Court dismisses appeal challenging undisclosed income addition under Section 115JB

The High Court dismissed the appeal challenging the addition of undisclosed income and its exclusion from book profit under Section 115JB. The Court found that the Assessing Officer's reliance on the Managing Director's retracted statement without additional evidence was insufficient. Relying solely on retracted statements for additions was deemed unsustainable based on previous decisions. As there was no further evidence supporting the addition, the Court upheld the decisions to delete the undisclosed income from the assessment, affirming the deletion from the book profit calculation under Section 115JB.

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Issues:
Challenge to the addition of undisclosed income and exclusion from book profit under Section 115JB.

Analysis:
The High Court considered the appeal challenging the addition of Rs. 2 crores as undisclosed income and its exclusion from the book profit under Section 115JB. The Assessing Officer relied solely on the Managing Director's retracted statement during a survey, leading to the addition. However, the Court noted that the statement was retracted shortly after its recording. The Court referred to previous decisions where it was held that additions based solely on retracted statements without further evidence were not sustainable. The Court emphasized that in this case, there was no additional evidence supporting the addition, and the Assessing Officer's reliance on the retracted statement was insufficient. Therefore, the Court found no error in the decisions of the CIT (A) and the Tribunal to delete the Rs. 2 crores from the assessment. Consequently, the Court dismissed the appeal, upholding the deletion of the amount from the assessment and book profit calculation under Section 115JB.

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