TMI Blog1994 (7) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... hs in the asst. yr. 1991-92. At the outset, it would not be out of context to mention here that the partners retracted the earlier statements for agreeing to make the additions as aforesaid. His explanation was that the search continued from 9.00 a.m. on 7th Sept., 1990 upto 3 p.m. on 9th Sept., 1990 i.e., two days and two nights. During the said search, great pressure was brought on him. Therefore, there was no alternative for him except to agree for making the said additions as aforesaid. 4. The second explanation was that the addition cannot be made merely for agreeing to make such addition. The Assessing Officer must have a basis and supporting documentary evidence to make even the agreed addition. If there is no supporting evidence or material on record, for making the addition, on the mere statement recorded at the time of search bringing pressure upon him cannot be justified. Nothing incriminating was found at the time of search. No documents or loose papers to support the additions was found. For this reason also, the additions as made aforesaid cannot stand to the test. Such addition, according to the appellant, should be deleted. 5. Thirdly, the learned representati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Shri Kishore A. Meshwani, Bombay, in ITA No. 7161/Bom/1987 for the asst. yr. 1983-84 and in the case of Shri Amilal S. Meswani in ITA No. 7162/Bom/87 for the asst. yr. 1983-84. In that case, the dispute was for making the addition of ₹ 4,90,000. The search and seizure operations were carried out under s. 132 on 27th Nov., 1986. The statement of the assessee was recorded under s. 132(4) at the time of search. The assessee offered the amount of ₹ 3 lakhs as unaccounted jewellery. Discrepancies were also found. Details of income were furnished. Regular books of account were not maintained nor they were found in the course of search proceedings. Certain money was also found at the time of search and the Department questioned the availability of that money. The net profit returned was assessed. The Tribunal held that only the profit was to be charged and not the amount offered. However, in that case, 82 items were found. In para 11 of the said order, the Tribunal clearly held that merely on the basis of assessee's offer for being taxed at ₹ 3 lakhs for unexplained jewellery as contained in his answer extracted, the assessment could not be sustained. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial point to make and confirm the addition. 11. It may be correct that even a person conducting a tea stall business at the very important and posh locality may earn much more but that does not mean that the business conducted at the tea stall at the railway station would also earn such handsome and sizeable income. The other tea stall owners of railway stations have shown comparatively similar income from their business. The turnover of the comparative cases was also nearer to the assessee's turnover. Therefore, it would be incorrect to say, even accepting lesser income in the comparative cases, the assessee does not have a case to accept either the turnover of the business or the profits as shown by it. Right from the date of filing the affidavit dt. 16th Nov., 1990, the partner of the appellant-firm submitted that his statement was recorded under s. 132(4) under the threats and coercion. The threats given and the coercion brought upon cannot be proved by furnishing documentary evidence as held by the CIT(A). The partners, S/Shri Ashok D. Shah and Pravin D. Shah had given statements. Mr. Dipchand M. Shah had not given any statement agreeing to make the addition. Not giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profit and loss of the assessee-firm and Mr. Dipchand M. Shah was only having 20% shares and therefore the statement should not be given much more importance. It was again pointed out that nothing was found from the premises of the firm. The learned representative forced the question where was the evidence to make the addition, if there was no evidence according to him, the addition cannot be made on the basis of the statement of two partners only, who gave their statement under pressure and force. The relevant points on this issue were from page 152 of the paper book. Mr. Irani cited and relied upon the decision of Delhi Bench 'A' in the case of Electra (Jaipur) P. Ltd. vs. IAC (1987) 26 ITD 236 (Del). The Delhi Bench 'A' held in that case the sole purpose of judiciary as well as of the Revenue is to get at the truth. If the truth is that the payment of commission was genuine and was dictated by the business needs, such a payment should not be disallowed merely on the ground that the evidence led was of such a nature as to create a very high degree of suspicion. The Tribunal admitted the assessee's evidence and directed to examine the payment of commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be considered for making additions. In the instant appeal also the offer made for settlement was not accepted by the Department and therefore Mr. Irani submitted that the evidence disclosed in the offer cannot be relied upon, when the offer itself was not accepted. Such an approach cannot be taken as correct and in support of this contention Mr. Irani relied on the decision of the Supreme Court in the case of State of Kerala vs. C. Velukutty (1965) 60 ITR 239 (SC). The Supreme Court held in that case on the facts that the maintenance of secret accounts in the head office does not necessarily follow that a corresponding set of secret accounts have been maintained in the branch office. Maintenance of secret accounts in the branch office might lead to an inference that the accounts disclosed did not comprehend all the transactions of the branch office. But that does not establish or even probabilize the finding that 135% or 200% or 500% of the disclosed turnover was suppressed. That could have been ascertained from other materials. The assessments were arbitrarily made by applying a ratio between disclosed and concealed turnover in one shop to another shop of the assessee. It was on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of black money has been brought on record. Mr. Singh relied upon the decision of the Patna High Court in the case of CWT vs. Rohtas Industries Ltd. (1967) 67 ITR 283 (Pat). This is again in support of not having any direct evidence. The Patna High Court held in that case in the absence of any direct evidence, a judicial or quasi-judicial Tribunal can base its conclusions on the basis of what are known as notorious facts bearing in mind the principles of s. 144 of the Evidence Act. The Assessing Officer did not find out any direct evidence, he has also not brought any notorious facts for making additions. This decision supports both the parties. 19. Then he has relied upon the decision of the Delhi High Court in the case of Raza Sugar Co. Ltd. vs. CIT (1981) 130 ITR 421 (Del) and Buland Sugar Co. Ltd. vs. CIT (1981) 130 ITR 434 (Del). Delhi High Court held in that case taking all the facts and circumstances into consideration the Tribunal found that some 'on money' on free sale of sugar was realised by the assessee- companies and that the amount added by the ITO on this account could not be said to be excessive. This decision supports the submission if there are an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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