Avinash Kumar Setia, New Delhi V. DCIT, New Delhi

ITA 1787/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8209 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 12-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 26-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GOTRU
• Keywords: Search and seizure; Document seized; Retraction; Documents seized
• Section: 133A

Judgement Text

ITA NO.1787/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO. 1787 /DEL/201 4 A.Y. 20 0 9 - 10 AVINASH KUMAR SETIA B-33, SHIVALIK, MALVIYA NAGAR, NEW DELHI 110 017 (PAN: ABBPS9057K) VS. DCIT, CENTRAL CIRCLE - 17, NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. UN MARWAH, FCA DEPARTMENT BY : SH. SHRAVAN GOTRU, SR. DR DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 12 1212 12- -- -0 00 04 44 4- -- -201 201 201 2016 66 6 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 2 22 28 88 8- -- -0 00 04 44 4- -- -201 201 201 2016 66 6 ORDER ORDER ORDER ORDER PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, NEW DELHI DATED 14.1.2013 PERTAINING TO ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUND: - THE LD. CIT(A) ERRED IN FACT AND IN LAW CONFIRMING THE ADDITION OF RS. 1,25,00,000/-, WHICH IS NOT ONLY BAD IN LAW BUT ALS O AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED HIS RETURN OF INCOME ON 4.10.2010 DECLARING INCOME AT RS. 4,43,912/-. IN THIS CASE, SURVEY U/S. 133A WAS CARRIED OUT ON 20.10.2008 WHEREIN THE ASSESSEE MADE A VOLUNTARY ITA NO.1787/DEL/2013 2 DISCLOSURE OF ADDITIONAL INCOME OF RS. 1,25,00,000/ -, BUT THE SAME WAS NOT DECLARED BY THE ASSESSEE IN HIS RETURN. ACCORDINGLY , THIS CASE WAS TAKE UP FOR SCRUTINY AND AO ISSUED NOTICE U/S. 142(1)/143(2) AL ONGWITH QUESTIONNAIRE DATED 25.10.2010 FOR FIXING THE CASE OF THE ASSESSEE FOR 1.11.2010. IN RESPONSE TO THE SAME, AUTHORISED REPRESENTATIVE OF THE ASSESSEE APP EARED FROM TIME TO TIME AND FILED REQUISITE INFORMATION / DOCUMENTARY EVIDENCE. THE AO SUMMONED THE ASSESSEE AS TO WHY THIS INFORMATION WAS NOT DECLARE D IN THE RETURN. THE ASSESSEE IN HIS STATEMENT HAS SUBMITTED THAT THE RETURN OF INCOME WAS FILED ON THE BASIS OF THE BOOKS OF ACCOUNTS BASED ON ACTUAL FACTS AND FI GURES. ASSESSEE FURTHER STATED THAT THE PART DECLARATION WAS GIVEN TO THE INVESTIG ATION DEPARTMENT UNDER PRESSURE. IT WAS ALSO STATED BY HIM THAT NO INCRIM INATING DOCUMENTS WERE FOUND DURING THE COURSE OF SURVEY AND THEREFORE, HE RETRA CTED FROM HIS DECLARATION AT THAT TIME AND ALSO AT THE TIME OF FILING THE RETUR N. THE AO CONSIDERED THE REPLY FILED BY THE ASSESSEE ALONGWITH OTHER DOCUMENTARY EVIDENCE AND HELD THAT THE ASSESSEE HAS NOT SHOWN ANY VALID REASON FOR NOT INC LUDING RS. 1.25 CRORES WHICH HE HAS VOLUNTARY SURRENDERED IN HIS RETURN OF INCOM E DURING THE SURVEY. THE AO FURTHER HELD THAT THE DOCUMENTS WERE FOUND DURING SURVEY AND IN RESPONSE TO THE DOCUMENT, ASSESSEE HAS MADE A DECLARATION AFTER SUC H A LONG TIME AT THE TIME OF FILING OF THE RETURN THE RETRACTION MADE IS AN AFT ERTHOUGHT. AS FAR AS SURRENDER MADE ORIGINALLY IS CONCERNED, IT WAS NOT UNDER DURE SS OR COERCION PARTICULARLY WHEN THE SURRENDER WAS NOT MADE ON THE VERY DAY OF SURVEY ITSELF. TO PRESUME PRESSURE OR COERCION EVEN AFTER 2 MONTHS IS AGAINST THE COMMON SENSE. IT IS POSSIBLE THAT AFTER HAVING MADE SURRENDER THEY HAD MANIPULATED THEIR ACCOUNTS SO AS TO NEGATE THE SURRENDER WHICH WAS VOLUNTARILY MADE. FINALLY, THE AO ADDED THE AMOUNT OF RS. 1.25 CRORES AS UNDISCLOSED INCOME OF THE ASSESEE, IN ADDITION TO THE INCOME AS RETURNED BY HIM AND COMPL ETED THE ASSESSMENT ON 29.12.2011 U/S. 143(3)/147 OF THE I.T. ACT. ITA NO.1787/DEL/2013 3 3. AGGRIEVED WITH THE ACTION OF THE ASSESSING OFFIC ER, ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 14.1.2013 HAS UPHELD THE ASSESSMENT ORDER BY DISMISSING THE APP EAL FILED BY THE ASSESSEE. 4. AGAINST THE LD. CIT(A)S ORDER DATED 14.1.2013, NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, SH. UN MARWAH, FCA/AUTHO RISED REPRESENTATIVE OF THE STATED THAT THE SIMILAR ISSUE HAS BEEN ADJUD ICATED AND DECIDED IN FAVOUR OF THE ASSESSEE BY THE ITAT IN THE CASE OF M/S IIBS IN FONET (P) LTD. VS. ACIT REPORTED IN 2016 (4) TMI 346 ITAT, DELHI, VIDE ORDER DATE D 8.3.2016 (IN WHICH THE JUDICIAL MEMBER IS THE AUTHOR OF THE ORDER) HAS H ELD THAT THE ADDITION MADE BY THE AO ON THE BASIS OF THE STATEMENT RECORDED U/S. 133A OF THE I.T. ACT, 1961 WITHOUT BRINGING ANY CORROBORATIVE MATERIAL ON RECO RD IS NOT SUSTAINABLE IN THE EYES OF LAW. HE FURTHER STATED THAT THE ORDER DATE D 8.3.2016 THE BENCH HAS ALSO HELD THAT THE ADDITION CANNOT BE MADE ON THE BASIS OF THE STATEMENT RECORDED DURING THE SURVEY U/S. 133A OF THE I.T. ACT IN VIE W OF THE VARIOUS JUDICIAL DECISION WHEREIN IT HAS BEEN HELD THAT THE SUCH STATEMENT D OES NOT HAVE ANY EVIDENTIARY VALUE ESPECIALLY THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. KAHDER KHAN SON (2008) 300 ITR 157 WHICH H AS BEEN UPHELD BY THE HONBLE SUPREME COURT OF INDIA IN THE CASE CIT VS. KHADER KHAN SON REPORTED IN (2012) 25 TAXMAN.COM 413 (SC) AND APPEAL FILED BY T HE REVENUE WAS DISMISSED BY HOLDING THAT SECTION 133A DOES NOT EMPOWER ANY I TO TO EXAMINE ANY PERSON ON OATH. IN ADDITION TO THESE CASES, HE RELIED UPO N THE FOLLOWING CASES ALSO:- - PULLANGODE RUBBER PRODUCE CO. VS. STATE OF KERALA (1973) 91 ITR 18 (SC) ITA NO.1787/DEL/2013 4 - RAVINDER KUMAR VS. DEPUTY COMMISSIONER OF INCOME TAX (2008) 33 SOT 25 (DELHI HIGH COURT) - TDI MARKETING (P) LTD. VS. ACIT (2008) 28 SOT 215 (DELHI HIGH COURT) - MAHESH OHRI VS. ACIT (2013) 23 ITR 522 154 - CIT VS. P. BALASUBRAMANIAN (2013) 33 TAXMANN.COM 130 (MADRAS HIGH COURT) - ITO VS. SURRENDER KUMAR JAIN ITA NO. 3871/DEL/201 1 - GAJJAM CHINNA YELLAPPA VS. ITO (2015) 370 ITR 671 (T&AP) (HC) - CIT VS. UTTAM CHAND JAIN (2010) 320 ITR 554 - R. ARUN VS. ITO, 2016 (3) TMI 321 ITAT, CHENNAI. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT THE SAME MAY BE UPHELD AND THE APPE AL OF THE ASSESSEE MAY BE DISMISSED ACCORDINGLY. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS PASSED BY THE REVENUE AUT HORITIES ALONGWITH THE STATEMENT RECORDED U/S. 133A OF THE I.T. ACT AND TH E CASE LAW CITED BY THE LD. COUNSEL OF THE ASSESSEE AS WELL AS CBDT INSTRUCTION NO. 286/2/2006/IT/(INV) DATED 10.3.2003; DECLARATION DATED 18.12.2008 MADE DURING THE PROCEEDINGS U/S. 133A OF THE I.T. ACT OF ESTIMATED INCOME; WITH DRAWAL DATED 16.12.2010 OF SURRENDER / DECLARATION MADE DURING SURVEY OPERATIO N CONDUCTED U/S. 133A OF THE I.T. ACT, 1961 ; AFFIDAVIT FILED DURING THE A SSESSMENT PROCEEDINGS BEFORE THE ITA NO.1787/DEL/2013 5 AO. FOR THE SAKE OF CONVENIENCE, WE ARE REPRODUC ING THE CONTENTS OF DECLARATION; WITHDRAWAL AND THE AFFIDAVIT FILED BY THE ASSESSEE ARE AS UNDER:- DECLARATION DATED 18.12.2008 DECLARATION DATED 18.12.2008 DECLARATION DATED 18.12.2008 DECLARATION DATED 18.12.2008 FROM: A VINASLT KUMAR SETIA B-33, SHIVALIK, MALVIYA NAGAR, NEW DELHI 18TH DECEMBER,2008 TO, ASSISTANT DIRECTOR OF INCOME TAX (INVESTIGATION) UNIT - 1 (2) NEW DELHI REG: MR. A VINASH KUMAR SETIA, B-33, SHIV ALIK, MAL VIY A NAGAR, NEW DELHI-H0017 SUB: DECLARATION DURING PROCEEDING U/S 133-A OF THE INCOME TAX ACT OF ESTIMATED INCOME DATE OF SURVEY: 20TH OCTOBER, 200S/21ST OCTOBER 200 S ~ ITA NO.1787/DEL/2013 6 RESPECTED MADAM, KINDLY NOTE THAT SURVEY PROCEEDINGS WERE CARRIED OU T AT MY PREMISES ON 20-10- 2008/21-10-.2008 AND CERTAIN RECORDS AND DOCUMENTS WERE SEIZED. I HAVE BEEN TENDERING THE EXPLANATIONS/CLARIFICATIONS ABOU T VARIOUS DOCUMENTS FROM TIME TO TIME. I HEREBY DECLARE THAT I SHALL PAY INCOME TAX ON EST IMATED INCOME, OVER AND ABOVE MY NORMAL INCOME, OF RS. 1,25,00,000/- (RUPEE S ONE CRORE TWENTY FIVE LACS ONLY) AND PAY INCOME TAX THEREON IN DUE C OURSE OF TIME. THIS INCOME - WILL BE AS PER THE IMPOUNDED DOCUMENTS, IMPOUNDED C OMPUTERS AND/OR IMPOUNDED RECORD. I HIS ESTIMATED INCOME SHALL BE D ECLARED IN MY OWN INDIVIDUAL CASE OR ANY OTHER ASSOCIATES CONCERN OR COMPANY IN WHICH I HAVE INTEREST. THIS DECLARATION MAY BE TREATED AS A DECLARATION MA DE IN PURSUANCE OF PROCEEDINGS UNDER SECTION 133-A OF THE INCOME TAX A CT, 1961. THIS DECLARATION IS MADE VOLUNTARILY AND TO BUY PEA CE AND AVOID PROTRACTED LITIGATION WITH THE INCOME TAX DEPARTMENT WITH UNDE RSTANDING THAT PENALTY U/S271(1) ( C ) THE INCOME TAX ACT, AS WELL AS THE PROSECUTION PROCEEDINGS SHALL NOT BE INITIATED AGAINST ME OR ANY OF MY CONCERN IN WHICH I HAVE INTEREST. THANKING YOU, YOURS FAITHFULLY, SD/- (AVINASH KUMAR SETIA) ITA NO.1787/DEL/2013 7 WITHDRAWAL DATED 16.12.2010 OF DECLARATION DATED 18 .12.2008 WITHDRAWAL DATED 16.12.2010 OF DECLARATION DATED 18 .12.2008 WITHDRAWAL DATED 16.12.2010 OF DECLARATION DATED 18 .12.2008 WITHDRAWAL DATED 16.12.2010 OF DECLARATION DATED 18 .12.2008 AVINASH KUMAR SETIA C-142, G.F. , SARVODAYA ENCLAVE, NEW DELHI - 110 017. TO ASSISSTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-17 NEW DELHI. SIR, RE:- IN THE MATTER OF SH A VINASH KUMAR SETIA WITHD RA WAL OF SURRENDER DECLARATION MADE DURING SURVEY OPERATION CONDUCTED U/S 133A OF THE INCOME TAX ACT 1961 ===================================== THIS IS TO INFORM YOU THAT DURING SURVEY OPERATION CONDUCTED U/S 133A OF THE INCOME TAX ACT 1961, DECLARATION WAS MADE VIDE LETT ER DATED 18/12/2008 MAKING AN SURRENDER OF RS 1.25 CRORE IN MY INDIVIDU AL CASE AS WELL AS ANY OTHER ASSOCIATE CONCERN IN WHICH IHAD INTEREST. THAT THE SAID DECLARATION WAS MADE U/S 133(A) OF TH E INCOME TAX ACT ~1961. IN THIS CONNECTION IT IS SUBMITTED THAT LETTER FOR DEC LARATION WAS GIVEN TO INVESTIGATION DEPARTMENT UNDER THE PRESSURE OF INCOME TAX AUTHORI TIES AND TO INCLUDE ADDITIONAL ESTIMATED INCOME IN THE RETURN ON THE BA SIS SEIZED DOCUMENTS. THIS ITA NO.1787/DEL/2013 8 LETTER WAS FILED TO REMOVE THE PRESSURE OF THE INCO ME TAX AUTHORITIES AND IT DOES NOT REPRESENT TRUE AND CORRECT PICTURE OF THE AFFAI RS. FURTHER IT IS ALSO SUBMITTED. THAT THERE WAS NO INCRIMINATING DOCUMENTS SEIZED/FO UND DURING THE COURSE OF SUGGESTING THE UNDISCLOSED INCOME OF RS 1.25 CRORE IN THE HANDS OF ASSEESSE. THIS FACT IS ALSO PROVED FROM THE SEIZED DOCUMENTS AND B OOKS OF ACCOUNTS REGULARLY MAINTAINED BY THE ASSESSE. KEEPING THIS FACTUAL POS ITION INTO CONSIDERATION AND BACKGROUND, NO SUCH INCOME IS DECLARED IN THE RETUR NS FILED FOR A. Y 2009-10. FURTHER THE ASSESSMENT HAS TO BE MADE ON THE BASIS OF ACTUAL INCOME AND NOT ON THE BASIS OF HYPOTHETICAL FIGURE. THE INCOME TAX RETURN FOR THE CAPTIONED ASSESSMENT YEAR WAS FILED BASED ON THE REGULAR BOOK S OF ACCOUNTS WHICH ARE ALREADY SEIZED BY THE DEPARTMENT .ACCORDINGLY FACTS AND FIGURES CAN BE VERIFIED FROM THE SEIZED MATERIAL INCLUDING THE BOOKS OF ACC OUNTS. FURTHER YOUR KIND ATTENTION IS INVITED TO INSTRUCTI ONS NO. 286/2/2003/IT(INV) DATED 10TH MARCH, 2003.ISSUED BY OF INDIA, MINISTRY OF FINANCE AND COMPANY AFFAIRS, DEPARTMENT OF REVENUE, CBDT WHICH IS REPRODUCED AS UNDER:- ' 'TO ALL CHIEF COMMISSIONER OF INCOME TAX (CADRE CONTROL) & ALL DIRECTORS GENERAL OF INCOME TAX. SIR, SUBJECT: CONFESSION OF ADDITIONAL INCOME DURING SEA RCH AND SEIZURE AND SURVEY OPERATION REGARDING ITA NO.1787/DEL/2013 9 SUBJECT:- CONFESSION OF ADDITIONAL INCOME DURING SE ARCH &SEIZURE AND SURVEY OPERATION-REGARDING. INSTANCES HAVE COME TO NOTICE OF THE BOARD WHERE AS SESSE HAVE ADMITTED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOS ED INCOME DURING THE COURSE OF THE SEARCH& SEIZURE-AND SURVEY OPERATIONS. SUCH CONFESSION, IF NOT BASED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSE WHILE FILING RETURN OF INCOME. IN THESE CIRCUMSTANCES, ON CONFES SION DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATION DO NOT SERVE ANY USEFUL PURPOSE. IT IS THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND C ONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WH AT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENT. SIMILARLY, WHILE RECORDING THE STATEMENT DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATION NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFE SSION AS TO THE UNDISCLOSED INCOME, ANY ACTION SHALL BE VIEWED ADVERSELY. FURTHER IN RESPECT OF PENDING ASSESSMENT PROCEEDING S ALSO, ASSESSING OFFICERS SHOULD ~ UPON THE EVIDENCES/ MATERIAL GATHERED DURI NG THE COURSE OF SEARCH/ SURVEY OPERATIONS OR THEREAFTER WHILE FRAMING THE R ELEVANT ASSESSMENT ORDERS. YOURS FAITHFULLY, SD/- S.RMAHAPATRA) UNDER SECRETARY(INV 11) ITA NO.1787/DEL/2013 10 FURTHER AS INFORMED EARLIER, THAT THERE WAS NO INCR IMINATING DOCUMENTS SEIZED/FOUND DURING THE COURSE OF SUGGESTING THE UN DISCLOSED INCOME OF RS 1.25 CRORE AND ALSO NO SUCH INCRIMINATING DOCUMENTS HAS BEEN POINTED OUT BY YOUR GOODSELF IN THE QUESTIONNAIRE ISSUED BY YOU TO SUGG EST THAT THERE WAS UNDISCLOSED INCOME EARNED BY THE ASSESSE DURING THE CAPTIONED ASSESSMENT YEAR. IT IS SUBMITTED THAT AS PER INSTRUCTION OF CB DT ON THE CAPTIONED SUBJECT AND ALSO BASED ON THE VARIOUS JUDGEMENTS, IT IS A WELL ESTABLISHED PRECEDENCE THAT IN THE ABSENCE OF ANY EVIDENCE, NO ADDITION IS REQUIRE D TO BE MADE FOR ANY ADHOC DECLARATION MADE BY THE ASSESSE. AND FOR THIS PROPO SITION OF LAW WE RELY ON THE JUDGEMENT :- B) PAUL MATHEW & SONS VS CRT 263 ITR 10 I (KER) C) SANJEEV KUMAR PANDHI VS CIT 305 ITR 101(P&H) D) ABHI DEVELOPERS VS ITA. 12 SOT 444 (AHM) IN VIEW OF THE ABOVE FACTS AS INFORMED EARLIER , NO INCRIMINATING DOCUMENTS SEIZED/FOUND DURING THE COURSE OF SUGGESTING THE UN DISCLOSED INCOME NOR ANY SUCH DOCUMENTS WERE CONFRONTED BY THE ASSESSING OFF ICER WHICH CAN RESULT INTO AN ADDITION OF ADDITIONAL INCOME OF RS 1.25 CRORE. HENCE NO SUCH INCOME WAS INCLUDED AND IN VIEW OF TH E ABOVE FACTS, NO ADVERSE INFERENCE MAY KINDLY BE DRAWN IN THIS REGARD. ANY OTHER CLARIFICATION IF NEEDED, THE SAME SHALL B E GIVEN AT YOUR CONVENIENCE. SD/- (AVINASH KUMAR SETIA) ITA NO.1787/DEL/2013 11 CONTENTS OF THE AFFIDAVIT CONTENTS OF THE AFFIDAVIT CONTENTS OF THE AFFIDAVIT CONTENTS OF THE AFFIDAVIT BEFORE THE ASSESSING OFFICER AFFIDAVIT IN THE MATTER OF ASSESSMENT PROCEEDINGS UNDER INCOME TAX ACT AFFIDAVIT OF SH. AVINASH KUMAR SETIA S/O LATE SH RC . SETIA AGE 40 YEARS RIO C .. 142, GROUND FLOOR, SARVODAYA ENCLAVE, NEW DELH I -110 017. I, THE ABOVE NAMED DEPONENT, DO SOLEMNLY AFFIRM AND STATE ON OATH AS FOLLOWS :- 1. THAT I AM ASSESSED TO TAX IN CENTRAL CIRCLE -17, NEW DELHI UNDER PAN: ABBPS9057K. 2. THAT I WAS PRESENT IN THE PREMISES WHEN THERE WA S A SURVEY OPERATION (NOT A SEARCH AND SEIZURE OPERATION) AND THEREFORE, THE CA SE IS COVERED BY SECTION 133A AND WHAT IS PROHIBITED UNDER SECTION 133A(4) CANNOT BE CIRCUMVENTED BY RESORT TO SUMMONS UNDER SECTION 131. 3. 'THE EVIDENTIARY VALUE OF THE STATEMENT RECORDED DURING A SURVEY OPERATION IS UNLIKE SECTION 132(4) WHICH TREATS THE STATEMENTS D URING SEARCH AND SEIZURE OPERATION AS EVIDENCE IN ANY PROCEEDINGS UNDER THE IN INDIAN INCOME TAX ACT. SECTION 133A, WHILE AUTHORIZING RECORDING OF STATEM ENT BY THE SURVEY OFFICER, DOES NOT GIVE THE SAME STATUS OF 'EVIDENCE TO SUCH RECORDED STATEMENTS'. THIS HAVE BEEN POINTED OUT IN PAUL MATHEWS & SONS VS. CI T (2003) 263 ITR 101. THAT IT IS THEREFORE, OPEN TO THE ASSESSEE TO EXPLAIN TH E STATEMENTS RECORDED DURING THE SURVEY AND BRING OUT THE FOLLOWING FACTS ON RECORD: A. THAT THERE WAS NO NOTICE TO ME. B. THE STATEMENT DOES NOT INDICATE THAT WHETH ER IT REFERS IS TO THE LIMITED ITA NO.1787/DEL/2013 12 COMPANIES, FIRMS OR MY PERSONAL ASSESSMENTS. SD/- DEPONENT VERIFICATON I, THE ABOVE NAMED DEPONENT, HEREBY DECLARE AND VER IFY THAT THE CONTENTS OF ALL THE PARAGRAPHS ABOVE ARE TRUE TO MY PERSONAL KNOWLE DGE AND IS ALSO BASED ON LEGAL ADVICE RECEIVED. AND NOTHING MATERIAL HAS BEE N CONCEALED AND IS FALSE. SO HELP ME GOD. SD/- DEPONENT 7.1 WE FIND CONSIDERABLE COGENCY IN THE LD. AR OF THE ASSESSEE THAT THE TRIBUNAL VIDE ORDER DATED 8.3.2016 HAS DEALT THE SI MILAR ISSUE AND DECIDED THE SAME IN FAVOUR OF THE ASSESSEE IN THE CASE OF M/S I IBS INFONET (P) LTD. VS. ACIT REPORTED IN 2016 (4) TMI 346 ITAT, DELHI, (IN WH ICH THE JUDICIAL MEMBER IS THE AUTHOR OF THE ORDER). FOR THE SAKE OF CONVENIENCE , WE ARE REPRODUCING THE RELEVANT PARA NO. 8 & 9 OF THE ORDER DATED 8.3.201 6 (SUPRA) AS UNDER:- 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES, S TATEMENT RECORDED U/S. 133A OF THE ACT AND THE CASE LAWS CITED BY THE LD. COUNSEL OF THE ASSESSEE, AS AFORESAID AS WELL AS THE CBDTS C IRCULAR DATED ITA NO.1787/DEL/2013 13 10.3.2003. WE FIND THAT IN THE PRESENT CASE AN ADDITION OF RS. 70 LACS WAS MADE BY THE AO ON THE BASIS OF STATEMEN T OF MR. AJAY SINGHAL AT THE TIME OF SURVEY RECORDED U/S. 133A OF THE I.T. ACT. WE FIND CONSIDERABLE COGENCY IN THE LD. COUNSEL OF THE ASSESSEES SUBMISSIONS THAT ADDITION CANNOT BE MADE ON THE BAS IS OF THE STATEMENT RECORDED DURING THE SURVEY UNDER SECTION 133A OF THE ACT, IN VIEW OF THE VARIOUS JUDICIAL DECISIONS WHEREIN, IT HAS BEEN HELD THAT SUCH STATEMENT DOES NOT HAVE ANY EVIDENTIARY V ALUE, ESPECIALLY THE DECISION OF THE HONBLE MADRAS HIGH COURT IN TH E CASE CIT VS. S. KHAKDER KHAN SON REPORTED IN {2008) 300 ITR 157 (M ADRAS) WHEREIN, IT HAS BEEN HELD THAT ADDITION ON THE BAS IS OF STATEMENT RECORDED DURING SURVEY UNDER SECTION 133A-SECT. 133 A DOES NOT EMPOWER ANY IT AUTHORITY TO EXAMINE ANY PERSON ON O ATH, HENCE, ANY SUCH STATEMENT HAS NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DURING SUCH STATEMENT CANNOT, BY ITSELF, BE MA DE THE BASIS FOR ADDITION AND THE DECISION OF THE HONBLE HIGH CO URT OF JHARKHAND DELIVERED IN THE CASE OF CIT, RANCHI VS. RAVINDRA KUMAR JAIN REPORTED IN (2009) 33 SOT 251 (DELHI) WHEREIN, IT HAS BEEN HELD THAT ADDITION MADE BY THE LOWER AUTHORITIES MERELY ON THE BASIS OF STATEMENT RECORDED DURING SURVEY AND THEREAFTER, WI THOUT BRINGING ITA NO.1787/DEL/2013 14 ANY CORROBORATIVE MATERIAL ON RECORD IS DEVOID ANY MERITS. WE ALSO FIND FORCE IN THE ASSESSEES COUNSEL CONTENTIO N THAT IN VIEW OF THE CBDTS LETTER ISSUED VIDE F.NO. 286/2/2003-IT ( INV.) DATED 10 TH MARCH, 2003 THE ADDITION MADE BY THE AO AND CONFIR MED BY THE LD. CIT(A) IS NOT SUSTAINABLE IN THE EYES OF LA W. FOR THE SAKE OF CLARITY WE ARE REPRODUCING THE CONTENTS OF THE CBDT S LETTER DATED 10.3.2003 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 DELHI, THE 10 TH MARCH, 2003 TO ALL CHIEF COMMISSIONERS OF INCOME TAX (CADRE CONTRA ) & ALL DIRECTORS GENERAL OF INCOME TAX INV. SIR, SUB:- CONFESSION OF ADDITIONAL INCOME DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATION REGARDING INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHER E ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED T O ITA NO.1787/DEL/2013 15 CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH & SEIZURE AND SURVEY OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CREDIBLE EVIDENCE, A RE LATER RETRACTED BY THE CONCERNED ASSESSEES WHILE FI LING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, ON CONFESSIONS DURING THE COURSE OF SEARCH & SEIZURE A ND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS A ND CONCENTRATION ON' COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE T HE INCOME TAX DEPARTMENTS. SIMILARLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH IT SEIZURES A ND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES/MATERIALS GATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATIONS OR THEREAFTER WHILE FRAMIN G THE RELEVANT ASSESSMENT ORDERS YOURS FAITHFULLY, SD/- (S. R. MAHAPATRA] UNDER SECRETARY (INV. II) ITA NO.1787/DEL/2013 16 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND RESPECTFULLY FOLLOWING THE PRECEDENTS OF THE HONBL E HIGH COURTS, AS AFORESAID AND IN VIEW OF THE CBDTS LETTER DATED 10.3.2003, AS AFORESAID, WE ARE OF THE CONSIDERED OPINION THAT TH E ADDITION MADE ON THE BASIS OF THE STATEMENT IN THE PRESENT CASE R ECORDED U/S. 133A IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE, WE DE LETE THE ADDITION OF RS. 70 LACS MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) AND ALLOW THE APPEAL OF THE ASSESSEE ACCORDINGLY. 7.2 WE ALSO FIND THAT THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. KHADER KHAN SONS (2008) 300 ITR 157 HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT AND THE APPEAL OF THE DEPART MENT HAS BEEN DISMISSED REPORTED IN (2012) 25 TAXMANN.COM 413 (SC). 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND RESPECTFULLY FOLLOWING THE PRECEDENTS OF THE HONBLE SUPREME COURT, HIGH COURTS, ITAT, DELHI BENCH DECISION DATED 8.3.2016, AS AFORESAID AND IN VIE W OF THE CBDTS LETTER DATED 10.3.2003, WE ARE OF THE CONSIDERED OPINION THAT TH E ADDITION MADE ON THE BASIS OF THE STATEMENT IN THE PRESENT CASE RECORDED U/S. 133A IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE, WE DELETE THE ADDITION O F RS. 1.25 CRORES MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) AND ALLOW THE AP PEAL OF THE ASSESSEE ACCORDINGLY. ITA NO.1787/DEL/2013 17 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/04/2016. SD SDSD SD/ // /- -- - S SS SD DD D/ // /- -- - [ [[ [PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI] ]] ] [H.S. SIDHU] [H.S. SIDHU] [H.S. SIDHU] [H.S. SIDHU] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATE 28/04/2016 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES