TaxTMI 
TaxTMI 
2009 (1) TMI 83
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.... amount will be paid by 50% of collection cheques and current account will be operated by Mahendra P. Shah. I hereby agree to deposit all cheques only in United Western Bank Mandvi Branch. However, I further confirm I will pay at least rupees five lakhs even though I cannot collect collection to that extent. I further confirm I will pay all loan amount on or before 31st May, 1991. Signed & Delivered Bhupen Chheda, 22nd Jan 1991. I, Mahendra P. Shah, stand guarantee for the above matter." 4. The statement of the assessee was recorded under Section 132(4) on 19.12.1991. In the course of recording the statement, the following question was put : "Q.20: I am showing you page No. 82 of the loose paper file No. A-20 as per which Mr. Bhupendra Chedda was liable to pay Rs. 20 lakhs to you on the dates mentioned therein but this amount which is receivable by you has not been reflected in the account maintained by you?" 5. The Assessing Officer based on the seized document made an addition of Rs. 20 lakhs in the income of the assessee under Section 69 as un-identified investment. Penalty proceedings were also initiated under Section 271(1)(c). 6. In the appeal memo filed before the Commis....
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.... order and it has not been used against the assessee. The Commissioner, Appeals was pleased to hold that the case made out by A.O. has no legs to stand and deleted the addition. 8. Both the Assessee as also the Revenue preferred appeals before the I.T.A.T. Dealing with this addition, the tribunal noted that CIT (A) accepted the contention of the assessee that the intended transaction i.e. advance of Rs. 20 lacs. by the assessee to Bhupendra Chedda did not materialise and that the A.O. had not examined the issue properly and did not take any material evidence in support of his premise that the money in fact had passed hands in his case. After considering various contentions and judgements cited, the learned tribunal was of the view that the document was seized from the premises of M/s. Eshita Dye Chemicals Private Limited and that the assessee was in full control of M/s. Eshita Dye Chemicals Pvt. Ltd. The tribunal also recorded that the document was put to the assessee and he did not deny that the document was related to him nor did he deny the transaction. The only explanation given was that he had not received the amount of Rs. 5 lacs. The tribunal also noted that the document wa....
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....se of Mitrani (supra), the Income Tax Act has been amended and Section 292(c) has been inserted by Finance Act, 2007 with effect from 1.10.1975. The effect of said amendment is that where the document is seized in the course of search under Section 132 or section 133, it can be used against the assessee subject to what has been set out in the section. Dealing with the last contention, it is submitted that the tribunal considering the material evidence on record has rightly arrived at the conclusion that Income Tax had tobe added in the case of the Assessee. This was permissible on the material available and therefore, no fault can be found in the decision of the tribunal. 11. We may firstly consider the second contention advanced on behalf of the assessee. The language of Section 132(4A) is similar to the language used in Section 292C. We may gainfully reproduce the relevant portion of Section 132 (4A) as also section 292C which read as under : "132(4A) : Where any books of account, other documents, money, bullion, jewellery or other value article or thing are or is found in the possession or control of any any person in the course of a search, it may be presumed - (i) that such....
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....to him, did not deny the said document. On the contrary, in the appeal memo and thereafter before the I.T.A.T. the stand taken was that it was an understanding which was not given effect to. The appellant also does not deny the existence of the two persons who have signed on the document namely Bhupendra Chedda and Mahendra Shaha. On the contrary the contention is that the statement and or application of the said persons were not considered. Considering the language of Section 292C, there is a presumption that the contents of the document are true, as the document was seized from the premises in control of the assessee and that the said document belongs to the assessee. A reading of the said document would make it clear that the document in fact is the document for return of money already advanced. The language used is that on or before 28.2.1991, Chedda would pay Rs. 5 lacs. towards the payment of loan out of Rs. 20 lacs. Then there are other amounts. This would indicate two acts firstly that the amount of Rs. 20 lacs. had already been received and the document thereafter shows in what manner the amounts would be paid. The document is dated 22.1.1991. The first payment was to be e....
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....that in fact statement of Bhupen Chedda was recorded. Similarly in so far as Mahendra Shah is concerned Mahendra Shah was the guarantor for the due repayment of the loan. Whether he opened a bank account or not is immaterial as the seized document clearly shows that the sum of Rs.20 lacs. was paid as loan by the assessee which Chheda had agreed to pay and to which Mr.Shah was a signatory as guarantor. The learned counsel also sought to rely on the judgment of the Supreme Court in Kisanchand Chellaram Vs. Commissioner of Income Tax, 125 ITR 713 (1980). The ratio of that judgment would be that if evidence is to be used against the assessee that evidence in the form of a document ought to have been shown to the assessee. That is not the case here. The search was made and document recovered in terms of 132(4A). To the same effect would be the judgment of this court in Smt. Panna Devi Vs. Commissioner of Income Tax 208 ITR 849. Reliance also placed in the judgment in the case of Mansukhlal Vs. Commissioner of Income Tax, 251 ITR 341. There on the facts the court recorded a finding that the real nature of the seized paper has not been established as to whether they belonged to the Petiti....