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Section 143, read with section 133A, of the Income-tax Act, 1961 - Assessment - Additions to income - Whether Assessing Officer can make additions on basis of materials collected during course of illegal survey - Held, yes FACTS During the course of survey conducted at the premises of the assessee, excess stock was found. Based on the material found during that survey, the Assessing Officer made additions. On appeal, the Commissioner (Appeals) partly allowed the assessee's appeal. In second appeal, the assessee was permitted to take additional ground, questioning the competence of Inspector to hold survey in violation of section 133A. The Tribunal allowed the assessee's appeal holding that the additions could not be made by the Assessing Officer based on inventory of stock taken during the course of survey which was illegal as Inspector was not competent to conduct survey. On reference : HELD From the facts available on record, it had come out that the action of the Inspector to conduct survey under section 133A was not legal under section 133A. Though no prohibition had been imposed on the Inspector to conduct such a survey, however, unless an authority is given under the provisions of section 133A, survey conducted by the Inspector is not legal and the Tribunal had recorded its finding accordingly. In the instant case, inventory of stock was prepared by the Inspector during the course of survey and based on said material, the Assessing Officer made additions. [Para 8] The Supreme Court, in the cases of Dr. Partap Singh v. Director of Enforcement [1985] 155 ITR 166 /22 Taxman 30 and Pooran Mal v. Director of Inspection (Inv.) [1974] 93 ITR 505, has held that the material collected during the course of illegal search can be made use of. If the ratio of those s is applied, then it becomes clear that even in the case of illegal survey, material collected can be used for additions. While delivering the s, the Supreme Court was cautious about the fact that material collected was coming out from illegal search and yet material collected was allowed to be used by the Assessing Officer. The same analogy would apply in the instant case for the reason that so far as the…

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