Admitted Income Can’t Be Disputed Without Retraction

Case Details: Narayan Rao Hebri vs. Assistant Commissioner of Income-tax - [2026] 184 taxmann.com 441 (Karnataka)

Judiciary and Counsel Details

S.G. Pandit & K. V. Aravind, JJ.
K.K. Chythanya, Sr. Counsel & Tata Krishna for the Appellant.
Y.V. Raviraj, Sr. Standing Counsel for the Respondent.

Facts of the Case

The assessee was engaged in real estate business. A survey under section 133A was conducted, and the assessee, by letter dated 29.09.2016, volunteered to offer a sum of Rs. 1,14,20,100 as additional income. The assessee filed the return of income for the relevant year and paid the corresponding taxes.

The return of income was selected for scrutiny to examine the payment of Rs. 24,00,000 made in cash during November 2016 towards income tax and the source thereof. The Assessing Officer (AO) treated both the unexplained cash and the sum declared during the survey as income from other sources and subjected them to tax at a rate of 60%.On appeal, the CIT(A) confirmed the additions made by the AO, and the Tribunal upheld the CIT(A)’s order. The matter then reached the Karnataka High Court.

High Court Held

The High Court held that the assessee contended that the additional income was admitted in the return on account of coercion exercised during the survey and based on the letter dated 29.09.2016, which, according to the assessee, was forcibly obtained by the Assessing Officer.

The assessee filed the return of income under section 139(1) and had the statutory opportunity to revise the return under section 139(5). Admittedly, the assessee neither retracted the letter dated 29.09.2016 admitting the additional income nor revised the return of income. The assessee also paid tax on the income so admitted.

Further, when the assessment was completed by adding the additional income and subjecting it to tax at the rate of 60%, the assessee, in the appeal before the CIT(A), challenged only the applicability of Section 115BBE, not the taxability of the additional income itself. For the first time before the Tribunal, the assessee contended that the additional income declared was based solely on a statement recorded during the survey and was unsupported by any evidence. The Tribunal rejected the said contention.

List of Cases Reviewed

Order dated 22.05.2025 passed in ITA No.2051/Bang/2024 by the Tribunal [Para 20] Affirmed

List of Cases Referred to

National Thermal Power Co. Ltd. v. CIT [1998] 97 Taxman 358/229 ITR 383 (SC) (para 9)
Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 (SC) (para 11.2)
CIT v. Mantri Share Brokers (P.) Ltd. [2018] 96 taxmann.com 279 (Rajasthan) (para 11.2)
CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710 (SC) (para 11.2)
CIT v. K. Venkatesh Dutt [2009] 319 ITR 331 (Karnataka) (para 11.2)
CIT v. V. Mr. P. Firm, Muar [1965] 56 ITR 67 (SC) (para 11.2)
CIT v. Sumitomo Corporation [2017] 80 taxmann.com 247/[2016] 382 ITR 75 (Delhi) (para 11.2)
National Co-operative Development Corporation v. CIT [2020] 119 taxmann.com 137/274 Taxman 187/427 ITR 288 (SC) (para 11.2)
Peerless General Finance and Investment Co. Ltd. v. CIT [2019] 107 taxmann.com 228/265 Taxman 413/416 ITR 1 (SC) (para 11.2)
CIT v. H.R. Basavaraj [2012] 20 taxmann.com 515/207 Taxman 111/[2011] 339 ITR 63 (Karnataka) (para 11.2)
CIT v. Shelly Products [2003] 129 Taxman 271/261 ITR 367 (SC) (para 11.2)
CIT v. P. Balasubramanian [2013] 33 taxmann.com 130/215 Taxman 288/354 ITR 116 (Madras) (para 11.2)
Paul Mathews & Sons v. CIT [2003] 129 Taxman 416/263 ITR 101 (Kerala) (para 11.2)
Kailashben Manharlal Chokshi v. CIT [2008] 174 Taxman 466/[2010] 328 ITR 411 (Gujarat) (para 11.2)
CIT v. S. Khader Khan Son [2008] 300 ITR 157 (Madras) (para 11.2)
CIT v. S. Khader Khan Son [2012] 25 taxmann.com 413/[2013] 352 ITR 480/[2012] 210 Taxman 248 (SC) (para 11.2).