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TMI Blog2008 (9) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... y of this reference before this court, the assessee expired and hence his legal heirs are brought on record, vide order dated July 9, 2008 in Civil Application No. 143 of 2008. The assessment year in question is the assessment year 1989-90. The assessee is a partner of M/s. Chokshi Kasturchand Dalaji and Sons. A search under section 132 was conducted on the premises of the said firm and the partners thereof including the assessee on November 4, 1988. A statement of the assessee under section 132(4) was recorded and during the course of the statement, the assessee made a disclosure of Rs. 7 lakhs as follows : Rs. Unaccounted investment in house property 4,00,000 Unaccounted cash 1,00,000 Unaccounted investment in furniture 1,00,000 Unaccounted investment in gold ornaments 1,00,000 Total 7,00,000 3. Later on in January, 1989 the assessee retracted the disclosure and stated that the disclosure of Rs. 50,000 only was acceptable to him. It was submitted before the Assessing Officer that the disclosure of Rs. 7 lakhs was made under pressure and coercion and that no note should be taken of it whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee retracted the earlier statement made on the search date and upon retraction he rendered himself untrustworthy and unreliable in the eyes of law and accordingly the addition of Rs. 7 lakhs to the income declared was fully justified. 6. Being aggrieved by the order of the Tribunal the assessee moved miscellaneous application against the order of the Tribunal which has been rejected vide order dated May 5, 1997 in Miscellaneous Application No. 49/ Ahd/1997. 7. On the above premises the above referred question of law is referred for the opinion of this court. 8. Mr. J. P. Shah, learned advocate appearing for the applicant-assessee has strongly urged that all the three authorities have not considered the retraction made by the assessee in its true perspective. The said statement was not a voluntary statement and the assessee was tortured, coerced and under great tension and pressure the said statement was recorded. He has, therefore, submitted that the said statement was not a voluntary statement. He has further submitted that the statement recorded by the searching party under section 132(4) was subsequently retracted and detailed affidavit was filed by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of instruction the benefit of the Instruction dated May 11, 1994 cannot be denied. 12. He has further relied on the decision of the Allahabad High Court in the case of CIT v. Radha Kishan Goel reported in [2005] 278 ITR 454, wherein it is observed that it is a matter of common knowledge, which cannot be ignored that the search is being conducted with the complete team of the officers consisting of several officers with the police force. Usually telephone and all other connections are disconnected and all ingress and egress are blocked. During the course of search person is so tortured, harassed and put to a mental agony that he loses his normal mental state of mind and at that stage it cannot be expected from a person to pre-empt the statement required to be given in law as a part of his defence. 13. He has further relied on the Instruction dated March 10, 2003, issued by the Central Board of Direct Taxes, which states that instances have come to the notice of the Board where assessees have claimed that they have forced to confess the undisclosed income during the course of the search and seizure and survey operations. Such confessions, if not based on credible evidence, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was adduced by the assessee. She has, therefore, submitted that there is no reason to disturb the findings arrived at by the authorities below and hence the question referred to this court by the Income-tax Appellate Tribunal is required to be answered in favour of the Revenue and against the assessee. 17. In support of her submissions she relied on the decision of the hon'ble Supreme Court in the case of K. I. Pavunny v. Assistant Collector reported in [1997] 3 SCC 721, wherein it is held that there is no prohibition under the Evidence Act to rely upon a retracted confession to prove the prosecution case or to make the same basis for conviction of the accused. Practice and prudence require that the court could examine the evidence adduced by the prosecution to find out whether there were any other facts and circumstances to corroborate the retracted confession. 18. She has further relied on the decision of the Kerala High Court in the case of V. Kunhambu and Sons v. CIT reported in [1996] 219 ITR 235, wherein it is held that the assessment was based on the statement of the assessee. Since no case had been made that the statement was made under a mistaken belief of fact or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. In normal circumstances, it is too much to give any credit to the statement recorded at such odd hours. The person may not be in a position to make any correct or conscious disclosure in a statement if such statement is recorded at such odd hours. Moreover, this statement was retracted after two months. 23. The main grievance of the Assessing Officer was that the statement was not retracted immediately and it was done after two months. It was an afterthought and made under legal advice. However, if such retraction is to be viewed in the light of the evidence furnished along with the affidavit, it would immediately be clear that the assessee has given proper explanation for all the items under which disclosure was sought to be obtained from the assessee. So far as the amount invested in house property is concerned, the assessee has specifically stated in his explanation dated February 28, 1989, that there was absolutely no basis for making the disclosure on account of bungalow at 68, Sarjan Society, Athwa Lines, Surat. It was in the year 1964 that the assessee took one Plot No. 68 in Sarjan Co-operative Housing Society which was also constructing the bungalow for which the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding and the assessee's explanation, we are of the view that this is a normal holding which can be found in any middle class Indian family and hence no addition could have been justified on that count. 25. So far as the addition of Rs. 1 lakh on account of unaccounted investment in furniture is concerned, it is stated by the assessee that on the ground floor furniture was made before 15 years and the assessee had spent Rs. 25,000 for renovation after making withdrawal from the firm's account. It is further submitted that the furniture on the first floor was partly received and paid out of withdrawals from the firm. At the time of the search additional furniture meant for the first floor was just received by way of parcel from Ahmedabad and was lying in bundles. A detailed source of investment of furniture purchased from Ahmedabad with a due confirmation from the party concerned have been filed by the assessee before the Assessing Officer. Since no payment of this additional furniture was made by the assessee till the date of search, no addition could have been made on this count. 26. In view of what has been stated hereinabove we are of the view that this explanation seems to ..... 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