TaxTMI 
TaxTMI 
2017 (5) TMI 1750
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....hat when the documents found in search are not related to the assessee provisions of section 292C of I.T. Act cannot be invoked. 4. On the facts and circumstance of the case. Ld. Commissioner of Income Tax (Appeals) has failed to appreciate that provisions of section 292C of I.T. Act are not applicable where the contents of documents are self-explanatory or dumb in nature. 5. On the facts and circumstances of the case Ld. Commissioner of Income Tax (Appeals) has failed to appreciate that Assessing Office could have invoked the provision of section 153C of I.T. Act in order to ascertain and assess the correct Assessee. 6. The Appellant craves leave to add, alter, amend or forgo any of the grounds of appeal at the time of hearing." 3. From the above grounds, it is gathered that only grievance of the assessee in this appeal relates to the sustenance of addition of Rs. 1,29,82,283/- in respect of alleged unrecorded sales/unrecorded business transactions and unrecorded payments etc. 4. Facts of the case in brief are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried out on 09.12.2005 a....
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....on that seized material found during the search and annexed as annexure A were related to the assessee. Copies of the papers found vide Page No.31, 32, &33 are enclosed in the Paper Book Page No. 14, 15, & 16. It is submitted that the Ld Assessing Officer failed to appreciate that no statement of the assessee on the date of search was recorded by the revenue. From the very first day the assessee was pointing out that these papers are not related to him and the Assessing Officer could make enquiries from the persons whose names are appearing in those papers. It is relevant to mention here that on 08.10.2005 i.e. prior to 2 months of search, there was a family function at the house of assessee as is evident from the seized records and so many people were gathered and one of them could have left these documents at the house of assessee. It is submitted that Page No.46 & 47 of the seized material also prove that there was function in the family of assessee .These documents are annexed at Page No.22, 23 and 24 of the Paper Book. However, the AO without making any enquiry or issuing any summons u/s 131 of the Act, to the concerned persons has made the addition in the hands of the assesse....
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....signed has failed to understand as to what the AO was doing with the seized material through out the two years and what stops him to conduct the enquiries from the persons whose names were appearing on the papers. Further assessee seeks to rely on the judgment of Allahabad High Court in the case of CIT Vs Ashok Kumar 286 ITR 541 (ALL). 1.4 It is submitted that the department has resorted to its last weapon i.e. search against the assessee and then too did not find any unaccounted asset or stock or any investment. Therefore, the returns of income filed by the assessee for the earlier years and for the impugned year are correct and reliable. It is true that the scope of the new assessment procedure u/s 153A is wide enough to include all kinds of income. However, it does not mean that the Assessing Officer can add anything on estimate basis. Reliance can be placed on the recent judgment of the ITAT Delhi Bench in the case of Anil Bhatia wherein the ITAT has discussed the scope of section 153A at length. Further reliance can be placed on the judgment of CIT Vs Girish Chaudhry 296 ITR 619 (Del). It is relevant to mention here that the facts of this case were similar to the fact....
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....regular assessment as well. Wherever the legislature intended the presumption to continue, it has provided so. Reference may made to Section 278D of the Act which provides that where during the course of any search under Section 132, any money, bullion, jewellery or other valuable articles or things or any books of account etc. are tendered by the prosecution in evidence against the person concerned, then the provisions of sub-section (4A) of Section 132 shall, so far as may be, apply in relation to such assets or books of account or other documents. This clearly spells out the intention of legislature that wherever the legislature intended to continue the presumption under sub- section (4A) of Section 132, it has provided so. It has not been provided that the presumption available under Section 132 (4A) would be available for framing the regular assessment under Section 143 as well. This is also evident from the fact that whereas the legislature under Section 132 (4) has provided that the books of account, money, bullion, jewellery and other valuable articles or things and any statement made by such person during examination may thereafter be used as evidence in any other....
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....judgment of Hon'ble Supreme Court in the case of P.R. Metrani reported in 287 ITR 209. In the said judgment the Hon'ble Supreme Court of India had observed as under: "Presumption under Section 132 (4A) is available only in regard to the proceedings for search and seizure and for the purpose of retaining the assets under Section 132(5) and their application under Section 132B. It is not available for any other proceeding, except where it is provided that the presumption under Section 132 (4A) would be available. In our considered view, the High Court of Allahabad in Pushkar Narain Sarraf (supra) and the High Court of Delhi in Daya Chand (supra) have taken the correct view in holding that the presumption under Section 132(4A) is available only in regard to the proceedings for search and seizure under Section 132. Such presumption shall not be available for framing the regular assessment. The High Court of Karnataka in the impugned judgment has clearly erred in holding to the contrary. Consequently, question No. 1 of the Revenue is answered in the affirmative, i.e. against the Revenue and in favour of the assessee. It may be clarified that through th....
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....ch may reasonably be assumed to have been signed by or to be in the handwriting of any particular person, are in that person's handwriting, and in the case of the document stamped, executed or attested that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.] [(2) Where the books of account, other documents or assets have been delivered lo the requisitioning officer in accordance with the provisions of section I32A. then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of subsection (1) of section 132A. had been found in the possession or control of that person in the course of a search under section 132]." The said provision has been inserted by Finance Act 2007 w.e.f. 1.10.75. As per the said provision Where any books of account, other documents are found in the possession or control of any person in the course of search, it may, in any proceeding under this Act be presumed that such books of accounts / other document b....
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.... on the following case laws: DCIT Vs Delco India Pvt. Ltd. and Others (2015) 7 TMI 47 (ITAT Del.) Pr. CIT Vs M/s Delco India Pvt. Ltd. (2016) 2 TMI 607 (Del.) CIT Vs M/s Khosla Ice & General Mills (2013) 1 TMI 451 (P&H) Sh. Pandoo P. Naig Vs ACIT in ITA Nos.7089 & 7364/Mum/2011 order dated 24.06.2016 (ITAT Mum.) ACIT, CC-32, Mumbai Vs Prakash B. Bandarkar, Parvin B. Bandarkar, Room in ITA Nos.6671 & 6672/Mum/2012 order dated 24.06.2016 (ITAT Mum.) CIT Vs S. M. Aggarwal (2007) 293 ITR 43 (Del.) CIT Vs Girish Chaudhary (2008) 296 ITR 619 (Del.) Jayanti Lal Patel Vs ACIT & Ors. (1998) 233 ITR 588 (Raj.) Mahaan Foods Ltd. Vs DCIT (2010) 123 ITD 590 (Del. C Bench) ACIT Vs Satyapal Wassan (2008) 5 DTR (Jab. Trib.) 202 Rakesh Goyal Vs ACIT (2004) 87 TTJ 151 (Del.) N. K. Malhan Vs DCIT (2004) 91 TTJ 938 (Del.) Jagdamba Rice Mills Vs ACIT (2000) 67 TTJ 838 (Chd.) Ashwani Kumar Vs ITO (1992) 42 TTJ 644 (Del.) ACIT Vs Ashok Kumar Vig. (2007) 106 TTJ 422 (Ranchi) ....
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.... the very beginning stated that page nos. 31, 32 & 33 etc. of Annexure A did not relate to him. The AO did not make any inquiry from the parties whose names were appearing in the said documents but made the addition by invoking the provisions of Section 263 of the Act. 9. On a similar issue in the case of DCIT Vs Delco India Pvt. Ltd. and Others in ITA Nos. 2453, 2952 & 2926/Del/2013, the ITAT Delhi Bench vide order dated 16.06.2015 had held as under: "A perusal of section 292C shows that a statutory presumption can be drawn where any documents is found in possession of a person in the course of a search or survey that it belongs to "such a person". A presumption is also drawn that the contents of such a document are true. The presumption having been drawn as per law is required to be confronted and the documents as per record have been confronted. Whether the onus placed upon the assessee in a given set of facts is discharged or not has to be seen from the replies of the assessee based on facts. However, the law is well settled that the presumption is rebuttable. In the facts of the present case, the assessee has denied having any transactions with M/s Smridhi....
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....arch and seizure are reduced to a farce. The repeated inactions speak louder than the half-hearted actions taken. We are of the view that as far as the assessee is concerned the onus to address the seized documents qua which a statutory presumption has been drawn stands fully discharged. - Decided in favour of assessee." 10. The aforesaid decision of the ITAT has been affirmed by the Hon'ble Jurisdictional High Court vide its order dated 10.02.2016 in the case of Pr. CIT Vs M/s Delco India Pvt. Ltd. reported at (2016) 2 TMI 607 (Del.) wherein it has been held as under: "17. Section 292C of the Act, inter alia, provides that where any books of accounts or other documents are found in possession or control of any person in the course of search under Section 132 or survey under Section 133A of the Act, it may be presumed that such books or documents belong to such person. Undisputedly, such presumption is rebuttable. It is not disputed that the Assessee had clearly denied having any dealing with M/s Smridhi Sponge Limited and had also filed an affidavit to that effect. The ITAT found, as a matter of fact, that the Assessee on its part had made the necessary enquiries and a....
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....see Shri Pandoo P. Naig, in this case, has, from the very beginning, denied his link or relation with the seized document or with any of the transaction made therein. As observed above, no corroborative, correlating or circumstantial evidence has been found either during the survey action or during post survey investigations which may make a connection or in any manner relate the assessee-Shri Pandoo P. Naig with the said document or the transactions mentioned therein. Hence the nature of document seized does not point any strong/reliable or stanalone presumption under section 292C of the Act against the assessee Shri Pandoo P. Naig." 12. From the observations made in the aforesaid referred to orders, it is clear that the presumption of facts u/s 292C of the Act is not a mandatory or compulsory presumption but a discretionary presumption. Since, the word used in the said Section is " may be" and not "shall". Secondly, such a presumption is rebuttable presumption and not a conclusive presumption because it is a presumption of fact not a presumption of law. In the present case, the assessee from the very beginning stated that the documents found during the course of search did not....