2012 (8) TMI 367 - DELHI HIGH COURT

Search and seizure - suppression of sale - assessee recorded two rates on the papers found whereas in the bills it had accounted only for the lower rate - Tribunal upheld deletion made by CIT(A) on ground that no evidence was found to show that the actual turnover of the assessee was more than the declared turnover - Held that:- Unlike Chapter XIV-B, Section 153A does not provide that a search assessment has to be made on the basis of evidence found as a result of search or other documents and such other materials or information as are available with the Assessing Officer and relatable to the evidence found.

In present case, CIT (Appeals) found that the assessee did record two rates as found from the seized papers, but entered only the lower rate in the sale bills, and has agreed with the AO that the book results deserved to be rejected u/s 145 and an estimate of the true income earned by the assessee had to be made. However, he misdirected himself in not upholding the turnover as estimated by the AO and accepted the turnover provided by assessee. Tribunal also while upholding action of CIT, erred in looking for some other corroboration to substantiate the contents of the loose papers, overlooking that the loose papers needed no further corroboration and the sale bills compared with the seized papers themselves corroborated the suppression of income. Tribunal ought to have examined the estimate made by the AO. The observation of the Tribunal that no evidence was found to show that the actual turnover of the assessee was more than the declared turnover is hair splitting.

The decision making process is as important as the correctness of the decision itself. Merely because the correctness of the decision appears unquestionable, the serious flaws or gaps in the steps that constitute the judicial decision making process cannot be overlooked. Question answered in favour of the Revenue by passing the order of remit to the Tribunal.