ITAT Delhi: Addition Under Section 69A Cannot Rest Solely on Retracted Search Statement Without Corroborative Evidence

April 17, 2026 : The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has upheld the deletion of an addition of ₹10.5 crore made under Section 69A of the Income-tax Act, 1961, reiterating that a statement recorded during search proceedings—if subsequently retracted—cannot, in isolation, justify an addition in the absence of corroborative material.

The Bench comprising Judicial Member Anubhav Sharma and Accountant Member Manish Agarwal dismissed the Revenue’s appeal and affirmed the order of the Commissioner of Income Tax (Appeals), who had deleted the addition made by the Assessing Officer.

The case arose from a search and seizure operation conducted on 21 December 2021 in the Oppo Mobile India Group. The assessee, serving as Director (Finance), was also subjected to search proceedings, during which his statement was recorded under Section 132(4). In response to a specific query, he allegedly admitted to receiving ₹10.5 crore in cash as commission linked to GST refunds and stated that the amount was used for purchase of jewellery and deposits in family members’ bank accounts .

Shortly after the search, the assessee retracted the statement through a detailed letter and affidavit, citing mental stress, prolonged interrogation, and medical issues during the search. The handwritten retraction letter (pages 6–10 of the record) specifically asserted that the admission was made under pressure and that no such income had actually been received .

Despite the retraction, the Assessing Officer proceeded to make the addition solely on the basis of the statement, without identifying any supporting evidence such as unexplained cash, jewellery, or bank deposits. The total income was accordingly assessed at ₹10.99 crore.

On appeal, the Commissioner (Appeals) deleted the addition, observing that no incriminating material was found during the search or subsequent inquiry. The assessment order, it noted, relied entirely on the retracted statement without any independent corroboration.

Before the Tribunal, the Revenue argued that the admission made during the search was clear and binding, and that the retraction was an afterthought lacking credibility. However, the Tribunal rejected these submissions after examining the factual record.

The Tribunal found that no material evidence had been brought on record to substantiate either the alleged receipt of ₹10.5 crore or its utilisation. It noted that no jewellery corresponding to the alleged investment was found, nor were any unexplained bank deposits identified. The Bench also emphasized that the retraction was made promptly—within a short period—and was supported by medical evidence and a detailed explanation of the circumstances.

Significantly, the Tribunal reiterated that a statement recorded under Section 132(4) does not constitute conclusive evidence and cannot independently justify an addition unless it is supported by tangible material discovered during the search or through subsequent investigation. It observed that, in this case, the addition was made “merely on the basis of so-called retracted statements” without any corroboration .

Relying on established judicial precedents, including the Delhi High Court’s ruling in PCIT v. Anand Kumar Jain (HUF), the Tribunal reaffirmed that statements recorded during search proceedings lack standalone evidentiary value unless backed by incriminating material. It also referred to CBDT Instruction No. 286/2/2003-IT(Inv.), which cautions against making additions based solely on surrender statements.

The Bench further highlighted that the burden under Section 69A lies on the Assessing Officer to establish the existence of unexplained money or assets through credible evidence. In the absence of such evidence, the addition was held to be unsustainable in law.

Accordingly, the Tribunal upheld the order of the Commissioner (Appeals) and dismissed the Revenue’s appeal.

Case Details:
ACIT v. Sanjay Goel
ITA No. 4500/Del/2025
Assessment Year: 2021–22
Order dated: 17 April 2026