9911796707
TMI Blog1991 (8) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned in the assessment of the assessee. The assessee's cement godowns were also searched and 57 bags of cement were found short. The search party had taken samples from the stock of cement in the assessee's godowns and they were sent to the Test House atCalcutta, which reported that the chemical analysis in all the three samples was different. A statement of the assessee, Ashwani Kumar, was recorded on 17th Oct., 1983 under s. 132, in which explaining the source of cash amounting to Rs. 1,86,330 he had stated that the same belong partly to Delhi Cement Company, partly to Dehradun Marble House, in which the assessee was a partner and partly to Shiv Builders. Regarding the ornaments amounting to Rs. 38,791 the assessee had stated that they belong to him personally. 4. A statement of the assessee was recorded on21st Oct., 1983also on which date, one of his godowns was searched and the assessee was asked to explain the reason for the shortage of 57 bags of cement. The assessee's explanation was that some of the bags had become wet partly and the wet portion was removed and thrown away, with the result that in some of the bags of cement the quantity left was less than the prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to belong to Delhi Cement Company. The Assessing Officer, therefore, treated the entire amount of Rs. 1,86,330 as unexplained and added the same to the assessee's income. On appeal, the learned CIT(A) has deleted this amount holding that by virtue of s. 69-A of the IT Act, 1961 this was taxable in asst. yr. 1984-85 as the cash was recovered in the financial year 1983-84, which was the previous year for asst. yr. 1984-85. Against this part of the CIT(A)'s order the Revenue as well as the assessee are in appeal. In the Revenue's appeal the only ground relates to the deletion of Rs. 1,86,330 contending that this amount was taxable in asst. yr. 1985-86 only. The assessee in its appeal also challenges the CIT(A)'s order contending that the assessee's explanation should have been accepted and the amount should be deleted on merits instead of on the technical point that the same falls for consideration in asst. yr. 1984-85. 8. Regarding the jewellery of Rs. 38,791 the Assessing Officer rejected the assessee's explanation because of the shift in the assessee's stand as indicated above. He, therefore, added this amount to the assessee's income. On appeal the learned CIT(A) has set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. However, the entry for the whole amount of cash, i.e., Rs. 1,86,330 was incorporated in the cash book of the concern produced during the assessment proceedings. The assessee was asked to explain the same, in response to which he stated that earlier he used to keep cash of the above mentioned concerns and he was under the impression that the same were still with him. The explanation of the assessee is not sustainable because it conflicts with his earlier statement. The cash available on the date of search Rs. 1,86,330 thus remains unexplained and is being added to the income of the assessee". The above observations would show that the assessee's explanation that the sum of Rs. 1,86,330 was the cash-in-hand of Delhi Cement Company has been disbelieved for the only reason that in his statement recorded on 17th Oct., 1983., the assessee had stated that the cash belonged partly to Shiv Builders, partly to M/s Dehradun Marble House and partly to Delhi Cement Company. The assessee's business premises and residence were searched simultaneously and the assessee was not present at the shop at the time of the recovery of cash amounting to Rs. 1,86,330. The search in this case continued fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. The assessee had a substantial business in cement and his sales for the year under consideration were of the order of Rs. 1,10,23,744. If the Revenue's stand that this entire amount of Rs. 1,86,330 is unexplained cash of the assessee is accepted, then it would mean that the assessee had no cash-in-hand for such a large scale business. This is absolutely unnatural. It is also to be remembered that even during the search the whole amount was not seized and only Rs. 1,85,000 were seized. We, therefore, hold that the source of this amount was properly explained to be the cash-in-hand of Delhi Cement Co., which was duly supported by the assessee's cash book and sale vouchers etc. 13. Regarding the CIT(A)'s finding that this amount should be considered for asst. yr. 1984-85 as it was the unexplained money within the meaning of s. 69A, we are of the view that in view of our above finding this controversy has become redundant. In any case even otherwise in view of the entries in the cash book recording the said amount as cash balance on 12th Oct., 1983, it was a case to which s. 68 could be applied if the assessee was not able to establish the genuineness of the transactions showi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition. In our view, this stands is also not correct. The assessee had retracted from his earlier statement and had made a fresh statement in support of which he relied on the affidavit of Sikander Lal and the entry in the cash book of Delhi Cement Co. regarding the advance of Rs. 26,000 to the said Sikander Lal. In such circumstances the earlier statement could not be mechanically relied on for making the addition and it was necessary to find out which of the two statements of the assessee was correct. It is for this purpose that the CIT(A) has remanded the matter back to the Assessing Officer. We may also mention that such a contention is not open to the Revenue because it has neither challenged the CIT(A)'s direction in its appeal nor has it filed a cross objection against the assessee's appeal on this point. For the above reasons the CIT(A)'s order on this point is upheld. 18. Grounds 3 and 4 in the assessee's appeal relate to additions of Rs. 31,668 and Rs. 8,53,618 made on the basis of the slip found in the assessee's shop. The contents of that slip have already been reproduced above in para 5 of this order. For making these additions the Assessing Officer observed as belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, it cannot be said that the total to the various figures at Rs. 8,53,618 is the income of the assessee in any manner whatsoever. It was also contended that the presumption permissible under s. 132(4A) can be raised only for the purposes of proceedings under s. 132 and not for the purposes of regular assessment. For this proposition reliance was sought to be placed on Pushkar Narain Sarraf vs. CIT (1990) 86 CTR (All) 110 : (1990) 183 ITR 388 (All). The learned Departmental Representative, on the other hand, supported the orders of the authorities below by relying on the presumption permissible under s. 132(4A). 21. We may first dispose of the contention of the learned counsel for the assessee that the presumption that is permissible under s. 132(4A) cannot be raised in the proceedings for regular assessment. The Hon'ble Allahabad High Court in the case referred to above was concerned with a different situation. In that case, during the course of search certain account books were seized in which certain cash credits were recorded. In the assessment proceedings the assessee pleaded that by virtue of s. 132(4A) the correctness of those credits, as recorded in the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. Everything physically present inside the shop of a person may not be in that person's control or possession. For proving possession it is necessary to show that the person concerned had the intentio possessendi. In this case nothing of that sort is pointed out by the authorities below. We also enquired from the learned Departmental Representative as to the exact place from where the slip was recovered and the learned Departmental Representative could not enlighten us on that point. 24. Then for presuming that the content of the books of account or document are true, the document must be a speaking one. In this case the slip, said to have been recovered by the Revenue, does not contain any narration in respect of the various figures noted therein. The slip does not indicate whether the figures referred to quantities of money or to quantities of goods and whether one side, and if so, which side represents receipts and which side represents outgoings. This is, thus a dumb document and as the orders of the authorities below would show they have merely added the total of the right side of the slip without supplying the figures any language to indicate their meaning. In the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... radiction to the same the assessee has stated that it was purchasing cements about the quality of which nothing was known to him. It was stated that the cement was purchased from M/s Jaipur Udyog Ltd. and from other reputed concerns and it was sold in the same form in packed bags. If the contention of the assessee is accepted true then, in my opinion, there should not have been any such discrepancy in the chemical analysis. The stock inventory was also made in which shortage of 57 bags of cement was also noticed. In explanation to the same it was stated that the stock became wet in rain. It was also found at the time of search and seizure that entry on original bill No. 2492 dt.7th Oct., 1983was for Rs. 16,585 whereas on the copy of the same, entry of only Rs. 66.34 p. was found. These all facts indicate that there is some unexplained dealings with the stock sales and purchases which are out of books of accounts. An estimated amount of Rs. 2,00,000 is being added to the income of the assessee on account of the above mentioned trading discrepancies." 27. There is no dispute that samples of the cement were taken and the National Test House,Calcuttareported varying results with respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s conducted in the residential premises of Shri Hakumat Rai, father of the assessee on the same date. A slip Annexure-8, page 47 was seized from there. On the slip it was noted that Shri Ashwani Kumar had paid the amount of Rs. 3 lacs to some person who is having some connection with M/s Dehradun Marble House. In his statement the assessee deposed that he did not know anything about it. In this way the assessee has not been able to explain the above said amount and the same is being added to the income of the assessee". As stated above, during a search at the residence of the assessee's father, Shri Hakumat Rai, a slip was found. The orders of the authorities below show that the said slip or a copy thereof was not brought on the record of the present assessee and that is why the contents thereof have not been reproduced by the authorities below, nor has the learned Departmental Representative placed a copy of that slip in the paper book. The assessee has, however, placed before us a copy of the assessment order in the case of Dehradun Marble House, a partnership firm in which the said Hakumat Rai was a partner. In that assessment order the contents of that slip have been reproduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akumat Rai. As a matter of fact the addition is not on account of non-explanation of the source from which the sum of Rs. 1 lac might have been advanced by the assessee to Hakumat Rai. The addition is for Rs. 3 lacs which sum, the slip states, was given to the assessee. Hakumat Rai has not made any statement to that effect. He dissociates himself from the slip. Similarly the assessee does not admit having taken or given any money to Hakumat Rai. As already stated no presumption under s. 132(4A) could be raised in respect of this document against Ashwani Kumar and, therefore, as regards the present assessee there is no evidence to show that, (i) any sum of Rs. 3 lacs was paid to the assessee by Hakumat Rai or anybody else : (ii) that the sum of Rs. 3 lacs represented income; and (iii) the sum of Rs. 3 lacs represented income for the accounting period ending 30th Sept., 1984 of the assessee. Therefore, the sum of Rs. 3 lacs mentioned in the aforesaid slip could not be treated as the assessee's income and this addition, therefore, too was unjustified. We accordingly delete the same. 30. In the result, the departmental appeal is dismissed and the assessee's appeal is partly allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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