9911796707
TMI Blog2005 (7) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... in confirming the addition of Rs. 1,85,900 representing the difference between purchase price of the first floor of the house property at Athugar Street, Nanpura, Surat, as recorded in the seized diary and the purchase price shown in the agreement for purchase of the said property?" The assessment year is 1984-85 and the relevant accounting period is S.Y. 2039. The assessee filed return of income on June 30, 1984, declaring total income of Rs. 37,510. The said return was accepted under section 143(1) of the Act, vide order made on January 21, 1987. On November 6, 1985, the residential premises of the assessee were subjected to search and seizure proceedings under section 132 of the Act. A notice came to be issued under section 148 of the Act and was served on March 31, 1989. The assessee submitted a return of income in response to the aforesaid notice and declared identical income as was shown in the original return of income. During the course of search proceedings one diary, viz., a telephone diary, consisting of 53 pages came to be seized. The following note appeared on the last page of the said diary: "S.Y. 2039 Sravan-sud-5 and Saturday dated 13-3-83 (August), the first fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that the first challenge as to initiation under section 147(a) of the Act was not pressed. The assessee carried the matter in appeal before the Tribunal. The issue regarding challenge to initiation of proceedings under section 147(a) of the Act was specifically raised and urged before the Tribunal. However, the Tribunal rejected the said contention holding that the assessee, having waived the contention before the first appellate authority, could not be permitted to reagitate the same contention before the Tribunal. The Tribunal also rejected various contentions raised on the merits of the addition for the reasons stated in its order dated March 9, 1992. Assailing the order of the Tribunal it was urged by Mrs. Soparkar that the Tribunal had committed an error in law in not permitting the assessee to agitate the ground regarding initiation of reassessment proceedings, that the said issue was a legal issue and went to the root of the matter, that it was incumbent upon the Tribunal to deal with the same on the merits. The assessee could not have been non-suited on the ground that the assessee had given up the said contention before the first appellate authority. In support of he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G as prescribed under the Income-tax Rules, 1962, but no acquisition proceedings had been commenced by the Department. On the basis of this, it was contended that the respondent ought to have undertaken an exercise to correctly evaluate the market value of the property before treating the amount mentioned in the noting on the last page of the diary as being the sale consideration. She placed reliance on the decision of the apex court in the case of Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 (SC) and the decision of the High Court of Assam in the case of Raj Mohan Saha v. CIT [1964] 52 ITR 231 with special reference to the observations at page 234 of the report. She, therefore, urged that the Tribunal's order was not only erroneous but was one which no reasonable person can make in the facts and circumstances of the case and was, therefore, required to be set aside deleting the addition in toto. Mr. B.B. Naik, appearing on behalf of the respondent, submitted that the Tribunal had recorded various findings of fact after appreciating evidence on record and no interference was called for. He, therefore, urged that the Tribunal's order be upheld. In so far as question No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n so far as question No. 2 is concerned, the facts on record go to show that the assessee cannot succeed. The original assessment had been completed under section 143(1) of the Act accepting the returned income. Though this order was made on January 21, 1987, and the search proceedings took place on November 6, 1985, there is nothing on record to show that while framing the original assessment the assessing authority had any material before it which would indicate that there was escapement of income. As recorded in the assessment order it is only subsequently on the perusal of the seized diary that the Assessing Officer came in possession of the information and thereafter verification of the assessment record was carried out. Noting in the diary constituted sufficient information for the assessing authority to form a prima facie opinion that there was escapement of income by either non-declaration of correct sale consideration or there was furnishing of inaccurate particulars as regards sale consideration. Therefore, the Tribunal was justified in holding that the assessee had failed to disclose fully and truly all material facts, necessary for the assessment of the relevant assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial year. In the present case the value of the property reflected in the noting in the seized diary is in excess of the value reflected in the books of account and the explanation offered by the assessee has not been found to be satisfactory by the authorities below and the Tribunal. In these circumstances, the authority is statutorily empowered to deem the difference as income of the assessee for the year under consideration by exercise of the discretion vested in the authority having regard to the attendant facts and circumstances. The Tribunal has rightly taken note of the fact that except for denying as to who is the person who has made noting in the diary neither the assessee nor her husband have indicated the name of the person who had written such a note in the seized diary. It is apparent that such a person could be only a person closely connected with the assessee or her husband and in whom the assessee or her husband would repose confidence so as to permit such a person to make noting of such a nature. Therefore, the statement by the assessee and her husband that they are not aware of the person who had made noting is not acceptable being against human probabilities and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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