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TMI Blog2023 (10) TMI 1145X X X X Extracts X X X X X X X X Extracts X X X X ..... leading to the deletion of the addition of Rs. 3,25,37,586/- and Rs. 17,29,25,670/- as referred to in paragraph 4(i) and (ii) of the stay petition were perverse? II. Whether on the ground the order of the tribunal with respect to the said issue should be set aside?" Thereafter paper-books were filed and the appeal became ready for hearing. On 15th September, 2023, when this appeal was called on for hearing, Mr. J. P. Khaitan learned Senior Advocate appearing for the respondent pointed out to this court that apparently there was a mistake on the part of the learned advocate for the appellant Commissioner of Income Tax to invite the court to admit the appeal on 30th September, 2019 because several years earlier on 26th August, 2008, the appeal had already been admitted on the following questions of law:- "whether on the facts and in the circumstances of the case Tribunal was justified and the conclusion at arrived by it in deleting addition of Rs. 17,29,25,670/- as undisclosed profit made on the basis of seized documents and in view of presumption under Section 132(4A) of the Income Tax Act, 1961, is perverse?" On a reading of the said order dated 26th August, 2008, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l balance allegedly reflected by eleven pages of seized papers marked as PP 37. Apparently in his statement dated 9th March, 2019 the respondent assessee had stated that those pages denoted the trial balance for the period of 01.04.1997 to 31.03.1998 and that it summarized his entire business operation for 1997-98. Subsequently he retracted from the statement by his letter dated 20th March, 2021 stating that it was a "test trial balance of imaginary figures". His explanation was that he was in the process of digitalizing his accounts, was provided a software by a manufacturer for this purpose and that imaginary figures were entered in that software to create the account. The assessing officer disbelieved that explanation stating that the code numbers in the digital version matched the code numbers in the books of account. On the basis of these documents the assessing officer computed the undisclosed income of the assessee at Rs. 3,25,37,586/-. Other loose sheets detected the undisclosed income of the assessee and his wife in the years ending 31st March, 1995, 31st March, 1996 and 31st March, 1997, page 19 relating to the undisclosed business income of the assessee's wife Smt. Prema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed us Section 292C of the Act which was inserted under the Miscellaneous Chapter XXIII of the Act by the Finance Act, 2007 with effect from 1st October, 1975. Now, the text of Section 292C substantially includes Section 132(4A) with some addition. We shall refer to Section 292C which is set out below:- "292C. Presumption as to assets, books of account, etc.- [(1)] 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 search under section 132 or survey under section 133A, it may, in any proceeding under this Act, 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 handwri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (5) of Section 132 and rebuttable presumption for the purpose of framing a regular assessment is not correct. There is nothing either in Section 132 or any other provisions of the Act which could warrant such an inference or finding." This dictum was followed by a division bench of our court in Principal Commissioner of Income-tax, Central-1, Kol. Vs. Ajanta Footcare (India) (P.) Ltd. reported in (2017) 84 taxmann.com 109 (Calcutta). Learned counsel said that on the basis of the above facts the assessing officer ought not to have made the presumption and that the CIT appeal and the tribunal were right in not drawing a presumption. Our View:- A presumption may be rebuttable or irrebuttable. If it is irrebuttable, it is conclusive proof of the fact. The court will not admit any evidence to disprove the presumption. Take for example, the common law presumption that a child under 7 years of age is incapable of committing a crime. It is an irrebuttable presumption. Or the fact that the sun rises in the east. When a fact may be presumed by the court or shall be presumed by the court makes the presumption rebuttable. The assertion of fact is taken to be true till it is disproved. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut scrupulously examining whether there were any substantial grounds enabling the assessee to resile from such admission. In those circumstances, the order of the tribunal with regard to the above issues is set aside. We remand the matter back to the tribunal with a direction upon it to reexamine the same on the basis of evidence on record by a detailed order within six months of communication of this order. The appeal is disposed of accordingly. Certified photocopy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities. (I. P. MUKERJI, J.) BISWAROOP CHOWDHURY, J.:- I have perused the judgment delivered by my Learned brother and have agreed with the grounds cited therein. However I add the following grounds. At the very outset it is to be considered on which questions of law the appeal was admitted. On 26th August, 2008 the appeal was admitted on the following substantial questions of law. 'Whether on the facts and in the circumstances of the case Tribunal was justified and the conclusion at arrived by it in deleting addition of Rs. 17,29,25,670/- as undisclosed profit made on the basis of the seized documents and in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing officer to ascertain as to whether the admission made by assessee before DDIT on 09-03-1999 was voluntary or not. Secondly it should have ascertained as to the contends of the documents/account papers which are seized by the Authority, whether those are within knowledge of the respondent Although it is not the requirement of law but it is an act of prudence on the part of the Income Tax Authority and shows reasonableness and bona-fide. It is not unusual that when a raid takes place in an establishment or house of an assessee, the assessee out of confusion and stress may make many statements in haste in order to complete the interrogation process. However necessary verification should be made to ascertain the statements made by the assessee. Now the question for consideration is whether the Income Tax Authority acted correctly in putting question to assessee with regard to Trial balance and other accounts papers seized from the establishment of assessee. It is a common practice that in a business establishment of a businessman business accounts are prepared by accountant or chartered accountant and the same are audited. The preparation of accounts requires special knowledge and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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