2015 (1) TMI 433

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....earched on 19.01.2001 by the officials of the Income Tax Department in exercise of power under Section 132 of the Act. A receipt evidencing payment of a sum of Rs. 10,00,000/- to one Mr. Prabhakar Reddy is said to have been discovered. Another receipt evidencing repayment of that very amount was also discovered. A statement under sub-Section (4) of Section 132 of the Act is also recorded on the day of search. When a question was put to the appellant as to whether he has made any payment to one Mr.Prabhu, he gave answer in a negative. Thereafter, a further statement was recorded on 27.03.2001. A question was put to the appellant as to whether he paid a sum of Rs. 10,00,000/- to Mr. Prabhakar Reddy. The appellant accepted that he paid that a....

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....de to verify that. Learned counsel submits that the amount has been reflected in the books of account of the said company and despite that the Block Assessment was made. Ms. M. Kiranmayee, learned Junior Standing Counsel appearing for Sri J.V. Prasad, learned Standing Counsel for Income Tax, on the other hand, submits that there existed adequate basis for recording the statement of the appellant once certain material in the form of receipts were recovered. She contends that the appellant himself admitted that he paid a sum of Rs. 10,00,000/- and then received it back, but, he did not indicate the source thereof. Learned counsel points out that the inclusion of the amount in the books of account of the company was an after thought and that ....

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.... (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. (rest of the provision is omitted since it is not relevant for the purpose of this lis.) A perusal of this provision discloses that the contents of books of account or other documents must be taken as true. If for any reason, the authority, who conducted the search, does not believe such documents as true, the very basis for the proceedings collapses. In the instant case, the plea of the appellant was that the amount was held by the company and that it was paid to the owner of the land. The transaction did not fr....