Court upholds CIT(A) decision, statements without evidence not binding on assessee

The High Court dismissed the Revenue's appeals, upholding the CIT(A)'s decision that statements made by a third party during a search could not lead to adverse consequences for the assessee without corroborative material. The Court emphasized that statements under Section 132(4) could not bind the assessee, especially when no incriminating material was found at the assessee's premises. The decision was based on precedent and concluded that no substantial question of law arose in this case.

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Issues: Revenue's grievance with deletions ordered by CIT(A) and affirmed by ITAT.

In this case, the Revenue's main grievance was regarding the deletions ordered by the CIT(A) and affirmed by the ITAT. The search assessment was conducted in relation to a particular group, and the assessee contended that statements made during the search proceedings should not be binding on them as they were made by a third party. The AO disregarded this contention and made additions to the tax based on those statements. The CIT(A) ruled in favor of the assessee, stating that statements made by a third party during a search could not lead to adverse consequences for the assessee without corroborative material. The ITAT upheld this view and referred to a previous court decision. The High Court agreed with the CIT(A)'s view that statements under Section 132(4) could not bind the assessee, especially when there was no corroboration in the present case. Additionally, since no incriminating material was found at the assessee's premises, the court applied the ruling from a previous case. Consequently, the court dismissed the appeals, stating that no substantial question of law arose in this matter.

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