Search statement requirements control reliance on post-search letters; conditional communications cannot bind the assessee as admissions.

A later letter sent by a partner could not be treated as a statement under section 132(4) because it was not recorded on oath by the authorised officer during search, was not made in the prescribed manner, and did not amount to an unconditional disclosure. The Assessing Officer was therefore required to examine the revised return on its own merits instead of rejecting it solely on that letter. The Indian Evidence Act did not assist the revenue, as the letter was a conditional communication rather than an unequivocal admission and the matter was not a criminal proceeding. The court held the reliance on the letter and the Evidence Act was misplaced.

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Issues: Whether the letter dated 25.01.1995 could be treated as a statement under section 132(4) of the Income Tax Act or as an admission binding on the assessee for making the assessment, and whether the provisions of the Indian Evidence Act could justify reliance on that letter.

Analysis: A statement under section 132(4) must be recorded on oath by the authorised officer during search or seizure, and the letter in question was only a later communication sent by post by one partner. It was not recorded during the search, was not in the prescribed return form, and did not amount to an unconditional disclosure. The Assessing Officer was required to examine the revised return on its own merits instead of rejecting it solely on the basis of that letter. Sections 24, 28 and 58 of the Indian Evidence Act did not assist the revenue because the matter was not a criminal proceeding and the letter was conditional rather than an unequivocal admission.

Conclusion: The letter could not be treated as a statement under section 132(4) or as a binding admission, and the revenue's reliance on the Indian Evidence Act failed. The question was answered against the revenue and in favour of the assessee.

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