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2008 (10) TMI 395 - AT - Income TaxAddition on Unexplained investments - statement on oath during survey u/s 133A - HELD THAT:- Though during the course of survey the director of the assessee-company admitted on oath that the unexplained investment on renovation was not included in the total income. The assessee explained that no renovation was actually carried on. Proof in this regard was also filed. An addition is sustainable provided expenditure has been incurred. Income is not computed on the basis of submissions of parties but on the basis of actual earning of income. The assessee has all along been claiming that it has not carried out any renovation, which requires any expenditure to be incurred. This fact should have been verified by the AO. Even after filing photographs in this regard the AO turned a blind eye to the ground reality and has sought to made addition merely on the basis of statement recorded during the course of survey. Section 133A do not compel an assessee to give statement on oath. If the survey officials have recorded the statement on oath, it is an excessive exercise of power. Except the statement of a director of the assessee-company, there is no other material to make the addition. However, when the assessee denies the fact of having made any investment and there is no other material except the statement of assessee that any investment has been made, no addition can be made u/s 69 without actually finding that investments are made. Since the basis of addition is statement of the assessee rather than actual investment having been made, we hold that provision of section 69 is not attracted in such a situation. We, therefore, delete the addition made u/s 69. In the result, the appeal is allowed.
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