SUPRIYA ROY,AGARTALA vs. ITO, WARD-1, AGARTALA, AGARTALA

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ITA 101/GTY/2025Status: DisposedITAT Guwahati03 February 2026AY 2018-1916 pages
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What did the Tribunal hold?

The Tribunal held that a statement recorded during a survey under section 133A, without corroborating material, cannot solely form the basis for additions. The assessee's husband's statement was an estimate and not conclusive proof of income.

What were the facts?

During a survey under section 133A, the assessee's husband provided a statement where he estimated business income for the year at 1.30% of the turnover, in addition to offering differences in cash and stock for taxation. The assessment order made additions based on this statement, along with the cash and stock differences.

What were the issues?

Whether additions made solely on the basis of a statement recorded during a survey under Section 133A are valid without supporting material. Whether the estimated income declared in the statement can be treated as conclusive income.

Which sections of the Income-tax Act were involved?

Section 133A,Section 143(3),Section 69A

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Income Tax Appellate Tribunal, GAUHATI BENCH, GUWAHATI

Before: SHRI GEORGE MATHAN, JM & SHRI LAXMI PRASAD SAHU, AM

For Appellant: Shri Sanjay Mody, AR, Shri Santosh Karnani, Sr. DR
For Respondent: Shri Santosh Karnani, Sr. DR
Hearing: 03/02/2026Pronounced: 03/02/2026

This is an appeal filed by the assessee against the order of the ld. Addl./JCIT(A)-2, Chennai, dated 13.12.2023 for the assessment year 2018- 2019. 2. At the time of hearing the Ld.AR drew our attention to pages 9 to 16 of the paper book which was copy of the written submission filed. The same reads as follows:-

3.

It was submission that the assessee is a retail trader of mustard oil. It was submission that there was a survey on the premises of the assessee on 21/03/2018. In the course of survey, the statement of the assessee’s husband, who is also an employee was taken. The Ld.AR drew our attention to the pages 1 to 5 of the paper book which is reads as follows:-

It was submission that this was statement recorded along with the stock statement and the cash statement at the time of survey. It was submission that in the statement the survey team had found that there was shortfall of stock of Rs.5,41,212/- and cash availability surplus of Rs.5,22,308/-. It was submission that it was specifically mentioned that the sale proceeds has not been deposited in the bank on account of survey. In the course of survey, the survey team took a statement from the said employee being a husband of the assessee that the there is a difference of Rs.5,22,308/- in respect of the cash. The difference in the value of stock Rs.5,41,212/- and over and above that 1.30% of the total turnover was treated as the undisclosed of the income of the assessee at Rs.9,94,500/-. In the return filed by the assessee, the turnover was shown by the assessee at Rs.7,70,95,391/- and net profit of Rs.9,65,360/- was shown. The alleged difference in cash and difference in the value of stock was not shown. The AO made an addition of the said two items to an extent of Rs.9,78,584/- and an addition of Rs.9,94,500/- as the undisclosed income of the assessee. It was the submission that, at the outset, in the course of itself the employee of the assessee being husband had categorically given the breakup of the differences. It was further submission that the statement of the assessee’s husband would not, first of all, have been taken. The stock statement and cash availability statement clearly showed that the assessee had sold the products and the sales proceeds were found in cash. The reasons for the cash being found was also explained. The assessee having also disclosed a net profit further addition of Rs.9,94,500/- was not called for. It was the prayer that the addition as made by the AO and as confirmed by the Ld.CIT(A) is liable to be deleted.

5.

In reply, the Ld.Sr. DR vehemently supported the order of the AO and CIT(A). It was submission that the wife being assessee was only a name lender and the actual business was being conducted by the assessee’s husband. It was submission that the statement given by the husband has also not been retracted. It was further submission that the statement should be considered in its entirety and the assessee’s husband having offered the additional income, the same should be brought a tax. He vehemently supported the order of the AO and CIT(A).

6.

We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the statement has been recorded from the employee of the assessee and it is specifically recorded as such that the said employee is husband of the assessee does not may be any difference and, therefore, the addition cannot be made on the statement recorded from an employee of the assessee. The facts also clearly show that in reply to the question no.6 and 7, the employee has explained the difference in the stock and the surplus cash found. It is also noticed that the statement records that an additional net profit is being offered of 1.3%, therefore, how an employee can give such declaration even if he is the husband of the assessee, does not stand to reason. This being so, as the addition having made on the basis of the statement recorded from the employee of the assessee, the same is unsustainable is liable to be deleted. It must also be mentioned here that it has been categorically been

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