Law:

Section:

I. Section 133A of the Income-tax Act, 1961 - Survey - Assessment years 1997-98 to 1999-2000 Statement recorded under section 133A(3)(iii ), though cannot be treated as independent evidence like evidence recorded under section 132(4), but it has corroboratory value in assessment and statement recorded under said provision can be even relied on by assessee [Partly in favour of assessee] Statement recorded under section 133A(3)(iii) though cannot be treated as independent evidence like evidence recorded under section 132(4), but it has corroboratory value in assessment and statement recorded under the said provision can be even relied on by the assessee. The decision of the Kerala High Court in Paul Mathews & Sons v. CIT [2003] 263 ITR 101 that the statement recorded under the above provision does not have evidentiary value, does not lay down the correct law. II. Section 144 of the Income-tax Act, 1961 - Best assessment - Assessment years 1997-98 & 1999-2000 Where during survey Department recovered certain account books, price list, etc., and statements were also recorded from managing partner, manager of hotel and also a supplier, all of whom had confirmed Department's stand that accounts written were not full and complete and did not reflect actual receipts on sales, best assessment under section 144 was only course open to Assessing Officer; Tribunal was not justified in upholding finding of Commissioner (Appeals) that statements recorded under section 133A(3)(iii ) had no evidentiary value and, therefore, estimation made by Assessing Officer was not justified [In favour of revenue] The assessee was engaged in the business of running a bar hotel as a partnership firm. During the survey conducted various records were recovered including the price list maintained by the bar hotel for retail sale of liquor. Statements were recorded from the managing partner, the hotel manager and also a supplier. The Assessing Officer found from the recovered materials and the statements that the gross profit conceded was incorrect and the gross profit received by the assessee was 60 per cent for the year 1997-98, 70 per cent for the year 1998-99 and 75 per cent for the…

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