Tribunal rejects addition to income based on retracted statement, citing lack of credible evidence.

The Tribunal upheld the CIT (A)'s decision to delete the addition of Rs. 2 crores to the assessee's total income. The Tribunal emphasized that the addition based solely on a statement made during a survey, which was later retracted, lacked credible evidence. The Tribunal dismissed the Revenue's appeal, supporting the deletion to prevent double taxation and affirming the CIT (A)'s reasoning.

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Issues Involved:
1. Admission of additional income during survey.
2. Validity of addition based on statements without supporting evidence.
3. Double taxation concerns.

Summary:

1. Admission of Additional Income During Survey:
The assessee, a company engaged in civil and mining contracts, filed its return of income for A.Y. 2017-18. During the assessment proceedings, the Assessing Officer noted that a survey operation under section 133A was conducted on the assessee, where the Director admitted additional income of Rs. 2 crores for the year. However, this additional income was not reflected in a revised return, leading to the addition of Rs. 2 crores to the total income by the Assessing Officer.

2. Validity of Addition Based on Statements Without Supporting Evidence:
The assessee contested the addition, arguing that no evidence of income suppression was found during the survey and that the admission was made under pressure. The CIT (A) called for a remand report and, after considering the submissions and supporting documents, deleted the addition. The CIT (A) noted that the additional income was admitted by the Director of M/s. PL Raju Constructions (P) Ltd. and not by the assessee. The CIT (A) relied on the principle that additions cannot be made solely based on statements made during surveys unless backed by credible evidence, as supported by the CBDT Instruction F.No.286/2/2003-IT (Inv.) and various judicial precedents.

3. Double Taxation Concerns:
The CIT (A) observed that the transactions between the assessee and M/s. PL Raju Constructions (P) Ltd. were already offered to tax by the latter. Therefore, adding the same income in the hands of the assessee would result in double taxation. The CIT (A) concluded that the addition of Rs. 2 crores in the hands of the assessee was unwarranted and directed its deletion.

Conclusion:
The Tribunal upheld the CIT (A)'s order, emphasizing that the addition based solely on the statement recorded during the survey, which was later retracted, was not justified. The Tribunal dismissed the Revenue's appeal, confirming that the CIT (A) was correct in deleting the addition to avoid double taxation and due to the lack of credible evidence supporting the initial statement.

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