Survey statements under Section 133A cannot be sole basis for additions without corroborating evidence

ITAT Jaipur held that survey statements under Section 133A cannot be solely relied upon for additions without corroborating evidence. The assessee successfully explained impounded documents, leading to deletion of additions made by AO. Court confirmed that no addition can be made based solely on statements, even with alleged admissions. Addition based on registered sale deed was deleted as payment was recorded in Balance Sheet. Addition for cash payments was deleted as it pertained to different assessment year. Section 115BBE was quashed as no undisclosed income source was established. However, addition under Section 69C for unexplained agriculture expenses was upheld based on CIT(A)'s detailed findings.

---

---

Issues Involved:
1. Legality and evidentiary value of statements recorded during the survey.
2. Addition of Rs. 20,22,500 based on the impounded documents.
3. Addition of Rs. 1,58,00,000 on account of unaccounted investment in Bhagat Public School.
4. Addition of Rs. 9,50,000 on account of unaccounted investment in ST land.
5. Benefit of telescoping and its computation.
6. Application of Section 115BBE.
7. Charging of interest under Sections 234A & 234B.

Issue-wise Detailed Analysis:

1. Legality and Evidentiary Value of Statements Recorded During Survey:
The assessee contended that the statements recorded during the survey under Section 133A have no evidentiary value. The Tribunal agreed, stating that the statute provides different provisions for recording statements under Sections 132(4), 133A(3)(iii), and 131, each operating independently. Statements recorded under Section 133A cannot be used as evidence against the assessee. The Tribunal cited various decisions, including CIT vs. S. Khader Khan Son, to support this view. The Tribunal concluded that the CIT(A) wrongly relied on the survey statements and that such statements, even if recorded on oath, do not hold evidentiary value in the absence of corroborative evidence.

2. Addition of Rs. 20,22,500 Based on Impounded Documents:
The Tribunal found that the impounded registered sale deed showed Devilal Bairava as the buyer of the agricultural land, and the assessee was neither a party to the transaction nor had signed the document. The Tribunal noted that the payment of Rs. 9,75,000 was recorded in the assessee's balance sheet and was not disputed by the Revenue. Therefore, the addition of Rs. 10,47,500 was deleted, and the Revenue's ground for challenging the deletion of Rs. 9,75,000 was dismissed.

3. Addition of Rs. 1,58,00,000 on Account of Unaccounted Investment in Bhagat Public School:
The Tribunal noted that the addition of Rs. 1,58,00,000 consisted of three figures: Rs. 40,00,000, Rs. 60,00,000, and Rs. 58,00,000. The addition of Rs. 40,00,000 was deleted by the CIT(A), and the Revenue did not appeal against it. The Tribunal found that the payment of Rs. 60,00,000 did not pertain to the year under consideration but to an earlier year, as indicated by the language of the agreement. Therefore, the addition of Rs. 60,00,000 was deleted. The addition of Rs. 58,00,000 was not pressed by the assessee and was confirmed.

4. Addition of Rs. 9,50,000 on Account of Unaccounted Investment in ST Land:
The Tribunal found that the impounded document showed the date of payment as 04.11.2016, which falls in the financial year 2016-17, relating to A.Y. 2017-18. Therefore, the CIT(A) rightly deleted the addition in the current year. The Tribunal dismissed the Revenue's ground on this issue.

5. Benefit of Telescoping and Its Computation:
The Tribunal noted that the CIT(A) allowed the benefit of telescoping, reducing the total additions sustained to Rs. 28,72,212. However, the Tribunal found that the CIT(A) wrongly reduced Rs. 11,60,000 as income utilized in A.Y. 2015-16, which had already been settled under the VSV scheme. Therefore, the net addition sustained was reduced to Rs. 16,72,212. The Tribunal further noted that the additions sustained up to the stage of the ITAT were Rs. 58,55,490, and after giving effect to the available cash, the net addition remained NIL. The Tribunal allowed the additional ground taken by the assessee for recomputing the benefit of telescoping.

6. Application of Section 115BBE:
The Tribunal found that the additions sustained were related to the business income of the assessee and could not be classified under the head "Income from Other Sources" for applying Section 115BBE. The Tribunal quashed the invocation of Section 115BBE and allowed the assessee's ground on this issue.

7. Charging of Interest Under Sections 234A & 234B:
The Tribunal noted that the charging of interest under Sections 234A & 234B is consequential and directed the AO to recompute the same after giving effect to the Tribunal's order.

Conclusion:
The Tribunal partly allowed the appeal of the assessee and dismissed the appeal of the Revenue. The Tribunal directed the AO to recompute the tax and interest liabilities after giving effect to the Tribunal's findings.

---