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2011 (2) TMI 1416 - AT - Income TaxUndisclosed negative peak credit - Addition on the basis of seized materials noted as A/GAR/5 - undisclosed money-lending business - materials seized on the basis of which the addition was made - assessee submitted before the lower authorities that it does not belong to him - Reliability on handwritten loose documents - HELD THAT:- The seized material A/GAR/05 found during the course of search and the statement recorded is some piece of evidence to make an addition. The AO has to establish the link between the seized material A/GAR/05 and other books of accounts of the assessee. It cannot be considered alone as conclusive evidence. The words 'may be presumed' appearing in s. 132(4A) gives an option to the authorities concerned to presume the things. But it is rebuttable and it does not give a definite authority and conclusive evidence. The assessee has every right to rebut the same by producing the same in support of his claim. The entire case depends on the rule of evidence. The assessee has every right to shift the burden of proof. There is no conclusive presumption. In the present case, the assessee as well as the assessee's son and also assessee's brother Shri S.K. Agarwal categorically stated in every stage of examination and statement recorded under s. 132(1) or 132 that the seized material A/GAR/05 did not at all belong to them. In spite of this the AO proceeded to conclude that these seized materials conclusively belonged to the assessee. Leave alone the issue relating to authorship of the document seized and the findings of the GEQD, the Department should find out and establish the nexus of these seized materials to the assessee's business while concluding block assessment. In the present case the assessee is having grievance for not providing the opportunity of cross-examining the parties whose statements were relied on by the AO while completing the assessment. The circumstances surrounding the case are not strong enough to justify the rejection of assessee's plea asking the opportunity of cross-examination. In view of this, we set aside the block assessment order and remand back the matter to the file of the AO. The AO is directed to give an opportunity of cross-examination of the parties as required by the assessee and thereafter if there is any sufficient evidence other than the unsubstantiated note book/loose slips marked as document A/GAR/5 or if this document (viz., A/GAR/05) is substantiated by any other evidence to establish that the assessee is having undisclosed income, then the AO shall complete the assessment in accordance with law determining the undisclosed income covering this block period in addition to the other undisclosed income uncontested before us. The appeal of the assessee is allowed for statistical purposes.
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