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April 2008

Survey : S. 69 and S. 133A : Addition to income merely on the basis of the statement recorded in the course of survey : Invalid

By K. B. Bhujle, Advocate
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11 Survey : S. 69 and S. 133A of Income-tax Act, 1961 : A.Y. 2001-02 : Addition to income merely on the basis of the statement recorded in the course of survey : Not valid.

[CIT v. S. Khader Khan Son, 214 CTR 589 (Mad.)]

On 24-07-2001, survey action u/s.133A of the Income-tax Act, 1961 was carried out in the premises of the assessee, wherein a statement of the partner was recorded offering an additional income of Rs.20,00,000 for the A.Y. 2001-02 and Rs.30,00,000 for the A.Y. 2002-03. The said statement was retracted by the assessee through a letter dated 3-8-2001. The Assessing Officer made additions to the income on the basis of the survey. The CIT(A) and the Tribunal deleted the addition.

On appeal by the Revenue, the Madras High Court upheld the decision of the Tribunal and held as under :

“S. 133A does not empower any I. T. Authority to examine any person on oath, hence, any such statement has no evidentiary value and any admission made during such statement cannot, by itself, be made the basis for addition.”

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