TMI Blog2013 (3) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... sen to examine the said Asaris. The statement recorded during survey operation u/s 133A may be a relevant material but in the absence of further materials to substantiate the same, such statement recorded under Section 133A can hardly be the basis for assessment. During the survey, 900 gms of gold was found in the premises of the assessee and the statement of the assessee was supported only to the extent of actual seizure of 900 gms. Since the statement of assessee in respect of the remaining gold was not substantiated, the Tribunal rightly set aside the addition in respect of the gold. Unaccounted cash of Rs.2,49,770/-, the assessee tried to explain the cash by stating that he has sold the land at Kodaikanal for Rs.2,80,000/- and the same was deposited in Bank on 5.10.2002 and the amount was withdrawn from the Bank on 17.10.2002 and during the course of survey, the Department came across the said cash. The survey was on 29.10.2002 and the drawal of money from the Bank was a few days before search. Even though the said amount of Rs.2,49,770/- was not disclosed in his books, the assessee tried to explain the same. The Tribunal rightly set aside the addition and remitted to the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty under Section 271(1)(c) of the Income-tax Act? And (c) Whether the direction of the Tribunal is to be construed as a mandatory direction to reopen or a direction to exercise discretion whether to reopen the Assessment order?" 3. Brief facts:- The assessee is doing business of manufacture of gold jewels for others on job work basis. There was a survey at the premises of the assessee on 29.10.2002. During survey, it was noticed that gold jewels weighing 900 grams were available at the premises of the assessee. During survey, a sworn statement under Section 133A sub-section 3(iii) was recorded from the assessee on 29.10.2002. The assessee filed his return of income on 21.07.2003 admitting an income of Rs.2,97,410/- and the return was processed under Section 143(1). As this is survey case, a notice under Section 148 was issued on 27.10.2004. In response to the said notice, the assessee filed return of income on 16.11.2004 admitting income of Rs.2,97,410/- and the same was taken up for scrutiny and notice under Section 143(2) was issued. While recording his statement during survey, the assessee was requested to state the investment in the gold business being in the form of j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urvey team clearly shows that the assessee was doing unaccounted business of gold jewellery and made an addition of Rs.8,70,800/- over and above the addition of Rs.4,79,200/-; (ii) in respect of unaccounted cash found during the course of survey, enhancement was made to the tune of Rs.2,49,770/-; (iii) addition of Rs.1,10,000/- towards interest earned on Rs.5.00 lakhs as unaccounted investment in money lending business, and (iv)initiation of penalty proceedings. The Commissioner of Income-tax (Appeals) accordingly dismissed the appeal making an enhancement of Rs.17,30,570/- made to the income determined by the Assessing Officer. 7. The appeal preferred by the assessee was partly allowed by the Tribunal:- (i) to confine the addition in respect of gold only to the extent of 900 gms of gold found at the time of survey; (ii) so far as unaccounted cash, addition of Rs.2,49,770/- was set aside with a direction to the Assessing Officer to verify whether cash balance as per the book of accounts has emanated from the cash withdrawn from the Bank on 17.10.2002; (iii) deleted the addition made towards interest on money lending business; and (iv) penalty proceedings under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33A of the Act has any evidentiary value. There is a clear distinction between the statement recorded under Section 132(4) and 133A. It is apt to refer to Sections 132(4) and 133A of the Act, which read as under:- 132. Search and Seizure. (1)... (2)... (3)... (4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income Tax Act, 1922 (11 of 1922), or under this Act. Explanation. - For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purpose of any investigation connected with any proceeding under the Indian Income Tax Act, 1922 (11 of 1922), or under this Act." "133A. Power of survey. - (1) Notwithstanding anything contained in any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be the basis for any assessment. 13. A power to examine a person on oath is specifically conferred on the authorities only under Section 132(4) of the Act in the course of any search or seizure. Wherever it thought fit and necessary to confer such power to examine a person on oath, the Income-tax Act has expressly provided for it. Whereas Section 133A does not empower any Income Tax Officer to examine any person on oath. Thus, in contradistinction to the power under Section 133A, Section 132(4) of the Income Tax Act enables the authorised 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 Income Tax Act. On the other hand, whatever statement recorded under Section 133A of the Act is not given an evidentiary value. 14. The scope of Sections 132(4) and 133A came up for consideration before the Kerala High Court in Paul Mathews and Sons v. CIT (2003) 263 ITR 101(Ker). In the said case, the assessee contended that the statement recorded during survey under Section 133A cannot be put against the assessee as the same has no evidentiary value. Accepting the stand taken by the assessee, the Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son during such examination can also be used in evidence under the Income Tax Act. On the other hand, whatever statement is recorded under Section 133A of the Income Tax Act it is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law, vide Paul Mathews and Sons v. CIT (2003) 263 ITR 101 (Ker); (iii) The expression "such other materials or information as are available with the Assessing Officer" contained in Section 158BB of the Income Tax Act, 1961, would include the materials gathered during the survey operation under Section 133A, vide CIT Vs. G.K.Senniappan, [2006] 284 ITR220(Mad)]; (iv) The material or information found in the course of survey proceeding could not be a basis for making any addition in the block assessment, vide decision of this Court in T.C. (A) No. 2620 of 2006 between Commissioner of Income Tax v. S. Ajit Kumar (2008) 300 ITR 152 (Mad); (v) Finally, the word "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 proceeding under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence 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. Any statement recorded under Section 133A would have evidentiary value only if supported with materials and form the basis for assessment. In his explanation, the assessee stated that he has been doing job work and the remaining 2100 gms had been given to 3 Asaris. The Officers had not verified whether the gold was available with the said Asaris nor chosen to examine the said Asaris. The statement recorded during survey operation under Section 133A may be a relevant material. But in the absence of further materials to substantiate the same, such statement recorded under Section 133A can hardly be the basis for assessment. During the survey, 900 gms of gold was found in the premises of the assessee and the statement of the assessee was supported only to the extent of actual seizure of 900 gms. Since the statement of assessee in respect of the remaining gold was not substantiated, the Tribunal rightly set aside the addition in respect of the gold. 19. In so far as unaccounted cash of Rs.2,49,770/-, the assessee tried to explain the cash by stating that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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