TMI Blog2011 (8) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... quired. - IT Appeal No. 2756 of 2005 - - - Dated:- 29-8-2011 - N. Kumar and Ravi Malimath, JJ. M. Thirumalesh for the Appellant. A. Shankar and M. Lava for the Respondent. JUDGMENT N. Kumar, J. This is a Revenue's appeal challenging the order passed by the Tribunal deleting the addition of Rs. 41,01,000/- as undisclosed income and levying income tax on the said amount. 2. The assessee is a prastising Chartered Accountant, A search was conducted in his residential premises on 30-11-2000. The diaries maintained by the assessee from 1-4-1990 till 31-7-1997 were found. The said diaries contained recording of various financial transactions. Apart from noting the transactions, at the end of every month the assessee dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er(Appeals). The appellate authority gave deduction of debt pertaining to a sum of Rs. 8,27,000/- and declared regular income of Rs. 1,62,107/- and held that undisclosed income is Rs. 39,38,900/-. To that extent the appeal was partly allowed confirming the order of the assessing authority. Aggrieved by the same, the assessee preferred an appeal to the Tribunal. The Tribunal held that the assessing authority was not correct in accepting some portion of diary and not accepting the remaining portion. In the absence of existence of material found during search and what is found in the diary the contents of the diary has to be accepted as correct and accordingly addition under Section 68 is not tenable in law. Further the Tribunal held that when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said dairy discloses the money lending transactions that is, amounts received, the amount paid and also the bad debts which is written off by the assessee. The said receipts had two components one received by cheque and another received by cash. The assessing officer has accepted the case of the assessee insofar as the amounts that were covered by cheque. It is the cash component which is held to be not substantiated by examining the persons who lent money and who received the money. The assessing authority has not accepted the writing off of all the debts. It is because of such computation the assessee is found to have not disclosed the income to the extent of Rs. 39,38,900/-. In the appeal proceedings the assessee has produced the certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed income. Similarly, in the very same account books, the assessee has written off the debts which was due to him. In view of amendment to Section 36(1)(vii) the obligation to prove that it is a bad debt and producing evidence is not required. Therefore, the Tribunal held that once in the very books of accounts of which the Revenue once assessed the assessee it is clearly recited that an amount of Rs. 43,70,000/- lakhs is bad debt till the date of search, it ought to be given a deduction. Therefore, the order passed by the Tribunal is in accordance with law and does not suffer from any infirmity which calls for interference. 6. Accordingly, the substantial questions of law in this appeal are answered in favour of the assessee and aga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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