ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1, AMRITSAR vs. SHRI PAWAN KUMAR , AMRITSAR

Facts

During a survey operation, the assessee made a voluntary surrender of Rs. 266 Lacs based on a diary entry under the head 'Building Account'. However, this surrender was retracted shortly thereafter, citing coercion. The Assessing Officer (AO) made an addition based on the initial surrender, which was partly reduced by the CIT(A) based on a valuation report.

Held

The Tribunal held that statements recorded under Section 133A of the Income Tax Act, 1961, which are retracted, have no evidentiary value without corroborative evidence. The addition sustained by the CIT(A) merely on the basis of a valuation report, when the allegation of undisclosed investment was not supported by credible evidence, was also deemed unsustainable.

Key Issues

Evidentiary value of retracted statements recorded during survey and the validity of additions based solely on such statements or valuation reports without independent corroboration.