HITECH ENGINEERS & CONSULTANTS PVT LTD,NEW DELHI V. ACIT, CIRCLE-11(2), NEW DELHI

ITA 5198/DEL/2024

AI Insights

The case involves Hitech Engineers & Consultants Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) sustaining an addition of Rs. 1,50,00,000 to their income for the assessment year 2016-17. This addition was based on a 'surrender' made during a survey under section 133A of the Income Tax Act, 1961. The appellant argued that the addition was unjustified as it was based solely on the survey statement, which lacked corroborative evidence. The Tribunal, referencing a judgment by the Delhi High Court in the case of PCIT-3 v/s ARN Infrastructure Ltd, agreed with the appellant, noting that statements recorded under section 133A do not have evidentiary value as they are not made under oath and are not supported by any corroborative material.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705513 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Other Referred Cases: PCIT-3 v/s ARN Infrastructure Ltd ITA 37/2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: KAPIL GOEL
• Keywords: Business income; Rejection of books of accounts; Retraction
• Section: 142(1); 145; 133A; 115JB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘B’: NEW DELHI) BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA No:- 5198/Del/2024 (Assessment Year- 2016-17) Hitech Engineers & Consultants Pvt. Ltd., C/o Kapil Goel Adv. F- 26/124 Sector 7, Rohini, Delhi. Vs. ACIT, Circle 11(2), New Delhi PAN No:AABCH5367H APPELLANT RESPONDENT Assessee by : Shri Kapil Goel, Adv. Revenue by : Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing : 01.05.2025 Date of Pronouncement : 30.06.2025 ORDER PER SUDHIR PAREEK, JM The aforecaptioned appeal has been preferred by the Assessee against the order of Commissioner of Income Tax (Appeal), Delhi-31 ([in short (Ld. CIT(A)] dated 18.10.2024 for AY2016-17. 1.1. The Assessee/appellant has raised the following grounds of appeal for adjudication: ITA No.- 5198/Del/2024 Hitech Engineers & Consultants Pvt. Ltd. 2 “ That Ld. CIT(A) erred in sustaining addition made by the Ld. AO in impugned assessment order to the extent of Rs. 150,00,000/- on a/c of stated “surrender” made during the course of survey action u/s 133A of 1961 Act which is untenable in law.” 2. Facts of the case may be narrated as that the assessee/appellant, filed its return of income on 16.10.2016 declaring total income of Rs. 2,48,11,490 under normal provision and income of Rs. 2,41,87,677/- u/s 115JB of the I.T. Act, 1961. Thereafter, the case was selected for compulsory manual scrutiny and in persuation thereof notice u/s 143(2) and 142(1) issued on 29.09.2017,30-01-2018 and20-08-2018 respectively and duly served on the assessee. 2.3 The survey in the case of the assessee was conducted u/s 133A on 22.09.2015 by the DDIT (Investigation)-I, Gurugram, report of which was forwarded to the office of the Learned AO alongwith survey report and documents found and impounded during the course of survey. In the course of proceedings, the Learned AO rejected the books of accounts as per provision of section 145(3) of the Act by stating that books of accounts of the assessee are patently inaccurate, incomplete and defective for which reason rejection of the books of accounts is justifiable. The Learned AO ITA No.- 5198/Del/2024 Hitech Engineers & Consultants Pvt. Ltd. 3 computed total income of Rs 7,23,98,160/-. Aggrieving with above, the assessee filed appeal before the Learned CIT(A), where the addition to the extent of Rs 1,50,00,000/- upheld and sustained out of total addition of Rs 4,73,15,108/-. 3. On being dissatisfied with the impugned order, assessee before us by way of present appeal and submitted that the Learned AO erroneously sustained addition made by the Learned AO on account of surrender made during the course of survey action u/s 133A of the Act which is not tenable in the eye of law. 4. Heard rival submission and carefully perused the material available on record. 5. In the course of hearings, the Learned AR submitted that vide impugned order, addition of Rs 323,15,108/- on account of deviation in closing stock was deleted but the amount on account of surrendered during survey in statement u/s 133A of the Act was sustained and also submitted that the Learned CIT(A) reversed the rejection of the books of account, for which the Revenue not in appeal and on being so, it has retained the finality. It is also ITA No.- 5198/Del/2024 Hitech Engineers & Consultants Pvt. Ltd. 4 submitted that while doing so, the Learned CIT(A) observed that there is no any unaccounted sale/purchase. 6. Further submitted that it is undisputed that the books of account of the assessee found to be valid, correct and complete and also that no unaccounted sale/purchase in the hands of the assessee and above all, it is quite relevant to mention here that only reason to sustain the addition in question is statement recorded u/s 133A of the Act. In this regard it is submitted that there is no any correlation to any corroborative material and same cannot exist when the books of assessee are found to be correct and valid u/s 145 of the Act. It is also submitted that it is well settled that additions cannot be made on unfounded surmises. 7. Per Contra, the Learned DR relied upon the impugned order by submitting that the assessee never retracted or filed any retraction letter from declaration made during survey of the undisclosed income in question. 8. The Learned AR relied upon the judgement passed in the case the PCIT-3 v/s ARN Infrastructure Ltd ITA 37/2019 dated 27-07- 2023, in which Hon’ble High Court Of Delhi held that the statement recorded u/s 133A of the Act has no any evidentiary ITA No.- 5198/Del/2024 Hitech Engineers & Consultants Pvt. Ltd. 5 value, since the officer concerned is not authorized to administer oath and record a sworn statement, relevant extract thereof is hereby reproduced as under: 24. Given the position, the Tribunal in our view, quite correctly has concluded that since there was no corroborative material available for making addition, the assessment order, qua this aspect, could not be sustained. 25. As observed by the Madras Hihg Court in S. Khader Khan Son’s case, there is a qualitative difference between the statement recorded under Section 133A and Section 132(4) of the Act. 26. The statement recorded under Section 133A of the Act has no evidentiary value, since the officer concerned is not authorized to administer oath and record a sworn statement. This is in contradiction with the statement recorded 132(4) of the Act, which is recorded on oath by an officer who is vested with necessary powers. 27. Given this position and the fact that no corroborative evidence was found to support that addition, we are not inclined to interfere with the impugned order passed by the Tribunal. ITA No.- 5198/Del/2024 Hitech Engineers & Consultants Pvt. Ltd. 6 9. The Learned CIT(A) observed that in the light of statement given by the director on oath u/s 133A of the Act, there is no merit to delete the addition in question. Relevant extract thereof as under; 6.3 With retrospective the second issue of addition ofRs.1,50,00,000/- (included in addition of Rs.4,73,15,107/- it observed from the statement given by the director Mr. Rajeev Bansal on oath under section 133A in Q. NO.40 where director himself admitted to surrender Rs.1.5 crores as income of the company to cover discrepancies found during survey. It has been further categorically stated by the director his statement that this amount of Rs.1.5 Crore would be over and above the normal business income of the company and no expense would be claimed against the said amount of Rs.1.50 Crore. In light of above surrender of income by the director of the appellant company and its affirmation in the assessment proceedings by his authorized representative Mr. C.P. Gupta in response to summons issued on 06.12.2018, I am unable to find merit in submissions of the appellant to delete the addition of Rs.1.50 Crore. Since the amount of Rs.1.50 Crores has been self-declared on basis of discrepancies found by the survey team, the addition to the extent of Rs.1.50 Crore ITA No.- 5198/Del/2024 Hitech Engineers & Consultants Pvt. Ltd. 7 is upheld and sustained out of total addition ofRs.4,73,15,108/- and balance addition is deleted. 10. The Learned AR vehemently argued that from the bare perusal of the impugned order ,it is manifested that addition in question is based solely on the statements recorded u/s 133A of the Act, which has no any evidentiary value and as per established principles of law addition in question unsustainable only on this plea and it is also essential to mentioned that in the impugned order, it is held that it has not been pointed out any instance of unaccounted sales or purchases by bringing any cogent material to discard the trending results of the appellant and revenue from operations/gross are not in doubt. 11. On the basis of foregoing fact situation and by following binding judicial precedent as mentioned hereinbefore, we finds material substance in the plea of the assessee/appellant and hold that appeal of the assessee deserves to be allowed, by deleting the addition in question. 12. Consequently, the appeal of the assessee is hereby allowed as indicated above. ITA No.- 5198/Del/2024 Hitech Engineers & Consultants Pvt. Ltd. 8 Order pronounced in the open court on 30.06.2025. Sd/- Sd/- (SHAMIM YAHYA) (SUDHIR PAREEK) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 30.06.2025 Pooja/NEHA, Sr. PS/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, Delhi "