Statutory presumption for seized documents upheld; bare denial of ownership was insufficient, and the addition was restored in principle.

Seized papers found in the assessee's premises were treated as evidentiary material where they recorded receipts, expenses and payments, and a bare denial of ownership was insufficient to dislodge the statutory presumption attached to such material. The absence of a satisfactory explanation for the entries meant that deletion of the addition could not be sustained in full. The addition was restored in principle, subject to the Assessing Officer verifying that no double addition occurred when recomputing income.

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Issues: Whether the addition made on the basis of seized papers could be deleted merely on the footing that the documents did not belong to the assessee and whether the statutory presumption arising from the seized material was rebutted.

Analysis: The seized papers were found from the assessee's premises in search proceedings and contained entries indicating receipts, expenses and payments. The documents were not uniformly incapable of evidentiary use, and for the relevant papers the assessee could not dislodge the presumption attached to material found in his possession by a bare denial of ownership. The presumption under the Act operated against the searched person, and the absence of a satisfactory explanation for the entries meant that the deletion ordered by the first appellate authority could not be sustained in full. The Tribunal also directed that the Assessing Officer ensure that there is no double addition while giving effect to the computations.

Conclusion: The addition was restored in principle and the Revenue succeeded, subject to verification against double addition while recomputing the income.

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