TaxTMI 
TaxTMI 
TaxTMI 
2010 (4) TMI 1246
X X X X Extracts X X X X
X X X X Extracts X X X X
....I, Kanpur. Though the three separate reference applications have been moved by the Revenue before the Tribunal, in three aforesaid appeals, the Tribunal has referred only one composite reference. At the instance of the Revenue, the following questions have been raised: "1. Whether on the facts and in circumstances of the case, the Hon'ble Income-tax Appellate Tribunal was justified in holding that the investment in question reflected in parcha No. 56 could not be brought to assessment in the hands of Shadiram Ganga Prasad, Smt. Premlata Kanodia and Shri S.P. Kanodia in the manner in which the Department had brought them to assessee in their hands ?" 2. Whether on the facts and in the circumstances of the case, the Hon'ble Income....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esaid capital investment had been given to them for the aforesaid period, i.e., June, 1980 to December, 1980 and accordingly, a sum of Rs. 2,07,440 had been added towards unexplained investment and interest, in the case of partnership firm, a sum of Rs. 1,86,696 has been added in the hand of Sri S.P. Kanodia and a sum of Rs. 77,790 has been added in the hand of Smt. Premlata Kanodia being unexplained investment and the interest accrued thereon. The order of the assessing authority has been confirmed by the Commissioner of Income-tax (Appeals). The matter went to the Tribunal in second appeal. Before the Tribunal, it was contended that the said loose parcha was written by one Sri R.K. Awasthi and it was a rough parcha in connection with the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fore us, namely, Shri G.P. Kanodia, Smt. Premlata Kanodia and Shri S.P. Kanodia ? 15. The department's explanation is that the abbreviations S.P. And Prema could not but refer to S.P. Kanodia & Premlata and so far as S.R.G.P. was concerned, it represented Shadi Ram Ganga Prasad and as the jottings, prima facie, indicated interest at the rate of the 9.44 per cent for six months worked out on the capital amounts noted against the above names. The only inference to be drawn from these jottings could be that interest indicated in the said paper had been given to the parties named above on the capital amounts belonging to them. 16. There are two difficulties in accepting this line of reasoning. Firstly, it is noted that item No. 3 pertai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a in the manner in which the department has brought them to assessments in their hands. In view of this we are unable to sustain the additions in the hands of the three appellants as above." 4. Heard Sri R.K. Upadhyaya, learned Standing Counsel appearing on behalf of the Revenue and Sri S.K. Garg, learned counsel, appearing on behalf of the respondent/assessees. 5. Sri R.K. Upadhyaya, learned Standing Counsel submitted that under section 132 (4A) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") a presumption can be drawn that the parcha belonged to the persons from whose possession it was seized. He further submitted that for the purpose of the assessment also such presumption is contemplated under section 292C of the Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to the unexplained investment made by the assessees and the interest mentioned therein had been accrued to them. No opportunity of cross-examination to Sri D.P. Kanodia was given to the assessees. The entries in the parcha, therefore, remained uncorroborated. Moreover, the entries against Sri S.P. Kanodia and Smt. Premlata Kanodia were found scored out. What is the reason for scoring out such entries is not explained and, therefore, in the absence of corroborative evidence, the Tribunal has rightly held that no adverse inference can be drawn from the entries of parcha No. 56 against the assessees. The finding of the Tribunal is finding of fact based on the material on record, which cannot be said to be perverse, which requires any interfe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mine the wholesale dealers as witnesses in presence of the assessee; it is sufficient if such wholesale dealers are merely tendered by the sales tax authorities for cross-examination by the assessee for whatever worth it is." 10. This Court further observed as follows: "It is true that the decision was in slightly different context but the principle laid down appears to be that in cases where entries are detected in the account books of other dealer the burden is on the Department to produce that dealer for cross-examination and if the Department fails to do so no adverse inference can be drawn against the assessee. It has been argued by the learned Standing Counsel that the Supreme Court has not gone to the length of saying that the ent....