INCOME TAX ACT, 1961

Section 132(4)

Search and seizure - Statement recorded under section 132(4) - Evidentiary value - No corroborative evidence found during search

Assessee was engaged in real estate development AO based on statement recorded under section 132(4) during search at assessee's premises made addition under section 69 on account of undisclosed investment in construction. Assessee's case was that declaration of alleged undisclosed income by the assessee without any credible evidence found during the course of search could not be relied upon and making additions merely on the basis of the same was legally and factually incorrect. Held: Though search while making impugned additions under section 69 merely relied upon statements recorded under section 132(4) without any corroborative documentary evidence on record. No document/paper was found by department in relation to alleged amount used in construction activities which was unexplained. Moreover, there was no addition in the impugned assessment order on account of short cash found rather during assessment proceedings, AO took entirely different stand of making impugned addition of Rs. 1 crore for alleged investment of Rs. 1 crore by taking incorrect inference from statement of assessee recorded during search. Accordingly, addition made by AO could not be sustained.

Followed:Satish Chandra Agarwal v. ITO in ITA No. 311/JP/2015 dt. 12-4-2018.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13 & 2017-18

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