JUDGMENT 1. We have heard learned counsel appearing for the parties. 2. The special appeals are directed against the orders dated January 29, 1999, passed by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (for short, "the Tribunal"), by which the Tribunal has partly allowed the appeals filed by the assessee and dismissed the appeals of the Revenue. 3. The appeal was admitted on the following substantial questions of law : "1. Whether the statement recorded under section 132(4) of the Income-tax Act can be ignored or overlooked, which is free from any ambiguity or extraneous circumstances ? 2. Whether the normal course of assessment under section 143(3) cannot be adopted and, accordingly, estimate of income of the entire period on the basis of bills/vouchers found for a few days or part period can be made as the assessment in this case relates to pre-block period assessment ? 3. Whether the Income-tax Appellate Tribunal was justified in approving finding of the Commissioner of Income-tax (Appeals) which has no reasonable basis for reaching to conclusion about estimate of sales from Rs. 7,59,000 to Rs. 5 lakhs only ?" 4. The assessee-firm derived income from trading of silver ornaments and also pawning of gold and silver ornaments. It maintained two separate trading accounts ; one for silver ornaments and another for silver bullion. On a search carried out at the business premises and also the residential premises of the partners on October 10, 1990, two diaries indicating the credit sales, out of the regular books, were found and seized. These diaries started on April 1, 1990. The diaries relating to any earlier years were not found. At the time of search, statements of the partners of the assessee-firm were recorded under section 132(4) of the Income-tax Act, wherein the partners surrendered an amount of Rs. 6,13,080, which represented the entries in the two diaries relating to unaccounted credit sales. Notices were issued under section 148, on which the revised return for the current year 1989-90) was filed, in which the assessee surrendered Rs. 2,28,540. The Assessing Officer assessed the total unexplained income for the four years at Rs. 8,92,268. In appeal before the Commissioner of Income-tax (Appeals), the addition of Rs. 5,08,500 was made, and the relief was given for the remaining amount. 2,28,540. The Assessing Officer assessed the total unexplained income for the four years at Rs. 8,92,268. In appeal before the Commissioner of Income-tax (Appeals), the addition of Rs. 5,08,500 was made, and the relief was given for the remaining amount. The details of the revised returns, assessments and the orders upheld by the Commissioner of Income-tax (Appeals) are given as follows : Assessment year Filed by the assessee Assessed Finally upheld by the CIT(A) 1990-91 1,52,690 2,74,750 1,75,000 1989-90 55,430 2,67,168 1,76,000 1988-89 14,020 1,84,100 87,500 1987-88 6,400 1,66,250 70,000 2,28,540 8,92,268 5,08,500 5. The Commissioner of Income-tax (Appeals) held that the grievance of the appellant was that the additions made were totally unjust, in regard to the recorded transactions. The appellant had maintained different details, by way of books of account, bills, etc. The decline in the gross profit was due to the fluctuation in the market, and thus, there was no justification in observing that trading addition was required, relating to books of account maintained by the appellant. With regard to the additions made, it was held that the appellant had surrendered the amounts on the basis of peak investment. The unrecorded sales were reported to be higher than the amount surrendered for peak investments. 6. The Commissioner of Income-tax (Appeals) found that in view of the provisions of section 145, the estimation was justified, and there was no infirmity, however, the estimations so made, in regard to the unaccounted transactions were on much higher side and found that it would be fair and reasonable, if unrecorded sales are directed to be taken at Rs. 5 lakhs, and the gross profit at 35 per cent on the estimated addition was deleted. 7. It is submitted on behalf of the Revenue that the appellate authority as well as the Tribunal have grossly erred in law, inasmuch as they could not have reduced the amount, in view of the clear and unequivocal surrender made by the assessee. He has relied on V. Kunhambu and Sons v. CIT (1996) 219 ITR 235 (Ker) , in which the Kerala High Court held that considering the income from undisclosed sources and on a surrender made in the premises, the assessment on the basis of the voluntary statement was valid. He has relied on V. Kunhambu and Sons v. CIT (1996) 219 ITR 235 (Ker) , in which the Kerala High Court held that considering the income from undisclosed sources and on a surrender made in the premises, the assessment on the basis of the voluntary statement was valid. The Kerala High Court, considering the import of section 132(4), held that it does not change the substantive provision of the Act nor does it lay down a different method of using the statement recorded under sub-section (4) of section 132 of the Act. Sub-section (4), which permits interrogation of persons not only in relation to the books of account, etc., found as a result of the search but also on any other matter, relevant for any proceeding under the Act. 8. In the present case, the Tribunal held that the assessments, on estimation, were not permissible, on the face of the material, which was found during the search, and statement made by the assessee. The assessing authority went beyond the material and the statement in making assessment on a higher side, on the basis of estimation. 9. Learned counsel appearing for the assessee relied upon the statement made by the assessee, from which we find that, at the time of recording statement making surrender, the assessee had stated that such surrendered amount may be adjusted from the sales, in the statement of accounts, which have been recorded in the blue and red diaries, which were seized. 10. After the seizure on October 10, 1990, the chartered accountant of the assessee had sent a clarification on December 8, 1990, with regard to the surrender that the entire surrendered amount of Rs. 9,32,107 was coupled with the statement that the amount may be verified from the credits entered in the diaries. The chartered accountant clarified the statement, with an observation that the surrendered amount must be subject to the verification of the credits entered in the diaries and thereby reducing the amount surrendered to that extent. He had further explained that the amount worked out was on the peak investment, for which working had been done by arranging transactions entered in the diaries in historical sequence in a details statement. The statement included both the unexplained and surplus resulted from such transactions. The total unexplained investment, according to the chartered accountant, worked out to Rs. 6,13,080 as against Rs. The statement included both the unexplained and surplus resulted from such transactions. The total unexplained investment, according to the chartered accountant, worked out to Rs. 6,13,080 as against Rs. 9,32,107 arrived by merely roughly adding the sums mentioned in diaries irrespective of it being a debit entry or credit entry. Further, surplus of cash according to working statement, comes to Rs. 1,52,407. 11. We do not find any force in the submission of the learned counsel appearing for the Revenue that the surrender was unconditional, without any explanation, or that, the assessee had agreed, at that time to add the entire surrendered amount to his income. He had clearly mentioned that the amount surrendered, as reflected in the red and blue diaries, should be accounted, subject to the verification of credits entered in the diaries, and thereby, reducing the amount of surrender, to that extent. 12. We do not find any error in the findings of the Tribunal, that the statements made during search, must be correlated with the records, which are found, and if there is any ambiguity, the explanation given by the assessee should be taken into consideration, before making the assessment. The legal position with regard to the undisclosed income from the diaries, does not need any elaboration, however, if the material found during the search, does not tally with the statement records, and that the statement is made subject to the material, which has been seized, a conscious effort should be made to consider the effect of the statement and to make an appropriate assessment by correlating the statements with due material. 13. Learned counsel appearing for the respondent has relied on Swaroop Chand Kojuram v. CIT (1999) 235 ITR 732 (Raj) and CIT v. Pushpa Raj Mehta (1999) 237 ITR 638 (Raj) . In both these cases, decided by a Division Bench of this court, it was held that the method of computation of income does not raise any question of law, much less, substantial question of law, to be considered by the court. Since the appeal has been admitted, we have examined the questions. 14. We are satisfied that the Commissioner of Income-tax (Appeals) had after taking into account the statement of the assessee, in which he had surrendered the income and having referred it to the books of account, disagreed with the quantum of the additions made by the assessing authority. Since the appeal has been admitted, we have examined the questions. 14. We are satisfied that the Commissioner of Income-tax (Appeals) had after taking into account the statement of the assessee, in which he had surrendered the income and having referred it to the books of account, disagreed with the quantum of the additions made by the assessing authority. The assessment made by the Commissioner of Income-tax (Appeals) was not found to be incorrect by the Tribunal and, thus, the questions raised by the Revenue are returned in favour of the assessee and against the Revenue. 15. All the Income-tax appeals are, accordingly, dismissed.A copy of this judgment be placed in all the connected files. *******