ITAT deletes Additions for Unexplained Cash Credit as it was not based on Incriminating Material found during course of Search Operations [Read Order]

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) deleted the addition for Unexplained Cash Credit as it was not based on incriminating material found during the course of search operations.

The assessee, Jasmin K. Ajmera raised a pertinent legal ground to submit that the impugned additions as made in the assessment order are not based on any incriminating material found during the course of search operations and this being non-abated year, the additions are not sustainable in law.

The assessee refuted the allegations of Ld. AO, inter-alia, by submitting that except for the statement, there was no evidence in support of the allegation. No incriminating documents / evidence were found from the possession of the assessee during the course of search action. The sole reliance on the statement was contrary to specific directions of CBDT and there was no corroborative evidence to support the addition.

No additions could be made merely on the basis of statement without there being any corroborative evidence on record. Further, the statement of the assessee was taken under coercion, pressure and undue influence and given under stress, Therefore, the statement was not a valid statement in the eyes of law. The entire statement stood fully retracted vide affidavits dated 02/08/2013 and 14/08/2015 explaining the entire chain of events. Therefore, the recorded statement would have no evidentiary value.

The coram of Judicial Member, C. N. Prasad and Accountant Member Manoj Kumar Aggarwal held that in the absence of any incriminating material, the additions could not be made in the hands of the assessee as per settled legal proposition. Accordingly, the impugned additions stand deleted.

“The surrendered income must be correlated with some incriminating material found during the course of search action so as to justify the addition. We find that there is no such incriminating material in the case of the assessee which would show that the transactions under consideration were sham transactions and there was any connection / nexus between the assessee and the group entities of Shri Shirish C. Shah,” the ITAT ruled.

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