Addition made solely on the basis of statement recorded u/s 132(4) without having corroborating evidence is unsustainable.

Last updated: 20 January 2021

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The Income Tax Appellate Tribunal has ruled that any addition made to income solely based on a statement recorded under Section 132(4) of the Income Tax Act, without any corroborating evidence, is unsustainable. This means the tax authorities cannot simply rely on a taxpayer's statement during a search and seizure to add to their income without further proof.

Court :
ITAT Visakhapatnam

Brief :
These appeals are filed by the revenue against the orders of the Commissioner of Income Tax (Appeals)-3, Visakhapatnam in Appeal Nos.314 to 318 /2019-20/CIT(A)-3/VSP/2020-21 dated 31.07.2020 for the Assessment Year (A.Y.)2013-14 to 2017-18. The appeals are filed by the Revenue with the delay of 3 days along with condonation petition stating administrative reasons and requested to condone the delay.

Citation :
ITA 201/VIZ/2020

IN THE INCOME TAX APPELLATE TRIBUNAL,
VISAKHAPATNAM BENCH, VISAKHAPATNAM
(through web-based video conferencing platform)

BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER&
SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER

I.T.A.No.197/Viz/2020 to 201/Viz/2020
Assessment Year:2013-14 to 2017-18)

Dy.Commissioner of
Income Tax
Central Circle-1
Guntur
Appellant

Vs.

M/s Bharathi Consumer Care Products Pvt. Ltd.,
11/25, Amaravathi Road, Gorantla, Guntur
[PAN : AADCB9107B]
Respondent

Appellant by :Shri D.K.Sonowal, CIT DR
Respondent by:Shri M.V.Prasad, AR

Date of Hearing :25.11.2020
Date of Pronouncement:23.12.2020

O R D E R

Per Bench :

These appeals are filed by the revenue against the orders of the Commissioner of Income Tax (Appeals)-3, Visakhapatnam in Appeal Nos.314 to 318 /2019-20/CIT(A)-3/VSP/2020-21 dated 31.07.2020 for the Assessment Year (A.Y.)2013-14 to 2017-18. The appeals are filed by the Revenue with the delay of 3 days along with condonation petition stating administrative reasons and requested to condone the delay.

We have heard both the parties and condone the delay and admit the appeals of the revenue.

To know more in details find he attachment file

FAQ :

Section 132(4) allows tax authorities to examine a person during a search and seizure operation and record their statement. This statement can be used as evidence.

No, according to this ruling, additions cannot be made solely on the basis of a statement recorded under Section 132(4) without any corroborating evidence.

For a tax addition to be valid, it must be supported by corroborating evidence, not just a statement made under Section 132(4).

The appeals were filed by the revenue against orders from the Commissioner of Income Tax (Appeals). The Tribunal condoned a delay in filing the appeals and admitted them for hearing.