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TMI Blog2020 (5) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order passed under s. 143 of the Income Tax Act, 1961 (here-in-after referred to as "the Act") dated 23/03/2016 relevant to the Assessment Year 2013-2014. First we take ITA No. 2351/Ahd/2017 for A.Y. 2013-14. The assessee has raised the following grounds of appeal. 1. The learned CIT(A) and AO have erred both in law and on the facts of the case in confirming the addition based on survey statement which was recorded under highly questionable circumstances and not at all reliable. 2. The learned CIT(A) and AO have erred both in law and on the facts of the case in not appreciating that the so called incriminating material viz. Diaries impounded as Annexure A-l & A-2 were created during the course of the Survey and at the insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rming action of the Id. AO in levying interest u/s.234A/B/C of the Act. 8. The learned CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in initiating penalty u/s.271(l)(c) of the Act. 2. All the grounds of appeal are interlinked, hence we have clubbed all of them for the purpose of adjudication. The only issue raised by the assessee is that the learned CIT (A) erred in confirming the rejection of books viz a viz confirming the addition of Rs. 1,42,58,000/- based on statement recorded and diaries impounded during survey, without verifying the veracity of the same. 3. The fact in brief is that the assessee is a firm and engaged in the business of property development and construction of buildings. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is based upon survey statements and incriminating materials found during the survey is upheld and related ground of appeal are dismissed Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 5. The learned AR before us did not dispute the diary found during the course of survey operation wherein the receipts were noted against the sale of flats but contended such receipts as business receipts. The ld. AR further claimed that there can be addition for the element of profit embedded in such business receipts. The learned AR also contended that part of the business receipts amounting to Rs. 62,92,000/- were duly recorded in the regular books of accounts which signifies that the other receipts not rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he regular books of accounts as business receipts. There is no dispute about the fact that the diary found during the course of survey belongs to the assessee in pursuance to the provisions of section 292C of the Act. Similarly the contents of such diary are also true as per the provisions of section 292C of the Act. This fact has not been disputed by the learned AR for the assessee at the time of hearing before us. Thus it is proved beyond doubt that the diary belongs to the assessee and its contents are true. 7.1 The 2nd controversy arises how to determine the income of the assessee based on the contents recorded in such diary. From the preceding discussion we note that an amount of receipt of Rs. 2,05,50,000/- has been shown in such dia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of business of the assessee. There is no dispute about the fact of the business in which the assessee is engaged i.e. property development and construction of buildings. ii. There was no information gathered during the survey operation suggesting that the assessee has made some investment for the earning of such undisclosed receipts as discussed above. 7.3 In view of the above, we are of the considered opinion that it is the only element of profit embedded in such business receipts which can be added to the total income of the assessee. In holding so, we also draw support and guidance from the judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. Samir Synthetics Mill reported in 326 ITR 410where it was held as under: As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any addition to the total income of the assessee merely on the basis of survey statement recorded under section 133A of the Act until and unless it is based on corroborative evidences. Furthermore, the statement recorded on oath during the survey has no evidentiary value as held by the Hon'ble Madras High Court in the case of CIT vs. S Khader Khan Son reported in 300 ITR 157 which was subsequently confirmed by the Hon'ble Supreme Court reported in 25 Taxmann.com 413 by observing as under: "Section 133A of the Income Act, 1961 - Survey - Whether Section 133A does not empower any ITO to examine any person on oath; so statement recorded under section 133A has no evidentiary value and any admission made during such statement cannot be made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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