Retracted search statement alone cannot sustain addition without corroborative evidence linking seized cash to the assessee.

Cash found during search could not be added as undisclosed income solely on the basis of a retracted statement under section 132(4) when the statement was internally contradictory and later withdrawn by affidavit. The record contained no independent incriminating material or other reliable corroboration linking the cash to the assessee-company, and the rebuttable presumptions under sections 132(4A) and 292C were not enough on their own. In the absence of supporting evidence, a standalone retracted search statement was insufficient to sustain the addition, and the disputed addition was deleted.

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Issues: Whether the addition of cash found during search as undisclosed income of the assessee was sustainable solely on the basis of a retracted statement recorded under section 132(4) of the Income-tax Act, 1961, without corroborative material.

Analysis: Cash was found at the residential premises of a director, and the addition rested primarily on his statement under section 132(4). That statement was internally contradictory and was retracted shortly thereafter by affidavit. The retraction was not displaced by any independent incriminating material gathered during search or any other reliable evidence linking the cash to the assessee-company. The statutory presumptions under sections 132(4A) and 292C are rebuttable, and the record did not establish that the cash belonged to the assessee-company merely because a statement later attributed it to the company. In these circumstances, a standalone retracted statement was insufficient to support the addition.

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

Final Conclusion: The assessee succeeded because the disputed addition could not be upheld on the basis of a retracted search statement unsupported by corroborative evidence.

Ratio Decidendi: A retracted statement recorded during search cannot, by itself, justify a tax addition unless it is supported by independent incriminating material or other corroborative evidence.

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