TaxTMI 
TaxTMI 
2023 (3) TMI 669
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....eizure operation in the case of M/s. P.L. Raju Constructions (P) Ltd, a survey operation u/s 133A of the Act was conducted on 26.02.2019 in the case of the assessee. The Assessing Officer noted that during the course of survey, the Director of the assessee company Shri P. Satya Prasad has admitted additional income of Rs.5.00 crores for various years, the details of which are as under: A.Ys Original income offered (Rs.) Addl. Income (Rs.) Revised total income (Rs.) 2016-17 4,09,71,690 2,00,00,000 6,09,71,690 2017-18 3,92,02,560 2,00,00,000 5,92,02,560 2018-19 3,76,23,810 1,00,00,000 4,76,23,810 TOTAL 5,00,00,000 4. He noted that although the Director of the company Shri P. Satya Prasad has admitted additional income of Rs.2,00,00,000/- for the impugned A.Y, however, no such additional income has been admitted by way of filing a revised return. He, therefore, confronted the same to the assessee . The assessee in response to the same submitted that subsequent to the survey and search operation, they came to know that due to the discrepancy in the subcontracts of M/s. PL Raju Constructions (P) Ltd, they have ....
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....s taken sub-contract from M/s. PL Raju Constructions (P) Ltd during the financial year 2015-16 for Karwar, Guwahati, Hasimara and Rambili sites for work order of Rs.27,06,45,100/-. However, the assessee company has executed the work to the extent of Rs.22,37,74,0831 only. 7. It was submitted that before the Assessing Officer, the assessee company has stated that it had executed work to the extent of Rs.22,37,74,0831 only and the balance work has not been done. This fact was also confirmed by M/s. PL Raju Constructions (P) Ltd. It was further submitted that there was no evidence either documentary or otherwise in respect of suppression of any income by the assessee company. No discrepancy was also found at the time of survey operation. Even subsequently before the Investigation Wing also no documentary evidence in respect of suppression of income by the assessee company was found. Relying on various decisions, it was argued that the addition made by the Assessing Officer is not warranted. 8. Based on the arguments advanced by the assessee, the learned CIT (A) called for a remand report from the Assessing Officer. After considering the remand report of the Assessing Officer and....
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....so claimed by the appellant company that the Director of M/s. PL Raju Constructions Pvt. Ltd. has admitted the entire sub-contract works as it has undisclosed income to the extent of Rs. 35 crores and therefore making an addition of the same in the appellant's hands which would result in double taxation of the same income. The submissions were forwarded to the AO for remand report and the report was received vide letter dated 14.09.2020 which is reproduced in para 5.3 above. The counter comments of the appellant of the remand report is reproduced at para 5.4 above. In the remand report, the AO mentioned that the assessee neither produced the affidavit retracting its earlier statement. It was also mentioned that the ratio in the case of Concept Communication Ltd. Vs. DCIT is not applicable for want of retraction and no In plea of cross examination was raised during the course of assessment proceedings. its counter comments, the appellant stated that the sworn statement of the Director of M/s. PL Raju Constructions Pvt. Ltd., was not provided to him earlier and therefore he could not ask for any cross examination. Further, he has stated that for the current year, M/s. PL Raju Con....
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....efore the Tribunal by raising the following grounds: "1. The Ld. CIT(A) erred on facts and in law in allowing relief to the assessee. 2. The Ld. CIT(A) ought to have upheld the addition of Rs.2,00,00,000/- based on discrepancies in execution of sub-contract works found during the course of survey. 3. The Ld. CIT(A) ought to have appreciated the fact that the amount admitted during the Course of survey covers the discrepancies in all subcontract works and is not limited to the sub-contract works executed for M/s. P L Raju Constructions Pvt. Ltd. 4. The Ld. CT(A) erred in granting relief on the ground of double taxation while stating that M/s. PL Raju Constructions Pvt. Ltd. had offered additional income towards discrepancies in transactions with the assessee for the A.Y. 2017-18 without appreciating the fact that the additional income admitted by M/s. P L Raju Constructions Pvt. Ltd. was for income chargeable to tax in the hands of M/s. P L Raju Constructions Pvt. Ltd. and not the assessee-company. 5. The Ld. CIT(A) ought to have appreciated the fact that both M/s. P L Raju Constructions Pvt. Ltd. and the assessee are separate and unrelat....
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.... Son (2008) 300 ITR 157 (Mad), which has been upheld by the Hon'ble Supreme Court as reported in CIT vs. S. Khadan Khan Son (2012) 25 Taxmann.com 413 (S.C) he submitted that the statement recorded u/s 133A of the Act on oath has no evidentiary value and therefore, any addition made solely on the basis of the statement recorded u/s 133A cannot be sustained. Relying on various other decisions, he submitted that addition cannot be made merely on the basis of statement recorded during the course of survey. He further submitted that no discrepancy of any other nature, any incriminating evidence/bills/vouchers were found during the course of survey other than the statement made by the Director which was subsequently retracted. Therefore, the learned CIT (A) is fully justified in deleting the additions and the grounds raised by the Revenue are liable to be dismissed. 13. We have heard the rival arguments made by both the sides, perused the orders of the AO and CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the AO in the instant case made addition of Rs.2.00 crores in the hands of the a....
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.... likely to be disclosed before the Income Tax Departments. Similarly, while recording statement during the course of search it seizures and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, assessing officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders. Yours faithfully, Sd/- (S. R. Mahapatra] Under Secretary (Inv. II) 16. We find the Hon'ble Madras High Court in the case of CIT vs. S Khadar Khan Son (2008) 300 ITR 157 (Mad), while holding that the statement elicited during the survey operation has no evidentiary value has observed as under: "An admission is extremely an important piece of evidence but it cannot be said that it is conclusive; and it is open to the person who made the admission to show that it is incorrect. The word 'may' used in section 133A(3)(ii )... viz 'record the statement of any person which may be useful for or relevant to any proceeding under....
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....ove decision of the Hon'ble Madras High Court has been upheld by the Hon'ble Supreme Court reported in CIT vs. S. Khadar Khan Son (2012) 25 traxmann.com 413 (S.C). 18. The Hon'ble Rajasthan High Court in the case of CIT vs. Shri Ashok Dharendra, reported in 369 ITR 145 has held that addition is not justified merely on the statement recorded during the course of survey. The Hon'ble Gujarat High Court in the case of CIT vs. M.P. Scrap Traders reported in (2015) 372 ITR 507 has held that the addition cannot be made on the basis of statement during the course of survey. Various other decisions relied on by the learned Counsel also support the proposition that no addition can be made merely on the basis of statement made during the course of survey unless the same is backed by credible evidence at the disposal of the Revenue. 19. Since in the instant case, the Assessing Officer has made the addition merely on the basis of a statement recorded during the course of survey of Shri P. Satya Prasad, Director of the assessee company who had admitted additional income of Rs.2.00 crores for the year under consideration and since such statement has been retracted by the Dir....