2007 (9) TMI 273 - HC - Income Tax

Block Assessment undisclosed assessment additions based on NOTE interpretation of paper note as a dying declaration - Section 17 to 23 of the 1872 - held that - It is well settled that admissions constitute best piece of evidence because admissions are self-harming statement made by the maker believing it to be based on truth. It is well known that no one will tell a lie especially harming ones own interest unless such a statement is true - in the present case the assessee has made a selfharming statement in a note just before his entry to an Operation Theatre for a surgery titled as Just in case . The note has clearly stated that somebody called Tyagi has a cash entry of Rs. 4, 11, 000/- who was to be told to withdraw that money from PFL and the family was to get the cash addition made on the basis of such declaration upheld however such declaration can not be held as dying declaration - even if the statement made by the assessee cannot be regarded as dying declaration it has to be regarded as admission within meaning of Sections 17 and 18 of the 1872

Summary

Issues:
Interpretation of a note as a dying declaration under Section 32 of the Indian Evidence Act, 1872.
Misconception by Tribunal regarding the assumption of facts of cash paid without determining relatability and longevity to the block period.
Differential treatments of the same cause of action of the addition by the Tribunal.

Analysis:
1. The appeal under Section 260A of the Income-tax Act, 1961 challenged the order passed by the Income Tax Appellate Tribunal regarding the block period from 1.4.1990 to 29.8.2000. The questions raised included the interpretation of a note as a dying declaration under Section 32 of the Indian Evidence Act, 1872, the misconception by the Tribunal on the assumption of facts of cash paid, and the differential treatments by the Tribunal of the same cause of action.
2. The case involved a search and seizure under Section 132 of the Act at the assessee's residence, leading to the assessment of undisclosed income based on a note seized during the search. Penalty proceedings were also initiated.
3. The Commissioner of Income Tax (Appeals) allowed the appeal, deleting various additions concerning unexplained money. However, the Tribunal rejected the assessee's submission regarding the note, treating it as a dying declaration and adding the amount under Section 69 of the Act.
4. The Tribunal's decision was challenged, arguing that treating the statement as a dying declaration was erroneous. The counsel contended that the statement did not fit the definition of a dying declaration and was unsustainable.
5. The Court found no merit in the appeal, emphasizing that admissions are significant evidence and the statement in the note constituted a self-harming admission by the assessee. The Tribunal's reliance on the note was justified as the assessee failed to provide a satisfactory explanation.
6. While the Tribunal erred in considering the statement a dying declaration, the Court upheld its reliance on the statement as an admission under Sections 17 and 18 of the Evidence Act. The statement, made in contemplation of death, was deemed equivalent to an admission supported by impending fear of death.
7. The Court answered questions 1 and 2 against the assessee, dismissing the appeal as question 3 was not pressed by the counsel. The Tribunal's decision to add the amount as unexplained income was upheld based on the admission made by the assessee in the note.