DY COMMISSIONER OF INCOME TAX, CIRCLE-5(1)(1), MUMBAI, MUMBAI vs. FALCON BUS LINES PRIVATE LIMITED, MUMBAI

This appeal is filed by the Revenue against the order dated 07.10.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the Ld. CIT(A)"] for the Assessment Year 2017-18 arising out of the assessment order passed under section 143(3) r.w.s. 147 of the Income-

The Revenue has raised the following effective ground of appeal:

Briefly stated, the facts are that the assessee is engaged in the business of operating bus services and ticket booking. A survey under section 133A of the Act was conducted on 31.08.2016 at the business premises of the assessee. During the course of survey, the Director of the assessee company surrendered a sum of Rs.1,45,53,867/- as additional income. The assessee, however, incorporated the surrendered amount in its regular books of account and disclosed the same in the return of income. During reassessment proceedings, the Assessing Officer treated the surrendered amount as unexplained cash credit under section 68 and made the impugned addition.

Before the Ld. CIT(A), the assessee contended that the addition was made merely on the basis of the statement recorded during survey without any corroborative material. It was also submitted that though the proceedings were under section 133A, the statement was recorded under section 131 without satisfying the statutory conditions. The Ld. CIT(A), after considering the submissions and relying upon the judgment of the Hon'ble Supreme Court in CIT vs. S. Khader Khan Son (352 ITR 480), held that a statement recorded during survey has no independent evidentiary value and, in the absence of corroborative material, no addition could be sustained merely on the basis of such statement. Accordingly, the addition was deleted.

The Ld. Departmental Representative relied upon the assessment order and submitted that the Director had voluntarily admitted the undisclosed income during survey and, therefore, the Assessing Officer was justified in making the addition. The Ld. Authorised Representative, on the other hand, supported the order of the Ld. CIT(A) and submitted that except the survey statement, no independent material had been brought on record to justify the addition under section 68.

We have heard the rival submissions and perused the material available on record. It is an undisputed fact that the survey was conducted under section 133A on 31.08.2016. The addition has been made solely on the basis of the statement recorded during the course of survey. The Ld. CIT(A) has recorded a finding that the statement was recorded by invoking section 131 during survey proceedings without there being any material to show that the statutory conditions for exercise of such power were satisfied. More importantly, except the statement of the Director, the Assessing Officer has not referred to any independent evidence to establish that the amount represented unexplained cash credit exigible to tax under section 68 of the Act.

The Hon'ble Supreme Court in CIT vs. S. Khader Khan Son (352 ITR 480) has affirmed the legal position that a statement recorded during survey under section 133A has no conclusive evidentiary value and an addition cannot be sustained solely on the basis of such statement without corroborative evidence. In the present case, the Revenue has failed to bring any independent material to support the impugned addition. We also note that the survey was conducted on 31.08.2016, when the books of account for the relevant financial year had not been closed, and the surrendered income was subsequently incorporated in the regular books and disclosed in the return of income. In these

Accordingly, we find no infirmity in the order of the Ld. CIT(A) and dismiss the grounds raised by the Revenue.

In the result, the appeal filed by the Revenue is dismissed.