2018 (12) TMI 641 - AT - Income Tax

Unexplained money addition u/s. 69A - addition made on statement made under oath u/s. 132(4) and 131(1A) - Held that - It is clear that there is no material or corroborative evidence to support the statement made under section 132(4) of the Act in respect of the addition of ₹ 30 lakh against unexplained investment in stock and ₹ 23.20 Lacs against the unexplained expenditure. The assessee did not admit the addition, which means, he retracted the said surrender in the return of income filed. We find that the Tribunal in the case of best infrastructure (India) Private Limited 2016 (5) TMI 1298 - ITAT DELHI and the Hon ble Jurisdictional High Court in the case of Harjeev Aggarwal 2016 (3) TMI 329 - DELHI HIGH COURT have in the similar facts and circumstances, held that no addition can be made merely on the statement recorded under search and seizure proceedings on a standalone basis without any supporting or corroborative material. - Decided in favour of assessee

Summary

Issues Involved:
1. Deletion of additions made by the Assessing Officer (AO) under Section 69A of the Income Tax Act.
2. Admissibility and evidentiary value of statements made under oath during search proceedings.
3. Applicability of precedents in similar cases.

Issue-wise Detailed Analysis:

1. Deletion of Additions Made by the AO under Section 69A:
The primary issue is the deletion of additions made by the AO under Section 69A of the Income Tax Act, 1961. The AO had added amounts of ?1,11,64,700, ?1,25,00,000, and ?1,00,00,000 to the incomes of the respective assessees on account of unexplained money. These additions were based on the declarations made by the assessees during post-search proceedings and were subsequently confirmed under oath. However, the Ld. CIT(A) deleted these additions, leading to the Revenue's appeal.

2. Admissibility and Evidentiary Value of Statements Made Under Oath:
The Revenue argued that the statements made by the assessees under oath during search proceedings were admissible evidence and should not have been disregarded. The AO relied on these statements to make the additions. However, the Tribunal noted that no incriminating material or evidence was found during the search to support these statements. The Tribunal referred to the case of ACIT vs. Sh. Subhash Chander Sudha, where it was held that statements made during search proceedings cannot be the sole basis for additions without corroborative evidence. The Tribunal emphasized that the statements recorded under Section 132(4) of the Act must be corroborated with material evidence to stand the test of appeal.

3. Applicability of Precedents in Similar Cases:
The Tribunal also considered various precedents, including the decision of the Andhra Pradesh High Court in the case of Commissioner of Income Tax-II, Hyderabad vs. Naresh Kumar Agarwal and the ITAT 'G' Bench decision in the case of ACIT vs. Sh. Subhash Chander Sudha. These cases established that additions based solely on statements made during search proceedings, without any supporting evidence, are not tenable. The Tribunal upheld the Ld. CIT(A)'s order, which had followed these precedents, and concluded that the additions made by the AO were not justified.

Conclusion:
The Tribunal dismissed the Revenue's appeals, affirming the Ld. CIT(A)'s decision to delete the additions made under Section 69A. The Tribunal emphasized the necessity of corroborative evidence to support statements made during search proceedings and relied on relevant precedents to uphold the assessees' appeals. The Tribunal's decision was consistent across all three cases, applying the same legal principles and findings.