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2014 (8) TMI 1110 - ITAT HYDERABADAdmission of additional income - statement offering additional income in the course of search/survey - Held that:- In this case the revenue would like to sustain the addition of ₹ 15,00,000 offered during the course of survey without any iota of supporting evidence for escapement of income. The Madras High Court in the case of CIT vs. S. Kadhar Khan Son [2007 (7) TMI 182 - MADRAS HIGH COURT ] has held that Sec. 133A doesn't empower any Income Tax authority to examine any persons on oath. Hence, any sued statement made in the course of survey has no evidentiary value and any admission made during such statement cannot by itself be made the basis of addition. This view is supported by the instructions given by the CBDT issued on 10.3.2003 which had laid down that confession obtained during the course of search and seizure and survey operation do not serve any useful purpose. The Assessing officer should, therefore, collect evidence which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Department. Similarly, while recording statement during the course of search and seizure operation no attempt should be made to obtain confession as to the undisclosed income. Any action to the contrary shall be viewed adversely. Thus we hold that the addition of ₹ 15,00,000 has been made based purely on the confession made by the assessee in the course of survey and hence cannot be sustained without any further supporting evidence. - Decided in favour of assessee Disallowance u/s. 40A(3)- Held that:- We find that the assessee has filed paper book giving the particulars of payment in cash which was disallowed as well as other payments which has been disallowed for non-deduction of tax at source. The assessee contends that the expenditure in cash are such provision of 40A(3) will not apply and the payment of ₹ 2,44,163 does not attract provision of sec. 40(a)(ia). This evidence or argument do not appear to have been considered by the AO or CIT(A). In the interest of justice, we remit the issue of disallowance of ₹ 13,63,209 u/s. 40A(3) and ₹ 2,44,163 u/s. 40(a)(ia) to the file of the AO. The AO shall give reasonable opportunity to the assessee to submit his case and decide the issue in accordance with law.
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