Retraction of search confession cannot sustain income addition without corroborative evidence in undisclosed income disputes.

An addition to income cannot be sustained solely on a retracted confession recorded during search or survey proceedings when the Revenue produces no corroborative material. The record must contain tangible, credible, substantive evidence before such a statement can be used to establish undisclosed income, and general evidentiary principles require corroboration. Board circulars discouraging confessions during search and survey reinforce this approach. In the absence of supporting material, the Tribunal's view that the addition was unsustainable was not perverse or illegal, and no substantial question of law arose.

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Issues: Whether an addition to income can be sustained solely on the basis of a confession recorded during search and survey proceedings, when the confession is retracted and no corroborative material is brought on record.

Analysis: The Revenue's case rested entirely on the assessee's confession recorded during search and survey. The confession was retracted, and the record did not disclose any tangible, credible, or substantive evidence collected by the department to support the allegation of undisclosed income. The circulars of the Board against obtaining confessions during search and survey and the general principles of evidence required corroboration before reliance could be placed on such a statement. In the absence of corroborative material, the finding of the Tribunal that the addition was unsustainable could not be termed perverse or illegal, and no substantial question of law arose.

Conclusion: Reliance solely on the retracted confession was impermissible in the absence of corroborative evidence, and the Tribunal's view was upheld.

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