ACT Vs Nethi Ravi (ITAT Hyderabad)
Statement u/s 132(4) Prevails Over Afterthought: ITAT Hyderabad Restores ₹2.15 Cr Addition u/s 69A
Hyderabad ITAT ‘DB-A’ Bench, in ACIT vs. Shri Nethi Ravi (ITA No.594/Hyd/2024, AY 2021-22, order dated 24.12.2025), allowed the Revenue’s appeal and restored addition of ₹2,15,49,000 u/s 69A, reversing the relief granted by the CIT(A).
During a search u/s 132 in Spectra India Group, cash of ₹4.65 crore was found at the residence of the assessee, a Director in the Group. In his statement u/s 132(4), the assessee categorically admitted that ₹2.50 crore belonged to the Group, while the balance ₹2.15 crore belonged to him, earned from commission, real-estate business and other sources.
Subsequently, in a statement u/s 131 and by way of affidavit, the assessee retracted and claimed that the entire cash belonged to the Spectra India Group. The AO rejected the retraction as an afterthought and taxed ₹2.15 crore as unexplained money u/s 69A. However, the CIT(A) deleted the addition relying mainly on a post-search letter and book entries of the Group.
The Tribunal held that a statement u/s 132(4) carries strong evidentiary value and the burden to disprove such admission lies heavily on the assessee. The ITAT found that:
– the retraction was not supported by contemporaneous or corroborative evidence;
– there was no debit to the assessee’s personal account in the Group’s books;
– mere post-search journal entries and a self-serving letter could not override the clear admission; and
– acceptance of the assessee’s plea would amount to mechanical deletion without proper verification.
Accordingly, the ITAT held that the CIT(A) erred in deleting the addition, restored the AO’s action, and upheld taxation of ₹2.15 crore as unexplained money u/s 69A in the hands of the assessee. The Revenue’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
