A.L. GEHLOT, AM. -This appeal by the Revenue is directed against the order dated 22nd Oct., 1996, of CIT(A)-II, Baroda, for the asst. yr. 1993-94.

2.The grounds raised by the Revenue are as under:

"On the facts and in the circumstances of the case and in law, the learned CIT(A) erred-

(i) in deleting the addition of Rs. 16,00,000 on account of disclosure made under section 132(4);

(ii) in setting aside the addition of Rs. 4,00,000 made in respect of income from transport business."

3.A search and seizure operation was carried in the month of September, 1992. The assessee filed return declaring total income of Rs. 25,000 on an estimated basis. During the course of search, the assessee has disclosed Rs. 16 lakhs in his statement recorded under section 132(4) on 24th Sept., 1992. The AO has reproduced the question and answer to the said disclosure in para 8 of his order The AO issued show-cause notice to the assessee as he has not shown the disclosure amount of Rs. 16 lakhs. In reply to that show-cause notice, the assessee stated that he was not aware about the said disclosure. In fact, under the depression he signed the statement. He did not understand the implications of the same. It has been stated that he (was) strongly denying having earned such income. The AO rejected the explanation and submission of the assessee and added the said disclosure of Rs. 16 lakhs. Similarly, the AO made the addition of Rs. 4 lakhs on account of assessee's business of running the buses. The facts of the case in brief noted by the CIT(A) (are) that the assessee is a stamp vendor and travel agent during the year under consideration. The residence of the assessee was searched by the IT authorities on 24th Sept., 1992, when his wife's statement was recorded under section 132(4) since the assessee was out of station on that date. The second statement of the assessee was recorded under section 132(4) on 19th Nov., 1992. The search party did not get any worthwhile cash or valuables. Cash of Rs. 731 only was found and returned to the assessee. There was no seizure of any valuables, jewellery or ornaments. It was submitted before the CIT(A) that on account of search, the assessee (was) constantly under disturbed state of mind and was not aware of the provisions and procedures of search under the IT Act. The CIT(A) also recorded the fact that the assessee was required to declare income of Rs. 16 lakhs under pressure even though the same was not supported by any assets or valuables or other documentary evidence. After considering the submission of the assessee, the CIT(A) deleted the said addition with following observations :

"I have also considered the contentions of the appellant, the documents filed the appellant and the assessment order together with the contentions of the AO. In my opinion, merely because the appellant under threat has given a declaration of income of Rs. 16 lakhs, even the declaration is neither specific about the period during which the appellant earned income, nor the tangible assets or investments, if any, made by the appellant out of such income in support of the declaration made.

While giving the final judgment, it is difficult to ignore certain points :

(i) The appellant is a stamp vendor, writing books of account of some persons, and doing supervision work of building of some friends and relatives.

(ii) During the search, the books of account, documents, the papers relating to transactions of building construction, labour work, etc. were found from the premises of the appellant and the same were seized.

(iii) During the search, cash of Rs. 732 was found and returned. There was no seizure of any valuables, jewellery, ornaments, fixed deposits, etc.

(iv) The appellant owns immovable properties as below :

Residential building at Lunawada, bearing CS. No. 4740, purchased on 4th Aug., 1983 for Rs. 44,999 from Joshi Shankarlal Motiram, by Hira Kuvarba, appellant's mother.

Building No. CS. No. 4743 was purchased in the name of J.M. Rathod for Rs. 24,999 on 3rd March, 1996.

The appellant has l/3rd share in the HUF agricultural land of 30 bighas.

(v) Whatever properties referred by the AO in the assessment order for construction and supervision pertain to asst. yrs. 1983-84 to 1986-87. None of the properties were constructed during the financial year relevant to the asst. yr. 1993-94. There must be some income of the appellant during the asst. yrs. 1983-84 to 1986-87, for which the AO has not taken any action so far and the income of those years cannot be assessed in asst. yr. 1993-94.

(vi) I have also verified the seized materials particularly Annex. B-20 which relate to 1983 to 1989 and none of the papers pertain to the asst. yr. 1993-94.

Considering all the above facts and evidences and totality of circumstances, it is very difficult to sustain the addition of Rs. 16 lakhs only on the basis of statement made by the appellant. The investigation wing also has not brought out any evidence that the appellant has earned Rs. 16 lakhs only in one year, i.e., asst. yr. 1993-94.

Considering all the facts and circumstances of the case, it is very difficult to sustain the addition of Rs. 16 lakhs, which is not corroborated by any movable or immovable assets. Hence, I direct the AO to delete the addition of Rs. 16 lakhs."

4.The learned Departmental Representative relied upon the order of AO and submitted that the AO has made the addition on the basis of admission and declaration made by the assessee at the time of search. The learned Departmental Representative submitted that the declaration made at the time of search under section 132(4) is binding in nature and the assessee had to disclose this amount in the return of income. In support of his contention, he relied upon the decision of Tribunal, Ahmedabad Bench, in the case of Manoharlal Kasturchand v. Asstt. CIT [1997] 57 TTJ (Ahd.) 639 : [1997] 61 ITD 55 (Ahd.).

5.The learned Authorised Representative, on the other hand, relied upon the order of CIT(A) and submitted that the search party did not get any worthwhile cash or valuables from the premises of the assessee. The cash of Rs. 731 only was found and same was returned to the assessee. He further submitted that the declaration was made at the time of search as the assessee was constantly under disturbed state of mind and he was not aware of the provisions and procedures of the search under the IT Act. During the course of recording the statement, the assessee was under constant threat of penalty and prosecution and was confused about various questions asked by the search party about the documents, papers, etc., of other persons found from the premises of the assessee. The assessee has declared Rs. 16 lakhs under pressure which is evident from the fact that no such corroborative evidence, asset or valuables were found in the form of immovable or movable properties from the residence of the assessee. He further submitted that, in fact, two mini buses which were acquired by taking loan, have been auctioned by the bank for recovery of loans taken by the assessee. The learned Authorised Representative further submitted that whatever transaction of land, construction activities, supervision business, etc., which have been mentioned by the AO in the assessment order have taken place between the financial years, 1984-85 to 1986-87 and not during the year under consideration, i.e., asst. yr. 1993-94. The learned Authorised Representative drew our attention to the copy of affidavit submitted which is at page Nos. 76 to 84 of assessee's paper book. He further submitted that this affidavit is form of additional evidence as relevant to the matter, so same may be admitted. He drew our attention that the search might have wrongly taken place at the residence of the assessee. The learned Authorised Representative filed list of cases which has been placed on record . On the basis of said list of cases, the learned Authorised Representative submitted note on evidentiary value of admission/confession and retraction. He relied upon the following decisions :

(i)AIR 1957 SC 637

(ii)AIR 1963 SC 1094

(iii)AIR 1976 SC 376

(iv)Asstt. CIT v. Mrs Sushila Devi S. Agarwal [1994] 49 TTJ (Ahd.) 663 : [1994] 50 ITD 524 (Ahd.)

(v)[1994] 50 TTJ (Bom.) 421 (sic)

(vi)ITA No. 1958/A/98 (Ahd.), dated 29th Sept., 1999

The learned Authorised Representative has also relied upon the decision of Tribunal in ITA No. 3207/A/96 for asst. yr. 1993-94, dated. 29th Aug., 2003.

6.We have heard the learned Representatives of the parties and perused the record. After considering the facts of the case, we find that the AO had made the addition merely on the. basis of statement recorded under section 132(4) at the time of search. We find that at the time of search no evidence or material or assets, immovable or movable properties were found which supports the disclosure of Rs. 16 lakhs. The assessee had retracted from the said disclosure which has not been accepted by the Department. It is true that simple denial cannot be considered as a denial in the eyes of law but at the same time, it is also to be seen (that) the material and valuable and other assets are found at the time of search. The evidence ought to have been collected by the Revenue during the search in support of the disclosure statement. The decision cited by learned Departmental Representative is distinguishable on facts. In the said case, the disclosure was of Rs. 7 lakhs which was supported by investment in house property, unaccounted cash, unaccounted investment in furniture and unaccounted in gold ornaments, etc., whereas in the case under consideration no such assets or valuables were supported to the disclosure. It is settled position of the law that authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being properly instructed, is overassessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected [S.R. S.R Koshti v. Commissioner Of Income-Tax (2005) 193 CTR (Guj) 518]. The ITO is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment or addition. [Dhakeswari Cotton Mills Ltd. v. CIT (1954) 26 ITR 775 (SC)]. It is true that an apparent statement must be considered real until it was shown that there were reasons to believe that the apparent was not the real. Science has not yet invented any instrument to test the reliability of the evidence placed before a Court or Tribunal. Therefore, the Courts and Tribunals have to judge the evidence before them by applying the test of human probabilities [Cit v. Durga Prasad More 1973 CTR (SC) 500 : (1971) 82 ITR 540 (SC)]. In the light of above discussion, we apply the ratio of Apex Court in the case of Durga Prasad (supra), i.e., test of human probabilities, we do not find any material on record on which basis it can be said that the disclosure of the assessee for Rs.16 lakhs is in accordance with law and in spirit of section 132(4). Under the circumstances, we find that the CIT(A) has correctly deleted the addition.

7.The second ground is pertaining to Rs. 4 lakhs on account of transport business. The AO made the estimation of Rs. 4 lakhs. The CIT(A) has sent back this matter to the file of AO with certain direction.

8.After hearing both the sides, we do not find any infirmity in the order of the CIT(A). In view of the fact, the order of CIT(A) is confirmed.

9.In the result, the appeal of Revenue is dismissed.