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2023 (1) TMI 371 - AT - Income TaxAssessment u/s 153A - undisclosed income - assessee himself disclosed additional income in his statement recorded u/s 132(4) - AO noted that the assessee had made the retraction of the statement recorded u/s 132(4) of the Act and the retraction was made after 132 days of recording his original statement in the course of search proceedings - HELD THAT - CIT(A) while holding that the revised return of income filed by the assessee to be in order has given a finding that during the course of search, assessee had admitted disclosure of income in the case of assessee as well as the group and the admission was offered as income in the case of 5 persons and taxes were also paid on such income. He has further given a finding that the disclosure made in the case of the assessee was not supported by any undisclosed asset/seized paper and the disclosure was a balancing figure after considering the disclosure and the amount disclosed as income in case of 5 persons. Also given a finding that the addition of undisclosed amount was not based on any evidence found during the course of search. The submissions of assessee had made disclosure of undisclosed income in the course of search was made for the assessee as well as other entities in the group has not been controverted by Revenue. Before us, no fallacy in the findings of CIT(A) has been pointed out by Revenue. The only stress placed by Revenue is that the amount was accepted as undisclosed income in the statement recorded u/s 132(4) of the Act. It is a settled law that only on the basis of the statement, and without any corroborating evidence no addition of income can be made. Appeal of Revenue is dismissed.
Issues Involved:
1. Deletion of addition of Rs. 4,87,44,948/- on account of undisclosed income. 2. Validity of retraction of the statement recorded under section 132(4) of the Income Tax Act. 3. Assessment based on the revised return of income. 4. Evidentiary value of the statement recorded under section 132(4) of the Income Tax Act. Issue-wise Detailed Analysis: 1. Deletion of Addition of Rs. 4,87,44,948/- on Account of Undisclosed Income: The Revenue's appeal challenged the deletion of Rs. 4,87,44,948/- added by the AO as undisclosed income. The CIT(A) deleted the addition, noting that the disclosure made by the assessee during the search was not supported by any undisclosed asset or seized paper. The CIT(A) observed that the disclosure of Rs. 5.22 crores was a balancing figure and not based on any evidence found during the search. The CIT(A) concluded that the revised return filed by the assessee was in order and the addition made by the AO was erroneous. 2. Validity of Retraction of the Statement Recorded under Section 132(4) of the Income Tax Act: The AO did not accept the retraction of the statement recorded under section 132(4), made after 132 days, considering it an afterthought. The assessee argued that the initial disclosure was made to buy peace and avoid litigation, and later, after examining records, it was found that the disclosed amount was incorrect. The CIT(A) accepted the assessee's retraction, noting that the disclosure was not supported by any evidence found during the search. 3. Assessment Based on the Revised Return of Income: The assessee filed a revised return of income on 10.12.2013, reducing the declared income from Rs. 7,67,44,950/- to Rs. 2,85,82,880/-. The AO did not accept the revised return, considering the retraction of the statement recorded under section 132(4) as an afterthought. The CIT(A) held that the revised return was valid, as the initial disclosure was not supported by any evidence found during the search. 4. Evidentiary Value of the Statement Recorded under Section 132(4) of the Income Tax Act: The Revenue argued that the statement recorded under section 132(4) has evidentiary value and the assessee had voluntarily disclosed the income. The CIT(A) and the tribunal held that without any corroborating evidence, no addition of income can be made solely based on the statement recorded under section 132(4). The tribunal upheld the CIT(A)'s order, finding no infirmity in the deletion of the addition made by the AO. Conclusion: The tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s order that deleted the addition of Rs. 4,87,44,948/- on account of undisclosed income. The tribunal agreed with the CIT(A) that the revised return filed by the assessee was in order and that the addition made by the AO was not supported by any evidence found during the search. The tribunal reiterated that only on the basis of the statement recorded under section 132(4) and without any corroborating evidence, no addition of income can be made. Order: The appeal of the Revenue is dismissed. Order pronounced in the open court on 06.01.2023.
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