Section 68 addition deleted on factual findings; later uncorroborated statement could not override contemporaneous evidence.

A section 68 addition based on a seized memorandum of understanding and a third party's later statement was deleted where the Tribunal found, on contemporaneous material, that the transaction belonged to that third party and not the assessee. The High Court accepted those factual findings, noting the supporting agreements to sell, complaints against the seller, a retraction affidavit, and the absence of cash recovery from the assessee's premises. It held that the later uncorroborated statement could not displace the contemporaneous evidence and that no substantial question of law arose, so the Revenue's challenge failed.

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Issues: Whether the addition of Rs. 20 crores under section 68 of the Income-tax Act, 1961, based on the seized memorandum of understanding and the statements of the third party, was sustainable; and whether any substantial question of law arose from the Tribunal's deletion of the addition.

Analysis: The Tribunal had found, on the basis of the seized MOU, the first statement of the third party, the supporting agreements to sell, the complaints lodged against the seller, the affidavit retracting the later statement, and the absence of any cash recovery from the assessee's premises, that the transaction belonged to the third party and not to the assessee. The later statement recorded at the assessment stage was found to be uncorroborated and inconsistent with the contemporaneous material. The High Court accepted these factual findings and held that no infirmity was shown in the deletion of the addition. It further held that the appeal would require re-appreciation of evidence, which is impermissible in the absence of a substantial question of law.

Conclusion: The addition of Rs. 20 crores under section 68 was not sustainable against the assessee, and no substantial question of law arose.

Final Conclusion: The Tribunal's deletion of the disputed addition was upheld, and the Revenue's challenge failed at the threshold on facts and law.

Ratio Decidendi: In an appeal under section 260A of the Income-tax Act, 1961, a pure finding of fact based on corroborated material cannot be disturbed unless it gives rise to a substantial question of law; a later uncorroborated statement cannot displace contemporaneous evidence accepted by the fact-finding authority.

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