2013 (6) TMI 754 - AT - Income Tax

Summary

Issues Involved:

1. Whether the CIT(A) erred in law by not appreciating that u/s 132(4A), the onus is on the assessee to rebut the evidence found in his possession.
2. Whether the CIT(A) erred in law by not considering the evidence on totality and ignoring the evidence on record.
3. Whether the CIT(A) erred in law by granting relief to the assessee despite the assessee not discharging the onus of rebutting the evidence on record.

Summary:

Issue 1: Onus of Rebutting Evidence u/s 132(4A)

The Revenue contended that the CIT(A) failed to appreciate that u/s 132(4A), the onus is on the assessee to rebut the evidence found in his possession. The Tribunal had previously observed that the seized material (A/GAR/05) was just hand-written loose documents and not conclusive evidence. The Tribunal emphasized that the burden is on the assessee to prove that the documents do not belong to him, but also noted that the Department must establish a link between the seized material and the assessee's business. The CIT(A) found that the Assessing Officer did not gather any additional evidence to substantiate the entries in the seized documents, thus failing to comply with the Tribunal's directions.

Issue 2: Consideration of Evidence on Totality

The Revenue argued that the CIT(A) ignored the evidence on record, including a register containing money lending activities. The Tribunal had previously held that the seized material alone could not be considered conclusive evidence without corroborative material such as loan agreements, promissory notes, or statements from parties involved. The CIT(A) noted that the Assessing Officer relied solely on the previously discredited documents without gathering new evidence, thus justifying the deletion of the addition.

Issue 3: Granting Relief Despite Non-Discharge of Onus

The Revenue claimed that the CIT(A) granted relief to the assessee despite the assessee not discharging the onus of rebutting the evidence on record. The Tribunal had directed the Assessing Officer to provide the assessee with an opportunity to cross-examine the parties and gather additional evidence. The CIT(A) found that the Assessing Officer did not comply with these directions and relied solely on the unsubstantiated seized material, leading to the deletion of the addition.

Conclusion:

The Tribunal upheld the CIT(A)'s order, stating that the Assessing Officer did not strictly comply with the Tribunal's directions and failed to gather corroborative evidence. The Tribunal emphasized that judicial discipline requires adherence to the directions of higher authorities and that the Assessing Officer must act fairly and reasonably. Consequently, the Revenue's appeal was dismissed, and the cross-objection of the assessee was also dismissed.