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Section 133A of the Income-tax Act, 1961 - Survey - Assessment year 2005-06- Whether though an admission made during survey is extremely important piece of evidence, it cannot be said to be conclusive and it is open to person, who has made admission, to show that it is incorrect - Held, yes - During survey operation at business premises of assessee-firm, revenue noticed some discrepancies in stock - As partner of assessee was not able to explain difference in stock at that time, he offered certain income for assessment - Subsequently, assessee submitted that said statement about stock was incorrect, and that impugned discrepancy had been reconciled - Consequently, assessee withdrew offer of additional income for assessment - Assessing Officer did not accept assessee's plea and assessed income as per statement given by partner - Whether as assessee had been able to explain discrepancy in stock found during course of survey, Assessing Officer could not have made said addition solely on basis of statement made by partner on behalf of assessee - Held, yes FACTS During the course of survey at the business premises of the assessee-firm, the tax officials noticed some discrepancies in stock. One of the partners of the assessee could not explain that difference at that time and, therefore, to buy peace of mind, certain additional income was offered for assessment. Subsequently, the assessee submitted that the statement of partner about stock was incorrect; and that the impugned discrepancy had been reconciled as it was only a mistake. Consequently, the assessee withdrew the offer of additional income for taxation on account of excess stock. However, the Assessing Officer did not accept the plea of the assessee and made assessment relying upon the statement given during the course of survey. On appeal, the Commissioner(Appeals) deleted the said addition holding that the Assessing Officer did not make any independent enquiry and he had not made out a case that the amount surrendered during survey operation had not been included in the final books of account. The appeal filed by the revenue before the Tribunal was also dismissed. On appeal to the High Court : HELD From a…

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