AO cannot make Income Additions Solely based on Retracted Statement of Third-Parties: ITAT

In a recent ITAT ruling, it was held that the Assessing Officer (AO) cannot make income additions solely based on a retracted statement from a third party. The tribunal emphasized that such statements must be corroborated by other evidence and cannot be the sole basis for making income adjustments. The case underlines the importance of verifying and validating statements and ensuring that any income additions are supported by concrete evidence rather than retracted or unreliable sources. This decision reinforces the need for due diligence in tax assessments and underscores the rights of taxpayers to fair and just treatment.