TMI Blog2005 (7) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee ?" 2. The brief facts of the case are as follows : The applicant/assessee (hereinafter referred to as "the assessee") is a Hindu undivided family and was engaged in the sarrafa business and also had income from property and agriculture. The Income-tax Department conducted a search at the business and residential premises on September 23, 1976. 3. In the search conducted by the Department, considerable ornaments and bullion were found both at the shop as well as at the residence, some of which were also seized. Besides the above, the officers also seized a cash book in the search. The Commissioner of Income-tax (Appeals) referred to it as a Kachchi cash book. The reading by the Tribunal of the cash book did not lead to any such conclusion. According to the Tribunal, it was a normal cash book, except with the interpolations, which will be discussed a little later. 4. In the course of assessment proceedings, the Income-tax Officer found several abnormal features in the maintenance of the books of account as well as in the activities of the assessee. He found that the assessee had disclosed a profit of Rs. 19,714 on the sale of silver ornaments of Rs. 35,211. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's cash book. 7. At this stage, the Income-tax Officer examined the assessee's cash book found in the search. He examined the various entries and noticed that they had also been interpolated after the cash book had been written in the normal course. In support of the assessee's explanation that it had borrowed funds to the extent of Rs. 90,000 from the various parties, affidavits of the concerned parties had also been produced, some of these parties were also examined by the Income-tax Officer. They had invariably, except some, stated that they held certain agricultural land and they had deposited their savings with the assessee. In the case of Smt. Lalmani Devi, it was submitted, which was supported by her affidavit, that she had sold land from 1970 to 1973, and the sale proceeds had been deposited with the assessee in two credits of Rs. 8,000 and Rs. 5,000 on February 13, 1976 and February 14, 1976. It appears she was a pardanashin lady. Request was made for her examination on commission, which was probably not accepted by the Income-tax Officer. The Income-tax Officer did not believe the story of the assessee that it had borrowed Rs. 90,000. According to him, none of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that these entries were in different ink but observed that they had been made by the responsible persons, while the other entries were made by the munim. He also held that the assessee had fully explained the genuineness of the credits by proving the identity of the lenders and their capacity to lend the amounts. He also observed that there was nothing to doubt the purchase of silver ornaments by the assessee. Similarly, he also accepted the genuineness of the ornaments taken on approval from the two Lucknow and Mathura parties. He finally deleted the addition of Rs. 1,13,914. 10. The Department came in appeal before the Tribunal challenging the above deletion. The Tribunal dealt with the matter in paragraphs 24 to 27 of its order in the following words : "24. We have carefully considered the submissions placed before us. Section 132(4A) of Income-tax Act, 1961, no doubt creates a presumption that the content of the books of account and other documents found in the search are true, but that presumption is rebuttable. In our opinion, it has been rebutted by the Department in the present case. We have ourselves examined the cash book found in the search very carefully and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n interpolated in the cash book on both the credit and debit sides. The final total which was Rs. 2,288 was changed to Rs. 25,288 showing an increase at Rs. 23,000. Similarly on August 28, 1976, the entries relating to Rs. 20,000 were interpolated in the cash book. The total originally stood at Rs. 694.24 on both the sides, which was increased by adding the figure of Rs. 20 making it Rs. 20,694.24. This is clear even from the naked eye. 26. For the reasons stated above, we are in agreement with the findings of the Income-tax Officer that the entries in the cash book cannot be relied upon. The question then arises whether independent of the cash book, the assessee's explanation that it had received various amounts aggregating Rs. 90,000 from different parties or the alleged purchase of silver and/or ornaments of the value of Rs. 95,000 together with the receipt of ornaments of the value of Rs. 43,000 on approval could be believed. Here also we are in agreement with the findings of the Income-tax Officer. We have perused his order thoroughly. He has dealt with the affidavits of the alleged creditors as well as their statements. Some of them were also not produced before the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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