Voluntary search admission and seized stock records can sustain undisclosed income addition despite a belated retraction.

A voluntary admission recorded during search, corroborated by seized stock sheets and the chief accountant's statement, supported the addition of undisclosed income. The partner's sworn statement that the stock represented unaccounted goods and that the amount should be treated as undisclosed income was treated as reliable contemporaneous evidence. A belated retraction by affidavit and revised stand, unsupported by proof of coercion, mistake, or contrary evidence, was rejected as an afterthought. The seized papers were not accepted as mere estimates of future purchases, and the addition was therefore sustained.

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Issues: Whether the addition of Rs. 2 crores as undisclosed income, based on seized stock statements and the partner's statement recorded during search, could be sustained despite the later retraction and the plea that the seized papers contained only estimates of future purchases.

Analysis: The seized sheets contained detailed stock particulars and were found during search along with contemporaneous statements of the chief accountant and the partner. The partner stated on oath that the stock reflected in the papers was unaccounted and offered Rs. 2 crores as undisclosed income. The retraction made months later through an affidavit and revised stand was found to be an afterthought unsupported by contemporaneous evidence. The statement recorded at search was treated as voluntary, consistent, and corroborated by the seized documents and the accountant's statement. The Court further held that a declaration of fact made on oath and acted upon by the Department could not be disowned later, and that the assessee had failed to prove coercion, mistaken belief, or that the papers merely contained estimates.

Conclusion: The addition was validly made and the assessee's challenge to it failed.

Ratio Decidendi: A voluntary and contemporaneous admission recorded during search, corroborated by seized material and surrounding circumstances, can form the basis of addition and cannot be displaced by a belated and unproved retraction.

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