TaxTMI 
TaxTMI 
2013 (1) TMI 159
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....43(2), and the impugned assessment framed. The first appellate authority having allowed the assessee partial relief, both the assessee and the Revenue are in appeal. 2.2 The two additions for the current year are on the basis of the material in the form of print-outs of computer back up files found on the system at the assessee's premises, and addition/s based on which form the subject matter of the respective appeals, which we shall take up in seriatim. Assessee's Appeal (ITA No. 4076/Mum/2011) 3.1 The document under reference reads as: Funds received from Date Amount Funds used for Alliance Hotel Parvez sir White House Nawab Masjid Adi Enterprises Parvez sir 10.10.05 100000.00 100000.00 21.10.05 25000.00 25000.00 27.10.05 20000.00 20000.00 29.10.05 10000.00 10000.00 9.11.05 150000.00 119000.00 31000.00 11.11.05 289000.00 21000.00 11.11.05 150000.00 5000.00 12.11.05 10000....
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....w wishes to take up a legal ground, that is, whether assuming the document to be true, could any addition be at all made on its basis. This is as all it says or speaks, in simplistic terms, is of 'A' giving loan to 'B'. If that be so, no addition in the hands of 'B', the recipient, could be made; the document itself explaining the source of the funds as 'A'. The Revenue could not take or adopt a segmented or disjointed approach, considering the document as true in-so-far as the destination of funds is concerned, i.e., the assessee, and not true with regard to their source, Shri Parvez Ghaswala ('P', say), specified in the same document. Section 68 of the Act would not, thus hold, for which reliance was placed by him on the following decisions: (i) T.S. Kumarasamy v. ACIT [1998] 65 ITD 188 (Mad) (ii) ACIT v. Vatika Greenfield Ltd. [2009] 121 TTJ 208 (Del.) (iii) CIT v. Indeo Airways Pvt. Ltd. [2012] 349 ITR 85 (Del) [ITA Nos. 1620, 22/2010] Even section 69 would not apply in-as-much as no investment has been found by the Revenue, the nature and source of which is to be, or remains to be, explained. On being enquired as to who was Mr. Parvez, the 'A' in the asse....
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....t to have been proceeded against. The deeming of section 68 would thus apply. 4. We have heard the parties, and perused the material on record, as well as the case laws cited. 4.1 The law in the matter is exquisitely clear, even as both the sides have relied on case laws. What all section 292C provides for is a presumption as to the truth of any document, etc., found during search or survey; of the moneys etc., recovered from him as belonging to the assessee. The same does not contradict; rather, compliments and supports the rule of evidence as enshrined in sections 68, 69, et. al. Where is the question of deeming any money, bullion, jewellery or other valuable article or thing found with the assessee as his un-explained income, unless there is a antecedent presumption as to the same belonging to him? The two therefore have to be read in conjunction and as complimentary, and not as disjunctive or de hors each other. The principle involved, as explained by the apex court in the case of Chuharmal v. CIT [1988] 172 ITR 250 (SC), referring to section 110 of the Indian Evidence Act, 1872, is of common law jurisprudence. All what it means, it goes on to explain, when it is said that th....
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....c., (not recorded) by the assessee in the books of accounts maintained by him for any source of income, to the satisfaction of the Assessing Officer (AO), lest it may be deemed as its income for the relevant year. Now, the transactions of availing monies from 'P' having not been recorded in the assessee's books of account, section 68 of the Act could not be said to be applicable. However, that would be to no consequence, as the admission of the transaction/s itself implies of the corresponding amount/s in the assessee's hands in the form of cash on the relevant date/s. Section 68, on one hand, and sections 69, 69A, etc., on the other, are in that sense complimentary, even as explained by the hon'ble Allahabad High Court in the case of CIT v. Jauharimal Goel [2005] Where a sum is recorded in the books of account, section 68 is attracted, and the assessee is obliged to explain the same as to its nature and source. Alternatively, where it is not so recorded, that is, kept off the books of account, it is the corresponding amount, in the form of any asset, to explain which, as to the nature and the source of its acquisition, that the assessee's obligation in law extends to. The present ....
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....ith the scheme, as well as intent and purposes of the Act. The only difference would be, as aforesaid, that the deposit/s could only be, where so, deemed as income of the year of deposit/s. We, thus, find no legal hindrance or barrier to the invocation of the said sections, or s. 69A in the instant case. 4.3 We, next, consider the assessee's argument that the document itself explains the source of the money with it (as on the relevant dates), so that the mandate of the section is satisfied, and no addition could be made. That is, the Department cannot take a contrary stand, accepting the document as true, yet overlooking the fact that the same itself clearly spells out the source of the money. The argument is valid, for the presumption as to the truth of the document, which would apply uniformly over the entire document, can be impugned - in whole or in part - only on the basis of some materials. So, however, the obligation cast on the assessee is to explain both the nature and source of the money, and not its source alone. The assessee's explanation is completely silent on the first part. In fact, even the fact that 'P' is a partner stood revealed only in response to a query by t....
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....elf cannot be a ground or justification for extending the deeming, or the rule of evidence as provided therein, to persons not covered thereby. We have already held that the provision of section 292C and the deeming of provisions of Chapter VI are to be read in unison, being only in codification of the principles of common law jurisprudence. Accordingly, the assessee's income stands validly assesseed to the extent of Rs. 5,61,000/-, and the balance Rs. 12.83 lacs stands to be deleted. We direct accordingly. 4.4 The issue having been decided by us, thus, on the basis of a finding of fact, i.e., upholding the Revenue's non-satisfaction with the assessee's explanation as to the nature and source - qua which the AO is to be satisfied, of the monies with it, we are unable to see; the law in the matter being trite, as to how the case law relied upon by either party is relevant. Revenue's Appeal (ITA No. 4738/Mum/2011) 5. The contents of the documents find mentioned at para 6, page 3 of the assessment order, are as under: Particulars Amount Rs. (a) The sheet 'Botawala' contains certain cash entries, particularly in lines 224, 229, 237 and 240. They indicate aggregate cash payments o....