TaxTMI 
TaxTMI 
2014 (7) TMI 561
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....ppeals are decided and disposed of by this common order. 3.0. Feeling aggrieved and dissatisfied with impugned judgment and order passed by the learned Tribunal dated 31.12.2013 passed in ITA No. 1247/RJT/2010 for AY 200708, by which, the learned Tribunal has allowed the said appeal preferred by the respondent assessee and deleted the addition of Rs. 25,50,320/made by the Assessing Officer as unexplained investment in stock in hands of the respondentassessee and deleted addition of Rs. 7,00,500/made by the Assessing Officer as cash in hand, Revenue has preferred Tax Appeal No. 525 of 2014 with the following proposed substantial question of law. A. Whether the ITAT is justified in law as well on the facts in coming to the conclusion that r....
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..../as per the declaration made in statement under Section 133A of the Act? 4.0. The facts leading to the present Tax Appeal in nutshell are as under: 4.1. That an action under Section 133 A of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried on 4.1.2007 at the business premises of the partnership firm namely M/s. M.P. Scrap Traders, Rajkot in which Shri Kishorebhai Mohanlal Karia, was also partner. During the course of survey proceedings, statement of said Shri Kishorebhai Mohanlal Karia was taken in which, fixed deposits and bank transactions in th name of various family members and partners found stood surrendered as undisclosed income in various years i.e. assessment years 2000-01 to 2004-05. In the said stateme....
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....cepted the application of money 4 ITA towards gift to Hiren Dattani for Rs. One lac, gold bullion Rs. 27,34,500/and payment of taxes. He, however, did not accept the investment in excess stock for Rs. 25,50,320/and excess cash found Rs. 7,00,500/and made the additions thereon as undisclosed investment in the case of partnership firm M/s M.P. Scrap Traders over and above the addition of Rs. 6 lacs as stated hereinbefore. The reason taken in not accepting the said application by the assessing authority as well as by the Ld. CIT(A) is that the appellant Shri Kishorebhai Mohanlal Karia had filed two affidavits dated 23rd January, 2007. In one of the affidavit, the assessee has retracted the statement made during the course of survey proceedings....
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.... that while making the aforesaid additions in the hands of Shri Kishorbhai Mohanlal Karia as well as in the hands of firm, the AO solely relied upon the statement of Shri Kishorbhai Mohanlal Karia recorded at the time of search on 4.1.2007 which subsequently came to be retracted and / or explained within the period of 19 days i.e. 23.01.2007. It is required to be noted that as such except aforesaid statement recorded at the time of search which was subsequently retracted, there was no other material and / or corroborative material with the AO, on which, the addition of Rs. 6 lacs in the hands of Shri Kishorbhai Karia and Rs. 7,00,500/cash in hand and Rs. 25,50,320/as unexplained investment in stock in the hands of the assesse M/ s. M.P. Scr....
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....dated during the survey proceedings do not have any evidentiary value and the same should not be used against the assessee, even though, he had made a correct disclosure of investments of Rs. 96,38,410/in the returns of income filed for the aforesaid five years. The Hon'ble Apex Court in the case of CIT Vs. S. Khader Khan Sons, (2013) 352 ITR 480 (SC) clearly admitted the principle that Section 133A of the I.T. Act does not empower any I.T. authority to examine any person on oath and therefore any admission made in survey cannot by itself be made a basis for addition. As the appellant Shri Kishorebhai Mohanlal Karia in appeal before us has acted on the surrender of Rs. 96,38,410/, the retraction made through such an affidavit dated 23/1....
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....upon to produce any documentary evidence. Consequently the assessee was entitled to assume that the income tax authorities were satisfied with the affidavit as sufficient proof on this point. In fact, the A.O. has not even rejected such an affidavit of the assessee in the entire proceedings before him. Under the circumstances and having regard to the judgment by the Hon'ble Allahabad High in the case of Sohan Lal Gupta Vs. CIT (1958) 33 ITR 786 at page 791, as also was considered at the time of hearing in presence of the parties in appeal, we are satisfied that the assessee has made a bonafide claim of application of the income that stood surrendered in the aforesaid five years i.e. 2000-01 to 2004-05 and there being no contrary materia....