad, Director of the assessee company has admitted additional income of Rs.2.00 crores for the impugned A.Y during the course of survey in the premises of the assessee company on 26.02.2019. The above offer was given before the Add. Director of Income Tax on 26.2.2019. It is also an undisputed fact that the assessee vide affidavit dated 1.6.2019 filed before the DDIT (Inv.) Unit-I Hyderabad, copy of which is placed at page 16 to 18 of the Paper Book, had retracted from the statement. 15. We find the CBDT vide instruction F.No.286/2/2003- IT (Inv.) dated 10.03.2003 has directed the Field Officers not to make any addition on the basis of investigation made during the course of search survey unless such confession is backed by credible evidence. The contents of the instructions by the CBDT read as under: F. No. 286/2/2003-IT (Inv) GOVERNMENT OF INDIA MINISTRY OF FINANCE COMPANY AFFAIRS DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES Room No. 254/North Block, New Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th., In contradistinction to the power under section 133A. section 132(4) enables the authorized officer to examine a person on oath and any statement made by such person during such examination Can also be used in evidence under the Income-tax Act. On the other hand. whatever statement is recorded under section 133A is not given an evidentiary value. The statement obtained under section 133A would not automatically bind upon the assessee. Therefore. admission made during such statement cannot be made the basis of any addition. The scope of section 132(4) and section 133A [with regard to recording of statement of any person on oath/ has been considered at length by Hon'ble High Court of Kerala in the case of Paul Mathews and Sons v. CIT [2003 263 ITR 101 Kerala). Relevant findings of Hon'ble Court are reproduced hereunder: we find that such a power to examine a person on oath is specifically conferred on the authorized officer only under section 132(4) of the Income-tax Act in the course of any search or seizure. Thus. the Income-tax Act. whenever it thought fit and necessary to confer such power to examine a person on oath. the same has been expressl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Counsel for the assessee to the proposition that the statement recorded during the course of survey has no evidentiary value unless the same is backed by credible evidence, the addition made by the Assessing Officer was rightly deleted by the CIT (A). 20. It is also pertinent to mention here that the Director of PL Raju Constructions (P) Ltd Shri P. Venkatapati Raju in his statement u/s 132(4) during the course of search on 22.4.2019 in his reply to question No.6 has specifically stated to cover up any deficiencies in the matter of DCS Ltd and any other deficiencies that may arise to give quietus to the litigation that may emerge in the matter of DCS Ltd, the company has admitted the additional income of Rs.32.00 crores out of which Rs.5,57,65,000/-relates to the impugned A.Y. In view of the above and in view of the detailed reasoning given by the CIT (A) we do not find any infirmity in the order of the CIT (A) deleting the addition. Accordingly, the same is upheld and the grounds raised by the Revenue are dismissed. 21. In the result, appeal filed by the Revenue is dismissed. Order pronounced in the Open Court on 14th March, 2023. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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