M/S VARUN TRADERS,AMRITSAR vs. DEPUTY COMMISSIONER OF INCOME TAX , AMRITSAR

Facts

During a survey, the assessee made a voluntary surrender of Rs. 266 Lacs for undisclosed investments based on entries in an impounded diary. The surrender was later retracted, claiming it was made under pressure. The Assessing Officer rejected the retraction and added the amount as undisclosed income.

Held

The tribunal held that a statement recorded under Section 133A has no evidentiary value if retracted shortly after, especially without corroborative evidence. It deleted the addition of Rs. 266 Lacs, emphasizing that additions cannot be based solely on retracted statements or suspicion.

Key Issues

Can an addition be sustained solely based on a retracted statement made during a survey under Section 133A without corroborative evidence? What is the evidentiary value of statements recorded under Section 133A?