DCIT Vs Ahinsa Infrastructure and Developers Limited (ITAT Mumbai)
Survey statements cannot be only basis for making addition and the AO has to make independent enquiry and bring some corroborative material on record to support those additions
Income Tax Appellate Tribunal (ITAT), Mumbai, recently adjudicated the case of DCIT Vs Ahinsa Infrastructure and Developers Limited, concerning the assessment year (AY) 2014-15. The Revenue challenged the decision of the Commissioner of Income Tax (Appeals) [CIT(A)], who had deleted two additions made by the Assessing Officer (AO): ₹4.50 crores surrendered during a survey and ₹44.50 lakhs attributed to unaccounted cash receipts. These additions were primarily based on statements recorded during a survey conducted under Section 133A of the Income Tax Act, 1961, and certain impounded documents.
The ITAT upheld the CIT(A)’s deletion of both additions, citing the Supreme Court’s precedent in S Khader Khan (352 ITR 480), which established that statements recorded under Section 133A lack evidentiary value. Furthermore, the Tribunal noted that the AO failed to provide corroborative evidence or conduct independent inquiries to substantiate the additions. The Revenue’s reliance on impounded documents, deemed “dumb documents,” was also criticized, as these lacked signatures or specific correlations with taxable transactions.
Judicial precedents played a significant role in this decision. The ITAT referred to Common Cause Vs Union of India (394 ITR 220) and Sheraton Apparels Vs ACIT (256 ITR 20), emphasizing that unsigned or unauthenticated documents cannot form the basis for additions. Additionally, the Tribunal cited Kishanchand Chelaram (125 ITR 713), asserting that any evidence used for additions must be shared with the taxpayer for rebuttal, which was not done in this case.
