TMI Blog1998 (9) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... extract brief facts necessary for adjudication of the issue involved in this appeal which, as borne out from records before us are as under: "Action under s. 132 was taken at assessee s residence on 4th Feb., 1986, when the assessee, in his so-called preliminary statement, in answer to question as to how much cash would be available in his house had replied as under: "Sudhir Kumar Jain PNB,ModelTown. Kamal Kumar Jain (Sons) -do- Mohit Jain -do- Account Nos. : I do not remember. I do not have any FDRs nor does any of my dependents have such FDRs. Q. : How much cash would be available in your house? A. : In my bedroom at ground floor and the setting room adjoining and also one bedroom near to my bed room (where my mother stays whenever she is here), total cash of Rs. 25,000 approximately is lying. The break up of this is as follows: (i) Rs. 14,000 belongs to my wife Smt. Kanti Devi. (ii) Rs. 8,000 belongs to one, and (iii) Rs. 7,000 belongs to my mother. Q. : Do you have any cash kept in your house belonging to anyone else apart from what you have stated above or is some cash belonging to you lying with anybody else? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... You had categorically stated that there was no other cash apart from that available with you in your room. Please explain the discrepancy. Ans. No. 1. : I was mentally disturbed on the unexpected arrival of the big team of the officers and I could not recollect the exact position nor I keep my cash counted. The estimate given was approximate and I got headache by the action of the raiding party which they had made by circling the premises and the persons. This was my first experience of the kind. R.K. Jain 4-2-1986 Q. No. 2. : May I remind you that in the morning at the time of recording of the statement you did not complain of any headache or any other problem with you. Would you please now explain the source of acquisition of the amount of Rs. 94,530 found from your bedroom? Ans. No. 2. : Rs. 30,000 were handed over by my sons Karuna and Kamal Rs. 25,000 by Sudhir and Madhu, Rs. 7,000 by my mother Shrimati Hira Devi and the balance belong to my wife and myself. Which is Rs. 32,530. Q. No. 3. : In the morning you stated that you received Rs. 10,000 only from your son Sudhir or his wife Madhu whereas now you say that you received Rs. 25,000. Please explain the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Kant Jain were also recorded during search operation on4th Feb., 1986. During the course of assessment proceedings the assessee was called upon to explain the source of cash of Rs. 94,530 out of which cash of Rs. 90,000 was seized, I found during the search and the assessee as per para 12 of his written reply dt.5th Feb., 1988, explained the ownership of cash person-wise which was as stated in his second statement recorded during the search itself and also explained the sources of such availability with relevant persons, in the following terms: "With regard to the cash seized and retained under s. 132(5), it is submitted that during the course of search the authorised officer found Rs. 94,530 in my house at F. 12/2,ModelTown,Delhi, out of which Rs. 90,000 was seized. Break-up of the amount and its ownership is as under: . Rs. Smt. Kanti Devi (wife) 23,250 Smt. Karuna Jain (wife of my son Kamal Kant Jain) 30,000 Smt. Hira Devi Jain (mother) 7,000 Sudhir Jain (son) 25,000 Cash belonging to self 9,280 With regard to the nature and source of the cash of my wife, it was explained that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings and she had confirmed that the amount of Rs. 30,000 belonged to her. Even during the course of search, I had explained in my statement under s. 132(4) that the amount of Rs. 30,000 belonged to my daughter-in-law Smt. Karuna Jain. Thus it is submitted that there is absolutely no contradiction in the statements made under s. 132(4) and copy of statements recorded during 132(5) proceedings. Regarding the amount of Rs. 7,000 belonging to my mother Smt. Hira Devi, this was explained during the course of my statement recorded under s. 132(4). It was explained that my father was a leading lawyer ofDelhiwho died in 1982 and his estate duty assessment was completed by the Asstt. Controller of Estate Duty,New Delhi. My mother had her deposits in Rishab Kumar Janender Kumar and she had been drawing Rs. 6,000 every year on account of interest. She was living partly with me and partly with my brother Jajender Kumar Jain and therefore she was not required to make any expenses. She is 76 years of age and she had kept the amount of Rs. 7,000 with me. Her confirmation was also filed during 132(5) proceedings. With regard to the amount of Rs. 25,000 belonging to my son Sudhir Jain, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash of Rs. 30,000 which was claimed by the assessee as belonging to Mr. Kamal Kant Jain and Mrs. Karuna Jain and cash of Rs. 25,000 which was claimed as belonging to Sudhir Jain and Smt. Madhu was not accepted. Consequently, an addition of Rs. 55,000 was made while completing the assessment. The CIT(A), however, allowed the assessee a further relief of Rs. 10,000 against assessee s claim of availability of cash of Rs. 25,000 from Sudhir Jain and Mrs. Madhu Jain, after holding that there being contradictions in the so-called preliminary statement and the statement recorded during the search, the former is to be preferred, because that gives the true state of affairs. According to him the assertions during the recording of second statement were afterthought. The assessee is in appeal against the aforesaid action of the Revenue authorities. 6. The assessee s counsel, in the light of the above facts and circumstances, submitted that the so-called preliminary statement, which admittedly was recorded before the start of the search action was given under the disturbed state of mind. According to him any ordinary person, who is visited by a contingent of IT authorities for the first ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e close of the search. He, therefore, disputed the conclusion of the Revenue authorities in holding that the WT returns were filed was afterthought. Concluding his remarks the assessee s counsel heavily relied on various statements and the documentary evidence submitted before the lower authorities and placed in its compilation furnished before the Tribunal. He further submitted that the authorities have accepted a part of the statement when they accepted the availability of cash of Rs. 32,530 with the assessee and his wife, because in the preliminary statement the assessee had claimed only a cash of Rs. 22,000 on this account. According to him when the Revenue authorities were accepting a part of assessee s version why not the balance one especially when the same was supported by statements of concerned persons duly corroborated by documentary evidence. He, therefore, submitted that the addition of Rs. 45,000 confirmed by the CIT(A) out of addition of Rs. 55,000 is liable to be deleted in toto. The assessee s counsel had made another submission that the onus which lay on the assessee for explaining the source of cash found during search was discharged and the Revenue cannot take t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preliminary statement, which admittedly (as observations of CIT(A) in para No. 2.5 of his order) was recorded before the actual rummaging for the search was started, there is no dispute about the proposition canvassed by the learned Departmental Representative that the first statement carries more weight. However, the dispute arises only when such a statement, as has been recorded in the present case i.e., recorded before actual start of the search action and consequently to resolve this controversy, it is necessary to consider the provisions of sub-s. (4) of s. 132 which at the relevant time were in the following terms: "(4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian IT Act, 1922 (11 of 1922), or under this Act." 10. The language used in the aforesaid provisions speaks of "examination of oath during the search and seizure" which clearly means that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement under s. 132(4). 12. Coming to the second issue, we, in view of our findings against the status and binding nature of so-called preliminary statement in the foregoing para, hold that the second statement could not be said to be the retraction of the so-called preliminary statement. 13. Presuming that the second statement was the retraction of the so-called preliminary statement then we are of the opinion that since the assessee s assertion in the second statement giving reasons for assertions in the so-called preliminary statement have not been contradicted by the Revenue, it has to be held that the preliminary statement was given under a disturbed state of mind which could be retracted by the assessee legally entitled to retract and to substantiate his second statement. Here we would respectfully refer to the decision of the Hon ble Supreme Court at AIR 1976 SC 376 where the Hon ble apex Court has held that any admission made in ignorance of legal rights or under duress cannot bind the maker of the admission. Respectfully following the law laid down by the Hon ble Supreme Court and in view of the circumstances explained by the assessee in his second statement, which hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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