TMI Blog1999 (3) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ompleted under s. 158BC of the IT Act, 1961 for the block period 1987-88 to 1997-98. The assessee is in appeal against the block assessment framed by the AO. Four grounds have been raised. The same are discussed and disposed of as follows: 3. Ground No. 1 read as under: "The learned Asstt. CIT erred in holding, without any evidence that there was escapement of sales for the period 1st Jan., 1986 to 2nd Nov., 1986 (Asst. yr. 1987-88) merely because suppression was found in the seized books for subsequent period. There is no presumption in law that if subsequently there was suppression, there must be such suppression in earlier year and the onus to prove such presumption was on the Department. The learned CIT erred m putting a negative burden on the appellant not realising that appellant could not prove the non-existence of a fact. The net profit for asst. yr. 1987-88 at Rs. 1,24,265 calculated on this presumptive basis, is not justified. The said addition may kindly be deleted." During the course of search and survey operation, it was found that the assessee-firm was suppressing sales. For the asst. yr. 1987-88 as per the seized documents, the suppressed sales pertained to onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch. This section does not provide a licence to the Revenue for making roving enquiries connected with the completed assessments. It is beyond the power of the AO to review the assessments completed unless some direct evidence comes to the knowledge of the Department as a result of search which indicates clearly the factum of undisclosed income. Without such evidence of material the AO is not empowered to draw any material presumption as to the existence of undisclosed income. A presumption is an inference of fact drawn from other known or proved facts. It is the rule of law under which Courts are authorised to draw a particular inference from a particular fact, until and unless the truth of such Chapter XIV-B does not give power to the Revenue to draw the presumption in regard to the undisclosed income. The AO could proceed on the basis of material detected at the time to search and the evidence gathered." Thus, there is no scope for presumption in the statute inasmuch as the provisions under Chapter XIV-B are concerned. The maxim of English Law as propounded by Holroyd, J. prescribes: "It is better that ten guilty men should escape rather than one innocent should suffer". The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifurcation as to the holding of each member concern could not be given by Girish M. Kamat at the stage of recording his statement on 5th July, 1996. He was directed to produce 45 persons in whose names the FDRs were made. He stated in answer to question No. 8 that all the 45 names are fictitious and therefore, he could not produce them or give then addresses. He was asked to explain the sources of Rs. 12 lakhs made in 45 fictitious names. He stated that the source of investment was out of business concerns of Kamat Group. Later on his written reply dt. 29th May, 1997 Shri Girish M. Kamat gave personwise investment as under: ------------------------------------------------ Name of the concern Amount of FD FDR No. (Rs.) ------------------------------------------------ M/s Hotel Vrindavan 5,00,000 603 to 624 628 to 630 M/s S.N. Construction 3,40,000 631 to 644 668 to 670 Shri M.V. Kamat 2,00,000 658 to 667 Mrs. P.M. Kamat 20,000 645 Shri G.M. Kamat 1,40,000 671 to 677 ------------------------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atively, he argued that even if on the basis of paper seized during the search and placed at p. 2 of the paper, the amount of Rs. 12 lakhs should be assessed in the hands of the assessee on proportionate basis. 11. We have considered the rival submissions and perused the facts on record. From question No. 4 and reply to it in the statement of Shri Girish M. Kamat it is evident that the FDRs aggregating to Rs. 12 lakhs with Mahaveer Pat Sanstha did not belong to Shri Girish M. Kamat but to the concern of Kamat group. This fact is also further clear from the seized paper placed at p. 2 of the paper book. In our view this is not a dump paper. Its contents speak for themselves. As pointed out above, on the right side of the paper, it is written the name of Mahavir Pat and FDR 12L meaning thereby Rs. 12 lakhs. On the other side of the paper are given the names of concerns of Kamat group and the name of the assessee i.e., Vrindavan promptly appear on the left side of the paper book. The paper has to be read as a whole. It cannot be read in bits. On the basis of the contents of the paper, the assessee declared as sum of Rs. 5 lakhs on account of FDRs with Mahaveer Pat Sanstha as undiscl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egular books of account are discarded because of the seized materials and the seized material is not a complete record of all the unaccounted transactions, then the estimate of undisclosed income can be made by applying the provisions of ss. 145 and 143(3) of the IT Act, 1961. In that case, it was found by me as a fact that seized material was not a complete record of the unaccounted transactions, but was a mere compilation of such transactions. In view of such fact, the estimate of undisclosed income was held to be justified in principle. However, in the present case, the said legal principle cannot be applied because of the distinguishable facts. In the present case, the seized material is a complete record of unaccounted sales and purchases from 3rd Nov., 1986, to the date of search. Such seized material is in the form of diaries, which were in continuity right from 3rd Nov., 1986, till the date of search. There is no material whatsoever to suggest that there was any transaction outside the books of account prior to 3rd Nov., 1986. In view of these distinguishable facts, I completely agree with the conclusion arrived at by my learned brother on this issue. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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