TMI Blog2009 (7) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... aving been recorded, no addition can be made unless the same can be corroborated by any material either found during the course of survey or subsequently brought on record by the department while framing the assessment. Even appellate proceedings are extension of the assessment proceedings and the CIT(A) has got co-terminus powers to do what the AO has failed to do. The fact that surrender on account of investment in building was not recorded on the day of survey, but the assessee was subsequently called to the office on the next date and he was forced to surrender the amount itself indicate that undue influence was exercised on the assessee to surrender the amount. As in the case of Paul Mathews Sons v. CIT [ 2003 (2) TMI 25 - KERALA HIGH COURT] held that statement of assessee recorded during the course of survey under provisions of section 133A(3)( iii ) can be said to be useful or relevant to the assessment proceedings only in the circumstances when there is a material on record to prove through the existence of any of the activities on the basis of which disclosure is stated to be made. It was categorically mentioned by the Hon ble High Court that statement recorded u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(Appeals) has erred in confirming the addition of Rs. 22,90,000 made by the Assessing Officer merely on a/c of amount surrendered in statement recorded during survey under section 133A, which was later on retracted, without any corroborating evidence at all. ( ii )On the facts and in law, the order of learned CIT(Appeals) is based only on conjectures and surmises in total disregard of the facts of the case, the ratio of judgments of courts and the instructions of the Board relating to evidentiary value of surrender during survey, which were cited before him in writing and relevant documentary evidence was also produced before him. ( iii )On facts and in law, the learned CIT (Appeals) has totally ignored the fact that the assessee s brother had constructed the house primarily by taking loan from the bank and the deptt. Has nowhere established that any investment, over and above that satisfactory explained by the owner through his statement under section 133A, had been made by the assessee and the surrender had clearly been made under coercion to buy peace only and was later-on retracted. ( iv )On facts and in law, the ld. CIT (A) has erred in failing to adjudicate on ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im that this building No. 2195/5, Rama Colony, Rohtak belongs to you. Please state the dates and years of acquisition of plot and subsequently construction thereon along with sources of investment, what is the total investment in this property ? Ans. Yes, this building belongs to me. The plot was purchased two years back approximately for Rs. 5,16,000 (copy of Registry has been supplied). The area of plot is 300 sq. yards. Total cost of construction in this building, comprised of basement, ground floor and first floor is Rs. 12 or 13 lakhs. The building has been constructed during the period approximately one year back. The sources of investment in purchase of plot and construction thereon are as under: ( i ) Loan from Oriental Bank of Commerce i.e., College for women, Rohtak s Branch in the month of Feb., 2004 Rs. 9,90,000.00 ( ii ) Rs. One lakh withdrawn from Gugnani Trading Co. on 25-9-2004 Rs. 1,00,000.00 ( iii ) Rest of the amount was contributed from my family members i.e., wife son etc. ( iv ) The investment in purchase of plot was made by withdrawing the same from accounts with M/s. Gugnani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... render substantial income by admitting that unaccounted funds were invested in house No. 2195/5. The assessee s factual reply on this issue contained in Answer No. 2( iv ) at pages 5 and 6 of the statement is as under : "( iv )Regarding investment in property No. 2195/5, Rama Colony, Rohtak. As earlier stated by my brother in his statement recorded by you, he has constructed the property with investment of Rs. 17-18 lakhs. Since the property is in the name of Sh. Devinder Kumar, it is up to him only to explain the sources of investment. However, I admit that I am running offices and godown from this building and apparently contributed towards its construction in addition to the investment made by Sh. Devinder Kumar out of undisclosed income of financial year 2004-05 from my proprietary firm M/s. Gugnani Trading Co. Therefore, to buy peace of mind and avoid litigation, I surrender an additional income of Rs. 22,90,000 assessable in the hands of my said firm for the assessment year 2005-06. This surrender will be in addition to an over and above the normal income of my said firm. I am ready to pay additional tax liability on the said surrender income as advance tax for the finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation." 8. It is crystal clear from the statement recorded during the course of survey that building No. 2195/5 was owned by the brother of the assessee Shri Devinder Kumar whose statement was also recorded with regard to the source of investment in the building. Shri Devinder Kumar was also filing his income-tax return since last many years. Neither during the course of survey nor thereafter, even uptill framing of assessment under section 143(3), the Assessing Officer brought any material on record to substantiate that any investment over and above what has been shown by Shri Devinder Kumar was made on the said property, nor he took pains to refer the valuation of the building to the Departmental Valuation Officer so as to find out correct state of affairs and to substantiate his stand that investment in the building was more than what has been recorded/disclosed by Shri Devinder Kumar who is the owner of the building. We also found that statement with regard to investment in building No. 2195/5 was recorded on the next date of survey and the assessee was compelled to admit the investment in property of which the assessee was not the owner. Nothing was found during the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that statement of assessee recorded during the course of survey under provisions of section 133A(3)( iii ) can be said to be useful or relevant to the assessment proceedings only in the circumstances when there is a material on record to prove through the existence of any of the activities on the basis of which disclosure is stated to be made. It was categorically mentioned by the Hon ble High Court that statement recorded under section 133A cannot be given evidentiary value as such evidentiary value is not attached with the provisions of section 133A of the Act. The only basis for addition as per Assessing Officer was the statement of the assessee without any corroborative material or documentary evidence on record. Hon ble Madras High Court in the case of CIT v. S. Khandar Khan Chand [2008] 300 ITR 157 , observed that where assessee has admitted suppressed income but there was no documentary evidence in possession of the department, no addition can be made on the basis of such statement. The Hon ble High Court reviewed all the available judgments on the point along with CBDT Instructions dated 10-3-2003, and went to the extent of holding that section 133A does not empower any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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