Survey statement accepted, but income addition was restricted proportionately where later-year material was absent.

A survey declaration under section 133A was treated as relevant material, and surrounding facts such as unrecorded cash receipts and cash expenditure on house construction could not be ignored. However, because the survey took place after only part of the previous year had elapsed and there was no incriminating material for the later period beyond the survey statement, the addition was not sustained in full. The Tribunal applied a proportionate and fair estimate by separating the period up to the survey date from the period thereafter, resulting in only partial relief to the assessee.

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Issues: Whether the assessee's total income for the assessment year could be sustained at the full amount declared during survey, or whether the addition had to be restricted on a proportionate basis having regard to the period covered by the previous year and the material available.

Analysis: The assessee had made a declaration during survey under section 133A of the Income-tax Act, 1961 and had honoured that declaration for the earlier assessment year, but not for the assessment year in question. The Tribunal accepted that the statement recorded during survey was relevant and that the surrounding facts, including unrecorded cash receipts and cash expenditure on house construction, could not be ignored. At the same time, the survey had occurred after only part of the previous year had elapsed, and there was no incriminating material for the later part of the year beyond the survey statement. The Tribunal therefore applied a proportionate and fair estimate, separating the period up to the survey date from the period thereafter.

Conclusion: The addition could not be sustained at the full amount of Rs. 50 lakhs. The income was to be estimated at Rs. 25,96,623, resulting in only partial relief to the assessee.

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