2007 (7) TMI 232

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....w would arise for determination of this Court:- "Whether on the facts and in the circumstances of the case, the Ld. ITAT is right in law in computing the assessee's income at Rs. 55,000/- as against the income of Rs. 6,18,150/- estimated by the Income-tax Officer?" 2. Before adverting to the submissions made on the controversy raised, few facts are necessary to notice as flows from the statement of the case. The respondent-firm was engaged in the business of purchase and sale of auto spare parts in respect of the year under reference. It had headquarter at Jalandhar and Branch Office at Kapurthala. There were three partners, namely, Shri Gurbax Singh, father and his two sons Sarvshri Manjit Singh and Amrik Singh. On the inspection und....

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....f the assessee could not constitute a basis for making addition of Rs. 5,65,300/-. The Tribunal in its order dated 25.06.1993 unequivocally condemned the approach adopted by the CIT (A) in para 6.1 and 6.2 in its order dated 23.4.1992. The Tribunal after quoting para 6.1 and 6.2 from the order of the CIT (A), held as under:- "16. In view of the above, the basic question would be as to what inference should be drawn on the given facts.  As it is, the Assessing Officer and the CIT (A) have not appreciated the assessee's contention and the written submissions that entries were imaginary particularly the fact that neither any shoguns was taken nor there was any girl by the name of Dolly in whose marriage expenses were incurred. Further ....

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....red income by the assessee of Rs. 14,240/-. 6. Mr. Sanjeev Bansal, learned counsel for the revenue, has stressed that once a diary has been seized from the business premises of the assessee, which is found to be hand written by one of the partner Shri Manjit Singh then it cannot be discarded on any ground whatsoever. According to the learned counsel in the absence of any plausible explanation furnished by the firm through its partner like Shri Manjit Singh, the Assessing Officer was fully competent to frame assessment on the basis of the entries made in the diary. Mr.  Bansal has submitted that if any document is discarded in this fashion, it would result into huge loss to the revenue encouraging concealment of income by the dishone....