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2022 (10) TMI 816 - AT - Income TaxUnexplained investment u/s 69B - Addition made after thorough investigation - Search u/s 132 - statement of the assessee was recorded u/s 132(4) wherein he stated that cash had been given to him by chairman of DLH Group for investment - HELD THAT:- The assessee has corroborated with the evidences that his statement was given during the disturbed mental condition under coercible interrogation for several hours and there was supporting evidences to demonstrate that there was valid reason for retracting the said statement vide affidavit - It is noticed that without contrary disproving the material facts as discussed supra, the A.O had merely made the addition on the basis of retracted statement. The assessee has also explained that Karan/Shweta Dodani were running Ponzi scheme to defraud the investors by offering high rate of return on the investment and against them the complaint were filed before the Bombay police/economic offence wing and cases were also filed before the Hon’ble Bombay High Court. The assessee has also referred the order of Session Court holding that the accused/person were running a systematic plan to cheat investors by inducing them to invest the amount by giving assurance to pay handsome return. The aforesaid facts and relevant supporting evidences demonstrate that the assessee was trapped by the Ponzi Scheme launched by Karan/Shweta with modus operandi to cheat the investors. The assessee had further substantiated such material facts with detail of investment of Rs.2.15 crores made through banking channel which fetched cumulatively compounding interest equivalent to Rs.3.61 crores and till date even the principal investment made by the assessee were not returned. A.O has neither disproved these material fact and supporting detail nor made any further investigation to prove contrary to the claim and submission of the assessee. A person making admission is at liberty to contradict them or show that they are untrue or mistaken, or made under misapprehension. Burden to prove that admission as incorrect is on the maker and in case there is failure on the part of maker to prove that earlier stated facts were wrong, his earlier statement was sufficient, if retraction is proved then A.O cannot conclude the case on the basis of such earlier statement. Here in the case of assessee he has filed the retraction immediately after recording of his statement by filing an affidavit along with other supporting evidences as discussed supra, however, without contrary disproving the material facts and relevant supporting material as discussed supra, the A.O had merely made the addition on the basis of retracted statement. In the light of the above facts and circumstances we don’t find any infirmity in the decision of ld. CIT(A), therefore, this ground of appeal of the revenue stand dismissed.
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