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2008 (7) TMI 544 - HC - Income TaxIncome from undisclosed sources - Whether on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the addition of Rs. 8,78,358 in the hands of the assessee ? Held that- except the statement of K and R there was no other evidence available with the department. A copy of the statement of R was not given nor was an opportunity of cross examination R given to the assessee. K had subsequently retracted his statement. Even after retraction, he along with two other partners had filed disclosure petition disclosing this very amount in the disclosure petition. The Assessee’s statement was recorded by the Assessing Officer and some discrepancies were pointed out but merely on the basis of such discrepancies, adverse presumption could not be drawn against him. The department had failed to establish any nexus between the promissory note and the amount said to have been given by the assessee to K. The Tribunal was not right in law in upholding the addition of Rs. 8,78,358 in the hand of assessee.
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