TaxTMI 
TaxTMI 
2016 (8) TMI 1407
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....y admitted the undisclosed income in his statement recorded under Section 132(4) of the Income Tax Act, 1961 at the time of search and also made surrender to that extent. iii. Whether on the facts and in the circumstances the learned CIT(A) had erred in law in adjudicating the appeal without removal of the defect of the nature of filing of the statement of fact as mandated by statutory form no. 35. iv. That the appellant craves to add, delete or modify any of the grounds of appeal before or at the time of hearing. Revised grounds of appeal. 2. Ground No. 1 and 2 of the appeal are related to additions of Rs. 30 lakhs and Rs. 23.20 lakhs made by the Assessing Officer relying on the statement of the assessee under section 132(4) of the Act, which have been deleted by the learned Commissioner of Income-tax(Appeals). 2.1 The learned CIT(DR), relying on the order of the Assessing Officer, submitted that statement made by the assessee under section 132(4) of the Act is one of the admissible evidence and, therefore, cannot be rejected for making addition in the case of the assessee. 2.2 On the other hand, learned Authorized Representative of the assessee, relying....
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....iii) ............................. (iv) .............................." 2.4 The Tribunal, while concluding above, has relied on the judgment of the Hon'ble Jurisdictional High Court in the case of CIT Vs. Harjeet Aggarwal vide ITA No. 8/2004. The relevant paragraphs of the order of the Tribunal are as under: "11. In the case of Harjeev Aggarwal (supra), Hon'ble Jurisdictional High Court considered the evidentiary value of the statement recorded during the course of search. The relevant portion is paragraph 19, 20 & 24, which are reproduced below for ready reference:- "19. In view of the settled legal position, the first and foremost issue to be addressed is whether a statement recorded under Section 132(4) of the Act would by itself be sufficient to assess the income, as disclosed by the assessee in its statement, under the Provisions of Chapter XIV-B of the Act. 20. In our view, a plain reading of Section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words "evidence found as a result of search" would not take within its sweep statements rec....
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....4 Thus, we find that the Hon'ble Jurisdictional High Court as well as the Tribunal has held that no addition can be made merely on the basis of statement recorded during the search and seizure operations on standalone basis without reference to any other material discovered during search and seizure operation. The Tribunal has particularly held that no such additions could have been made in proceedings under section 153A of the Act. 2.5 When we advert to the facts of the case in hand, we find that in the course of search proceedings inventory of the consolidated stock of the five firms was prepared. The list of the five firms has been mentioned by the Assessing Officer in the assessment order. In the questionnaire issued to the assessee in the course of assessment proceeding, the Assessing Officer has mentioned that in the statement recorded under section 132(4) of the Act, it was explained by the assessee that the stock inventory prepared at the time of search was a consolidated inventory for the different business concerns on the date and the same had to be bifurcated as per the items of the different concern, which was a quiet time taking exercise, and it was not possible to ....
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.... admission has to be necessarily corroborated with material evidence to stand the test of appeal. In this case as there was no stock difference found on reconciling, which has also been admitted by the AO in the impugned order, I am afraid the surrender of additional income on this account has no basis. The assessee deserves to succeed on this ground of appeal." 2.7 Similarly, in respect of another addition of Rs. 23.20 Lacs, the Assessing Officer has mentioned that certain loose documents containing expenses on education of children, purchase of personal items, investment in construction of residential Bungalow and details of movable and immovable properties were seized. The assessee explained that total financial figure mentioned in these documents was of the tune of Rs. 2.5 lakhs and which was incurred out of disclosed sources of the assessee. However, the Assessing Officer rejected the explanation and proceeded to make the addition on the basis of surrender of Rs. 23.20 made in the statement under section 132(4) of the Act to cover discrepancy, if any, found in the seized documents. The learned Commissioner of Income-tax (Appeals) has specifically mentioned that even in rema....
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.... case of Harjeev Aggarwal (supra) have in the similar facts and circumstances, held that no addition can be made merely on the statement recorded under search and seizure proceedings on a standalone basis without any supporting or corroborative material. Thus, respectfully following the findings of the Tribunal in the case of Best Infrastructure (India) Private Limited (supra) and Hon'ble Jurisdictional High Court in the case of Harjeev Aggarwal (supra), we hold that order passed by the learned Commissioner of Income-tax (Appeals) on the issue in dispute is well reasoned and no interference on our part is required, accordingly, we uphold the finding of the learned Commissioner of Income-tax (Appeals) on the issue in dispute. Thus, ground No. 1 and 2 of the appeal are dismissed. 3. In ground No. 3, the Revenue has agitated the issue that the learned Commissioner of Income-tax (Appeals) adjudicated the appeal without filing of the statement of fact as mandated by the statutory form No. 35. 3.1 The learned Commissioner of Income-tax (Departmental Representative) submitted that learned Commissioner of Income-tax (Appeals) has adjudicated the appeal despite being the defect in the....
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....f-explanatory. It was submitted that separate filing of facts cannot come in the way in any manner or disabled the CIT(A) while deciding the issue before him. The ld. AR of the assessee pointed that the ld. CIT(A) has called for the remand report and non filing of the statement of facts in no way will affect the lis at hand before the ld. CIT(A). At best it can be called an irregularity which cannot be fatal and he referred to the leading Commentary on Income Tax Law Chaturvedi and Pithisaria Page 12734 Sixth Edition 2014. Thereafter, the ld. AR quoted the Hon'ble Supreme Court observations in Jai Jai Ram Manohar Lal vs. Natiional Building Material Supply AIR 1969 SC 1267 and ITAT Coordinate 'G' Bench decision in the case of Shri Ram Hari Ram ITA 3531/D/2012 wherein similar objection was rejected by Speaking order para 8 and 9. 10. We have carefully considered the arguments of both sides, perused the material placed before us. We are not reproducing the lengthy argument note of the ldDR, because we take note that a Coordinate Bench of this Tribunal in the case of SVP Builders (India) Ltd. vs. DCIT ITA No. 4674/D/2014 dated 19.2.2015 has adjudicated this issue a....