Reinstatement of assessing officer's order upheld; s.132(4) statements carry strong evidentiary value; deponent must rebut

HC upheld the Tribunal's restoration of the assessing officer's order, rejecting the appellant's claim that assessment was based solely on the statement recorded under s.132(4). The court held that the AO relied on seized material as well, and that statements under s.132(4) carry strong evidentiary value per established SC precedent; the burden lies on the deponent to rebut them with cogent, corroborative evidence. The appellant's late retraction and interested affidavits were held unreliable. No substantial question of law arose, so the Tribunal's factual findings were affirmed.

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Issues Involved:
1. Admissibility, relevance, and evidentiary value of the statement recorded under Section 132(4) of the Income Tax Act, 1961.
2. Validity of additions made by the assessing officer based on seized materials and statements.
3. Justification of the appellate authority's modifications and deletions in the assessment.
4. Tribunal’s decision to restore the order of the assessing officer.

Issue-wise Detailed Analysis:

1. Admissibility, Relevance, and Evidentiary Value of the Statement Recorded Under Section 132(4):
The court examined the admissibility and evidentiary value of statements recorded during a search under Section 132(4) of the Income Tax Act, 1961. It was highlighted that such statements carry significant evidentiary value and can be used as corroborative evidence along with documentary evidence unearthed during the search. The court referred to Sections 132(4) and 132(4A) of the Income Tax Act, which establish a statutory presumption that items found during a search belong to the person in possession. The court also cited the Supreme Court’s decision in Banalal Jat Constructions Private Limited v. Assistant Commissioner of Income-Tax, which affirmed that a voluntary statement made under Section 132(4) can form the basis of assessment, and mere retraction without strong evidence does not invalidate the statement.

2. Validity of Additions Made by the Assessing Officer Based on Seized Materials and Statements:
The assessing officer made additions based on the seized materials and the appellant's statements during the search, which included cash balance, unexplained gold and silver, and advances made. The Tribunal found that the assessing officer did not rely solely on the statements but also on material evidence seized during the search. The appellant's different explanations at different stages were unsupported by cogent material evidence, failing to dislodge the presumption under Sections 132(4) and 132(4A).

3. Justification of the Appellate Authority's Modifications and Deletions in the Assessment:
The Commissioner of Income Tax (Appeals) had modified the cash balance and value of silver articles and deleted the value of gold jewellery and advance made to Sampathkumar. However, the Tribunal found that the explanations provided by the appellant, including affidavits from his mother-in-law, were self-serving and lacked corroborative evidence. The Tribunal restored the assessing officer's order, finding that the appellant’s retractions were mere assertions without credible evidence.

4. Tribunal’s Decision to Restore the Order of the Assessing Officer:
The Tribunal’s decision to restore the assessing officer's order was based on the finding that the appellant failed to provide convincing evidence to support his claims. The Tribunal emphasized that the appellant did not make timely retractions with sufficient evidence and that the affidavits provided were unreliable. The Tribunal concluded that the assessment was not solely based on the statement under Section 132(4) but also on corroborative material evidence.

Conclusion:
The court concluded that the appellant's case was based on facts and did not raise any substantial question of law. The Tax Case Appeal was dismissed, affirming the Tribunal’s decision to restore the assessing officer's order. The court reiterated that statements made under Section 132(4) have strong evidentiary value and are binding unless convincingly rebutted with credible evidence.

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