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"22. We have heard learned counsels appearing for the respective parties at great length and considered the submissions. We have also gone through the orders passed by the authorities below. It is true that in normal circumstances this Court would not interfere in the finding of fact arrived at by the authorities. It is, however, to be seen as to whether the explanation tendered by the assessee would be considered by the authorities below. It is also to be seen as to whether an addition made is merely based on the statement recorded by the Assessing Officer under section 132(4) of the Act and whether any cognizance may be taken of the retracted statement. So far as case on hand is concerned, the glaring fact required to be noted is that the statement of the assessee was recorded under section 132(4) of the Act at mid night In normal circumstances, it is too much to give any credit to the statement recorded at such odd hours. The person may not be in a position to make any correct or conscious disclosure in a statement if such statement is recorded at such odd hours. Moreover. this statement was retracted after two months.

5.2 In view of the aforesaid since the statement of the Shri. Jindal has been recorded in the night, which has immediately been retracted same cannot be treated as incriminating material. It is submitted that in the instant case, apart from the retracted statement of Shri. IC Jindal, and unsubstantiated allegation of Shri. Aseem Kumar Gupta, no material was found from the premises of the appellant. It is submitted that in fact in the case of CIT vs. Harjeev Aggarwal reported in [2016] 70 taNmann.com 95 (Delhi), it has been held that statements recorded during search and seizure operations are not evidence found as a result of search. However, it was held that the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanation to Section 132(4) of the Act. However, such statements on a standalone basis without reference to any other material discovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the Assessee during search operation.

"It is not as if the retraction from a statement by an assessee would put an end to the procedure that ensued on account of survey or search. The Assessing Officer can very well support his findings on the basis of other material. If he did not have any other material, in a way, it reflects upon the very perfunctory nature of the survey. We find that the appellate authority and the Tribunal did not apply the correct parameters, while adjudicating the appeals filed before them. On the undisputed facts of the case, there was absolutely no basis for the Assessing Officer to fasten the liability upon the appellants. Our conclusion find support from the Circular dated 10.03.2003 issued by the Central Board of Direct Taxes, which took exception to the initiation of the proceedings on the basis of retracted statements. "

43. Regarding the authenticity of the retraction statement the arguments of the revenue fails when the same is available on the file of the ld AO and ld AO himself has issued certified copy of that retraction letter, same letter is also referred to in the order of ld CIT (A). Revenue before us could not submit any evidences that the retraction statement is not authentic. Further revenue has no answer why it took the cheques for taxes when it is so sure of the undisclosed income and further not deposited the same at all leave aside on time. All these cumulative factors go strongly in favour of the assessee about its timely retraction of the admission.