Subhash Kumar Aahi Vs ACIT (ITAT Jabalpur)
Survey surrender not sacrosanct: ITAT Jabalpur deletes additions on jewellery, cash, renovation & GP
The Jabalpur ITAT substantially allowed the Assessee’s appeal and deleted multiple additions arising from a survey u/s 133A, holding that mere surrender during survey, unsupported by corroborative evidence, cannot be the sole basis for additions.
A survey conducted on 30-05-2012 resulted in surrender of ₹89.29 lakh towards alleged excess stock of gold & silver jewellery, excess cash, unexplained investment in shop renovation, and estimated GP on surrendered stock. The Assessee later retracted the surrender, explaining that the discrepancies arose due to non-reconciliation at the time of survey and that crucial contemporaneous records were ignored by the Department.
The Tribunal held that a statement recorded u/s 133A has no evidentiary value by itself, unless supported by material evidence. On facts, it found that the repair & remodeling register, receipt books and vouchers for customers’ jewellery were found during the survey itself and were duly acknowledged by the Department. The activity of receiving jewellery for repair/remodeling was undisputed, even supported by the statement of the employee engaged in such work. Hence, the addition of ₹54.58 lakh towards alleged excess gold jewellery was deleted.
Similarly, the addition of ₹9.52 lakh towards excess cash was deleted as the Assessee had demonstrably withdrawn ₹11.50 lakh from bank just before the survey, which had not been posted in the cash book. The Department failed to show that the cash was spent elsewhere.
The Tribunal also deleted the addition of ₹5.19 lakh on alleged excess silver jewellery, noting that purchase bills were found during survey and were never disputed by the AO. Mere non-posting of bills in books could not justify an addition.
On the issue of unexplained investment in shop renovation (₹14.22 lakh) based on a DVO report, the ITAT held that the valuation wrongly treated an already-constructed three-storey building as fresh construction, ignoring the registered purchase deed and bills evidencing disclosed renovation expenditure. Moreover, the purchase and renovation pertained to earlier assessment years, making the addition untenable even on that count.
Consequently, the estimated GP addition of ₹23.67 lakh on alleged sale of excess stock was also deleted, as the very foundation of unexplained stock did not survive.
The Tribunal thus deleted all major additions, holding that vital evidence found during survey and placed on record was ignored by the lower authorities, and partly dismissed only the legal grounds challenging the validity of assessment. The appeal was partly allowed, overwhelmingly in favour of the Assessee
FULL TEXT OF THE ORDER OF ITAT JABALPUR
