Sworn Statement Recorded u/s 132(4) of IT Act Can Be Relied Upon in Proceedings Under PBPT Act

Case Details: K. R. Radhakrishnan v. Initiating Officer, Kochi - [2024] 166 taxmann.com 662 (SAFEMA-New Delhi)

Judiciary and Counsel Details

• Munishwar Nath Bhandari, Chairman & Balesh Kumar, Member
• Shameem Ahamed, Adv. for the Appellant.
• Kanhaiya Singhal, SPP, for the Respondent.

Facts of the Case

Assessee was engaged in agricultural activities and running the business of a poultry farm. He was working as a part-time employee also with one M.R. Traders. A search was conducted in the business premises of M.R. Traders by the Income Tax Department. During the search, the statement of the assessee was recorded. He was asked about the investment made by M/s M.R. Traders in the name of the assessee.

In the statement, the assessee gave details of the vehicle and the properties in his name. On the basis of the sworn statement provided by the assessee under section 132(4) of the Income Tax Act, the Initiating Officer initiated proceedings under the Prohibition of Benami Property Transactions Act, 1988, by issuing a notice u/s 24(1) of the Act.

In response to the show cause notice, the assessee submitted documents showing the source of income from agricultural activities and the poultry farm. All the properties in the assessee’s name were out of the savings, loan and income from agriculture apart from the poultry farm. However, ignoring the aforesaid, all the properties in the hands of the assessee were taken to be Benami after holding its beneficial owner to be one Rajesh of M.R. Traders.

The Initiating Officer passed the order, which was confirmed by the Adjudicating Authority. Later, the assessee filed an appeal before the Appellate Tribunal.

Appellate Tribunal Held

The Appellate Tribunal held that the sworn statement recorded u/s 132(4) of the Income Tax Act can be relied upon in proceedings under the Prohibition of Benami Property Transactions Act, 1988 and the authorities are not under an obligation to record a separate statement by holding an enquiry.

Further, the Adjudicating Authority rightly clarified the position to hold it as a case of a Benami transaction. Therefore, each aspect of the matter was considered by the Adjudicating Authority, and finding only lame excuses taken by the appellant, the arguments were not accepted. There is no error in the order, and otherwise, a detailed discussion of each issue has been made. However, finding no merit in any of the issues, the appeals there fail and are dismissed.