Shanti Prime Publication Pvt. Ltd.
Sec. 133A of Income Tax Act, 1961 – Survey – Addition statement – AO cannot come to the conclusion that the assessee has issued accommodation bills and reject the books of account of the assessee on the basis of the statement of the director alone.
Facts: Whether the Tribunal erred in holding that on the basis of the statement of the director Shri Saurabh N. Garg alone, the AO cannot come to the conclusion that the assessee has issued accommodation bills and reject the books of account of the assessee?
Held, that Tribunal was satisfied that assessee was mainly engaged in the import of diamonds and sales in local markets to exporters who export the goods. Import of diamonds by the assessee was done through custom authorities and through regular banking channels in India. All the transactions relating to purchase and sales were made through account payee cheques and that there was not a single transaction by way of cash. Parties to the transaction were reputed in the trade; sales were made to reputed exporters who were assessed to tax and their identities were known to the Income Tax Department besides they were registered under the state tax laws. Thus, Tribunal noted that assessee had discharged the onus of proving the transactions as genuine by furnishing relevant documents, such as, copies of bank statements, ledger copies of various purchases, xerox copies of purchase invoices, relevant copies of daily stock register, confirmation letters etc. On such basis Tribunal recorded a clear finding of fact that assessee was not engaged in issuing accommodation bills and acting as a dummy for importing diamond bills. In arriving at such finding Tribunal noted that the survey party did not find any incriminating evidence and material that could establish the stand taken by the Assessing Officer. There was no dispute to the fact that no incriminating evidence was found on the day of the survey. It was also noted that merely on the basis of statement of one of the directors i.e. Shri Saurabh Garg that too recorded after 20- 25 days of the survey could not be a basis for bringing into assessment and making any addition to the income without further supporting or corroborative evidence. Statement recorded under Section 133A not being recorded on oath cannot have any evidentiary value and no addition can be made on the basis of such statement. – PR. CIT Vs. SUNSHINE IMPORT AND EXPORT PVT. LTD.  424 ITR 195 (BOM)