2018 (10) TMI 1511 - HC - Income Tax

Addition u/s 69 - loose slips were recovered in search which showed several entries pertaining to cash and cheque transactions - Held that - t. For the first time, before the Commissioner of Income Tax (Appeals), the assessee took a stand that the slips are only dumb sheets and there was no connection with the purchasing of residential property and further, the assessee sought to explain the notings to mean as monthly instalments and arranging of funds and not for payment. The Commissioner of Income Tax (Appeals), after considering the said statement, has given reasons as to why the statements of the assessee are not tenable. In fact, the assessee in no uncertain terms has accepted in his statement that the slip represents payment made for the purchase of property in question. The retraction is vague and a clear afterthought. The case on hand is not a simple case of relying upon some scribbling and notings, but a case where the entries, which were clear and legible, were taken into consideration by the Assessing Officer. The correctness of which was examined by the Commissioner of Income Tax (Appeals) and further examined by the Tribunal. Thus, we find the assessee has not made out any good ground to interfere with the order of the Tribunal. - Decided against assessee.

Summary

Issues:
1. Substantial Question of Law: Addition under Section 69 of the Income Tax Act, 1961.

Analysis:
1. The appeal was filed against the order passed by the Income Tax Appellate Tribunal regarding the addition under Section 69 of the Income Tax Act, 1961 for the Block Period 1991-92 to 2000-01. The search conducted in the business premises of the assessee revealed loose slips with entries related to cash and cheque transactions, including an on-money payment for the purchase of a property. The assessee initially admitted the on-money payment but later retracted the statement, claiming mental tension during the initial admission.

2. The Assessing Officer did not accept the retraction and treated the undisclosed on-money payment as income. The Commissioner of Income Tax (Appeals) and the Tribunal upheld this decision, considering the entries in the slips and the statements made by the assessee. The appellant argued that the entries should not be considered, citing coercion during the search, but the courts found the evidence credible and admissible.

3. The Commissioner of Income Tax (Appeals) and the Tribunal found the evidence, including the loose slips and statements, to be conclusive in establishing the on-money payment not accounted for by the assessee. The courts rejected the appellant's attempts to discredit the evidence, emphasizing the clear and detailed nature of the entries in the slips and the multiple statements made by the assessee acknowledging the on-money payment.

4. The courts relied on legal definitions and precedents to establish the admissibility of the loose slips as documents under Section 132(4) of the Act. The Division Bench's interpretation of the definition of 'document' and the admissibility of such evidence supported the decision to treat the entries in the slips as valid proof of the undisclosed income. The appellant's retraction of statements was deemed invalid due to the clear evidence presented.

5. The courts distinguished the case from precedents where survey statements were questioned, emphasizing the multiple statements made by the assessee and the clarity of the evidence in this case. The appellant's arguments were deemed insufficient to overturn the Tribunal's decision, and the appeal was dismissed with costs against the assessee.