2016 (7) TMI 1524 - GUJARAT HIGH COURT - Income Tax

Head Note / Extract:
Addition made pursuant to the statement recorded u/s 132(4) - assessee has retracted from the said disclosure which has not been accepted by the revenue - HELD THAT:- Revenue ought to have collected enough evidence during the search in support of the disclosure statement. It is a settled position of law that if an assessee, under a mistake, misconception or on not being properly instructed, is overassessed, the authorities are required to assist him and ensure that only legitimate taxes are collected. The Assessing Officer cannot proceed on presumption u/s 134(2) of the Act and there must be something more than bare suspicion to support the assessment or addition. In the present case, though the revenue’s case is based on disclosure of the assessee stated to have been made during the search u/s 132(4) of the Act, there is no reference to any undisclosed cash, jewellery, bullion, valuable article or documents containing any undisclosed income having been found during the search. As decided in KAILASHBEN MANHARLAL CHOKSHI VERSUS COMMISSIONER OF INCOME-TAX [2008 (9) TMI 525 - GUJARAT HIGH COURT] merely on the basis of admission the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such admission. From the statement recorded at such odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admission. As gone through the order passed by the Tribunal no infirmity in the said order. Revenue is not in a position to produce any material on record so as to warrant interference by this Court. The deletion of addition on account of household expenses and cloth transaction has been rightly confirmed by the Tribunal. Tribunal has rightly applied the principles of telescoping for reducing additions made by the Assessing Officer. Decided in favour of the assessee and against revenue.