2010 (8) TMI 1067 - HC - Income Tax

Summary

Issues Involved:
The issues involved in this case are related to the addition of Rs. 19,00,000 made on the basis of loose papers seized during a search u/s. 132 of the Income Tax Act. The main questions proposed by the appellant revenue are whether the Appellate Tribunal was right in confirming the order passed by the CIT(A) deleting the said addition, and whether the initial onus on the assessee to dislodge the presumption pursuant to the loose papers was fulfilled.

Tax Appeal No.769 of 2009 - M/s. B.M. Transport:
The appellant, M/s. B.M. Transport, was assessed for the block period 1996-97 to 06th February, 2002 u/s 158BC of the Income Tax Act. The Assessing Officer made an addition of Rs. 19,00,000 in the hands of M/s. B.M. Transport based on a Debit Note seized during the search, indicating a transaction with M/s. M.R. Shah Transport Company. The Commissioner (Appeals) and the Tribunal both deleted this addition, stating that the unsigned debit note was not conclusive evidence for the addition, and no material was found during the search to support the transaction. The Tribunal upheld the deletion of the addition, finding no legal infirmity in the order.

Tax Appeal No.770 of 2009 - Shri Prahlad R. Agrawal (HUF):
Shri Prahlad R. Agrawal (HUF) was assessed u/s 158BC of the Act for the same block period. Similar to the previous case, an addition of Rs. 19,00,000 was made in the hands of Shri Prahlad R. Agrawal based on the same Debit Note. The Commissioner (Appeals) and the Tribunal also deleted this addition, stating that the seized document was not conclusive evidence and no supporting material was found during the search. The Tribunal concurred with the findings of the Commissioner (Appeals) and upheld the deletion of the addition.

Appellant's Arguments:
The appellant strenuously supported the assessment orders, arguing that the seized document indicated a business transaction between the parties, and the presumption should be that the transaction took place. However, the Commissioner (Appeals) found that the unsigned debit note was not sufficient evidence for the addition, and no supporting material was found during the search to substantiate the transaction.

Conclusion:
The Tribunal upheld the orders of the Commissioner (Appeals) in both cases, stating that the seized document was not conclusive evidence for the addition. The Tribunal found no legal infirmity in the orders and dismissed both tax appeals, as no substantial question of law arose from the facts and circumstances of the case.