Conditional search disclosure without corroborative seized evidence cannot sustain taxation or deny refund.

A conditional and vague disclosure made during search proceedings could not, by itself, be taxed as income when no specific incriminating seized material linked it to the amount disclosed. The Tribunal followed its coordinate bench decision on identical facts and applied the CBDT instruction cautioning against reliance on confessional statements alone in search cases. As the addition rested only on the disclosure and lacked corroborative evidence, it was held unsustainable. The Assessing Officer was directed to refund the tax paid on the disputed disclosure.

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Issues: Whether the amount of Rs. 15 lakhs offered conditionally during search proceedings could be taxed as income and whether tax paid thereon was refundable in the absence of any corroborative seized material.

Analysis: The Tribunal followed its earlier coordinate bench decision on identical facts and held that the disclosure was only conditional and vague. It found no specific incriminating material, no nexus between the disclosure and any seized evidence, and relied on the CBDT instruction discouraging reliance on confessional statements alone in search cases. On that basis, the additions made merely on the strength of the disclosure were held unsustainable.

Conclusion: The conditional disclosure could not be taxed as income, and the Assessing Officer was directed to grant refund of the tax paid on the amount of Rs. 15 lakhs.

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