Section 133A :No Addition on the Basis of Statement during Survey

ACIT Vs. Ajoy Bakli, I.T.A No. 312/Kol/2013, Date of Pronouncement: 06.05.2015, ITAT - Kolkata

Whether any disclosure of income by the assessee in the statement recorded u/s 133A during survey, could be taken as evidence to make addition of income by AO?

Held_No

Brief facts:

The assessee was engaged in the business of running a petrol pump and rice trading. A survey u/s. 133A was carried out at the business premises of the assessee on 24-03-2009. During the survey, statement of the assessee was recorded u/s.133A as well as u/s.131 in which he had disclosed an income of Rs. 23 lakhs. Assesee has filed his return of income for AY 2009-10 on 30-09-2009 declaring total income of Rs.22,24,550/- along with regular books of accounts duly audited u/s. 44AB and the entries therein were duly supported by evidence. The AO made an addition of Rs. 23 lakhs in the total income of the assessee for AY 2009-10 on the contention that during the course of survey, the assessee had disclosed an income of Rs. 23 lakhs, but failed to include this income in the return. However, the AO while framing the assessment was satisfied with the books of the assessee. Being aggrieved, assessee filed appeal before Ld. CIT(A) who reversed the order of AO by stating that in the absence of any other evidence, apart from the specious admission of disclosure obtained during survey, the impugned addition made to the total income of assessee was in disregard of law.

Held:

“Hon’ble Madras High Court in the case of CIT Vs. S.Khader Khan Son (2008) 300 ITR 157 (Mad.) has considered the evidentiary value of the statement recorded during the survey and held that on the basis of the statement  addition cannot be made. This judgment has been upheld by the Hon’ble Supreme Court. Similarly, the Hon’ble Kerala High Court in the case of Paul Mathews & Sons Vs. CIT reported in (2003) 263 ITR 101 (Ker.) has held that section 133A  empowers the authority to record the statement of  any person, which may be useful for, or  relevant to any proceeding under the Act. This section only enables the authority to record any statement of any person, which may be useful, but does not authorise for taking any sworn statement. The statement recorded by an officer on oath will be used as evidence in any proceeding, whereas statement recorded u/s. 133A has not given any evidentiary value. Respectfully, following the judgments of the Hon’ble Madras High Court, Kerala High and Hon’ble Supreme Court, we are of the view that the 1st appellate authority has not committed any error while deleting the addition. The ld. DR was also unable to point out any other corroborative evidence. In view of the above discussion, we dismiss the appeal of the revenue.”