2015 (11) TMI 929 - HC - Income Tax

Court rules statements under Section 133-A lack evidentiary value for undisclosed income. Denial before Tribunal holds weight.

The court upheld the orders of the Commissioner, Income Tax (Appeals) and the Income Tax Appellate Tribunal, ruling that statements recorded under Section ... Addition on undisclosed income on basis of a statement made by the assessee - Held that:- The assessee filed an appeal before the Commissioner, Income Tax (Appeals), with specific assertion that the statement made by him would have not been accepted to make any addition and therefore, his denial is apparent. In view of it, the orders passed by the Commissioner, Income Tax (Appeals) and the Income Tax Appellate Tribunal do not suffer from any wrong who accepted the assessee appeal relying upon the judgment of Hon'ble Supreme Court in CIT Vs. S. Khader Khan Son reported at (2013 (6) TMI 305 - SUPREME COURT). The appeal is having no substantial question of law. Issues:Validity and correctness of the judgment passed by Income Tax Appellate Tribunal and Commissioner, Income Tax (Appeals) regarding undisclosed income based on a statement made during a survey under Section 133-A of the Income Tax Act, 1961.Analysis:The case involved a situation where incriminating documents were discovered during a survey under Section 133-A of the Income Tax Act, leading to the assessee surrendering a certain amount against purchase of land and cash. The assessing officer added this undisclosed amount to the taxable income based on the statement made by the assessee during the survey. The appeal was filed challenging this addition before the Commissioner, Income Tax (Appeals), who accepted it, citing a judgment of the Hon'ble Supreme Court. The Supreme Court had ruled that statements recorded under Section 133-A have no evidentiary value, and any admission made during such statements cannot be the basis for addition to taxable income.The appeal by the revenue before the Income Tax Appellate Tribunal was dismissed, leading to the current appeal questioning the validity and correctness of the judgments. The appellant argued that since the assessee did not retract from his statement, the law laid down by the Supreme Court in a previous case was not applicable in this situation. However, the court found no merit in this argument. The assessee had specifically asserted before the Commissioner, Income Tax (Appeals) that his statement should not have been accepted to make any addition, indicating a clear denial.Consequently, the court upheld the orders passed by the Commissioner, Income Tax (Appeals) and the Income Tax Appellate Tribunal, stating that they did not contain any errors. The court concluded that the appeal did not raise any substantial question of law and, therefore, dismissed it.