9911796707
TMI Blog1991 (1) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... r under the U.P. Money Lending Act, 1976 vide registration No. 414. The partners of the firm Shri Raj Pal Singh and Shri Ram Autar in their individual capacity are also registered money lenders under the U.P. Money Lending Act, 1976 vide registration Nos. 365 and 388 respectively. A return of income declaring an income of Rs. 25,843 was submitted on30th July, 1983. On27th October, 1983search and seizure operations were carried out at the business premises as well as the residential premises of the partners which are situated at the same premises. The ITO completed assessment for the aforesaid year at an income of Rs. 1,88,390 under s. 143(3) on24th Feb., 1986. The assessee preferred further appeal in which the various additions made in the declared income were challenged and the appellate order was passed by the CIT(A) on3rd March, 1987. The assessee has submitted the present appeal against the various additions confirmed by the CIT(A). 3.1 Ground No. 1 Ground No. 1 relates to addition of Rs. 1,35,000 and Rs. 14,645 made on the basis of seized paper marked as Anexure-A-26 pg. 10. During the course of search this paper was found and seized from the debris in the shop premises of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the said paper which are written in English do not, in any way, relate to the assessee firm. He further contended that several other papers were found from the business premises as well as the residential premises of the partners and the handwriting of none of the seized papers is similar to that of the seized paper in question, which also supports the assessee's contention that it does not relate to the assessee-firm. The said paper does not contain the name of the firm or the name of the partner or any debtor. It is nowhere mentioned that any money was advanced by the assessee firm or by any other connected person. The fact that this paper does not, in any manner, relate to the assessee firm is also corroborated by the fact that the pawned articles, cash and stocks found during the course of search was fully found to be verifiable from the regular books of accounts and no addition whatsoever was made in the assessments of the assessee in relation to any unaccounted assets found during search. He further relied upon the decision of Tribunal in the case of Chaman Lal Dhingraa and others in ITA Nos. 815/86, and 1564/86 1563/86 dt.24th July, 1989. Our attention was invited towar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other documents shall also be presumed to be true. Such statutory provisions contained in s. 132(4A) are undoubtedly available to the Revenue even during the course of regular assessment proceedings. Similar provisions are also contained in s. 69. He also invited our attention towards the report of the Select Committee published in (1975) 99 ITR (ST) 19 at page 45 in which the Committee had observed that the powers proposed in sec. 132(2) in the Taxation Laws (Amendment) Bill, 1973 are draconian in nature. Despite this report, the Legislature in its wisdom has enacted the aforesaid provisions of s. 132(4A) and the same clearly casts the burden on the assessee to rebut the aforesaid statutory provisions contained in s. 132(4A). Such rebuttal cannot be done merely by denial by the assessee firm but the same has to be rebutted on the basis of the cogent material or other evidence. The assessee has not been able to rebut such a statutory provision and, therefore, the departmental authorities have rightly made the aforesaid additions. 3.6. It was further argued that the contention of the assessee that no undisclosed investment or assets were found during the course of search is incorre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in the case of Chuharmal vs. CIT (1988) 70 CTR (SC) 88 : (1988) 172 ITR 250 (SC) in which it was held that all that s. 110 of the Evidence Act, 1872 did was to embody a salutary principle of common law jurisprudence, viz. Where a person is found in possession of anything, the onus of proving that he was not its owner was on the person. This clearly supports the Revenue's contention that such onus lies upon the assessee that he was not the owner of the seized paper found from their possession. He also relied upon the following other judgments to support the aforesaid contentions: (1) CIT vs. Sait Khubchand Perumal (1987) 65 CTR (AP) 225 : (1988) 169 ITR 278 (AP) (2) CIT vs Bala I.M. Rao (1989) 177 ITR 114 (Mad) (3) CIT vs. Bimal Prakarh Gupta (1990) 81 CTR (P&H) 332 : (1989) 179 ITR 613 (P&H) (4) CIT vs. Soorajmal Nazarmal (1989) 79 CTR (Cal) 24 : (1990) 181 ITR 340 (Cal) (5) CIT vs. Tribunal (1988) 72 CTR (MP) 134 : (1988) 40 Taxmann 59 (MP) 3.10. As regards the judgment of Hon'ble Allahabad High Court reported in Pushkar Narayan Sarraf vs. CIT relied upon by the learned counsel for the assessee, it was contended by the learned Senior Departmental Representative that the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course of search. A similar presumption may also be made as to the correctness of the contents of the books of accounts so seized. Such presumptions are available only for the limited purpose of estimating the undisclosed income and the estimated tax liability for the purposes of deciding whether the seized assets should be seized or retained. This presumption cannot have the effect of excluding or overriding the provisions of s. 69 during the course of regular assessment proceedings. The view is fortified by the judgment of Hon'ble Allahabad High Court in the case of Pushkar Narayan Saraf vs. CIT 4.2 However, even without the availability of such statutory presumption as contained in s. 132(4A) during the course of regular assessment proceedings, the initial onus of proving that the assessee was not its owner was on the assessee, as it is an admitted fact that the said paper was found and seized from the debris in the shop premises belonging to the assessee firm. Th Hon'ble Supreme Court in the case of Chuharmal has clearly held that it is a salutary principle of common law jurisprudence that where a person was found in possession of anything, the onus of proving that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onus of proving that he was not its owner was on that person but such a presumption is a rebuttable presumption and the same can be dislodged or rebutted by such person. In the present case the assessee has categorically stated that the paper does not belong to him, the entries recorded therein do not relate to him and the same is not in the hand writing of any of the partners or employees, on any connected person. Such a denial coupled with the surrounding circumstances that the seized paper is not in the hand writing of any of the partners or employees, it does not contain the name of the assessee clearly supports the assessee's contention that the initial onus lying upon the assessee was successfully dislodged by them. The officers of the Department found this paper during the course of search conducted on27th Oct., 1983, no statement of the partners were recorded during the course of search on that date in relation to the aforesaid seized document. If any such statement had been recorded, the same has not been brought to our notice nor it finds place in the order passed by the learned departmental authorities. This paper was also not put to the assessee during the course of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2th July, 1982 to 12th Sept. 1982 has been worked out. This indicates that the figure of Rs. 1,35,000 recorded in the seized paper cannot be said to represent an unexplained investment made in the financial year 1982-83. On this account also, the addition made by the Assessing Officer and confirmed by the CIT(A) deserves to be cancelled. 4.6 Taking an overall view of the facts and circumstances of the case, we are of the view that the addition of Rs. 1,35,000 and Rs. 14,645 should be cancelled, and the same are therefore, deleted. 5. The next ground relates to an addition of Rs. 8,331 in the declared trading results. The learned counsel for the assessee. Invited our attention towards the gross profit chart the contended that in the preceding year the addition made in the declared gross profit was deleted. He further contended that addition made in the declared gross profit for the asst. yr. 1984-85 has also been deleted by the AAC vide order dt.25th Aug., 1988. It was pointed out that reliance placed on the sales tax assessment order does not support Revenue's case as according to the U.P. Sales Tax Act an assessee having turnover of Rs. 50,000 is not liable to sales-tax. The sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared by the assessee at Rs. 7,132 in the assessment year under consideration is better as compared to job receipts of Rs. 6,623 declared and accepted in the appeal for the asst. yr. 1982-83. The learned Senior Departmental Representative supported the order passed by the Departmental authorities and urged that the addition should be confirmed. 6.1. We have heard the parties and have perused the relevant chart and the orders passed by the departmental authorities. The facts relating to this item are the same as has been discussed in the assessment order for the asst. yrs. 1982-83 to 1983-84. It will be worthwhile to add that the search was made in the month of October, 1983 and assessment for asst. yr. 1982-83 and 1984-85 were completed on24th Feb., 1986after taking into consideration, the material found during the course of search. Since the facts relating the assessment year under consideration appear to be the same and no distinguishing features have been pointed out by the learned Senior Departmental Representative and the job receipts declared by the assessee is better as compared to be immediately preceding year, the addition of Rs. 2,868 made in the declared job work recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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