2008 (3) TMI 645

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....r the assessment year 1994-95, the respondent, a firm, sold one acre and ten cents of land and a hospital complex therein, to one Sri Satyabalan, for a consideration of Rs. 30 lakhs. However, during search conducted in the premises of the purchaser, he made a statement to the department under section 132(4) of the Income-tax Act confirming that the sale price for the land and building purchased from the respondent-assessee was Rs. 71 lakhs as against Rs. 30 lakhs declared in the document. In fact, pursuant to the statement given at the time of search, Sri Satyabalan filed a return and paid tax on the additional income of Rs. 41 lakhs which, according to him, is the sale price paid over the value declared in the sale document. Based on the s....

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....l Sri N. Sukumaran, appearing for the respondent-assessee. While departmental counsel contended that CIT (Appeals) and Tribunal have committed serious error in relying on the statement in the cross-examination by Sri Satyabalan, counsel appearing for the assessee submitted that statement given by Sri Satyabalan before the department in the course of search under section 132(4) cannot be relied upon against the respondent-assessee. Besides hearing counsel on both sides, we have also gone through the orders of the lower authorities. We are unable to uphold the order of the Tribunal for the reason that it is just based on a retracted statement given by the purchaser, namely, Sri Satyabalan in cross-examination. It is the admitted position that....

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....he view that the Assessing Officer rightly rejected the evidence of the purchaser given in cross-examination only as last effort to save the respondent-assessee. In fact purchaser's statement given under section 132(4) is not only supported and strengthened by subsequent offer and payment of tax on the additional income, but is also proved by the valuation report obtained by the department from the approved valuer who has valued the property at above Rs. 1.68 crores. Besides this, the purchaser himself got the property valued after purchase for availing bank loan wherein the valuation of the property is at Rs. 71 lakhs, which is the actual sale price at which the property was purchased by the purchaser, according to the statement given by h....