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2019 (9) TMI 357

..... rson during survey proceedings under Section 133A - HELD THAT:- Merely by reason of the fact that the income tax authority has administered oath to an assessee and recorded his sworn statement during the survey proceedings under Section 133A it cannot be found that such statement has no evidentiary value at all and that it cannot be used in any manner against the assessee in any proceedings under the Act. As explained in Travancore Diagnostics [2016 (11) TMI 76 - KERALA HIGH COURT] the statement on oath made by an assessee to the income tax authority during the survey proceedings under Section 133A is not conclusive. The assessee can explain or withdraw the admission, if any, made by him in such statement. Assessment of tax cannot be made solely on the basis of such sworn statement made by the assessee under Section 133A(3)(iii) of the Act. At the same time, such statement can be used to corroborate other materials before the assessing authority, including the contents of any document. In our view, the dictum laid down in Paul Mathews [2003 (2) TMI 25 - KERALA HIGH COURT] and Hotel Samrat [2009 (11) TMI 269 - KERALA HIGH COURT] and Travancore Diagnostics (supra) can be harmonised i .....

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..... oceedings, the assessee gave a statement on oath on 11. 03. 2011 to the income tax authority that he had given an amount of 95 lakhs rupees as advance for purchase of the property. Subsequently, the appellant sent a letter dated 04. 03. 2013 to the department. In that letter he took the plea that he had executed the agreement in the capacity as the Managing Director of the company and that the amount of 95 lakhs rupees was invested out of the funds of the company and that he had not made any personal investment in the deal and also that the deal was subsequently cancelled by the company. 3. The assessing officer did not accept the explanation given by the appellant regarding the nature and source of the amount. The assessing officer found that the books of accounts of the company did not reveal that the amount of 95 lakhs rupees was invested by the company in such a deal. Therefore, the aforesaid amount was brought to tax by the assessing authority as unexplained investment. 4. The appellant took up the matter in appeal before the Commissioner of Income Tax (Appeals). The appellate authority agreed with the view taken by the assessing officer and dismissed the appeal. The appellant .....

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..... correct proposition of law that a statement made on oath by the assessee before the income tax authority during the survey proceedings under Section 133A of the Act has no evidentiary value at all? (3) Is it permissible under law to make assessment of tax solely on the basis of the statement made on oath by an assessee before the income tax authority during the survey proceedings under Section 133A of the Act? 9. Section 133A of the Act deals with survey proceedings. Section 133A(3)(iii) of the Act provides that an income-tax authority acting under Section 133A may record the statement of any person which may be useful for, or relevant to, any proceeding under the Act. It is evident from this provision that, during survey proceedings, the incometax authority has got power to record the statement of any person. The expression any person in this provision includes an assessee. 10. Learned counsel for the appellant relied upon the decision of a Division Bench of this Court in Paul Mathews and Sons v. Commissioner of Income Tax : (2003) 263 ITR 101 in support of his contention that the income tax authority has got no power to examine on oath any person or to record any sworn statement .....

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..... it was not necessary to do so in that case. In Hotel Samrat (supra), it was observed as follows: During hearing, we felt that the decision of this Court in Paul Mathews and Sons reported in [2003] 263 ITR 101 above referred to does not lay down the correct position of law because, in our view, statement recorded under Section 133A(3)(iii) though cannot be treated as independent evidence like evidence recorded under Section 132(4), has corroboratory value in assessment and statement recorded under the said provision can be even relied on by the assessee. In other words, the decision of this Court that the statement recorded under the above provision does not have evidentiary value, in our view, does not lay down the correct law. However, since counsel for the respondent assessee does not rely on the above decision, we proceed to consider these cases on the merits without referring the matter for consideration to a Full Bench because by the operation of the latter part of the section, such statement has relevance for assessment and other proceeding under the Act . 14. Another Division Bench of this Court considered the issue in Travancore Diagnostics (P) Limited v. Assistant Commiss .....

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..... manner against the assessee in any proceedings under the Act. As explained in Travancore Diagnostics (supra), the statement on oath made by an assessee to the income tax authority during the survey proceedings under Section 133A of the Act is not conclusive. The assessee can explain or withdraw the admission, if any, made by him in such statement. Assessment of tax cannot be made solely on the basis of such sworn statement made by the assessee under Section 133A(3)(iii) of the Act. At the same time, such statement can be used to corroborate other materials before the assessing authority, including the contents of any document. In our view, the dictum laid down in Paul Mathews (supra) and Hotel Samrat (supra) and Travancore Diagnostics (supra) can be harmonised in this manner without any conflict. Thus, the substantial questions of law raised as items (1) and (3) are answered in favour of the assessee and against the revenue. The substantial question of law raised as item No. (2) is answered in favour of the revenue and against the assessee. 16. Section 69 of the Act provides that, where in the financial year immediately preceding the assessment year, the assessee has made investmen .....

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..... than the Managing Director of the company. He could have easily produced records or materials to show that the amount was actually invested by the company and not by him in his personal capacity. In the absence of any such materials produced, the assessing officer was justified in rejecting the explanation given by the appellant and in bringing the amount to tax as unexplained investment. 19. The assessment of tax made by the authority concerned is not solely based on the sworn statement of the appellant given to the income tax authority. The basis of the assessment is the agreement executed by the appellant for purchase of property and also the circumstance that the appellant failed to establish his plea regarding the investment made. The sworn statement of the appellant only corroborates those materials. The fact that the assessing authority gave emphasis to the sworn statement of the appellant while passing the order of assessment does not change this fact situation. 20. The Tribunal has adverted to the factual aspects and confirmed the findings made by the assessing authority and the appellate authority. The conclusion reached by the Tribunal on a finding of fact cannot be int .....

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