Admission made under pressure does not equate to valid tax liabilities: Revenue authorities must provide substantial evidence to support their claims.
A search operation was conducted, leading to the issuance of notices under Section 153A of the Income Tax Act.
The appellant initially surrendered ₹13 crores during the search but later filed returns with significantly lower additional income, raising questions about the validity of the surrender.
The Assessing Officer (AO) disallowed certain expenses claimed by the appellant, citing a lack of proper documentation.
The AO’s decision was based on statements made during the search, where the appellant allegedly conceded that some expenses were not supported by vouchers.
The Commissioner of Income Tax (Appeals) upheld part of the AO’s disallowance but allowed a 40% reduction of the total disallowed amount.
The CIT (A) noted that while there was no direct evidence from the search, other materials justified the AO’s examination.
ITAT held that admission made under pressure does not equate to valid tax liabilities & Revenue authorities must provide substantial evidence to support their claims.
The Tribunal emphasized the importance of corroborative evidence in tax assessments, particularly following a search operation.
It referenced legal precedents indicating that admissions made under duress or pressure cannot be used to impose tax liabilities without supporting evidence.
The Tribunal highlighted that the burden of proof lies with the revenue authorities to substantiate claims of bogus expenses.
This Tribunal’s decision underscores the critical role of evidence in tax assessments, particularly in cases involving search operations. It highlights that admissions made under pressure do not equate to valid tax liabilities, and the revenue authorities must provide substantial evidence to support their claims.
The copy of the order is as under:
