COMMISSIONER OF INCOME TAX Vs. NARESH KUMAR AGARWAL

JUDGEMENT

(1.) THE respondent is an assessee under the Income -tax Act, 1961 (for short, "the Act"). A search was conducted in his premises on January 9, 1996, under section 132 of the Act. Nothing tangible was discovered during the course of search. However, a sworn statement of the respondent was recorded under sub -section (4) of section 132 of the Act on March 20, 1996. It was alleged that the respondent declared a sum of Rs. 15,00,000 as his undisclosed income. Based upon that, a notice under section 158BC of the Act was issued on August 21, 1996. On receipt of the same, the respondent pleaded that the statement dated March 20, 1996, was forcibly extracted from him and that there is no truth in it. He stated that his undisclosed income is Rs. 65,020 and that he is prepared to pay tax thereon. Faced with this situation, the Assessing Officer caused special audit under section 142(2A) of the Act. The respondent is said to have not extended co -operation. Ultimately, an order was passed on July 20, 1997, by the Assessing Officer in exercise of the powers under section 158BC read with section 143(3) of the Act determining the undisclosed income of the respondent as Rs. 15,00,000. A sum of Rs. 9,00,000 was levied as tax thereon. Aggrieved by that, the respondent filed I.T.A. (S.S.) A. No. 204/Hyd/1997 before the Hyderabad A. of the Income -tax Appellate Tribunal (for short, "the Tribunal"). The Tribunal allowed the appeal through order, dated December 27, 2001. Hence, this appeal by the Revenue.

(2.) SRI S.R. Ashok, learned senior counsel for the appellant, submits that the Tribunal was mostly guided by the fact that the respondent has retracted from the sworn statement and it did not take into account the evidentiary value of such a statement. He contends that the statement recorded on oath cannot be brushed aside just because the assessee has retracted from it, at a later point of time. Placing reliance upon the judgment of the Kerala High Court in CIT v. O. Abdul Razak : [2013] 350 ITR 71 (Ker), learned counsel submits that though the burden is upon the Department to prove its case in the context of a search operation, the burden stands discharged, when it persuades the assessee to make the statement and the same is recorded.

(3.) IT is not in dispute that the search was conducted in the premises of the respondent on January 9, 1996. It appears that nothing incriminating was found or recovered during the search. It was only two and half months thereafter, i.e., on March 20, 1996, that a statement was recorded from the respondent. The statement is sought to be treated as the one under sub -section (4) of section 132 of the Act.