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2015 (7) TMI 47 - AT - Income TaxUndisclosed income - addition based on information found on the computer during search - presumption u/s 292C - Apart from the fact that the specific unrelated documents were found it was vehemently argued there is no other evidence with the department to insist that the assessee had transactions with the said concern. - The assessee denied having any transaction with M/s Smridhi Sponge Ltd. and made a claim that it may have belonged to someone who may have visited the assessee’s office. - Held that:- The present case is not only a case of simple denial but the denial is on affidavit. The assessee as per record is also found to have made efforts to trace the said concern. The internet search conducted admittedly as per record has made a mention of specific Kolkata’s address as per ROC site on a specific date. Admittedly one notice was sent to it that too after a lapse of almost a year which came back unserved. It is also seen that apart from that the assessee has also made efforts to give PAN details and also the jurisdiction of the AO where M/s Smridhi Sponge was being assessed. The record demonstrates that the AO chooses to rely more on postal authorities and makes no effort to cross check the information from the AO of M/s Smridhi Sponge who admittedly had many transactions in cash with some parties. M/s Smridhi Sponge as per record was not a dummy entity but a functional thriving entity. What repeatedly emerges from the above-mentioned facts and evidences is that the assessee during the assessment proceedings and in the appellate proceedings makes an all out mammoth exercise to give the details of M/s Smridhi Sponge Ltd. and also traces the two specific cheque numbers mentioned in the seized documents which were paid by the bankers of M/s Galaxy found mentioned as “Galaxy” in the seized documents however surprisingly for unstated reasons the department sits back after issuing notices to the address provided of M/s Smridhi Sponge relying blindly on section 292C of the Act only on the rationale that the print outs had been founded from assessee’s premises and thus they necessarily disclosed the assessee’s undisclosed transactions with the said concern. The said conclusion of the tax authorities is completely misplaced on facts. A perusal of section 292C shows that a statutory presumption can be drawn where any documents is found in possession of a person in the course of a search or survey that it belongs to “such a person”. A presumption is also drawn that the contents of such a document are true. The presumption having been drawn as per law is required to be confronted and the documents as per record have been confronted. Whether the onus placed upon the assessee in a given set of facts is discharged or not has to be seen from the replies of the assessee based on facts. However, the law is well settled that the presumption is rebuttable. In the facts of the present case, the assessee has denied having any transactions with M/s Smridhi Sponge and has also denied consequently the contents of the seized document as relatable to it; the denial as per the assessment order is also on an affidavit; the particulars available in the public domain procured through the internet searches from the ROC and the official income tax sites as per print outs of the downloads are relied upon. The fact that these were unimpeachable third party evidences that too from the official government sites goes without saying. In these facts, merely sending notices to the addresses provided on the ROC site cannot be said to be rebutting the evidence on record namely that M/s Smridhi Sponge, assessed to tax in a specific jurisdiction in Kolkata manufacturing M.S.Ingot and Sponge Iron, having specific address as per ROC site receiving payments in cash and cheque as per the seized documents qua which presumption u/s 292C operates towards their correctness; wherein two specific cheques were honoured by Punjab National Bank at Jamshedpur whose account number was “1021”; , branch code and factum of the payments made on behalf of the M/s Galaxy Exports as the same “Galaxy” found mentioned at Paper Book page 47 (Seized documents) also dealing in “Iron Ore” were provided; where the names and addresses of the Directors of both the companies; their authorized share capital; details of their balance sheets as per ROC site; Auditor’s, Reporters etc. are all given. The fact that these were relevant unimpeachable evidence has not been doubted. In these facts the reluctance of the tax authorities to address this issue and to carry the enquiries to the logical conclusion is a glaring fact of deliberate inaction. The repeated inactions speak louder then the half hearted actions undertaken. The evidences remains unrebutted on record. No effort to co-relate the assessee’s alleged undisclosed transactions with M/s Smridhi Sponge appear to have been addressed so as to demolish the consistent claim on record that it had no dealings with the said concern. In such a background the departmental stand that the level of information available with the assessee proved that the assessee had interactions with the said concern is adding insult to injury. The silence of inaction speaks much louder than the frenzy of the misdirected actions necessitating a pro-active department to address the fest spreading malaise lest the tools of search and seizure are reduced to a farce. The repeated inactions speak louder than the half-hearted actions taken. We are of the view that as far as the assessee is concerned the onus to address the seized documents qua which a statutory presumption has been drawn stands fully discharged. - Decided in favour of assessee.
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