Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Statements recorded under Section 132(4) are generally not considered incriminating material by themselves. They are viewed as information or evidence that may be used in assessments only if they relate to actual incriminating evidence unearthed during the search ["DEPUTY COMMISSIONER OF INCOME TAX DELHI vs GAURAV DALMIA DELHI - Income Tax Appellate Tribunal"], ["OM PRAKASH TANTIA FARIDABAD vs DCIT CENTRAL CIRCLE-25 NEW DELHI - Income Tax Appellate Tribunal"], ["DEPUTY COMMISSIONER OF INCOME TAX DELHI vs GAURAV DALMIA DELHI - Income Tax Appellate Tribunal"], ["Sri V. Srinivasan vs Ms. Neha Sahay - Income Tax Appellate Tribunal"].
The key legal principle established is that such statements do not constitute incriminating material unless corroborated by tangible evidence found during the search. Courts have consistently held that mere statements, especially when retracted or unsupported by seized material, cannot justify additions or assessments ["DEPUTY COMMISSIONER OF INCOME TAX DELHI vs GAURAV DALMIA DELHI - Income Tax Appellate Tribunal"], ["DEEPAK KAKUBHAI MEHTA MUMBAI vs DCIT CENTRAL CIRCLE - 4(1) MUMBAI - Income Tax Appellate Tribunal"], ["ACIT CENTRAL CIRCLE-15 NEW DELHI vs LUXMAN BUILDERS PVT. LTD. NEW DELHI - Income Tax Appellate Tribunal"], ["OM PRAKASH TANTIA FARIDABAD vs DCIT CENTRAL CIRCLE-25 NEW DELHI - Income Tax Appellate Tribunal"].
Judicial precedents, including the case of Harjeev Aggarwal, clarify that statements recorded under Section 132(4) do not automatically amount to incriminating evidence and cannot be sole basis for additions in assessments ["DEPUTY COMMISSIONER OF INCOME TAX DELHI vs GAURAV DALMIA DELHI - Income Tax Appellate Tribunal"], ["ACIT CENTRAL CIRCLE-15 NEW DELHI vs LUXMAN BUILDERS PVT. LTD. NEW DELHI - Income Tax Appellate Tribunal"], ["Sri V. Srinivasan vs Ms. Neha Sahay - Income Tax Appellate Tribunal"].
Many assessments based solely on such statements, especially when no incriminating material is found at the premises, are deemed unsustainable. The law emphasizes the necessity of tangible, corroborative evidence to justify any addition ["DEPUTY COMMISSIONER OF INCOME TAX DELHI vs GAURAV DALMIA DELHI - Income Tax Appellate Tribunal"], ["Revenue vs Assessee - Income Tax Appellate Tribunal"], ["A One Sizing Works vs The Asst. CIT Central Circle 3 - Income Tax Appellate Tribunal"].
In summary, recorded statements under Section 132(4) are not inherently incriminating material and their evidentiary value depends on their relation to actual evidence found during search. Without corroboration, they cannot be used as the basis for making additions or assessments ["DEPUTY COMMISSIONER OF INCOME TAX DELHI vs GAURAV DALMIA DELHI - Income Tax Appellate Tribunal"], ["Sri V. Srinivasan vs Ms. Neha Sahay - Income Tax Appellate Tribunal"], ["ACIT CENTRAL CIRCLE-15 NEW DELHI vs LUXMAN BUILDERS PVT. LTD. NEW DELHI - Income Tax Appellate Tribunal"], ["Late Shri Brat Pal Singh Tyagi vs DCIT, Central Circle, Ghaziabad - Income Tax Appellate Tribunal"].
References:- Statements recorded under Section 132(4) of the Act do not by themselves constitute incriminating material as has been explained by this Court in Harjeev Aggarwal. ["DEPUTY COMMISSIONER OF INCOME TAX DELHI vs GAURAV DALMIA DELHI - Income Tax Appellate Tribunal"]- The words 'evidence found as a result of search' would not take within its sweep statements recorded during search and seizure operations. ["DEEPAK KAKUBHAI MEHTA MUMBAI vs DCIT CENTRAL CIRCLE - 4(1) MUMBAI - Income Tax Appellate Tribunal"]- In the absence of any incriminating material found during the course of search, no addition can be made solely based on the statement recorded u/s 132(4). ["Revenue vs Assessee - Income Tax Appellate Tribunal"]- The law is settled that statements recorded u/s 132(4) are not conclusive evidence and cannot be sole basis for additions unless corroborated by tangible evidence. ["ACIT CENTRAL CIRCLE-15 NEW DELHI vs LUXMAN BUILDERS PVT. LTD. NEW DELHI - Income Tax Appellate Tribunal"]- The courts have repeatedly held that such statements are not incriminating material unless supported by seized evidence. ["OM PRAKASH TANTIA FARIDABAD vs DCIT CENTRAL CIRCLE-25 NEW DELHI - Income Tax Appellate Tribunal"]
In the high-stakes world of income tax searches under the Income Tax Act, 1961, a critical question often arises: statements recorded under Section 132(4) are not considered incriminating material found from the premises. This issue is pivotal for taxpayers facing assessments under Section 153A, where authorities might rely on statements made during raids. But do these statements alone justify additions to income? Judicial precedents overwhelmingly suggest no—without corroboration, they lack the weight to stand as incriminating material.
This blog delves into the legal nuances, drawing from landmark judgments and additional sources to clarify the position. Whether you're a business owner or tax professional, understanding this can safeguard against unwarranted assessments.
Statements recorded under Section 132(4)—where an authorized officer examines a person during a search and records their statement—do not by themselves constitute incriminating material for framing assessments under Section 153A. Courts have consistently held that such statements require linkage to tangible evidence unearthed during the search. PCIT (central) VS Anand Kumar Jain (HUF) - 2021 0 Supreme(Del) 1631
As emphasized in key rulings:- Standalone statements, without reference to materials discovered, cannot empower the Assessing Officer (AO) to make block assessments merely based on admissions. PCIT (central) VS Anand Kumar Jain (HUF) - 2021 0 Supreme(Del) 1631- A plain reading of Section 158BB(1) does not allow computing undisclosed income solely on such statements; they fall outside evidence found as a result of search. However, if relatable to seized materials, they gain evidentiary value. Pr. Commissioner Of Income Tax (Central)- 3 VS Agson Global Private Limited - 2022 0 Supreme(Del) 253
This principle protects taxpayers from assessments premised on potentially coerced or retracted confessions.
Multiple High Court and Tribunal decisions reinforce that Section 132(4) statements are not inherently incriminating. For example:
Statements recorded under Section 132(4) do not by themselves constitute incriminating material as has been explained in PCIT (central) VS Anand Kumar Jain (HUF) - 2021 0 Supreme(Del) 1631 and Anurag Dalmia vs Income Tax Office - 2025 0 Supreme(Del) 664. The scope of such statements is limited unless they relate to evidence or material unearthed during the search. Pr. Commissioner of Income Tax (Central) vs Agson Global Pvt. Ltd. - Delhi (2022)
In another case, the counsel argued successfully that absent incriminating material from the premises, no addition can be made solely on a Section 132(4) statement, especially under Section 153A. HECTOR ENTERPRISES PVT. LTD DELHI vs DCIT CENTRAL CIRCLE- 29 DELHI - 2026 Supreme(Online)(ITAT) 2250
Similarly:
The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. PCIT (CENTRAL) - 3 Vs SAJAN KUMAR JAIN - 2021 Supreme(Online)(DEL) 1050
Courts mandate corroboration for these statements to hold sway:
A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. Anurag Dalmia vs Income Tax Office - 2025 0 Supreme(Del) 664
Retracted statements face even stricter scrutiny. A retracted confession under duress cannot solely justify undisclosed income without supporting evidence, aligning with CBDT Circulars and prior precedents. Surabhi Shelters Pvt. Ltd., Hyderabad. vs The Dy. Commissioner of Income-Tax, Central Circle III, Hyderabad. - 2025 Supreme(Online)(Tel) 20723
In block assessments, absent incriminating materials, additions based on retracted statements by directors or owners are invalid. The burden lies on the department to prove claims. Surabhi Shelters Pvt. Ltd., Hyderabad. vs The Dy. Commissioner of Income-Tax, Central Circle III, Hyderabad. - 2025 Supreme(Online)(Tel) 20723
Further:
Statements recorded under Section 132(4) cannot be treated as conclusive evidence and are akin to statements recorded... in the absence of incriminating material cannot form basis for quantification. Surabhi shelters Pvt.Limited vs The Dy. Commissioner of Income Tax - 2025 Supreme(Online)(Tel) 65672Surabhi shelters Pvt.Limited vs The Dy. Commissioner of Income Tax - 2025 Supreme(Online)(Tel) 39124
Section 153A assessments post-search are confined to undisclosed income backed by incriminating materials. Mere statements don't qualify, particularly if assessments were already completed pre-search. Revenue vs M/s Supreme Polymers Pvt. Ltd. - 2025 Supreme(Online)(ITAT) 3816
In one appeal, the court dismissed revenue's challenge to deletions under Section 153A, upholding that without incriminating evidence, completed assessments cannot be altered. Revenue vs M/s Supreme Polymers Pvt. Ltd. - 2025 Supreme(Online)(ITAT) 3816
Revenue appeals under Section 260A failed where additions under Section 68 relied solely on directors' statements during search, without justifying Section 153A jurisdiction. Principal Commissioner of Income Tax, Delhi VS Best Infrastructure (India) Pvt. Ltd. - 2017 Supreme(Del) 2559
Even in criminal contexts, incriminating statements under Section 132(4) must be tied to seized materials for admissibility. Karti P. Chidambaram VS Deputy Director of Income Tax (Investigation), Nungambakkam - 2020 Supreme(Mad) 1280
While generally not standalone, exceptions exist:- Corroborated Statements: If directly linked to documents or assets seized, they support assessments. Pr. Commissioner Of Income Tax (Central)- 3 VS Agson Global Private Limited - 2022 0 Supreme(Del) 253- Non-Retracted and Voluntary: Unretracted statements tied to evidence may aid proceedings, but rarely alone.- Procedural Use: They can constitute information if relatable to search findings. PCIT (CENTRAL) - 3 Vs SAJAN KUMAR JAIN - 2021 Supreme(Online)(DEL) 1050
However, retracted ones, especially without books-of-account entries or disclosure likelihood proof, fail. Commissioner of Income Tax VS Harjeev Aggarwal - 2016 Supreme(Del) 1286
Authorities should heed: Mere statements made during the course of the search, under Section 132(4) of the Act, cannot be considered to be incriminating material. Principal Commissioner of Income Tax, Delhi VS Best Infrastructure (India) Pvt. Ltd. - 2017 Supreme(Del) 2559
Disclaimer: This article provides general insights based on judicial trends and is not legal advice. Tax laws evolve, and outcomes depend on specific facts. Consult a qualified tax professional for personalized guidance.
In summary, while Section 132(4) statements play a role in tax proceedings, they are not a shortcut to deeming income undisclosed. Taxpayers armed with this knowledge can navigate searches more effectively.
#IncomeTaxAct, #TaxLaw, #Section132
hold significance when the incriminating material relating to unaccounted cash component in the transaction of shares were found and corroborated by statements recorded u/s 132(4) of the key persons handling the transactions. ... Whether the retraction of statements recorded under Section 132(4) of the Act, made much later and without contemporaneous evidence, can override the ev....
The learned counsel for the assessee submitted that the entire addition rests on a fundamentally flawed premise, namely, that statements recorded under section 132(4), even in the absence of any incriminating material found during the search at the assessee’s premises, can justify additions under section ... Thus, the facts on record reveal that except the so called incriminating materia....
Fifthly, statements recorded under Section 132 (4) of the Act do not by themselves constitute incriminating material as has been explained by this Court in Harjeev Aggarwal. ... Here, the assessment has been framed under section 153A on the basis of alleged incriminating material (being the statement recorded under 132(4) of the Act). ... The ....
132(4) as incriminating material, and the failure to follow the mandatory procedure under section 153C. ... justification for deleting the additions made on account of bogus long term capital gain, the significance of the statement recorded under Section ... The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material ....
Counsel submitted that in the absence of any incriminating material found during thecourse of search conducted in the Assessee’s premises, no addition can be made solely based on the statement recorded u/s 132(4) of the Act. The Ld. ... Here, the assessment has been framed under section 153A on the basis of alleged incriminating material (being the statement recorded under section#HL_END....
The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. ... Here, the assessment has been framed under section 153A on the basis of alleged incriminating material (being the statement recorded under 132(4) of ....
Section 132 of the Act, during a raid, the authorized officer is empowered to examine any person found in possession or control of undisclosed material and record his statement, and such statements recorded can be used in evidence in any subsequent proceedings initiated against such
found during a search under Section 132 or requisition under Section 132A and held that such statements in the absence of incriminating material cannot form basis for quantification. ... Naresh Kumar Agarwal1, wherein it was held that statements recorded under Section 132(4) cannot be treated as conclusive evidence and are akin to statements recorded#....
found during a search under Section 132 or requisition under Section 132A and held that such statements in the absence of incriminating material cannot form basis for quantification. ... Naresh Kumar Agarwal1, wherein it was held that statements recorded under Section 132(4) cannot be treated as conclusive evidence and are akin to statements recorded#....
section 132 or requisition under section 132A or not, i.e., whether any addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132 A of the Act, 1961 or not. ... Here, the assessment has been framed under Section 153A on the basis of alleged incriminating#....
Likewise, insofar as the retraction (as noted above) was concerned, the Tribunal noted that in the letter dated 24.03.2017, it had only been indicated that to avail benefits under the Pradhan Mantri Garib Kalyan Yojna (PMGKY) Scheme, it had offered to pay tax on Rs.50 crores, which was later modified to Rs.30 crores. Based on this, the Tribunal concluded that there was "no confession" made by Mr Arpesh Garg that unaccounted income had been introduced by the assessee in the form of share capital. Therefore, according to the Tribunal, the statement made under Section 132(4) of the Ac....
Whereas in this case no material seized from accused nor any incriminating statements were recorded from accused to contend that same is admissible under Section 132(4) of the Income Tax Act. 42. In Babita Lila and another Vs. Union of India [2016 (9) Supreme Court Cases 647] the Honourable Apex Court held that despite incriminating statements were recorded during search by Income Tax Officer, the Deputy Director is not competent to lodge complaint. In Jayappan Case, incriminating evidence including statements under Section 132(4) of the Income Tax Act was recorde....
Harjeev Aggarwal, (2016) 290 CTR 263 and submitted that mere statements made during the course of the search, under Section 132 (4) of the Act, cannot be considered to be incriminating material. Fifthly, statements recorded under Section 132 (4) of the Act of the Act do not by themselves constitute incriminating material as has been explained by this Court in Commissioner of Income Tax vs. Lastly, as already pointed out hereinbefore, the facts in the present case are different from the facts in Smt. Dayawanti Gupta vs. CIT (supra) where the admission by th....
The Revenue had not contested the said finding as being perverse and thus, the said finding could not be disturbed. 11. Mr. Salil Aggarwal, learned counsel for the Assessee submitted that the Income Tax Authorities had not found any incriminating material during the search conducted at the premises of the Assessee, which would be relevant for making the addition of Rs.74 lacs under a block assessment. He, emphatically, submitted that statements recorded under Section 132(4) of the Act could not be construed as evidence for the purposes of Section 158BB(1) of the Act. He fur....
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