Mere Confession Of Assessee Not Enough for Conviction Without Credible Evidence: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) quashed the ₹1.33 Cr addition made by the Assessing Officer (AO), stating that a confession made by the assessee without corroborative evidence cannot justify an addition under Section 69 of the Income Tax Act, 1961.

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While conducting a search and seizure at Aerens Group, authorities found documents mentioning Brij Kishore Kochar’s name (assessee). Based on these, the tax department claimed that the assessee made ₹1.77 crore in unexplained cash investments.

The assessee initially admitted to these investments. However, the very next day, he retracted this statement, saying it was given under pressure. The tax department still added ₹1.33 crore to his taxable income for 2006-07, which the assessee challenged before the tribunal.

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The counsels Tarandeep Singh and Sandeep Yadav, representing the assessee stressed that the retracted statement had no evidentiary value, as it was made under duress and lacked corroboration.

They referred to CBDT Instruction No. 286/2/2003, which prohibits reliance on coerced confessions. Further, no incriminating material was found in the assessee’s premises, and the seized documents belonged to Aerens Group, not the assessee.

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Meanwhile, Javed Akhtar, Departmental Representative of  the revenue argued that the initial admission and third-party documents sufficiently established unexplained investments. They contended that the retraction was an afterthought to evade liability.                                                                                                  

The bench comprising Vikas Awasthy (Judicial Member) and Amitabh Shukla (Accountant Member) heard the case.

The Bench ruled that additions under Section 153A of the Income Tax Act,1961, require incriminating material found specifically during the assessee's own search, as established in the cases of PCIT v. Pilot Industries Ltd. (2023) and ACIT v. Subhash Khattar (2017).

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The tribunal noted that the retracted statement lacked evidentiary value without corroborative material. The bench also observed that no incriminating documents were recovered from the assessee's premises.

Based on these observations, the tribunal allowed the assessee’s appeal and set aside the additions made by the AO.

To Read the full text of the Order CLICK HERE

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