Retraction of survey statements requires independent corroboration before additions can be sustained

Statements recorded during survey proceedings may be relied upon, but once retracted they lose standalone evidentiary value and cannot, by themselves, sustain additions. The Assessing Authority must support any proposed addition with independent corroborative material, and the officer who recorded the statement cannot simply reject the retraction as false without proper legal scrutiny. As no independent material was available and the assessments rested only on retracted statements, the additions were set aside.

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Issues: Whether assessments based solely on statements recorded during survey could be sustained after the assessee retracted those statements, and whether corroborative material was required to support the additions.

Analysis: Statements recorded in survey proceedings may be relied upon by the revenue, but once the person making the statement retracts it, the statement loses its standalone evidentiary force. In such a case, the Assessing Authority must support the proposed addition with other material. The authority who recorded the statement cannot treat the retraction as false on its own; the matter has to be judged on legal standards by the proper forum. On the facts found, no independent material was available to justify the additions, and the assessment was founded only on the retracted statements.

Conclusion: The assessments could not be sustained and the additions were set aside in favour of the assessees.

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