Survey statement evidence cannot stand alone; reduced excess stock findings required fresh income-tax consideration.

A statement recorded during survey has no evidentiary value equivalent to a sworn search statement, so an assessment cannot rest on it alone. Here, however, the income-tax assessment also drew support from the commercial tax proceedings, a reaffirmation letter from the maker of the statement, and the assessee's failure to show the statement was wrong. The quantification of alleged stock suppression was linked to excess stock found in the KVAT inspection, and the later KVAT order substantially reduced that excess. The assessment was therefore not invalid solely for relying on the survey statement, but it required fresh consideration to give effect to the reduced KVAT finding.

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Issues: Whether an assessment can rest solely on a statement recorded during survey under section 133A of the Income-tax Act, and whether the income-tax assessment based on alleged suppression of stock had to be reconsidered in view of the subsequent KVAT proceedings.

Analysis: A statement recorded during survey under section 133A does not, by itself, have evidentiary value comparable to a sworn statement recorded during search under section 132(4). An assessment founded entirely on such a statement cannot be sustained. In the present case, however, the assessment was not based only on the survey statement: it also referred to the commercial tax proceedings, the re-affirmation letter issued by the maker of the statement, and the absence of material from the assessee showing the statement to be incorrect. At the same time, the quantification of suppression in the income-tax assessment was found to have been derived from the excess stock detected in the KVAT inspection, and the later KVAT order reduced that excess stock substantially.

Conclusion: The assessment was not held illegal on the ground that it depended solely on the survey statement, but the matter required fresh consideration because the reduced excess stock under the KVAT order had to be given effect in the income-tax assessment.

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