2014 (11) TMI 1243

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....Chirma Yellappa and G. Anjaiah. The firm is an assessee of income-tax and it purchased a plot of land in Nizamabad, in December, 1991, for a consideration of Rs. 3,57,600. The Assessing Officer caused survey in the business premises of the firm on September 14, 1995. He opined that the consideration for the plot of land purchased in December, 1991, is Rs. 6,00,000 and there was an understatement of the consideration. Statements are said to have been recorded from all the three partners in this behalf. The differential amount was treated as undisclosed income of the firm and one-third each of the same was added to the income of the partners. Accordingly, notices were issued under section 148 of the Income-tax Act, 1961 (for short "the Act") ....

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.... interest were extracted on the day of inspection, would reveal the nature of coercion and pressure exerted upon the appellants. He submits that a statement recorded during the course of survey and search can constitute the sole basis for an Assessing Officer to pass orders, only when it is not retracted from, and once it is retracted, the order of assessment must be based upon some other material. He has placed reliance upon certain precedents, 5. Sri J.V. Prasad, learned counsel for the respondent, on the other hand, submits that the statements were made by the appellants on their own accord and obviously, for that reason, the Assessing Officer did not proceed further in the survey, and gather other material. He contends that in case t....

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....assessment were passed. Those orders were upheld by the Commissioner of Income-tax (Appeals) as well as the Tribunal. 8. The Act empowers the Assessing Officers or other authorities to record the statements of the assessees, whenever a survey or search is conducted under the relevant provisions of law. The statements so recorded are referable to section 132 of the Act. Sub-section (4) thereof enables the authorities not only to rely upon the statement in the concerned proceedings but also in other proceedings that are pending, by the time the statement was recorded. 9. If the statement is not retracted, the same can constitute the sole basis for the authorities to pass an order of assessment. However, if it is retracted by the person ....