Post-search and retracted statements under search provisions cannot alone sustain block assessment without independent supporting material.

A statement under section 132(4) of the Income-tax Act is valid only when recorded during the course of search or seizure; a post-search statement does not satisfy that condition and cannot be treated as a section 132(4) statement. Where no incriminating material is found, the power to record such a statement is not attracted. A retracted section 132(4) statement also lacks conclusive evidentiary value and cannot, by itself, sustain a block assessment under section 158BC; the Revenue must support the case with independent material. The analysis also relies on the principle against self-incrimination and treats admissions as non-conclusive proof.

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Issues: (i) Whether a statement recorded after the conclusion of search can be treated as a statement recorded under section 132(4) of the Income-tax Act, 1961. (ii) Whether a retracted statement recorded under section 132(4) can, by itself, sustain a block assessment under section 158BC of the Income-tax Act, 1961.

Issue (i): Whether a statement recorded after the conclusion of search can be treated as a statement recorded under section 132(4) of the Income-tax Act, 1961.

Analysis: Section 132(4) permits examination on oath only during the course of search or seizure. A statement recorded long after the search has ended does not satisfy that requirement. The provision also contemplates examination in relation to material found during the search. Where nothing incriminating is recovered, there is no occasion to invoke the power to record such a statement.

Conclusion: The post-search statement could not be treated as a valid statement under section 132(4) of the Income-tax Act, 1961.

Issue (ii): Whether a retracted statement recorded under section 132(4) can, by itself, sustain a block assessment under section 158BC of the Income-tax Act, 1961.

Analysis: A statement recorded under section 132(4) has evidentiary value only so long as it remains unchallenged. Once it is retracted on the ground of coercion or want of truth, it cannot be treated as conclusive proof or the sole basis for penal tax liability. The Department must establish its case by independent material. The Court also referred to the constitutional protection against self-incrimination and the principle that admissions are not conclusive proof.

Conclusion: A retracted statement under section 132(4) could not, by itself, sustain the block assessment under section 158BC of the Income-tax Act, 1961.

Final Conclusion: The assessment based solely on the post-search, retracted statement was unsustainable, and the Revenue's challenge failed.

Ratio Decidendi: A statement under section 132(4) is admissible only when recorded during the course of search or seizure and, if retracted, cannot by itself constitute the sole basis for block assessment without independent supporting material.

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