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TMI Blog2003 (10) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... ount, and they must be maintained for the purpose of drawing the source of income under the Income-tax Act. Admittedly, the additional sales found as a result of search, was not recorded in the books of account regularly kept in the course of business by the appellant. Merely because the appellant accepted the additional sales for the purpose of assessment of the relevant year on the basis of entries in the seized documents, the same would not constitute accounts of the appellant maintained in the regular course of business and on that basis alone liability cannot be fastened on the assessee by holding him to have committed the default. Accordingly we are satisfied that the record carrying entries from which the appellant admits of addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed by the ld. CIT(A), is in dispute. For the sake of convenience, all the three appeals are disposed of by a common order. 2. The main order confirming the penalty of Rs. 31,825 in the case of Shri Brij Lal Goyal is for assessment year 1995-96. The other order for assessment year 1993-94 confirming penalty of Rs. 27,890 is in the case of the same assessee and the third order confirming penalty of Rs. 36,837 in the case of Shri I.S. Goyal for assessment year 1995-96 which are both on identical facts and circumstances wherein the ld. CIT(A) followed his decision of assessment year 1995-96 given in the case of Shri Brij Lal Goyal. 3. Both the assessees were searched on4-10-1994by an action under section 132 of the Act. The assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of record is a valid ground for secreting it. In the assessee's case, the seized record contains the assessee's business transaction by his own admission. Accordingly, crediting a part of sales turnover so as to bring it below Rs. 40 lakhs did not absolve the assessee from its obligation to have its account audited under section 44AB of the Act. The said section refers to "total sales, turnover or gross receipt" and "account". It does not allow the assessee to substitute the part of the turnover from total turnover and a part of account from the account. The correct and admitted turnover of the assessee in this case exceeded to Rs. 40 lakhs. He upheld the decision of the Assessing Officer that the appellant was liable to get his accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty of Rs. 36,837 and the same stood confirmed by the ld.CIT(A). 8. We have heard the parties with reference to material on record and precedents relied upon. Assessee's counsel has strongly relied upon the decision of the Hon'ble Bombay High Court in the case of Sheraton Apparels v. Asstt. CIT [2002] 256 ITR 201 for the plea that annexures or diaries so seized can hardly be described as books of account and no liability can be fastened on the assessee. We have taken note of this judgment. Explanation (5) to section 271(1)(c) enacts a deeming provision and has application to a situation where in the course of a search under section 132, the assessee is found to be the owner of any money, bullion, jewellery and other valuable articles or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y nature and circumstances are maintained for the purpose of drawing the source of income. Therefore, when books of account are tendered for claiming the benefit of Explanation 5 to section 271(1)(c) of the Act, they must be shown to be books, those books must be books of account, and they must be maintained for the purpose of drawing the source of income under the Income-tax Act. 11. It is evident from the aforesaid observation that books of account maintained in regular course only make the assessee eligible for grant of immunity from penalty and not with reference to any of such books, which have not been maintained in the regular course of business. Admittedly, the additional sales found as a result of search, was not recorded in the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re A-8 was not provided to him at least up to 21-2-1997 which is the date of issuance of a show-cause notice during the assessment proceedings for assessment year 1994-95 and is evident from internal page 2 of the assessment order of that year where the Assessing Officer says "a detailed show-cause notice based on the seized record was handed over to the AR of the assessee on 21-2-1997 after giving complete photocopies of the seized materials and other records". From perusal of assessment order for the assessment year 1995-96, we also find a mention made by the Assessing Officer that the appellant did not include income on the basis of seized Annexure A-8 in the income returned by him on16-9-1996. This goes to prove the bona fides of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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