Retraction of search statement cannot override a consistent project completion accounting method in a section 260A challenge.

A retracted statement recorded during search under section 132(4) did not, by itself, displace an assessee's consistently followed project completion method of accounting. The Bombay HC held that the Tribunal's remand was limited to verifying the correct taxable income on that recognised accounting basis, and that no substantial question of law arose under section 260A to justify interference. The Revenue's challenge therefore failed, and the remand order was upheld.

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Issues: Whether the Revenue's appeal under section 260A raised any substantial question of law against the Tribunal's remand order, and whether a statement recorded under section 132(4) could displace the assessee's consistently followed project completion method of accounting.

Analysis: The assessee had consistently maintained its books on the project completion method, which is a recognised method of accounting. The statement recorded during search, later retracted, was treated as an error and was not held determinative of the accounting method actually followed. The Tribunal's direction was confined to a fresh verification of correct taxable income under the project completion method, and the High Court found no legal infirmity in that approach or any substantial question of law warranting interference.

Conclusion: The appeal was held not maintainable on merits and the remand order was upheld; the Revenue failed.

Ratio Decidendi: A retracted statement under section 132(4) does not by itself override a consistently followed and recognised method of accounting, and a remand for computation of correct income on that basis does not, without more, raise a substantial question of law under section 260A.

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