MOHAMMAD RAFIQ, J.

1. This income tax appeal pertaining to assessment year 2013-14 under Section 260A of the Income Tax Act, 1961 has been filed by the appellant-revenue assailing judgment dated 15.09.2017 passed by the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur (for short ‘the Tribunal’) whereby the appeal filed by the respondent-assessee was allowed and appeal filed by the appellant was dismissed.

2. This appeal was admitted by this Court vide order dated 10.04.2018 on the following substantial question of law:

“(1) Whether on the facts and circumstances of the case of in law the Hon’ble ITAT was correct in upholding the decision of the CIT(A) and further deleting the addition of surrendered income by observing that affidavit of retraction filed by the assessee on 19.05.2013 has not been examined by the AO at any stage despite the facts that income surrendered in the statement under Section 132(4) of the Income Tax Act, 1961 dated 26.09.2012 was affirmed by the assessee in the statement recorded u/s 131 of the Income Tax Act on 15.10.2012?”

3. The skeletal facts essential for deciding the appeal are that search and seizure proceedings under Section 132 of the Act were carried out on 26.09.2012 at the residential premises of the assessee group and his family members. According to the revenue, certain incriminating documents/lose papers/books of accounts, etc. were found there, which were inventorized. Some of them were also seized at the time of search/survey under Section 132 of the Act. Thereafter, statement of the assessee was recorded on 27.09.2012, where a surrender of Rs. 2,28,44,545/- was extracted from the assessee and his statement was concluded at 9.00 P.M. on 27.09.2012. This statement surrendering the income was again reconfirmed from the assessee before the ADIT in statement under Section 131 of the Act on 15.10.2012 and 17.12.2012. However, these statements were later retracted by the assessee by filing an affidavit on 20.05.2013. The case of the assessee was selected for scrutiny and the assessee submitted return of income on 26.09.2013 declaring income of Rs. 36,81,840/- and agriculture income of Rs. 1,27,066/-. Notices under Section 143(2) and 143(1) of the Act were served on the assessee and after considering the response, assessment order was passed by the Assessing Officer on 25.03.2015 whereby additions were made in respect of the purchase of properties and constructions on the basis of seized material and admissions made by the assessee, total amounting to Rs. 3,42,05,891/- and agricultural income of Rs. 1,27,066/-.

4. The assessee being aggrieved by order of assessment preferred appeal before the Commissioner of Income Tax (Appeals)-2, Udaipur [for short ‘the CIT(A)’]. The CIT(A) considering the fact that the assessee retracted from the statement recorded during the course of search by filing affidavit on 20.05.2013 explained reasons of surrender, vide its order dated 30.03.2016 and deleted various additions details of which are as under:

“The additions of Rs. 24,11,588/- in respect of plot at Luv Garden and investment and construction thereof were deleted on the basis that the actual cost incurred were duly debited in the books of accounts and no discrepancies were found except surrender made by the assessee.

Addition of Rs. 1,37,725/- in respect of plot at Mahendra SEZ were also deleted on the ground of retractions which could not be rebutted by the Assessing Officer.

Additions of Rs. 36,56,632/- in respect of land in Mahapragya Nagar, Asind, Bhilwara were also similarly deleted.

Additions of Rs. 78,35,000/- in respect of investment in Anand City, Arjia, Ajmer Road, Bhilwara in Shop No. 12 were also deleted.

Additions of Rs. 88 lacs as advance since purchase of land were deleted to the extent of Rs. 73 lacs.

The third ground of appeal in respect of addition of Rs. 20 lacs on account of unexplained advances were deleted considering to be known.

The fourth ground of appeal in respect of addition