2013 (3) TMI 560 - HC - Income Tax

Rebuttal of statement - Additions on the basis of statements made u/s 132(4) during the course of search Assessee says that the statement under Section 132(4) was recorded from him while he was in a confused state of mind - Held that - The Tribunal was right in holding that there is nothing on record to show that the assessee had ever rebutted the presumption available under Section 132(4). At best what he is shown to have done is to file an affidavit when the matter came up before the Tribunal. - even in his letter dated 13.2.1997, the assessee did not make any reference to the earlier statements made under oath on 19.2.1996 and 29.2.1996, to which statements provisions of Section 132(4) of the Act applies. - The period within which a statement made on oath is retracted is of abundant relevance in deciding statutory matters of such nature. - Decided against the assessee.

Summary

Issues:
1. Justification of Tribunal's rejection of plea regarding statement under Section 132(4) of the Income Tax Act.
2. Sustainability of the addition of Rupees nine lakhs based on the statement recorded.
3. Adequacy of the assessee's explanation regarding the amount paid to daughters.
4. Relevance of the period within which a statement made on oath is retracted in statutory matters.

Analysis:

1. The primary issue in this appeal was whether the Tribunal was justified in rejecting the plea of the assessee concerning a statement recorded under Section 132(4) of the Income Tax Act. The Tribunal appropriately exercised its jurisdiction to consider the relevant materials and thoroughly evaluated the plea raised by the assessee on this matter.

2. The contention of the assessee was that the addition of Rupees nine lakhs was unsustainable as the statement under Section 132(4) was recorded while he was in a confused state of mind. The assessee claimed that the amount given to his daughters was not Rupees three lakhs each as recorded, but was actually provided by their brothers as per the father's instructions. However, the Tribunal found no legal infirmity in the reasoning and conclusion that the assessee had not succeeded in challenging the addition of Rupees nine lakhs.

3. The Tribunal observed that the assessee failed to reference the earlier statements made under oath on specific dates even in subsequent correspondence, which was crucial in matters governed by Section 132(4) of the Act. The failure to retract the statement within a relevant period was highlighted as a significant factor in determining the validity of the plea raised by the assessee.

4. The judgment reiterated that the period within which a statement made on oath is retracted holds substantial importance in statutory matters, emphasizing the need for timely and consistent responses from the assessee. Ultimately, the decision of the Tribunal to confirm the addition of the amount in question was upheld, leading to the dismissal of the appeal without any additional points raised or argued before the Court.