Tribunal upholds CIT(A)'s decision on addition without corroborative evidence

The Tribunal upheld the CIT(A)'s decision to delete the addition of Rs. 24.50 lacs, ruling that the addition could not be solely based on the assessee's retracted statement without corroborative evidence. The appeal by the Revenue was dismissed.

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Issues Involved:
1. Deletion of addition of Rs. 24.50 lacs on account of unexplained investment in purchase of two plots.
2. Consideration of evidences found during the search.

Summary:

Issue 1: Deletion of addition of Rs. 24.50 lacs on account of unexplained investment in purchase of two plots

The Revenue appealed against the CIT(A)'s order deleting the addition of Rs. 24.50 lacs made by the AO for unexplained investment in two plots. The AO based the addition on documents seized during a search operation, which indicated an investment of Rs. 64 lacs, out of which Rs. 24.50 lacs was allegedly paid in cash. The assessee initially surrendered this amount during the search but later retracted, claiming the surrender was coerced. The CIT(A) deleted the addition, stating that the addition could not be sustained solely based on the surrender and that the AO had not provided evidence of additional payment.

Issue 2: Consideration of evidences found during the search

The AO did not find the assessee's explanation convincing and relied on seized documents indicating a higher purchase price for the plots. The CIT(A) found that the AO did not bring any material evidence to show additional payment and that the rough jotting on the seized documents was related to construction costs, not the purchase price. The Tribunal noted that the assessee's retraction of the surrender was not supported by substantial evidence, but also found that the seized documents did not conclusively prove the payment of Rs. 24.50 lacs in cash. The Tribunal concluded that the statement made under s. 132(4) alone could not be the sole basis for the addition without corroborative evidence.

Conclusion:

The Tribunal upheld the CIT(A)'s decision to delete the addition of Rs. 24.50 lacs, stating that the addition could not be made solely based on the assessee's retracted statement and without corroborative evidence. The appeal by the Revenue was dismissed.

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