2023 (3) TMI 669 - AT - Income Tax

Addition based on statement recorded during the course of survey - Additional income admitted by the Director of the company during the course of survey which was not declared in the return of income - CIT-A deleted the addition - HELD THAT:- Since in the instant case, AO has made the addition merely on the basis of a statement recorded during the course of survey of Shri P. Satya Prasad, Director of the assessee company who had admitted additional income for the year under consideration and since such statement has been retracted by the Director before the Dy.Director of Income Tax (Inv.) Unit-I Hyderabad through an affidavit which has not been controverted and since the Revenue has no other material before them except the statement which has subsequently been retracted therefore, in the light of the CBDT Circular/Instruction and the various other decisions relied on by assessee to the proposition that the statement recorded during the course of survey has no evidentiary value unless the same is backed by credible evidence, the addition made by the AO was rightly deleted by the CIT (A).

Director of PL Raju Constructions (P) Ltd Shri P. Venkatapati Raju in his statement u/s 132(4) during the course of search on 22.4.2019 in his reply to question No.6 has specifically stated to cover up any deficiencies in the matter of DCS Ltd and any other deficiencies that may arise to give quietus to the litigation that may emerge in the matter of DCS Ltd, the company has admitted the additional income of Rs.32.00 crores out of which Rs.5,57,65,000/-relates to the impugned A.Y. In view of the above and in view of the detailed reasoning given by the CIT (A) we do not find any infirmity in the order of the CIT (A) deleting the addition.Grounds raised by the Revenue are dismissed.