Ramdev Buildcon Vs ITO (ITAT Ahmedabad)
The Ahmedabad Income Tax Appellate Tribunal (ITAT) has directed a fresh review of an assessment order, focusing on an addition of Rs. 1 crore based solely on a partner’s statement recorded during a survey. The case involved Ramdev Buildcon, a partnership firm, whose partner admitted to additional undisclosed profits during a survey conducted in 2016. However, this admitted income was not reflected in the firm’s income tax return for the assessment year 2016-17, leading the Assessing Officer (AO) to add the Rs. 1 crore to the firm’s income.
The partner’s statement, made during the survey proceedings, formed the sole basis for the AO’s addition. The Commissioner of Income Tax (Appeals) (CIT(A)) upheld this addition, as the assessee failed to appear for multiple hearings. The ITAT, however, found this reliance on a single statement without corroborating evidence problematic. The Tribunal noted that statements recorded during survey proceedings, while relevant, do not automatically hold evidential value without supporting material.
The ITAT emphasized the need for a thorough examination of the facts, particularly in light of the significant addition. While acknowledging the assessee’s consistent non-cooperation before revenue authorities, the Tribunal decided to restore the matter to the CIT(A) for a de-novo consideration. This decision was based on the principle of ensuring justice, especially considering the substantial amount involved. The Tribunal, however, imposed a cost of Rs. 5,000 on the assessee, to be deposited in the Prime Minister Relief Fund, due to the assessee’s consistent non-cooperation. This ruling highlights the importance of corroborating evidence in tax assessments and the limitations of relying solely on statements made during survey proceedings. This also shows the tribunal’s willingness to give an assessee a further chance, even after non-cooperation, when justice requires it.
