Addition cannot be made Merely on Statement unless supported by documentary evidence

Concept Communication Ltd Vs DCIT (ITAT Mumbai)

Conclusion – Addition cannot be made merely on the basis of the statement unless the same is supported by the documentary evidence. Statement recorded Under Section 133A of Income Tax Act, 1961 under fear/ coercion cannot be relied upon by the AO if it is not corroborated by documentary evidence. AO is bound to give the assessee an opportunity to  controvert evidence and cross examine the evidence on which department places reliance. A failure in opportunity to  cross examine can result in the order being a nullity. 

Facts –

Assessee is engaged in the business of advertising agency. Assessee engages vendors to undertake the campaign service on his behalf. The work done by the vendor is verified by the client and after verification, the payment is done to the assessee, who in turn disburses the amount to the vendor as agreed between them.

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