Sh. Manjit Singh, Amritsar. V. The Asstt .Commissioner of Income Tax, Amritsar.

ITA 194/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8799 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA
• Assessee Lawyers: SUBASH MAHAJAN
• Keywords: Block assessment; Retraction
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER [ I.T.A NO. 194(ASR)/2014 ASSESSMENT YEAR: 2010-11 MANJIT SINGH PROP. M/S PARDHAN JEWELLERS, G.T.ROAD, RAYYA, AMRITSAR. PAN:ANQPS7613G VS. ASST. CIT, CIRCLE (IV), AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SUBASH MAHAJAN (ADV .) RESPONDENT BY: SH. R.K. SHARDA (DR .) DATE OF HEARING: 03.02. 2016 DATE OF PRONO UNCEMENT: 04.03.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A), DATED 27.01. 2014, FOR ASST. YEAR: 2010-11. 2. THE GROUNDS OF APPEAL TAKEN BY ASSESSEE ARE REPRODUCED BELOW. (I) THAT THE ORDER OF THE COMMISSIONER (APPEALS) I S CONTRARY TO LAW AND FACTS OF THE APPELLANTS CASE. (II) THAT NO INCRIMINATING MATERIAL WAS FOUND TO SH OW THAT ASSESSEE HAD ANY UNDISCLOSED INCOME OR ANY UNDISCLO SED ASSETS HAVING NEXUS WITH THE EXTRA AMOUNT OF RS.45,71,382/ - SURRENDERED DURING SURVEY BARRING STATEMENT GIVEN BY THE ASSESS EE WHILE UNDER STATE OF CONFUSION MAKING ADDITION SIMPLY ON THE BA SIS OF SURVEY STATEMENT WHEN NOTHING WAS FOUND TO SUPPORT THE DI SCLOSURE IS NOT JUSTIFIED. (III) THAT LEARNED CIT(A) HAS ADOPTED IMAGINATIVE APPROACH TO JUSTIFY THE REASON FOR DISCLOSURE BY THE ASSESSEE TO SUPPOR T THE ADDITION OF RS.45,71,382/- MADE BY THE A.O. THE CIT(A) OBSERVAT ION ARE PURELY ITA NO.194 (ASR)/2014 ASST. YEAR:2010-11 2 SPECULATIVE AND CAN NOT BE A SUBSTITUTE FOR THE MAT ERIAL/EVIDENCE FOUND DURING SURVEY TO SUPPORT THE DISCLOSURE. (IV) THAT STOCK OF RS.1,94,28,618/- WAS SURRENDERE D ON 17-03-2010. THERE IS NO REASONS TO PRESUME THAT SUCH STOCK INVE NTORY WAS AVAILABLE TO THE ASSESSEE DURING THE ENTIRE YEAR, S O ESTIMATING THE SALE AT RS.82,33,571/- FOR THE PERIOD OF ONLY 14 DA YS ON STOCK INVENTORY OF RS.1,94,28,618/- AND CALCULATING THE G .P ON THE SAME FOR SUPPORTING THE DISCLOSURE OF RS.44,63,028/- IS HIGHLY UNJUSTIFIED. 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSE SSMENT ORDER ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND PROP. OF M/S PARDHAN JEWELLERS AND IS ENGAGED IN THE JEWELLERY BUSINESS. A SURVEY PROCEEDINGS U/S 133A OF THE ACT WAS CARRIED OUT OF THE BUSINESS PREMISES OF THE ASSESSEE ON 17.03.2010 WHEREIN ON PHYSICAL VERIFICATION STOCK T O THE TUNE OF RS.1,94,28,618/- WAS FOUND. THE STOCK WAS NOT FOUND TO HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNTS AS WELL AS IN STO CK REGISTER AND THEREFORE, THE ASSESSEE WAS CONFRONTED AND WAS ASKE D TO EXPLAIN VIDE QUESTION NO.22. THE ASSESSEE IN REPLY TO QUESTION N O.22 SUBMITTED THAT HE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS HOWEVE R, IN ORDER TO BUY PEACE OF MIND HE MADE A SURRENDER OF RS.2,40,00,000 /- IN ORDER TO MEET WITH ALL THE DISCREPANCIES FOUND DURING THE COURSE OF SURVEY. HOWEVER, ON 23 RD MARCH, 2010 THE ASSESSEE REITERATED FROM THE SURRE NDER AND REGARDING SURRENDER LETTER GIVEN DURING THE SURVEY PROCEEDINGS HE SUBMITTED THAT SINCE THERE WAS OPENING STOCK OF GOL D JWELLERY TO THE TUNE OF RS.10,80,000/- AS ON 31.03.2009 FOR WHICH HE HAD ALREADY FILED RETURNS OF INCOME, THEREFORE, THE SURRENDER SHOULD BE TAKEN AT RS.1,83,48,618/- OR ROUNDED OFF TO RS.1,85,00,000/- BEING PHYSICAL STOCK ITA NO.194 (ASR)/2014 ASST. YEAR:2010-11 3 FOUND DURING SURVEY PROCEEDINGS MINUS CLOSING STOCK OF EARLIER YEAR AS PER INCOME TAX RECORD AS ON 31.03.2009. THE ASSESSE E ALSO SUBMITTED THAT RS.2,40,00,000/- OFFERED AS SURRENDER WAS MADE UNDER GREAT MENTAL STRESS, CONFUSION AND MISUNDERSTANDING WHEREAS THE TOTAL STOCK FOUND AND VALUED WAS TO THE TUNE OF RS.1,94,28,618/ ONLY. THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS OBSERVED THAT INSTEAD OF RS.2,40,00,000/- OFFERED BY ASSESSEE DURING SURVEY PROCEEDINGS, HE HAD FILED IN THE RETURN OF INCOME AT LESSER AMOUNT AT RS.1,97,30,430/-AND THEREFORE, ASSESSEE WAS SHOW CAUSED AS TO WHY THE R EMAINING AMOUNT OF RS.44,63,028/- BE NOT ADDED IN THE INCOME OF ASSESS EE. IN REPLY THE COUNSEL OF ASSESSEE SUBMITTED THAT ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS BUT WAS REGULARLY FILING INCOME T AX RETURNS AND THEREFORE, CREDIT OF RS.10,80,000/- BEING CLOSING S TOCK OF EARLIER YEAR MAY BE ALLOWED. THE ASSESSING OFFICER OBSERVED THAT ASS ESSEE HAD NOT OBJECTED TO THE ADDITION PROPOSED IN THE SHOW CAUSE NOTICE AND HAD REQUESTED ONLY FOR CONSIDERATION OF OPENING STOCK O F RS.10,80,000/-. THE ASSESSING OFFICER FURTHER OBSERVED THAT ASSESSEE DU RING SURVEY PROCEEDINGS HIMSELF HAD OFFERED AN AMOUNT OF RS.2,4 0,00,000/- ON OTHER TWO OCCASIONS, ONE AT THE TIME OF RECORDING OF STAT EMENT AND OTHER IN THE SURRENDER LETTER. HE FURTHER OBSERVED THAT ASSESSEE HAD ALSO GIVEN CHEQUES OF RS.36 LACS IN ORDER TO PAY THE TAX LIAB ILITY ON SURRENDER AMOUNT, THEREFORE, HE DID NOT ACCEPT THE CONTENTION OF ASSESSEE AND MADE THE ADDITION OF RS.44,63,028/-. ITA NO.194 (ASR)/2014 ASST. YEAR:2010-11 4 4. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LEARN ED CIT(A) AND SUBMITTED VARIOUS SUBMISSIONS AND PLACED HIS RELIAN CE ON VARIOUS CASE LAWS, HOWEVER LEARNED CIT(A) DID NOT AGREE WITH THE CONTENTIONS OF THE ASSESSEE AND UPHELD THE ADDITION BY HOLDING AS UNDE R: 6. THE ASSESSEE HAS RAISED GROUND NUMBER 3 IN APPE LLATE PROCEEDING THAT AO HAS IGNORED THE OPENING STOCK OF RS. 10.80,000/- AND SAME WAS CLAIMED BY THE ASSESSEE IN THE LETTER DATED 23.03.2010, THAT IT SHOULD BE REDUCED FROM TH E TOTAL STOCK FOUND AT THE TIME OF SURVEY RS. 1,94,28,618/-. HOWE VER, IT IS SEEN FROM THE TRADING ACCOUNT FILED BY THE ASSESSEE THAT ASSESSEE HAS SHOWN SALE OF SUCH OPENING STOCK DURING THE YEAR AN D IT IS ALSO FACT THAT SURVEY IN THIS CASE WAS CARRIED OUT AT THE FAG END OF THE YEAR I.E. ON 17.03.2010, IT IS SEEN FROM THE TRADING ACC OUNT THAT SUCH OPENING STOCK WAS SOLD OUT FOR RS. 14,40,558/- AND UNACCOUNTED STOCK OF RS. 1,94,28,618/-, WHICH WAS FOUND DURING SURVEY PROCEEDING HAS BEEN SHOWN AS CLOSING STOCK. THUS I T IS CLEAR THAT OPENING STOCK WAS SOLD OUT DURING THE YEAR AND, HEN CE NO CREDIT FOR OPENING STOCK WAS JUSTIFIED IN THIS REGARD. DURING APPELLATE PROCEEDING ASSESSEES COUNSEL ALSO AGREED TO THIS I NFERENCE. IN-FACT, CLAIM OF OPENING STOCK FROM THE STOCK FOUND DURING SURVEY IS COMPLETELY UNJUSTIFIED AS IT MEANS THAT ASSESSEE HA S NOT CARRIED OUT ANY SELLING ACTIVITY OF GOLD/JEWELLERY DURING THE E NTIRE YEAR. IT CAN BE SEEN FROM THE ABOVE PART OF THE STATEMENT REPRODUCED THAT ASSESSEE HAS HIMSELF DECLARED RS.2. 40 CRORE WHEN HE WAS ASKED TO EXPLAIN PHYSICAL STOCK FOUND DURING SURVEY OF RS. 1,94,28,618/-. IT APPEARS THAT ASSESSEE HAS TRIED T O COVER DISCREPANCY IN STOCK AS SOME STOCK WHICH MAY HAVE B EEN GIVEN TO THE KARIGARS FOR MANUFACTURING JEWELLERY, TO THE CU STOMERS ON APPROVAL BASIS OR TO COVER INCOME FROM SUCH LOW SAL ES SHOWN DURING ENTIRE YEAR, DESPITE THE FACT THAT ASSESSEE WAS HAV ING SUCH HIGH UNACCOUNTED STOCK ETC. THROUGH THIS DISCLOSURE. WHI CH AFTER A THOUGHT WAS TRIED TO BE RETRACTED BY TRYING TO DISC LOSE ONLY' PHYSICAL STOCK FOUND DURING SURVEY PROCEEDINGS. IT CAN BE SEEN FROM ASSESSMENT ORDER AND ASSESSEES SUBMISSIONS THAT TH ERE WAS NO PRESSURE OR DURESS DURING SURVEY PROCEEDING AND AS SUCH SURVEY PROCEEDINGS WERE CARRIED OUT IN LEGAL MANNER AND AS PER OFFICIAL PROCEDURE. THE LETTER DATED 23.03.2010 IS ALSO NOT BONAFIDE AND INCORRECT AS IT CLEARLY SHOW AFTER THOUGHT TO TAKE ADVANTAGE OF CLOSURE OF SURVEY PROCEEDINGS ON 17.03.2010 BY STOP PING OFFICERS TO CARRY OUT FURTHER INVESTIGATION AND TO RECORD STATE MENT ON VARIOUS DISCREPANCIES IN THIS REGARD. EVEN IN THIS LETTER A SSESSEE HAS TRIED TO EXPLAIN PHYSICAL STOCK OF UNACCOUNTED GOLD/JEWEL LERY BY OPENING STOCK OF RS. 10,80,000/- WHICH WOULD HAVE MEAN THAT THERE WAS NO SALE BY THE ASSESSEE DURING THE YEAR DESPITE HAVING SUCH HUGE ITA NO.194 (ASR)/2014 ASST. YEAR:2010-11 5 INVENTORY AND SHOWROOM IN THE MARKET PLACE. THUS IT CAN BE SEEN THAT THE ABOVE RETRACTION LETTER IS CLEARLY AFTER T HOUGHT AND NOT BONAFIDE THE ASSESSEE HAS RELIED UPON ORDER OF HON, BLE ITAT, AHMEDABAD IN CASE OF PRAMUKH BUILDER, WHERE TAXATIO N OF ON MONEY ON BASIS OF STATEMENT OF PARTNER WAS CONSIDER ED. HERE IN PRESENT CASE IT HAS CLEARLY BEEN BROUGHT OUT THAT R ETRACTION OF THE ASSESSEE IS NOT BONAFIDE. FURTHER OTHER TWO CASES A RE REGARDING EVIDENTIARY VALUE OF STATEMENT RECORDED DURING SURV EY U/S 133A. IN PRESENT CASE ASSESSEE IS TRYING TO SUPPRESS CURRENT YEAR INCOME AS WELL BY SHOWING MERE SALE OF RS.14,40,558/- DURING ENTIRE YEAR, WHEN IT IS HAVING INVENTORY OF 1,94.28.618 IN HIS S HOW ROOM. EVEN CONSIDERING 6 MONTH INVENTORY AS SALES DURING THE Y EAR, IT WILL AMOUNT TO UNACCOUNTED SALE OF RS. 82,33,571/-( 97.1 4.309- 14,80,558) AND ON WHICH IT G.P. SHOWN BY ASSESSEE I S APPLIED, IT WILL COVER MAJOR PORTION OF THIS ADDITION DISCLOSUR E. UNDER THE CIRCUMSTANCES THE AO WAS JUSTIFIED IN MAKING ADDITION OF RS. 44,63,028/- TO THE RETURN ED INCOME. IN VIEW OF ABOVE, GROUND OF APPEAL NUMBER 1 & 2 ARE DI SMISSED. 7. THE GROUND NUMBER 3 REGARDING IGNORING THE OPENI NG STOCK OF RS. 10,80,000/- HAS ALREADY BEEN DISCUSSED ABOVE AN D IN VIEW OF ABOVE DISCUSSION, SAME IS ALSO DISMISSED . 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT THE ACTUAL FIGURE OF ADDITION MADE BY ASSESSING OFFICER COMES OUT AT RS. 45,71,328/- AGAINST THE FIGURE OF RS.44,63,028/- TAKEN BY ASSESSING OFF ICER. 7. THE LEARNED AR SUBMITTED THAT AT THE TIME OF SUR VEY THE STOCK WAS FOUND AND THE ASSESSEE HAD MADE A SURRENDER OF RS.2 ,40,00,000/- WHICH HE HAD MADE UNDER GREAT MENTAL STRESS. THE LEARNED AR SUBMITTED THAT THE AMOUNT OF SURRENDER CANNOT EXCEED THE VALUE OF STOCK FOUND DURING SURVEY PROCEEDINGS AND VALUE OF STOCK FOUND DURING SURVEY WAS ONLY RS.1,94,28,618/- HE SUBMITTED THAT WHEN ASSESSEE RE COVERED FROM THE STOCK OF SURVEY PROCEEDINGS HE FELT THAT SURRENDER OF RS.2,40,00,000/- WAS NOT JUSTIFIED KEEPING IN VIEW THE VALUE OF STOC K FOUND DURING SURVEY ITA NO.194 (ASR)/2014 ASST. YEAR:2010-11 6 WHICH WAS ONLY RS.1,94,28,618/- AND THEREFORE, HE R ETRACTED FROM THE SURRENDER WITHIN A PERIOD OF SIX DAYS. HE SUBMITTED THAT STATEMENT RECORDED DURING SURVEY PROCEEDINGS CAN NOT BE RELIE D FOR MAKING ADDITIONS UNLESS CORROBORATED BY OTHER MATERIAL. TH E LEARNED AR IN THIS RESPECT PLACED HIS RELIANCE ON THE ORDER OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. S. KHADER KHAN SON 254 CTR 228 (SC) FOR THE PROPOSITION THAT STATEMENT RECORDED U/S 133A HAD NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DURING SUCH STATEMENT CANNOT, BE MAD E THE BASIS FOR ADDITION. THE LEARNED AR FURTHER PLACED HIS RELIAN CE ON THE CASE LAW OF CIT VS. ASHOK KUMAR JAIN 369 ITR 0145 (RAJ) WHEREIN THE HONBLE RAJSTHAN HIGH COURT HAS HELD THAT IF ASSESSEE DOES NOT ADHERE TO THE SURRENDER MADE DURING THE COURSE OF SURVEY, THEN I T IS FOR THE ASSESSING OFFICER TO BRING ON RECORD COGENT MATERIAL AND OTHE R EVIDENCE TO SUPPORT THE ADDITION RATHER THAN RELY ON THE STATEMENTS SIM PLICITOR. THE LEARNED AR FURTHER RELIED UPON THE CASE LAW OF PAUL MATHEWS & SONS VS. COMMISSIONER OF INCOME TAX, 263 ITR 0101 DECIDED BY HONBLE KERALA HIGH COURT WHERE THE HONBLE COURT HAS HELD THAT ST ATEMENT RECORDED DURING SURVEY OPERATIONS HAS NO EVIDENTIARY VALUE. THE LEARNED AR SUBMITTED THAT THERE WAS NO MATERIAL AVAILABLE WITH THE AUTHORITIES TO SUGGEST THAT THE SURRENDER COULD EXCEED THE AMOUNT OF TOTAL STOCK FOUND AT RS.1,94,28,618/-. IN VIEW OF THE ABOVE THE LEARN ED AR ARGUED THAT THE APPEAL OF THE ASSESSEE MAY BE ALLOWED. ITA NO.194 (ASR)/2014 ASST. YEAR:2010-11 7 7. THE LEARNED DR, ON THE OTHER HAND SUBMITTED THAT ASSESSEE AT HIS OWN HAD SURRENDERED THE AMOUNT OF RS.2,40,00,000/-W HICH INCLUDED THE PHYSICAL STOCK AT THE TIME OF SURVEY AND ALSO THE D ISCREPANCIES IF ANY IN THE DOCUMENTS. HE SUBMITTED THAT THERE WAS NO PRESS URE ON ASSESSEE AS HE HIMSELF HAD GIVEN CHEQUES OF RS.36 LACS FOR PAYM ENT OF TAX LIABILITY. HE SUBMITTED BESIDES RECORDING OF STATEMENT THE ASS ESSEE AGAIN GAVE A SURRENDER LETTER CONFIRMING THE SURRENDER AND THERE FORE, RETRACTION IS NOT VALID. 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSEE DU RING SURVEY PROCEEDINGS HAD MADE A SURRENDER OF RS.2,40,00,000/ - WHICH REPRESENTED UNACCOUNTED STOCK TO THE TUNE OF RS.1,9 4,28,618/-. IT IS ALSO A FACT THAT ASSESSEE VIDE LETTER DATED 22 ND MARCH,2010 RECEIVED BY INCOME TAX OFFICER ON 23.03.2010 HAD REITERATED FRO M THE SURRENDER AND HAD REQUESTED THE AUTHORITIES TO MAKE ADDITION TO T HE TUNE OF RS.1,83,48,618/- ONLY BEING VALUE OF PHYSICAL STOCK OPENING STOCK. IT IS FURTHER A FACT THAT THE REVENUE AUTHORITIES DID NOT ISSUE ANY NOTICE TO COUNTER THIS RETRACTION NEITHER LEARNED DR WAS ABLE TO DEMONSTRATE BEFORE US THAT THE RETRACTION WAS COUNTERED BY THE ASSESSING OFFICER. WE FURTHER FIND THAT THERE IS NO MATERIAL WITH THE DEP ARTMENT ON THE BASIS OF WHICH THE ADDITION IN EXCESS OF THE PHYSICAL STOCK FOUND DURING THE SURVEY CAN BE MADE SPECIALLY KEEPING IN VIEW THE FA CT THAT ASSESSEE HAD REITERATED FROM THE STATEMENT RECORDED DURING SURVE Y PROCEEDINGS WITHIN ITA NO.194 (ASR)/2014 ASST. YEAR:2010-11 8 A PERIOD OF SIX DAYS ONLY. THE SURRENDER LETTER ITS ELF CAN NOT BE RELIED TO MAKE ADDITION IN THE ABSENCE OF OTHER CORROBORATED MATERIAL. THE OTHER CORROBORATED MATERIAL AVAILABLE WITH THE DEPARTMENT IS ONLY TO THE EXTENT OF RS.1,94,28,618/- BEING THE VALUE OF STOCK FOUND DURING SURVEY. THEREFORE, THE ADDITION OF RS.45,71,382/- MADE BY A .O AND CONFIRMED BY CIT(A) DO NOT HAVE ANY CORROBORATED MATERIAL. THE H ONBLE SUPREME COURT IN THE CASE OF S. KHADER KHAN SONS (SUPRA) HA S HELD THAT ANY STATEMENT RECORDED DURING SURVEY PROCEEDINGS HAS NO T EVIDENTIARY VALUE. WE FURTHER FIND THAT CBDT VIDE INSTRUCTION F. NO. 2 86/2/2003 DATED HAS DIRECTED AS UNDER: INSTANCES HAVE TO COME TO THE NOTICE OF THE BOARD WHERE ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE U NDISCLOSED INCOME DURING THE COURSE OF THE CONFESS THE UNDISCLOSED IN COME DURING THE COURSE OF THE SEARCH & SEIZURE AND SURVEY OPERATIONS. SUCH CONFESSIONS, IF NO BASED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED B Y THE CONCERNED ASSESSEES WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, ON CONFESSIONS DURING THE COURSE OF SEARCH & SEIZURE A ND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSES. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DIS CLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENTS. SIMILARLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH IT SEIZURES AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONF ESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY TO S HALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES/MATERIALS G ATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATIONS OR THEREAFTER WH ILE FRAMING THE RELEVANT ASSESSMENT ORDERS. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS . S. KHADER KHAN SON HAS HELD THAT MATERIALS COLLECTED AND STATEMENT S RECORDED DURING THE SURVEY ARE NOT CONCLUSIVE PIECE OF EVIDENCE BY ITSELF. THE BRIEF FACTS OF THE JUDGMENT OF MADRAS HIGH COURT ARE REPRODUCED BE LOW. ITA NO.194 (ASR)/2014 ASST. YEAR:2010-11 9 THE PRINCIPAL RELATING TO SECTION 133A OF THE INC OME TAX ACT, 1961, ARE AS FOLLOWS: (I) AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT AND THAT THE ASSESSEE SHOULD BE GIVEN A PROPER OPPORTUNITY TO SHOW THAT THE BOOKS O F ACCOUNT DO NOT CORRECTLY DISCLOSE THE CORRECT STATE OF FACTS; (II) IN CONTRADISTINCTION TO THE POWER UNDER SECTION 133A, SECTION 132(4) ENABLES TH E 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 ACT. ON THE OTHER HAND, WHATEVER STATEMENT IS RECORDED UNDER SECTION 133A IS NOT GIVEN ANY EVIDENTIARY VALUE OBVIOUSLY FOR THE REASON THAT THE OFFICER IS NOT AUTHORIZED TO ADMINISTER OATH AND TO TAKE ANY SWORN STATEMENT WHICH ALONE HAS EVIDENTIARY VALUE AS CONTEMPLATED UNDER LAW; 9III) THE EXPRESSION SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WIT H THE ASSESSING OFFICER CONTAINED IN SECTION 158BB WOULD INCLUDE THE MATERI ALS GATHERED DURING THE SURVEY OPERATION UNDER SECTION 133A; (IV) THE M ATERIAL OR INFORMATION FOUND IN THE COURSE OF SURVEY PROCEEDING COULD NOT BE A BASIS FOR MAKING ANY ADDITION IN THE BLOCK ASSESSMENT; AND (V) THE W ORD MAY USED IN SECTION 133A(3) (III) OF THE ACT, VIZ., RECORD THE STATEMENT OF ANY PERSON WHICH MAY BE USEFUL FOR, OR RELEVANT TO, ANY PROCEE DING UNDER THIS ACT MAKES IT CLEAR THAT THE MATERIALS COLLECTED AND THE STATEMENT RECORDED DURING THE SURVEY UNDER SECTION 133A ARE NOT CONCLU SIVE PIECE OF EVIDENCE BY ITSELF. A SURVEY WAS CONDUCTED IN THE PREMISES OF THE ASSE SSEE-FIRM. ONE OF THE PARTNERS IN HIS SWORN STATEMENT OFFERED AN A DDITIONAL INCOME OF RS.20 LAKHS FOR THE ASSESSMENT YEAR 2001-02 AND RS. 30 LAKHS FOR THE ASSESSMENT YEAR 2002-03. HOWEVER, THE SAID STATEMEN T WAS RETRACTED BY THE ASSESSEE THROUGH IT LETTER DATED AUGUST 3,2001, STATING THAT THE PARTNER FROM WHO A STATEMENT WAS RECORDED DURING TH E SURVEY OPERATION UNDER SECTION 133A, WAS NEW TO THE MANAGEMENT AND H E COULD NOT ANSWER THE ENQUIRIES MADE AND AS SUCH, HE AGREED TO AN AD HOC ADDITION. THE ASSESSING OFFICER BASED ON THE ADMISSIONS MADE BY T HE ASSESSEE, WHICH WERE DIRECTLY RELATABLE TO THE DEFECTS NOTICED DURI NG THE ACTION UNDER SECTION 133A OF THE ACT, RECOMPUTED THE ASSESSMENT. THE ORDER WAS SET ASIDE BY THE COMMISSIONER OF INCOME-TAX(APPEALS) AN D THIS ORDER WAS UPHELD BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT . HELD, DISMISSING THE APPEAL, THAT IN VIEW OF THE SCOPE A ND AMBIT OF THE MATERIALS COLLECTED DURING THE COURSE OF SURVEY ACT ION UNDER SECTION 133A SHALL NOT HAVE ANY EVIDENTIARY VALUE. IT COULD NOT BE SAID SOLELY ON THE BASIS OF THE STATEMENT GIVEN BY ONE OF THE PARTNERS OF THE ASSESSEE FIRM THAT THE DISCLOSED INCOME WAS ASSESSABLE AS LAWFUL INCOME OF THE ASSESSEE. THE ABOVE JUDGMENT OF HONBLE MADRAS HIGH COURT HAS BEEN UPHELD BY HONBLE SUPREME COURT WHICH HAS DISMISSED THE APPEA L FILED BY REVENUE. IN THE PRESENT CASE WE FIND THAT THERE IS NO MATERI AL WITH THE DEPARTMENT ITA NO.194 (ASR)/2014 ASST. YEAR:2010-11 10 TO MAKE ADDITIONS TO THE TUNE OF RS.2,40,00,000/- W HEREAS THE MATERIAL AVAILABLE WAS ONLY FOR RS.1,94,28,618/-. THE CALCUL ATIONS MADE BY LEARNED CIT(A) TO ARRIVE AT THE TURNOVER MADE BY AS SESSEE AND THUS PROFITS ESTIMATED BY HIM ARE NOT BASED UPON ANY MAT ERIAL AND ARE BASED UPON ANLY ON SURMISES AND CONJECTURES. 9. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE RELIANCE PLACED BY LEARNED AR UPON JUDICIAL PRECEDE NTS WE SEE MERITS IN THE ARGUMENTS OF THE LEARNED AR THAT THE ADDITIONS SUSTAINED BY LEARNED CIT(A) ARE NOT BASED UPON ANY MATERIAL. 10. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE A SSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MARCH, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED:04.03.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.