TaxTMI 
TaxTMI 
2008 (12) TMI 75
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....to the assessee particularly when on the contrary, the provisions of section 158BB(3) of the Act specifically cast onus on the assessee to establish the non-relateability of the document found during search with supporting documentary evidence? 4.2 Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in allowing relief of Rs.10,02,250/- to the assessee on the ground that the document dated 22.05.1993 seized was not confronted to the assessee during search operation when the document seized at the time of search had been confronted to the assessee during the assessment proceedings? 4.3 Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in allowing relief of Rs.33,80,000/- by merely relying on the statement recorded under section 132(1) of the Act ignoring the fact that the assessee had failed to explain the documents seized at the time of search and that the Assessing Officer was empowered to draw an adverse inference under Section 114 of the Indian Evidence Act especially when the assessee failed to substantiate his liability with supportive documentary evidence....
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.... be deciphered by its author. Since it has been found from the assessee it becomes the duty of the assessee to explain the same. The assessee was confronted with the said document in the course of assessment proceedings. The Assessing Officer required the assessee to explain as why the impugned amounts be not held as unexplained investment assessable in the hands of the assessee. The plea of the assessee was that in so far as the amounts totaling Rs.33,80,000 is concerned, the same reflects summary of payments which were due from various dealers and the payments in respect of which were to be made to the customers who sold the vehicles. The assessee submitted that he being in the business of commission agency, was only acting as a middleman in the sale/purchase of vehicles. The explanation of the assessee has been negated by the Assessing Officer as well as by the Ld. Commissioner of Income-tax (Appeals). According to the Revenue, certainly impugned amounts reflected the amounts recoverable from sub agents with regard to the vehicle sold through the assessee but the existence of the liability to hand over such amounts to the seller of the vehicle does not stand justified. Now the r....
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....ee contended that its examination does not reveal that the assessee ever purchased the vehicles on its own account and thereafter sold the same. This averment was made before the Assessing Officer. There is no rebuttal to this from the side of the Revenue. Therefore, to reach at such presumption and thereafter use it to decipher the contents of the document No.34 would be unjustified. In this situation, it is safe to deduce that the explanation tendered by the assessee with regard to the impugned notations is plausible and deserves to be accepted in the background of fact that the contra inference by the Assessing Officer is not based on any material. Therefore, we do not find any justification for sustaining the addition of Rs.33,80,000. 17. Now in so far as the addition of Rs.14.00 lakhs is concerned, herein also we find that the inference drawn by the Assessing Officer in para 4.7 of his order that the assessee had made investment in flour mill is not based on any corroborative material. Now, with regard to the sum of Rs.5,50,000 relating to the addition made on account of unexplained investment in milk chilling plant in our view the assessee has been successful in explaining....
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....-tax (Appeals) has since deleted the said addition by making the following discussion in Para 7.3 of his order which reads as under:- "7.3 The contention of the Ld. Counsel that the department did not discover any evidence during the search and seizure which proved conclusively that the household expenses declared by the assessee was less than the actual and therefore, no addition could be made under section 158 BC for it by simply estimating the expenditure is correct. Therefore, in view of the arguments of the Ld. Counsel for the assessee and the case law relied upon by him as also in view of the order of the HTAT Mumbai 'B' Bench in the case of Sunder Agencies V Deputy CIT (1997) 59 TTJ (mum) 610, the addition made by the Assessing Officer for low household expenses is deleted from the assessment under section 158 BC. However, the Assessing Officer may take action under section 148." In this background, we have considered the validity of the impugned addition. Undoubtedly, the finding of the Ld. Commissioner of Income-tax (Appeals) is that no material of evidence was discovered during search which proved that the household expenses declared by the assessee was less than th....