TaxTMI 
TaxTMI 
2016 (5) TMI 586
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....was declared at Rs. 2,07,51,940/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee on 26.8.2011. A search and seizure operation was carried out in the case of the assessee on 10.9.2010. Similarly, a survey under section 133A of the Income Tax Act was carried out in the case of M/s.Devraj Developers, Amul Diary Road, Anand on 19.2.2010. According to the AO, during the course of survey, various loose papers, small dairies were found and impounded. Statement of Shri Pranav S. Patel (PSP), partner of M/s.Devraj Developers was recorded under section 133A on 19.2.2010. Thereafter, his statement was further recorded under section 131 of the Income Tax Act. PSP had disclosed in his statement recorded at the time of survey as well as in the post-survey inquiry that he had made various payments to the assessee which are inventorised in Annexure A/1 to Annexure A/7. The ld.AO has noticed the details of the payments as under: "(a) Annexures-A-1 to A-7 are written by Shri Pranav S. Patel himself (b) Page No.9 of Annexure-A-1 is about payment of Rs. 20,00,000/- to the assesses on 18/12/2009 ag....
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....diary or in other loose paper. No person would make a huge payment without taking confirmation from other party. The assessee further contended that search was carried out at his premises and nothing incriminating was found, whereas, only survey was conducted at the premises of PSP. According to the assessee how PSP has been managing his affair, the assessee cannot be asked to explain the writing made by him in his diary. The assessee further put reliance upon the following judgments. "i) Kishanchand Chellaram Vs. CIT, 125 ITR 713 (SC) ii) CIT Vs. N. Swamy, 241 ITR 363 (Mad) iii) CIT Vs. P.V. Kalyansundaram, 282 ITR 259 (Mad); iv) Shankerlal Nabhumal HUF & Ors. Vs. DCIT, 80 TTJ (Ahd) 69; 6. On the strength of the above judgment, it was contended by the assessee that burden to prove, demonstrating the fact that the assessee has received payment was on the Revenue. Merely on the basis of documents found from the premises of a third party in the hand writing of the third party, without any cross-confirmation at end of the assessee, it cannot be assumed that the payment was made to the assessee. The assessee further contended that only statement w....
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....., Tax Appeal No.126 of 2015 and Anr. Copies of both decisions have been placed on record. The ld.counsel for the assessee pointed out that in the case of CIT Vs. Abhalbhai Arjanbhai Jadeja (supra), an addition was made by the AO on the basis of a statement recorded during the course of search. The addition was deleted by the ld.CIT(A) and order of the CIT(A) was confirmed. The Hon'ble High Court has upheld the order of the Tribunal by observing that sole statement of Shri Vikas Shah was not sufficient to make the addition in the hands of the assessee. In this way, the ld.counsel for the assessee prayed that the addition in the hands of the assessee is not sustainable. 8. On the other hand, the ld.DR relied upon the orders of the Revenue authorities. 9. We have duly considered rival contentions and gone through the record carefully. The first evidence or circumstances referred by the AO for making the addition is that statement of PSP was recorded during the course of survey. The contention of the ld.counsel for the assessee on this set of evidence is that this statement has no evidentiary value, hence, it cannot be used against the assessee, because, on the basis of the stat....
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....efore, there is much force in the argument of learned counsel for the appellant that the statement elicited during the survey operation has no evidentiary value and the Income-tax Officer was well aware of this" 10. Similarly, the Hon'ble Madras High Court has also concluded that statement recorded during the course of survey has no evidentiary value. The SLP against the decision of the Hon'ble Madras High Court has also been dismissed by the Hon'ble Supreme Court. The ld.counsel for the assessee has placed on record copy of the judgment of the Hon'ble Supreme Court as Annexure-A with the chart. 11. The next evidence recorded by the AO is that in the post survey inquiry statement of PSP was recorded on 5.3.2010 under section 131 of the Income Tax Act, which was on oath. Therefore, if statement recorded under section 133A was ignored, then, there is a further disclosure by the payer. We find that his statement was recorded from the back of the assessee, and no opportunity to cross-examine the deposer was given to the assessee. Hence, this statement cannot be used against the assessee. We find support from the decision of Hon'ble Supreme Court in the case of Kishanchand Chellar....
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....he assessee has confirmed the entry when it was made. The moment the assessee recognized his signature in all these entries and it is established that signatures are of the assessee, then, it is not the entries alone related to PSP, but it becomes joint responsibility to explain the entry. This is the reason that the assessee has shown this amount in his return of income. If we accept the conclusion drawn by the Revenue authorities, then, there would be a very dangerous situation, because PSP might have recorded hundred names or crores of amounts alleged to have been paid to the assessee. The assessee cannot be expected to prove the entries written by PSP in his diary. The onus is upon the Revenue to first prove that the assessee has received payment. The department failed to prove this aspect. The AO has taken the entries of PSP as a gospel truth, and assumed that it is the assessee who has to disprove them, whereas the position of the law is all together otherwise. It is the AO who has to first prove the payments alleged to have been received by the assessee, and only then, explanation of the assessee can be sought. From entries of PSP referred by the AO, this aspect has not been....