TMI Blog2022 (1) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... hy the assessee had agreed to make the addition, but the issue of valuation of work in progress as well as proof of genuineness of expenditure incurred, are pure questions of facts, which the AO should brought on record. AO failed to do so, but merely based on the statement given by the assessee, had proceeded to make the assessment and made addition. It is settled position of law that no addition can be made on the mere basis of the statement given by the assessee. Appellant had categorically stated before the Assessing Officer that there was no discrepancy in the valuation of work in progress, as well as no doubts as to the genuineness of expenditure incurred, inspite of this fact, the AO proceeded with making of addition based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,73,310/-. While doing so, the Assessing Officer made the following disallowances:- (i) Disallowance under valuation of work in progress - declared in survey action u/s. 133A of ₹ 26,00,000/-. (ii) Disallowance of expenditure partly supported by self made vouchers and not fully supported as declared in survey action u/s. 133A of ₹ 5,00,000/-. (iii) Disallowance of expenditure of sub-contracting work incurred during the year under consideration of ₹ 62,25,000/-. (iv) Disallowance on account of cessation of liability towards amounts payable to sub-contractors added u/s. 41 of ₹ 64,52,248/-. 3. Being aggrieved by the above additions, an appeal was filed before the ld. CIT(A), who vide impugned or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, as regards to the statement given in respect of unverifiable expenditure of ₹ 5,00,000/-, it is contended that the expenditure which is supported by self made vouchers was totalling to ₹ 7,55,188/- and the Assessing Officer disallowed a sum of ₹ 5,00,000/- out of ₹ 7,55,188/- is unreasonable. It is further submitted that the evidence in respect of the expenditure which is the nature of wages of labours, conveyance etc. vouchers are always self made. It is further contended that no addition can be made based on the mere statements given during the course of survey operations u/s. 133A placing reliance on the decision of the Hon'ble Supreme Court in the case of CIT vs. S. Khader Khan Son, 210 Taxman 248 (SC) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee and no further corroborative evidence is required for the purpose of making any addition based on the statement. 10. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the addition of ₹ 31,00,000/- made by the Assessing Officer based on the statement recorded during the course of survey operations u/s. 133A of the Act. In reply to question Nos. 10 and 11, the assessee had stated that he had agreed to offer an additional income of ₹ 31,00,000/- on account of undervaluation of closing stock of ₹ 26,00,000/- and unverifiable expenditure of ₹ 5,00,000/-. On going through the statement recorded during the course of survey action u/s. 133A, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the Department that, the discrepancy if any in the valuation of closing work in progress as on date of survey, still existed in the valuation of closing work in progress as on date of end of previous year, nor no addition can be made based on discrepancies, if any, in the valuation of work in progress in the middle of previous year. This approach of the Assessing Officer does not stand to the judicial scrutiny. Even the ld. CIT(A) had merely confirmed the action of the Assessing Officer without appreciating the ratio of the following judicial precedents and the CBDT's Instructions i.e. Hon'ble Madras High Court in the case of CIT vs. P. Balasubramanian, 354 ITR 116 (Mad.); Hon'ble Kerala High Court in the case of Paul Math ..... X X X X Extracts X X X X X X X X Extracts X X X X
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