Law:

Section:

Section 132 of the Income-tax Act, 1961 - Search and seizure - Assessment year 1993-94 - Whether while statement rendered by assessee at time of search under section 132(4) may be used in evidence in any proceeding, yet that, by itself, does not become sole material to rest assessment, more so when assessee seeks to withdraw same by producing material in support of such retraction - Held, yes - Department conducted search in assessee's premises on two consecutive days and two statements were recorded from assessee - In first statement, assessee offered a sum of Rs. 3 lakhs as unaccounted income - In second statement recorded on second day of search, assessee offered a sum of Rs. 4 lakhs, over and above what was offered on previous day - However, in course of assessment proceeding, assessee retracted second statement offering additional income of Rs. 4 lakhs and contended that amount offered was loan taken from relatives who had already been assessed on said amount and even otherwise, transactions related to years prior to date of assessment and had no relevance to year under consideration - Whether when assessee had explained his statement as not correct in context of materials produced, amount of Rs. 4 lakhs could be added to assessee's income on basis of his statement - Held, no [In favour of assessee] FACTS The assessee had his income from pawn breaking business as well as from commission earned on dealing with coconut seedling. The department conducted search in the assessee's premises on 10-5-1993 and 11-5-1993 during which certain cash, gold jewellery, Kisan Vikas Patra, fixed deposits, pronotes and finance deposits were seized. Two statements were recorded of the assessee on 10-5-1993 and 11-5-1993. In the first statement, he offered a sum of Rs. 3 lakhs as his unaccounted income and on second day, he offered a sum of Rs. 4 lakhs over and above what was offered on the previous day. However, in course of assessment proceedings, the assessee retracted his second day's statement offering an additional income of Rs. 4 lakhs. Contending that said amount represented loans taken from relatives who had already been assessed on said amount. The Assessing Officer…

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