Search statement alone cannot sustain addition without corroborative incriminating material in the assessee's case.

A statement recorded after the search in the assessee's case had concluded, without any surrender during that search and without seized material from the assessee's premises linked to the alleged undisclosed income, could not by itself sustain the addition. A search statement has evidentiary value, but an addition under the Income-tax Act requires corroborative incriminating material connecting the surrender to the assessee. On these facts, the addition was deleted as unsustainable.

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Issues: Whether the addition of Rs. 2,25,00,000 made on the basis of a partner's statement could be sustained when the search in the assessee's case had concluded before the statement was recorded and no incriminating material from the assessee's premises was correlated to the surrender.

Analysis: The statement relied upon by the Revenue was recorded after the search in the assessee's case had already concluded. The record showed no surrender during the search at the assessee's premises and no seized material from those premises was linked to the alleged undisclosed income. A statement recorded during a search has evidentiary value, but an addition cannot rest on that statement alone when it is not supported by corroborative incriminating material. On the facts, the statement could not be treated as a valid basis for making the addition in the assessee's hands.

Conclusion: The addition was not sustainable and was deleted in favour of the assessee.

Ratio Decidendi: A surrender recorded without linkage to incriminating material found in the assessee's search, and after the search in the assessee's case has concluded, cannot by itself justify an addition under the Income-tax Act.

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