Retracted search statement cannot alone sustain unexplained income addition without corroborative incriminating material.

An addition under section 69A cannot be sustained solely on a search statement under section 132(4) when that statement is promptly retracted and remains uncorroborated. ITAT Delhi noted that the assessee's alleged admission of commission income was withdrawn shortly after the search and was supported by medical material and an affidavit, while the search yielded no seized cash, jewellery, documents, or bank evidence linking the assessee to undisclosed income. A search statement is relevant evidence, but without independent incriminating material it cannot by itself establish unexplained income. The deletion of the addition was therefore upheld.

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Issues: Whether an addition under section 69A of the Income-tax Act, 1961 could be sustained solely on the basis of a statement recorded under section 132(4), when the statement was promptly retracted and no corroborative incriminating material was found during search.

Analysis: The addition rested on the assessee's statement during search admitting receipt of commission income, but that statement was retracted within a short time and supported by medical material and an affidavit. The search record did not reveal seized cash, jewellery, documents, or bank evidence corroborating the alleged receipt or its alleged utilisation. The finding was that a statement under section 132(4) is an important piece of evidence, but it cannot by itself sustain an addition where it is retracted and remains uncorroborated. In the absence of independent material linking the assessee to the alleged undisclosed income, the assessment under section 69A lacked factual support.

Conclusion: The addition was not sustainable and the deletion made by the appellate authority was upheld in favour of the assessee.

Final Conclusion: A retracted search statement, without supporting incriminating material, cannot by itself justify an addition as unexplained income.

Ratio Decidendi: A statement recorded during search under section 132(4) does not, by itself, constitute sufficient incriminating evidence to sustain an addition where it is promptly retracted and no corroborative material is found.

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