9911796707
TMI Blog2004 (11) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... t of any cash available either on account of customers' money as according to him the onus was on assessee and it was for the assessee to bring the material on record to bring evidence for such availability. He determined income on the said transaction of Rs. 16,87,500 taking the transactions as of whole period i.e. 480 days (18 months) based on two days transaction, found recorded in the loose papers. He also did not give any credit against the cash seized. It is true that an estimate of the transaction can be measured by sample found during the course of search provided the same is representative of the same state of affairs throughout. The transaction noted from loose paper of two days are taken as a base for 18 months, but that 18 months period was stated to be for the partnership and not individual business carried on by the assessee. One should also not forget the fact that it was not case of the assessee that he was carrying on this business of Hawala. His case was that he was doing courier business in the name of a partnership firm in which he was a partner and it was that partnership firm was carrying on business for 18 months. That theory of courier business of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... render made by the appellant, (5) not considering the grounds of facts for retraction of surrender made by the appellant, (6) confirming the ex parte order made by the Assessing Officer, (7) confirming that appellant is engaged in money transfer business, (8) confirming that the seized cash of Rs. 12.62 lakhs was income from undisclosed sources without considering the evidence of agricultural income in past years, and (9) confirming the estimated commission income of Rs. 55 lakhs made by Assessing Officer. 2. So far ground Nos. 1 and 2 are concerned, the ld. AR does not wish to press the same, these grounds are therefore dismissed as not pressed. 3. The facts in brief are that on receipt of specific information by the income-tax department that unaccounted cash was being collected at the premises at 202-203, Novelty Market, Jail Road, Indore in the name of some concern M/s. Patel Kamlesh Kumar Kantilal Co., a survey under section 133A was conducted by the Investigating Wing, Indore on 18-8-1999, during which a cash of Rs. 12,62,000 was found at the business premises. In absence of satisfactory explanation regarding the source of this money or any books of account showing that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 28-2-2001 but nobody appeared nor any request for further adjournment was made even thereafter. Further notices and penalty notice under section 271(1)(b) were issued on the known addresses of the assessee at Indore and in village in Gujarat but all returned unserved. The Assessing Officer accordingly concluded the assessment on 30-7-2001 ex parte on the basis of materials available on the record and to the best of his judgment. So fat-cash seized is concerned, the Assessing Officer assessed the same as undisclosed income of the assessee for the block period and added the same accordingly. He also ordered for initiation of penalty proceedings under section 158BFA of the IT Act. Regarding loose papers seized, the Assessing Officer was of the view that the assessee was doing hawala business having its branches at Ahmedabad, Baroda, Delhi, Mehsana, Nasik and Unjha besides Indore as per his visiting card found during search. He was also of the view that an amount mentioned in two loose papers as per him dated 18-8-1999 and 17-8-1999, '000' has been omitted, e.g. figure of Rs. 200 in fact was an amount of Rs. 2,00,000 cash which was written as 200 by omitting '000'. He accordingly c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses and when Kantibhai Patel returned from Ahmedabad to Indore on 20-8-1999 his statements were recorded. He submits that the surrender during the search and seizure of Rs. 12.62 lakhs and affidavit dated 21-8-1999 were made under pressure and duress (page Nos. 38 to 45 of the paper book i.e. letter dated 2-2-2001 and affidavit dated 22-8-2001). He refers CBDT circular (F.No. 286/2/2002/IT, Inv.) dated 10th March, 2003, wherein it has been advised that Assessing Officers should rely upon the evidence/materials gathered during the course of search/survey operation or thereafter while framing the relevant assessment order. The ld. AR submits that the surrender made during the course of search and seizure by the assessee has got no value. 5.1 The ld. DR on the contrary refers the statement of the assessee made before the Assessing Officer in answer to question No. 7 and justifies the orders of the lower authorities admitting the surrender made by the assessee. He cites following judgments in support and submits further that the CBDT circular mentioned by the ld. AR has no retrospective effect:- (1) Chuharmal v. CIT [1988] 172 ITR 250 (SC), (2) CIT v. Bimal Parkash Gupta [1989] 179 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of search. The judgments relied upon by the ld. DR hold that the onus to prove that the assessee is not owner of the seized money is upon the assessee and a surrender free from threat or fear will be acceptable. The facts of the present case are different as in the present case the assessee tried to claim the seized amount as its income but from the agriculture. The documents seized during the search however suggested that the assessee was indulged in money transfer business. We thus find force in the submission of the ld. AR and accordingly decide the issue raised in ground Nos. 4 and 5 in favour of the assessee with this finding that surrender or confession cannot be made sole basis for assessment especially when the assessee questions the same. Even the documents seized suggest otherwise. 6. Ground No. 6:- In support of this ground the Id. AR submits that on 29-1-2001, the date fixed by the department to comply the questionnaire dated 27-12-2000 alongwith notices under sections 143(2) and 142(1) issued, the authorized representative had appeared before the Assessing Officer and had requested for one month's time in written and accordingly the hearing was adjourned to 28-2-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rat Electricity Board and agriculture produce so cultivated were sold etc. The ld. AR submits further that the assessee himself owned 8 acres of land during survey and he also used to cultivate lands of his relatives situated in adjoining areas that is why a motor-pump of 52 HP power was needed to irrigate the big land area. He also draws our attention to the page Nos. 19 and 20 of the paper book No. 1 i.e., working-out of agricultural income derived on estimate basis during the assessment years 1987-88 to 18-8-1999 at Rs. 22 lakhs excluding the power bill charges and other expenses. He cites several judgments with stress on the following judgments in support:- 1. CIT v. C.J. Shah Co. [2000] 246 ITR 671 (Bom.), 2. CIT v. G. Krishnan [1994] 210 ITR 707 (Mad.), 3. CIT v. Smt. P.K. Noorjahan [1999] 237 ITR 570 (SC), 4. S.P Goyal v. Dy. CIT [2002] 82 ITD 85 (TM) (Mum.), 5. Asstt. CIT v. Gajiani Kudia Family Trust [1997] 63 ITD 20 (Mum.), 6. D.N. Kamani (HUF) v. Dy. CIT [1999] 70 ITD 77 (Pat.) (TM), 7. Sharma Associates v. Asstt. CIT [1996] 217 ITR 1(AT) (Pune), and 8. Rajmal Lakhichand v. Asstt. CIT [2001] 79 ITD 84 (Pune). In the alternative, the ld. AR submits that the amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction. We do not fully agree with this contention of the assessee as the loose papers seized during search (LPS page Nos. 21 and 22) indicate the amount in code (omitting '000' in the last of the figure as discussed by Assessing Officer, which is self explanatory and appears to us convincing one), name of client depositing the same with his phone No., currency note No., and name and address of person to whom the money was to be delivered. The assessee may be doing courier business as well. We thus find force in the case of the department that the assessee was indulged in the activities of the business of money transfer from one place to another on charging some commission from the clients as per the destination. The contention of the assessee in alternative is that if it is held to be indulged in money transfer business then commission earned on it may be taxed in its hands. The case of the department also remained that the money seized was owned by the assessee as his own undisclosed income. We do not agree with this contention of the department as from the documents seized which are also the basis of the assessment by the department, it is evident beyond doubt that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertainly the assessee will have no case in alternative. In other words while considering the entire case in view of evidence found and submissions thereto advanced by the parties, money seized cannot be kept altogether apart in isolation with this preoccupied conclusion that assessee is owner thereof. The facts and issue about the ownership raised in the case of Alleppey Financial Enterprises v. Assistant Director of Income Tax [1999] Hon'ble Kerala High Court 236 ITR 562 are almost similar in principle with the present case in hand. The issue before the Hon'ble Court therein mainly was as to whether the assessee was owner of the gold ornaments seized from the premises of the assessee during search. Allegation against the assessee was that it had effected unaccounted loan transactions to the tune of Rs. 39,56,630 on the security of gold pledged by the customers, the revenue seized the said gold ornaments valued at Rs. 47,53,000. Initially the Hon'ble Court prima facie did not accept the contention of the assessee that the pledged articles do not belong to it, but finding claim of the assessee was allowed. Relevant extracts of the judgment are being reproduced hereunder: "It is seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h in accordance with the provisions of section 132B." "On a conspectus of the aforesaid provisions of the Act, it would appear that the legislative intent by using the words "possession" and "represent" in section 132(1) is to denote the ownership of the gold ornaments to be seized. The various provisions which I have already referred to also lend support to the view that the authorities can seize only such of those gold ornaments which belong to the person in possession. It is for that reason the Legislature has inserted sub-section (4A) by the Taxation Laws (Amendment) Act, 1975, with effect from October 1, 1975, by which it is presumed that the gold ornaments or other valuable articles or things found in the possession and control of any person in the course of a search belong or belongs to such person. The provisions of section 132B which I have already referred to which says that the assets in the form of gold ornaments, etc., can be sold for realization of the dues mentioned in clause (i) of sub-section (1) thereof also in indicative of the fact that the Legislature assumes that the seized articles belong to the person from whom they are seized. It cannot be assumed or presum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer made the addition of Rs. 60 lakhs on account of consignment sales on the basis of entries found in the loose sheets. In the case of D.N. Karnam (HUF) the addition made as undisclosed income on the basis of documents seized raising presumption about receipt of "on money" from other buyers also in view of absence of other evidence, was deleted. In the case of Sharma Associates the assessee was carrying on the business as promoter and builder, defective vouchers were found during the search operations to which the assessee agreed and the addition was made, the Tribunal held such addition as income from undisclosed sources not valid as there was no finding in regular assessment to support such addition. The Pune Bench of the Tribunal in the case of Rajmal Lakhichand has held that the disallowance is impermissible mainly on a presumption that the assessee must have made payments exceeding prescribed limit. The decision in the case of B.D. Dal Oil Industries relied on by the ld. DR has distinguishable facts as in that case shortage was found in the stock during survey which was conceded by the assessee. Whereas in the present case the documents seized do not corroborate either the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar remaining amount (Rs. 12,62,000 - Rs. 10,21,159) is concerned, it may be presumed as income of the assessee earned by way of commission from the business of money transfer. 7.3 The ground Nos. 7 and 8 are thus partly allowed. 8. Ground No. 9:- It is related to the estimated commission income of Rs. 55 lakhs made by the Assessing Officer on the basis that the assessee earned the same from its six branches including Indore during the period of 18 months. The Assessing Officer was of the view that there was an on and average per day transaction of Rs. 30 lakhs in Indore and Rs. 12.50 lakhs in Nasik, whereas in other small town it was less. Accordingly, he estimated a net profit of Rs. 55 lakhs from all these six branches. The ld. CIT(A) has confirmed the addition with observation that the estimate of the Assessing Officer is quite fair and reasonable. 8.1 In support of this ground the ld. AR reiterates that it is a mere presumption that assessee was doing money transfer business as no evidence has been found to corroborate the same. He submits further that the basis of the entire estimate of income from all the 6 branches is a visiting card found during search and a block assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow that the revenue proceeded to verify figures from the bankers and reasonable presumption was that the impugned amount entrusted with the assessee by the third party meant for preparing drafts or cheque and the assessee had at the most earned income by way of commission. The decision in the case of Dr. S. Surendranath Reddy relied on by the ld. DR has different facts as in that case during the course of search an employee of the assessee had made an attempt to destroy the collection sheets containing details of suppression and some portion of collection sheets had actually been destroyed for practical purposes and on the basis of documents seized, a regular pattern of suppression was established leading to a presumption that there was suppression for whole of the assessment year. No such fact is there in the present case. It is a well established law that the block assessment cannot be made on estimation. The Assessing Officer as it is apparent from the assessment order was remained of the view that the assessee was not a partnership firm as no agreement or other document was furnished in support. The mentioning of names of different cities in visiting cards seized does not lead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e himself available only in the month of July end, 2001 as it is apparent from his affidavit. He submits that his Manager Harshal Bhai was also not attending business and these were the reasons that the notices and summons issued by the department to the assessee at his village address in Gujarat as well as the business premises in Indore could not be served upon them. He submits further that otherwise there was no reason to evade statutory obligation of the income-tax proceedings as the assessee himself was going to suffer in consequence. The absence or non-compliance to the notices on the part of the assessee was thus not intentional submits the ld. AR. The ld. DR, on the other hand, justifies the levy of penalty and refers orders of the lower authorities. 10.3 We find substance in the submission of the ld. AR that there was sufficient cause for non-compliance of notices issued by the department on the part of the assessee as the earthquake on 26-1-2001 and thereafter in Gujarat is an admitted fact and besides this the assessee himself was going to be the sufferer due to non-compliance with the notices issued by the department in consequence. Hence, non-compliance on the part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to documents/parcel were written there by part-time Accountant, who was not traceable. No evidence regarding business of parcel/courier business was found during the search. During search operation, one visiting card of the assessee was also found which depicted that assessee had Branch Offices at Ahmedabad, Baroda, Delhi, Mehsana, Nasik and Unjha giving full addresses of such offices. On the basis of this information, survey under section 133A was conducted at the branch office at Nasik. During this survey, statement of Shri Kamlesh Kumar Prahladbhai Patel of M/s. Patel Kamlesh Kumar Kantilal Co. was recorded. In this statement, he admitted that they were charging commission of Rs. 100 per lakh to Rs. 300 per lakh for carrying the money depending upon destination. He also stated that in Nasik office, there was daily transaction of Rs. 12,50,000 on an average. In this background, cash seized was assessed as undisclosed income of assessee for the block period and penalty under section 158BFA of the Act was also initiated. On the basis of loose paper, Assessing Officer concluded that assessee was doing Hawala business. He referred to two loose papers page Nos. 21 22 for 17-8-1999 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same at the time of search also and would not have surrendered the same. He also contended that circular No. F.No. 286/2/2002 relied on by the ld. Counsel for the assessee has been issued on 10-3-2003. Thus, these are new instructions of the Board and cannot have retrospective effect. He contended that no attempt was made to extract surrender and the same was made voluntarily by the assessee. He also referred to pages 42 to 45 and submitted that retraction letter was dated 2-2-2001 which was filed on 5-2-2001, which means retraction was made after a period of 1 Vi years, as search had taken place in Aug., 99. This clearly shows that it was an afterthought because if assessee had any explanation after the search, he would have come out with the same within a reasonable time. He submitted that since cash was found in the premises of assessee and the onus was on him to prove that cash did not belong to him and department was not required to conduct any enquiry in this respect. In this regard he referred to the decision of Hon'ble Supreme Court in Chuharmal v. CI7 [1988] 172 ITR 250, where it was clearly held that where a person was found in possession of any thing, the onus of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in parcel and courier business, which is clearly evident from the finding of weighing machine which was used for weighing packets and envelopes. He further contended that assessee had clearly stated in his affidavit that he was having agricultural income. He referred to pages 1 to 46 of paper book filed on 16-6-2003, which is English translation of documents in Gujarati language which were already filed on record. He emphasized that assessee had water pump with a capacity of 52 H.P. and which was used for the cultivation of lands. He pointed out that assessee was paying approximately Rs. 26,000 P.A. as electricity bill. He submitted that assessee was owner of 8 acres of agricultural land and was also cultivating agricultural land of relatives. He referred to pages 19 20 where agricultural income has been computed from the year 1987-88 to the date of search which comes to Rs. 22 lakhs. He also strongly relied on the following judgments:- CIT v. C.J. Shah Co. [2000] 246 ITR 671 (Bom.); CIT v. G. Krishnan [1994] 210 ITR 707 (Mad.); CIT v. Smt. P.K. Noorjahan [1999] 237 ITR 570 (SC); Asstt. CIT v. Gajiani Kudia Family Trust [1997] 63 ITD 20 (Mum.); D.N. Kamani, HUF v. Dy. CIT [1999] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erely sufficient to meet the household expenses of the family of the assessee. He also contended that alternative contention of the assessee that sum of Rs. 12.62 lakhs seized during the search should be treated as part of the alleged hawala transactions and tax the profit from commission earned on Hawala business on reasonable basis is also not well founded because estimation of profit would come in respect of transactions entered into by the assessee for which Deptt. has made addition of Rs. 55 lakhs. As far as sum of Rs. 12.62 lakhs is concerned, it was found from the premises of the assessee and it has been never claimed that money belonged to someone else, therefore, assessee was duty bound to discharge its onus that he was not owner of this money and which has not been discharged by the assessee. He also referred to the decision of Jaipur Bench in ITO v. B.D. Dal Oil Industries [1992] 40 ITD 180 where during survey assessee had agreed regarding certain discrepancies of stock during survey. It was held that in the absence of actual weighment, addition could not be deleted. He also contended that judgments relied on by the Ld. AR did not pertain to the issue before the Bench an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Court that "it is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, courts must carefully try to ascertain the true principle laid down by the decision". Again in case of Padmsudara Rao v. State of TamilNadu [2002] 255 ITR 147, Constitutional Bench of the Hon'ble Supreme Court observed at page 153 that "Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was concerned with the issue of undisclosed investment made by a young lady of 20 years in purchase of land amounting to Rs. 34,628 on 15-11-1967 and another piece of land on 27-11-1968 for Rs. 25,902. The explanation of the assessee regarding the source of purchase money for these investments was that same were financed from out of the savings from the income of properties which were left by her mother's first husband. These explanations were rejected by the Assessing Officer but were accepted by the Tribunal. The Hon'ble Supreme Court had held that section 69 uses the word 'may' and in such circumstances addition was rightly deleted by the Tribunal. Here in the instant case, source of cash has been stated to be out of accumulation from agricultural income which we have already rejected and clearly this decision is also of no help to the assessee. 11. I have gone through other cases cited by the ld. AR and find that facts of those cases were altogether different and cannot be compared with the case of the assessee. As far as decision of Nagpur Bench in Dwarkadas Agrawal, Akola's case is concerned, in that case certain loose papers were found which showed that assessee was workin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sanctioned by the petitioner to the various customers on the security of the pledged gold ornaments represent unaccounted or undisclosed income of the petitioner or not. If the respondents have a case that the loans so advanced represent undisclosed income, it is for the respondents to deal with the matter in accordance with law. It is also for the respondents to invoke the other provisions of law, if any, for safeguarding the interest of the Revenue." Thus, Court was concerned with the assets which did not belong to the assessee. In case before us, assessee had never claimed that money belonged to someone else. Only explanation given is that money was out of agricultural income accumulated over a period of time which we have rejected. The Hon'ble Supreme Court in Chuharmal's case has already laid down that when something is found in possession of assessee burden is on him to prove that that thing does not belong to him and the assessee has made no attempt to prove that before lower authorities or even before us. In the result, ground Nos. 7 8 are rejected. 13. Ground No. 9:- The brief facts in respect of this ground are that certain loose papers were found in the premises of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r business at other places also. In any case, no enquiry was conducted at other business places and there was no evidence on record that such other places also belonged to the assessee. Though a survey was conducted in Nasik office but that survey was conducted on 2-5-2000 i.e. almost 11/2 years and assessee was not confronted with the statement of Shri Kamlesh Kumar Prahladbhai Patel. He also relied on the following judgments:- S.P. Goyal v. Dy. CIT [2002] 82 ITD 85 (Mum.); Dwarkadas Agrawal v. Asstt. CIT 27 ITC 513; and Agrawal Motors, Jabalpur v. Asstt. CIT 26 ITC 362. 15. On the other hand, Ld. DR referred to pages 7 to 13 of the assessment order and submitted that Assessing Officer has reproduced the loose sheet where names and addresses of the persons were clearly given to whom money was to be delivered with a narration "to pay". For example, in the page No. 21 2nd entry is as follows: "100 Prakash Bhai - Balaji Delhi 1 Note 35G-092193" From this entry, it becomes clear that assessee was required to pay a sum of Rs. 1 lakh to Shri Prakash Bhai at Delhi and Note No. was also mentioned. This kind of entry clearly shows that assessee was doing money transfer business and Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the material before him. So long as the estimate made by him was not arbitrary and had a reasonable nexus with the facts discovered, it could not be questioned. It was wrong to hold that the officer must have material before him to prove the exact turnover suppressed". In S.P. Goyal's case, addition was deleted by the Tribunal because same were based on suspicion without any corroborative evidence. In the case before us, evidence regarding Hawala business was found in the premises of the assessee and the same is corroborated by the statement of Kamlesh Kumar Prahladbhai Patel at Nasik office. Again in case of Dwarkadas Agrawal, Nagpur Bench of the Tribunal had observed that transactions mentioned in the loose paper cannot be added as total income of the assessee and only reasonable profit has to be estimated on such transactions. I find that revenue has not conducted any enquiries in so called six other branches of the assessee and it would not be proper to estimate the transaction in those offices. However, as far as Indore office is concerned, loose papers were found which clearly give figures of daily turnover. In view of the decision of Hon'ble Supreme Court in H.M. Esufal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , inter alia, was seized which was added to the income of the assessee in absence of satisfactory explanation furnished by the assessee as regards the source of this cash. In the statement under section 132(4) of the Act, Shri Kantibhai Patel, son of Prabhudas Patel, Prop./main person available at the premises of this concern, M/s. Patel Kamlesh Kumar Kantilal Co., categorically admitted in his statement on 20-8-1999 before the Investigation Wing that the cash was his personal income from undisclosed sources. He surrendered the whole amount unconditionally as his undisclosed income to be taxed as per law. An affidavit dated 21-8-1999 was also furnished accepting unconditionally that the said cash was his own income from undisclosed sources. Question No. 7 and answer in the statement in this regard are extracted below:- Q.7 Please explain the source of the cash found of Rs. 12.62 lakhs on 18-8-1999 in your office premises. Please also state whether they are accounted /entered in the books of account? Ans. I am unable to explain the sources of the cash of Rs. 12.62 lakhs seized from my office. This is my personal money. This is not entered in my books of account. I voluntarily declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffice, replied that the proper reply could be given by his Sethji Shri Kantilalji. This was because this cash was his own and was kept at office by him before going to Ahmedabad. He also mentioned that even in the loose papers, slip books etc. seized from the office premises, there is no mention of M/s. Patel Kamlesh Kumar Kantilal Co. as a firm. 4. The CIT(A) upheld the addition by observing that the assessee had offered the amount in his statement as his personal income unconditionally and even executed an affidavit on the next day to this effect. If the assessee had any agricultural operations, (a claim seemed to have been made in appeal only) he would certainly have been sure about the sources of the seized cash as he had clearly two days at his disposal before he made the statement i.e. survey action commenced on 18-8-1999 and the statement was recorded on 20-8-1999. He also rejected the contention of the assessee that the cash was kept in Indore office to purchase some house as an afterthought, as there was no reason for the assessee to keep such huge amount in cash at Indore, whereas he himself was residing in Ahmedabad. If he had to invest this amount in Indore, he could ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry out further investigation as no books of account were found and it was never claimed before any authority the cash belonged to somebody else. 7. Before dealing with the first issue, it would be better to narrate the facts of the second issue also as both the issues are claimed to be intermixed. The Assessing Officer observed that the loose papers, slips etc. found and seized show the recording of some transactions, names, amounts etc. besides, some Pavtis (Delivery slips/acknowledgements) and the assessee in his statement dated 20-8-1999 in reply to question No. 8 had stated that all the entries on those loose papers were recorded by his accountant who had run away after the search operation. He had also stated that entries in those papers were related to parcel/courier business though for which no evidence, books of account etc. have been furnished. He further mentioned that during the search, Shri Harshad Thakkar, Manager in his statement recorded on 20-8-1999, in reply to question No. 8 has stated that page Nos. 1 to 19 are telephone numbers of their clients, page Nos. 20 to 24 are the calculations/working of charges which are related to documents/parcels and which have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion by observing that the loose papers found at the premises searched belonged to the assessee as they were not proved otherwise. There was direct nexus between suspected business of the assessee and these papers because these indicated the transactions of Hawala business coupled with the fact that the statement of Shri Kamlesh Kumar recorded at Nasik directly connected with Shri Kantilal Prabhudas Patel and the visiting card found at the business premises containing the addresses of branch offices at various places including Nasik. According to him, there could not have been a better and more dependable evidence than the statement of Shri Kamlesh Kumar Patel to prove that the assessee was running Hawala business and based on these facts and circumstances, he confirmed the addition. 9. The learned counsel of the assessee submitted that it is apparent from the assessment order that the Assessing Officer remained of the view that the assessee was not a partnership firm as no agreement or other document was furnished in support and that merely mentioning of names of different cities in visiting cards seized does not lead to a conclusion that the assessee was having its branches in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to him was the trust money lying with the assessee as belonging to his customers, and therefore was available to explain the cash found to the extent. He has treated/assumed the balance of Rs. 2,40,841 as income from Hawala business and confirmed the addition to that extent and no separate addition for business was held to be maintainable because of this addition. The learned Accountant member, however, gave no benefit of any cash available either on account of customers' money as according to him the onus was on assessee and it was for the assessee to bring the material on record to bring evidence for such availability. He determined income on the said transaction of Rs. 16,87,500 taking the transactions as of whole period i.e. 480 days (18 months) based on two days transaction, found recorded in the loose papers. He also did not give any credit against the cash seized. It is true that an estimate of the transaction can be measured by sample found during the course of search provided the same is representative of the same state of affairs throughout. The transaction noted from loose paper of two days are taken as a base for 18 months, but that 18 months period was stated to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
