K.S. Radhakrishnan, J.

1. Petitioners are husband and wife. First petitioner herein was a Professor in Pathology of the Calicut Medical College and was running a proprietary concern by name "Santhosh Clinic". He is an assessee with P.A. No. 46-007-PX-7697. Second petitioner, wife of the first petitioner, retired as a Professor of Dermatology and is a private practitioner and is an assessee with P.A. No. 46-007-PQ-9485.

2. Income Tax Department had received information that one Hamza, Proprietor, Hotel Sagar, Mavoor Road, Calicut had purchased the residential house belonging to the petitioners at Mavoor Road, Calicut for a consideration of Rs. 72 lakhs in the name of his children and the petitioners in turn purchased another residential property at Sathram Road, Calicut belonging to Dr. N. M. Mathai and his son George Mathai for a sum of Rs. 59 lakhs. Enquiry conducted by the investigation wing of the Department revealed that petitioners had sold their residential house with 11.5 cents of land at Mavoor Road for a consideration of Rs. 42 lakhs and in turn purchased the residential house of one Dr. N. M. Mathai and his son for a consideration of Rs. 29 lakhs, but the consideration shown was only Rs. 12 lakhs. Both the transactions were registered on the same day, i.e. 29th July 1995. Based on the information, a search was organised by the then Assistant Director of Income Tax (Investigation I) Calicut as per the warrant of authorisation issued by the Director of Income Tax, Bangalore under S.132 of the Income Tax Act. Search operations were conducted on 27-10-1995 at the residence of Sri K. T. Hamza, Proprietor of Sagar Hotel at Kunnamangalam, residence of Dr. Balakrishnan Nair and Dr. K. Narayani at Sathram Road, Calicut and at the residence of Dr. N. M. Mathai, Nedumchalil House at Muvattupuzha. During the course of search on 27-10-1995, a preliminary statement and sworn statement under S.132(4) were recorded from the petitioners. In the statement recorded first petitioner stated that the residential house at Mavoor Road with 11.5 cents of land was sold in July 1995 to one Abdul Razack and his minor brother (both children of Hamza, Hotel Sagar, Calicut) for a consideration of Rs. 12 lakhs. First petitioner also stated that the residence at Sathram Road, Calicut was purchased in July 1995 from Dr. N. M. Mathai and his son for a consideration of Rs. 24 lakhs and that there was no written agreement between him and Dr. N. M. Mathai. Registration charges were paid out of his own funds and the total consideration of Rs. 24 lakhs was paid. Rs. 6 lakhs by Demand Draft on 4-7-1995, Rs. 2.75 lakhs by Demand Draft on 10-7-1995, Rs. 0.25 lakhs by Demand Draft on 29-7-1995 and Rs. 15 lakhs by cash on 29-7-1995, constituting Rs. 24 lakhs. The search team consisted of six officers and 17 other officials assisted them. Search commenced on 27-10-1995 at the residence of the petitioners at 8 a.m. and concluded at 8 p.m. and Panchanama was prepared as per the departmental procedure in the presence of witnesses. Since search was not completed, books of accounts and records were put in an almirah and sealed in the presence of witnesses. Since scrutiny could not be completed during the search operations, prohibitory order under S.132(3) was served on the petitioners on the same day and statement was recorded from them under S.132(4) on the same day. 28-10-1995 and 29-10-1995 were holidays for the Department and the Assistant Director of Income Tax (Investigation I) Calicut along with Inspectors went twice to the residence of the petitioners and since they were not present it was not possible to resume the operations. Finally on 10-11-1995 first petitioner was requested to remain at his house and accordingly search was resumed and concluded on 10-11-1995. In the statement recorded on 10-11-1995 first petitioner had disowned the various statements made on 27-10-1995 in respect of sale and purchase of immovable properties stating that he was in