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2016 (3) TMI 41 - AT - Income TaxReopening of assessment - additions solely on the basis of such retracted statements - disallowance of sub-commission paid to M/s. Airwings Travel and Cargo Pvt. Ltd. and Airtrac Agents (India) Pvt. Ltd - Held that:- Even the AO was of the view that there was no direct incriminating evidence found against the assessee during the search action. We further find that even the Ld. CIT (A) in the impugned order has discussed that Airtrac had derived commission and incentives from other Air Lines also. The ld. CIT(A) has given a categorical finding that the AO had not brought any material on record in support of his conclusions that either these incomes relate to the same business in respect of which Assessee paid commission to Airtrac or to the effect that Assessee had diverted these incomes to Airtrac. The basis for coming to such conclusion by the AO does not find mention in the assessment order. Moreover, the above stated two companies have been regularly filing their returns of income with Income Tax Department. The income returned was duly accepted in various assessment proceedings for different years as detailed in the chart. Under such circumstances, adding the same income at the hands of assessee would amount to double taxation on the same income. Considering the above submissions and evidences on file and in the absence of any incriminating evidence against the assessee, the additions solely on the basis of retracted statements, which have duly been explained by the respective persons that the same were obtained under duress and further that the same were not correct and the correct position being explained with sufficient corroborative evidences on the file, in our view, the additions solely on the basis of such retracted statements without any corroborative evidence are not sustainable in the eyes of law especially when the assessee has proved with sufficient evidence on the file that various sub agents were offering business to the assessee for which the assessee was paying the commission to them including the concerns about which the AO has doubted the transactions. The another interesting fact is that assessment of the assessee for the assessment year 1996-97 which was originally completed were reopened under Section 148 on the basis of the information gathered during the search and seizure proceedings and the statements recorded as explained above under Section 132(4). During the reopened assessment proceedings, the AO accepted the explanation offered by the assessee regarding the retraction and the factual position with regard to the functioning of M/s Airtrac and M/s Airwings. The AO had completed the assessment accepting the assessee's stand vide assessment order dated 30th March, 2004. Under such circumstances, no justification has been offered for deviating from the earlier stand on the same set of facts and circumstances during the present block assessment. In view of our discussion made above, we do not find any justification on the part of lower authorities in making the impugned additions and the same are accordingly set aside. - Decided in favour of assessee
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