TMI Blog2011 (7) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it is stated that on the instructions of the father, the son had written them in the diary. The appellate authority as well as the Tribunal had failed to take note of the applicability of section 132(4A) to the present case as it was specifically enacted to the purpose of search and seizure, instead they had relied on the general provision of section 132(4) of the Act. Section 132(4A) does not prohibit the Assessing Officer from drawing a presumption when the case falls under the case of search and seizure. Hence, presumption, raised by the AO with regard to the seized diary is a valid one and it was very much available to be raised u/s 132(4A) - Decided in favor of Revenue - 151 of 2008 - - - Dated:- 7-7-2011 - ELIPE DHARMA RAO, VENUGOPAL M., JJ. JUDGMENT Elipe Dharma Rao J.- 1. The present appeal is preferred against the order of the Income-tax Appellate Tribunal, Madras "A" Bench, dated January 19, 2007, in IT (SS)A. No. 60/Mds/2003 for the assessment year : block period April 1, 1989, to March 16, 1999. 2. The following substantial question of law has been formulated at the time of admission of the appeal : "Whether, on the facts and in the circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and dismissed the appeal filed by the Revenue. Aggrieved by the order of the Tribunal, the Revenue has come forward with the present appeal. 4. Learned standing counsel for the Revenue contended that on account of purchase of land by the assessee, when there are incriminating documents found during the search showing a higher value when the documents relating to the purchase showing a lesser figure, the Tribunal ought not to have deleted the addition made by the Assessing Officer. It is the specific case of the learned standing counsel that the diary seized at the time of search had disclosed that the Trichur property had been purchased for Rs.29 lakhs, whereas in the assessment order relating to the block period a lesser value has been shown, i.e., Rs. 14 lakhs and, therefore, on the basis of the aforesaid diary, the Assessing Officer has correctly assessed the difference sum of Rs. 16.30 lakhs as addition and passed the order to the said effects. According to him, since the order passed by the Assessing Officer is based on the materials on record and a finding on facts it ought not to have been interfered by the Commissioner of Income-tax (Appeals) and the Tribunal. He has fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record, it is seen that the assessee is a partnership firm of which (1) Mr. K. A. Velayudhan, (2) Mr. K. V. Sukumaran, and (3)Mr. K. V. Vijayaraghavan, the former being the father and the latter being the sons, are partners. Till 1970's, the firm used to manufacture its own appalams and sell them, but, presently, the appalams are manufactured by individuals and brought to them and the assessee-firm sells the same with their name and logo. Apart from the trade in appalams the concern also manufactures various eatables and sells them through their outlets. While so, by action under section 132 of the Act, on March 16, 1999, the residential premises of the partners of the firm and other business concerns were searched and various acquisitions made by the partners of the firm relating to both movable and immovable properties were brought to light. Thereafter, a notice dated July 26, 1999, under section 158BC of the Act was served on the firm on July 28, 1999, calling for the block return under section XIV-B of the Act. Since there was no response to the notice, the assessee was requested to file the block return by letter dated October 26, 1999. Block return admitting an undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. This ground now raised by the assessee was not raised either before the Commissioner of Income-tax (Appeals) or before the Tribunal. The transactions being done by the partners of the firm should be treated as the transactions being done by the firm. Therefore, the contention that the assessee-firm is not liable to be assessed cannot be accepted and it is liable to be rejected. 11. The allied contention of the assessee that the partners have shown the transaction in their individual returns also cannot be accepted for the reason that the Assessing Officer has individually gone into the returns submitted by the partners and calculating the assessee's share and in corroboration with the entries found in that seized diary had come to a factual conclusion that the assessee had not disclosed the actual value of the lands purchased. This finding of the Assessing Officer was sought to be distinguished by the Commissioner of Income-tax (Appeals) that since the assessee had admitted the total undisclosed income of Rs. 90 lakhs though he had declared the undisclosed income to the extent of Rs. 74,85,015, the assessee is not liable to pay the addition arrived at by the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a presumption can be drawn without conducting an enquiry. Learned standing counsel for the Revenue by drawing our attention to section 132(4A) of the Act the contention that as per section 132(4A) a presumption can be drawn that the contents of the diary are true, when such diary is seized from the possession of any person in the course of search. Section 132(4A) which came into effect on October 1, 1975, is to the following effect : "(4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed - (i) that such books of account, other documents, money bullion, jewellery or other valuable article or thing belong or belongs to such person ; (ii) that the contents of such books of account and other documents are true ; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate that the presumption provided under section 132 which is a self-contained code for search and seizure and retention of books, etc., can be raised for the purposes of framing of the regular assessment as well. Wherever the Legislature intended the presumption to continue, it has provided so. Reference may made to section 278D of the Act which provides that where during the course of any search under section 132, any money, bullion, jewellery or other valuable articles or things or any books of account, etc., are tendered by the prosecution in evidence against the person concerned, then the provisions of subsection (4A) of section 132 shall, so far as may be, apply in relation to such assets or books of account or other documents. This clearly spells out the intention of the Legislature that wherever the Legislature intended to continue the presumption under sub-section (4A) of section 132, it has provided so. It has not been provided that the presumption available under section 132(4A) would be available for framing the regular assessment under section 143 as well. This is also evident from the fact that whereas the Legislature under section 132(4) has provided that the book ..... X X X X Extracts X X X X X X X X Extracts X X X X
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