TMI Blog1994 (9) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... our drafts had been deposited/credited in the books of M/s Karmjit Singh Baljit Singh. But these four drafts did not find any mention in the books of account of the assessee-firm. The AO, during the investigation at Amhedabad, recorded the statement of Sh Pritam Singh, who happened to be available there and who was a partner of the assessee-firm. Sh Pritam Singh, in the first instance, did not give any incriminating evidence in respect of the four drafts in question. But after two days, Sh Pritam Singh made a confessional statement in a letter/application dated 27-1-1982. The A.O. proceeded to make an addition on the basis of that confessional statement. Statement of one Sh Baljit Singh was also recorded at that time. This addition was initially deleted in the assessee's appeal by the CIT(A), but in the revenue's appeal, the Tribunal sustained the addition made at Rs. 20,000 to the income of the assessee-firm. The A.O. proceeded to initiate penalty for concealment of income. Penalty was imposed at 200 per cent of the amount of tax sought to be evaded. 3. The ld. counsel has argued before us that the addition appears to have been sustained only on the ground of the confessional s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f delay because the assessee did not file these statements in penalty proceedings. 5. The ld. counsel has, in support of his application for permission of additional evidence, has invited our attention to the decision of the Gujarat High Court in the case of CIT v. Motilal Hirabhai Spg. Wvg. Co. Ltd. [1978] 113 ITR 173. It was held that the Tribunal had the power to admit additional evidence. Reliance is also placed on the decision of the Madras High Court in the case of Anaikar Trades Estates (P.) Ltd. (No. 2) v. CIT [1990] 186 ITR 313. There also, it was observed that the Tribunal had the discretion to allow production of additional evidence u/r 29. Similar view was expressed by the Karnataka High Court in the case of Sri Shankar Khandasari Sugar Mills v. CIT [1992] 193 ITR 669. The ld. D.R. has, on the other hand, placed reliance on the decision of the Kerala High Court in the case of CAIT v. Amalgamated Tea Estates Co. Ltd. [1970] 77 ITR 455. It was held in that case that the Appellate Tribunal hearing an appeal had jurisdiction to admit additional evidence regarding a subsequent event. The ld. D.R. has submitted that the prosecution had already been launched and it did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier statement loses its significance and evidentiary value. Our attention has also been invited to the reply filed by the assessee-firm to the penalty notice before the A.O. as well as written submission/statements presented before the CIT(A). In these replies also, it was denied that the money was sent in the form of drafts by the assessee-firm. The ld. counsel has contended that, as per the facts, the drafts had never been obtained by the assessee-firm but by one Sh Amrik Singh, who had no concern with the firm, and by Sh Manmohan Singh in his individual capacity. No statement of Sh Manmohan Singh is said to have been recorded, though three drafts for Rs. 5,000 each are said to have been obtained by him. There is no statement from Sh Amrik Singh either. The ld. counsel has stated that in these circumstances, statement of Sh Pritam Singh becomes very clear when he retracted his confessional statement and denied that the firm had sent money to Ahmedabad. When the facts do not establish that the firm had any role in obtaining the bank drafts, the retracted statement of Sh Pritam Singh must be held to be acceptable and reliable. It is argued by the ld. counsel that the letter dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Ahmedabad firm and it is not clear if the statement of Sh Pritam Singh was recorded by the A.O. in his status as a partner of the Ahmedabad firm or as a partner of the assessee-firm. As already seen, in the statement recorded on 25-1-1982 by the A.O. at Ahmedabad, questions were asked to Sh Pritam Singh regarding different cheques and drafts received by the Ahmedabad firm, in which Sh Pritam Singh happened to be a partner. It would, therefore, appear that investigation was primarily made from Sh Pritam Singh regarding different cheques and drafts received by his firm at Ahmedabad. No question was asked regarding the four drafts, which are under consideration here. Therefore, the letter submitted by Sh Pritam Singh after two days proceeded to relate to the matter concerning Ahmedabad firm. Though in that letter, he also alleged that despatch of drafts by the assesee-firm was made but that statement loses its significance in view of dual status of Sh Pritam Singh--- one as a partner of the assessee-firm and the other as a partner of the Ahmadabad firm. It is to be noted that Sh Pritam Singh had received the amount of Rs 20,000 from M/s Karam Singh Baljit Singh after the four draf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to set off the profits made by the assessee, the finding that the losses put forward were false is sufficient to hold that there was a scheme on the part of the assessee to defeat the revenue. The ld. D. R. has, on the strength of the said decision, contended that in the present case the assessee sent certain drafts through the partner and wanted to conceal the income. Reliance is also placed on another Full Bench decision of the Punjab and Haryana High Court in the case of Vishwakarma Industries v. CIT [1982] 135 ITR 652. In that case, it has been held that the burden of proof had shifted from the revenue to the assessee after the Explanation was inserted in section 271(1)(c) by the Finance Act, 1964. 10. We have considered the case law cited by the ld. counsel as well as the ld. D. R. and we are of the view that there is no evidence to prove that the drafts in question had been purchased by the assessee-firm or had been recorded in the books of the Ahmedabad firm as having been received from the assessee-firm. The statements of S/Sh Pritam Singh, Baljit Singh and Ram Singh do not conclusively prove that the assessee-firm was guilty of concealment of income. It is correct that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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