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A search by the income tax party is followed by recording of statement u/s 132 (4) of persons searched.


In dismissing the SLP of the taxpayer in [2023] 452 ITR 229 (SC) the Supreme Court confirmed the order of the High Court which stated that statement recorded under section 132(4) of the Act and later confirmed in statement recorded under section 131 of the Act, cannot be discarded simply by observing that the assessee has retracted the same because such retraction ought to have been generally made within reasonable time or by filing complaint to superior authorities or otherwise brought to notice of the higher officials by filing duly sworn affidavit or statement supported by convincing evidence. Such a statement when recorded at two stages cannot be discarded summarily in a cryptic manner by observing that the assessee in a belatedly filed affidavit has retracted from his statement. Such retrac- tion is required to be made as soon as possible or immediately after the statement of the assessee was recorded. 


Duration of time when such retraction is made assumes significance. In this case the retraction has been made by the assessee after eight months. Order of the Jaipur bench of Tribunal got reversed as the Supreme Court in their order wrote “we are in complete agreement with the view taken by the High Court. “ 



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