Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2008 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2008 (4) TMI 341 - ITAT CALCUTTA-BRebuttable presumption u/s 292C - Undisclosed income - Search & Seized u/s 132 - during the course of search of the residential premises - documents were found and seized under identification mark AKG/3 - evidence of unaccounted profit of the appellant - addition made by the AO on the basis of AKG/3 can be sustained or not - Computation of Gross profit - without considering the opening Stock - closing stock has been considered for arriving at the GP - the profit worked out therein is not true profit. HELD THAT:- It is evident that s. 292C is a presumptive provision where certain facts are to be presumed by operation of law. However, it is a settled law that such presumptions are rebuttable presumptions. As per cl. (i), it is to be presumed that the books of account or documents belong to the person from whose possession or control these were found As per cl. (ii) it is to be presumed that the contents of the documents are true. Now the papers were found from the bedroom of Sri Arun Kumar Goenka. However, Sri Arun Kumar Goenka is not carrying on any business in his individual capacity. He is director of NFPL and his wife is partner in NC. The presumption under s. 292C is rebuttable presumption and the document has to be considered considering the totality of the facts of the case. The deeming provision cannot be applied mechanically ignoring the facts of the case and the surrounding circumstances. In view of the above, we reject the contention of the learned counsel that as per s. 292C the papers are to be considered in the case of Sri Arun Kumar Goenka and not in the case of either NC or NFPL. As per the presumption of the AO, the assessee is carrying on the business of purchase and sale of saree outside the books on large scale which has resulted in the huge income which is not recorded in the assessee's books of account every year. However, during the course of search of the assessee's premises, no unrecorded stock, cash or other assets were found. The Revenue has searched the business premises of the firm/company as well as the residential premises of the partners/directors. Not a single evidence of purchase or sale outside the books is found. In our opinion, it is impossible to carry on business on a huge scale outside the books unless there is some unrecorded stock, cash, debtors, etc. Moreover, if the assessees had huge unrecorded income of crores of rupees in each year, it would have reflected in the form of asset or some expenditure outside the books. No significant asset outside the books or no evidence of ostensible expenditure outside the books is found. In the above circumstances, we cannot uphold the additions made by the AO in the case of both the assessees for the assessment years under consideration on the basis of loose papers by making certain presumptions which are found to be untenable or contrary to the other evidence on record. In view of the above, we delete the additions made by the AO and confirmed by the CIT(A) on the ground of alleged undisclosed net profit outside the books. It is evident that before Settlement Commission it was never admitted by the assessees under appeal that the seized documents represent undisclosed income, on the other hand it has been contended that the seized documents cannot be relied upon to work out the true profit. Therefore, the argument of the ld DR that the huge undisclosed income was offered on the basis of loose papers before Settlement Commission is not based on any actual facts. In the result, all the appeals filed by the assessee are allowed.
|