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TMI Blog2011 (1) TMI 1535X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.8.99, proposing the following questions: "[1] Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in not taking cognizance of provisions of section 292C of the Income Tax Act, 1961, in correct perspective as the said document was seized from the premises of the assessee? [2] Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in deleting the addition of ₹ 21,25,000/- made on account of unaccounted net profit from undisclosed business transaction, even though the addition was made on the basis of seized material? [3] Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in law in deleting add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal, who confirmed the order of the Commissioner [Appeals] and dismissed the appeal filed by the revenue. 3. During the search operation, loose paper file, being Annexure A-1 was seized from the residential premises of the assessee. Page-5 of the said loose paper file shows notings in respect of calculation of net profit of some trading activity carried out by the assessee. On the basis of the above said loose paper file, the Assessing Officer made an addition of ₹ 21,25,000/-, being net profit as worked out in the loose paper file and considered the same as assesee's own undisclosed income for the block period pertaining to the assessment year 1999-2000. The Commissioner [Appeals], in the appeal filed by the revenue deleted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, it may be presumed that the contents of such books of accounts and other documents are true. The Tribunal has also committed egregious error in holding that it is an admitted fact that the above referred additions on account of unaccounted income were made by the Assessing Officer based on loose paper file Annexure:A-1 which was seized during the course of search proceedings and adopting the figures mentioned by the assessee in the said papers. It is vehemently submitted that the Assessing Officer had determined undisclosed income not only on the basis of the seized material, but also on such other material or information as are available with the Assessing Officer and such information gathered during the course of inquiries made af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmity in the order passed by the Tribunal which calls for interference in the appeal preferred by the revenue and the order of the Tribunal deserves to be quashed and set aside. 5. We have heard Ms. M.M. Bhatt, learned Senior Standing Counsel appearing on behalf of the appellant-revenue, at length and in great detail. On perusal of the order, the Tribunal has held in paragraph-13 as under:- "13. We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. The undisputed facts of the case are that during the course of search at the premises of the assessee a medical prescription was found on the reverse of which certain figures were jotted. The A.O. was of the view that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as earned income of ₹ 21.25 lacs which was not disclosed to the Department. Hence, we find no good reasons to interfere with the order of the CIT[A]. It is confirmed and the grounds of appeal of the Revenue are dismissed." 6. The facts emerging from the record indicate that during the course of search a loose paper file annexure A-1 showed calculation of net profit of some trading activity. Such entries were made on the letter head of Doctor Shri Maganbhai Patel who had visited the family on 1.7.1999 when someone in the family was sick. The assessee had explained that the entries were not in his handwriting or in the handwriting of any of his family members. It is true that under section 132(4A) of the Act there is a presumption that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of unaccounted assets etc. which could be said to have been made out of such alleged unaccounted income. Thus, in the absence of any corroborative evidence to support the case of the revenue that the assessee had actually earned such huge income, the Tribunal was justified in upholding the deletion of the addition of ₹ 21,25,000/-. This ground of appeal therefore, does not give rise to any question of law. 7. As regards the second question, the Assessing Officer had made the addition observing that it was reasonable to estimate the initial capital employed for the business out of which the above mentioned net profit of ₹ 21,25,000/- was earned, at ₹ 15 lakhs. Since this addition is merely based on the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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