- (1.) THE following questions of law have been referred to this Court under section 256(1) of the Income Tax Act, 1961 by the Income Tax Appellate Tribunal, Patna Bench, Patna: - "1. Whether the statement on oath recorded on 24.9.87 u/s 132(4) of the Act will be governed by the said provision as it stood on 24.9.87 or as amended by insertion of the explanation therein w.e.f 1.4.89? 2. Whether the statement on oath recorded on 24.9.87 is within the ambit and scope of section 132(4) as amended by insertion therein of the explanation w.e.f 1.4.89 and consequently admissible in evidence in the assessment proceedings? 3. Whether the addition of Rs.20 lakhs was proper and justified on the basis of the admission in the statement u/s 132(4) voluntarily made without there being any corroborative evidence of the existence of any such income in any tangible form?"
(2.) HOWEVER , reference has been argued on the question no.1 only and it has been submitted that though the question has been formulated with respect to applicability of proviso to section 132(4), which came into force with effect from 1.4.1989, by Explanation it has been declared that examination of any person under sub -section (4) of section 132 may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income Tax Act, 1961, learned counsel for the assessee submitted irrespective of insertion of proviso, assuming for the sake of argument that there was statement under section 132(4) of the Act of 1961, even then such statement alone without corroborative evidence cannot fasten any liability upon the assessee and that admission made in the statement under section 132(4) solely cannot be the ground for holding the income of the assessee. Learned counsel for the assessee relied upon the Division Bench judgment delivered in the case of Kailashben Manharlal Chokshi Vs. Commissioner of Income Tax reported in (2010) 328 ITR 411 (GUJ), wherein it has been held that retracted statement recorded under section 132(4) cannot be the basis for assessing undisclosed income of the assessee. In the above judgment, the Division Bench held that there must be some corroborative evidence to the admission. Learned counsel for the Revenue vehemently submitted that it is easy for anybody to retract from the statement given under section 132(4) and therefore, if the same view is taken by this Court, that will permit the tax evaders to give statement under section 132(4) admitting liability of income without any coercion, duress or force and then retract from that statement. It is also submitted that even retraction requires some corroborative evidence and the assessee could have submitted his evidence to show that he had no such income as has been admitted in his statement under section 132(4) of the Income Tax Act.
(3.) WE considered the submissions of the learned counsel for the parties and perused the reasons given in the impugned orders as well as reasons given in the case of Kailashben Manharlal Chokshi (supra).;