2011 (8) TMI 764

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....he said diaries contained recording of various financial transactions. Apart from noting the transactions, at the end of every month the assessee drew up a balance sheet depicting loans received and advances given. The names of the trust were also mentioned. The assessing officer held that the diaries are as good as books of account. According to him, the assessee is doing certain financial transactions which are not recorded in the regular books of account. Treating the diary as books of account, he treated the loans received as cash credits. He found that the peak of the credit on 30-11-1997 was Rs. 87.09 lakhs. After reducing the opening balance of such credit as on the first day of the block period he sought for an explanation from the ....

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....ents of the diary has to be accepted as correct and accordingly addition under Section 68 is not tenable in law. Further the Tribunal held that when once in the Accounts maintained by the assessee all the debts are proved the assessing authority was not justified in adding the same and therefore the Tribunal allowed the appeal and set aside the orders passed by the authorities. Aggrieved by the same, the Revenue is in appeal. 3. The learned counsel appearing for the Revenue assailing the impugned order of the Tribunal, insofar as the transactions as reflected in the books of account is concerned, submits that the assessee has failed to establish the same by examining the persons who lent money and persons who received money. Similarly, the....

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....ssee is found to have not disclosed the income to the extent of Rs. 39,38,900/-. In the appeal proceedings the assessee has produced the certificates of persons who had lent money and who opted for the voluntary disclosure scheme. That clearly discloses that the amounts which had been received by the assessee from those persons who did not account and therefore they did not come forward before the assessing authority to accept the said payment. However, once they opted for the voluntary disclosure scheme, the case of the assessee that he had received money from those persons though not substantiated by producing any acceptable evidence in the light of the subsequent event has to be accepted as correct. That is precisely what the Tribunal ha....