Assessee can rebut the statement made u/s 132(4) during search on the ground that it was under pressure & mistaken belief – ITAT

Brief of the Case

ITAT Mumbai held In the case of M/s Tribhovandas Bhimji Zaveri (Delhi) Pvt. Ltd. vs. ACIT that a careful perusal of provisions of sec. 132(4) as well sec. 292C would show that the said provisions state that the statement taken u/s 132(4) “may be used in evidence in any proceeding under the Act”. Thus, this provision gives discretion to the assessing officer not to use the statement in evidence. In the given case the assessee has reconciled the difference in stock, meaning thereby, the assessee has rebutted the admission made by it, which was under pressure and mistaken belief. In fact, the assessing officer himself has observed that the admission made under sec. 132(4) can be rebutted.

The Hon’ble Supreme Court in the case of Pullangode Rubber Products Company Limited Vs. State of Kerala (91 ITR 18) held that “an admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect” .

Facts of the Case

The assessee company is engaged in the business of manufacturing, processing and trading of gold and diamond jewellery, silver articles, wrist watches and is carrying on its business from its showroom situated at New Delhi. The revenue carried out search and seizure operations u/s 132 in the hands of the assessee, its directors, group concerns and related persons on 18-09-2009. Consequent to the search operations, the assessments of the assessment years under consideration were completed u/s 143(3) r.w.s. 153A. During the course of search, a sworn statement u/s 132(4) was recorded from one of the directors of assessee company named Shri Nand Kishore Zaveri, wherein he agreed to offer a sum of Rs.2.00 crores in AY 2009-10 and Rs.4.00 crores in AY 2010-11. However, in the returns of income filed in response to notices issued u/s 153A, the assessee did not offer the above said sums.

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