Tribunal overturns tax assessment, requires concrete evidence for additions.

The Tribunal allowed the appeal of the assessee (Thakker group), directing the AO to delete the addition of Rs. 2,58,20,476/-. It dismissed the Revenue's appeals for both assessment years 2014-15 and 2012-13, holding that the additions were based on assumptions, presumptions, and inadmissible material without corroborative evidence. The Tribunal emphasized the need for concrete evidence to justify any addition in the hands of the assessee.

---

---

Issues Involved:
1. Legality of proceedings under Section 153A.
2. Addition based on the statement given under Section 132(4) regarding on-money consideration.
3. Evidentiary value of statements and seized material.
4. Cross-examination and contradictory statements.
5. Presumption under Section 132(4A) and its applicability.
6. Corroborative evidence requirement.
7. Role of Settlement Commission findings in assessment of third parties.

Detailed Analysis:

1. Legality of Proceedings under Section 153A:
The appellant challenged the initiation of proceedings under Section 153A of the Income Tax Act, claiming the absence of incriminating material or unexplained assets found during the search action. However, this ground was not pressed during the hearing.

2. Addition Based on Statement under Section 132(4):
The primary issue was the addition of Rs. 2,58,20,476/- based on the statement given by the vendors (Kokani group) under Section 132(4) during the search and seizure proceedings. The Assessing Officer (AO) made the addition based on these statements, which suggested that the vendors received on-money over and above the stated consideration in the sale deed. The CIT(A) partially upheld this addition, confirming it to the extent of the amount admitted by the Kokani group in their statements.

3. Evidentiary Value of Statements and Seized Material:
The Tribunal noted that the statements given by the Kokani group under Section 132(4) were contradictory, as they later denied receiving any on-money from the Thakker group during cross-examination. The Tribunal emphasized that contradictory statements hold no evidentiary value, referencing the Supreme Court's decision in Dhirajlal Giridharilal vs. CIT, 26 ITR 736 (SC).

4. Cross-Examination and Contradictory Statements:
During cross-examination, the vendors categorically denied receiving any on-money from the Thakker group, stating that their declaration of additional income was made to buy peace with the Department. The Tribunal found that these denials and the affidavits filed by the vendors undermined the AO's reliance on their initial statements.

5. Presumption under Section 132(4A) and Its Applicability:
The Tribunal clarified that the presumption under Section 132(4A) applies only to the person in whose hands the material was found and cannot be extended to third parties. The Tribunal criticized the AO and CIT(A) for misapplying this presumption to the Thakker group.

6. Corroborative Evidence Requirement:
The Tribunal stressed that no addition can be made solely based on statements under Section 132(4) without corroborative evidence. It noted that no incriminating material was found during the search of the Thakker group's premises to suggest any payment of on-money. The Tribunal cited various judicial precedents, including the Gujarat High Court's decision in PCIT vs. Kunvarji Commodities Brokers Pvt. Ltd., 432 ITR 150, which held that additions cannot be made based on third-party statements in the absence of corroborative evidence.

7. Role of Settlement Commission Findings in Assessment of Third Parties:
The Tribunal observed that the Kokani group's admission of additional income before the Settlement Commission was not binding on the Thakker group. It referenced decisions like CIT vs. Vineeta Gupta and P.G. Foils Ltd. vs. Income-tax Settlement Commission to support this view. The Tribunal concluded that the findings in one person's assessment are not conclusive for another person's assessment without independent corroborative evidence.

Conclusion:
The Tribunal allowed the appeal of the assessee (Thakker group), directing the AO to delete the addition of Rs. 2,58,20,476/-. It dismissed the Revenue's appeals for both assessment years 2014-15 and 2012-13, holding that the additions were based on assumptions, presumptions, and inadmissible material without corroborative evidence. The Tribunal emphasized the need for concrete evidence to justify any addition in the hands of the assessee.

---