The Income Tax Appellate Tribunal in its recent order ruled that addition made under the Income Tax Act, 1961 solely on the basis of confessional statement without any supporting evidence is Invalid.
The bench including Judicial Member S.S.Viswanethra Ravi and Accountant Member J.Sudhakar Reddy were ruled so while preferring the appeal of assessee arise out of the order of the Commissioner of Income Tax (Appeals)-22, Kolkata under section 143(3)/153A of the Income Tax Act, 1961 for the Assessment Year 2009-10.
In instant case assessee is a company, filed its return of income declaring NIL income. A search and seizure operation was conducted u/s 132 of the Act on the locker of the assessee, in connection with the search on Merlin Group of cases. Subsequent a notice was issued u/s 153A of the Act to the assessee.
During the course of search assessee was asked to explain the asset found in the locker maintained at Shri Vardhan Safe Vaults Pvt. Ltd., Kolkata and the assessee submitted that the locker belongs to the old management which had not handed over the keys to the assessee.
The assessee also contended that the proper procedure to open the locker of another individual was denied and incorrect before the law but the same was denied by AO. It was stated that this locker was opened in the presence of one Mr. Shiv Kishan Mohta who is one of the directors of the company.
Mr. Shiv Kishan Mohta is his statement before the AO submitted that aforementioned asset, a silver utensil belongs to him, his son and daughter-in-law and the locker was maintained for family personal effect.
The Assessing Officer disbelieved the statement of Shiv Kishan Mohta and treated the assets in question as undisclosed income of the assessee and determined gross income at Rs. 4,28,180/-. Aggrieved the assessee carried the matter in appeal without success.
Further aggrieved the assessee is in appeal before the tribunal.
While considering all the aforesaid factors mentioned by Mr. Shiv Kishan Mohta the bench has the opinion that AO merely rejected the contention of assessee without any evidence to the contrary.
The bench said that since the assessee filed a copy of wealth tax returns for the assessment year 2009-10 wherein these silver articles have been declared by his family members in their returns of wealth and also filed a letter with the Assessing Officer confirming that this silver utensils belong to his family. This is so enough for the bench to declare that the addition made by the AO must be rejected.
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