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TMI Blog1999 (3) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... been completed under s. 158BC of the IT Act, 1961 for the block period 1987-88 to 1997-98. The assessee is in appeal against the block assessment framed by the AO. Four grounds have been raised. The same are discussed and disposed of as follows: 3. Ground No. 1 read as under: "The learned Asstt. CIT erred in holding, without any evidence that there was escapement of sales for the period 1st Jan., 1986 to 2nd Nov., 1986 (Asst. yr. 1987-88) merely because suppression was found in the seized books for subsequent period. There is no presumption in law that if subsequently there was suppression, there must be such suppression in earlier year and the onus to prove such presumption was on the Department. The learned CIT erred m putting a negative burden on the appellant not realising that appellant could not prove the non-existence of a fact. The net profit for asst. yr. 1987-88 at Rs. 1,24,265 calculated on this presumptive basis, is not justified. The said addition may kindly be deleted." During the course of search and survey operation, it was found that the assessee-firm was suppressing sales. For the asst. yr. 1987-88 as per the seized documents, the suppressed sales pertained to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch. This section does not provide a licence to the Revenue for making roving enquiries connected with the completed assessments. It is beyond the power of the AO to review the assessments completed unless some direct evidence comes to the knowledge of the Department as a result of search which indicates clearly the factum of undisclosed income. Without such evidence of material the AO is not empowered to draw any material presumption as to the existence of undisclosed income. A presumption is an inference of fact drawn from other known or proved facts. It is the rule of law under which Courts are authorised to draw a particular inference from a particular fact, until and unless the truth of such Chapter XIV-B does not give power to the Revenue to draw the presumption in regard to the undisclosed income. The AO could proceed on the basis of material detected at the time to search and the evidence gathered." Thus, there is no scope for presumption in the statute inasmuch as the provisions under Chapter XIV-B are concerned. The maxim of English Law as propounded by Holroyd, J. prescribes: "It is better that ten guilty men should escape rather than one innocent should suffer". The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion as to the holding of each member concern could not be given by Girish M. Kamat at the stage of recording his statement on 5th July, 1996. He was directed to produce 45 persons in whose names the FDRs were made. He stated in answer to question No. 8 that all the 45 names are fictitious and therefore, he could not produce them or give then addresses. He was asked to explain the sources of Rs. 12 lakhs made in 45 fictitious names. He stated that the source of investment was out of business concerns of Kamat Group. Later on his written reply dt. 29th May, 1997 Shri Girish M. Kamat gave personwise investment as under: ------------------------------------------------ Name of the concern Amount of FD FDR No. (Rs.) ------------------------------------------------ M/s Hotel Vrindavan 5,00,000 603 to 624 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. 9. Shri C.K. Bhake, the learned Departmental Representative strongly supported the order of the AO. He submitted that no reliance can be placed on the paper placed at p. 2 of the paper book which contains the name of the concern book but does not give the exact amount deposited by each group with Mahaveer Pat Sanstha. He submitted that this paper is a dumb paper and should be rejected outright. This paper was written in the hand of Shri Girish M. Kamat. The presumption is that the contents of it pertains to Girish M. Kamat and the entire amount of Rs. 12 lakhs is assessable in the hands of Mr. Girish M. Kamat. Accordingly, though the assessee declared a sum of Rs. 5 lakhs as its undisclosed income, the AO was justified in assessing the same on protective basis. 10. Alternatively, he argued that even if on the basis of paper seized during the search and placed at p. 2 of the paper, the amount of Rs. 12 lakhs should be assessed in the hands of the assessee on proportionate basis. 11. We have considered the rival submissions and perused the facts on record. From question No. 4 and reply to it in the statement of Shri Girish M. Kamat it is evident that the FDRs aggregating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: The appellant craves leave to add, alter, omit or substitute any of above grounds at the time of hearing of the appeal." This ground is general in nature and calls for no comments 14. In the result, the appeal is allowable in part. K.C. SINGHAL, J.M.: After going through the order proposed by my learned brother, I find myself in complete agreement with the conclusions arrived at by him. However, I would like to add few words in respect of grounds No. 1 disputing the addition made by the AO in respect of estimated suppressed sales and purchases for the period from 1st Jan., 1986 to 2nd Nov., 1986, because of my observations in the order dt. 9th Feb., 1999, in the case of M/s K.M. Khopade in ITA (SS) No. 281/PN/97 wherein it has been held by me that where the regular books of account are discarded because of the seized materials and the seized material is not a complete record of all the unaccounted transactions, then the estimate of undisclosed income can be made by applying the provisions of ss. 145 and 143(3) of the IT Act, 1961. In that case, it was found by me as a fact that seized material was not a complete record of the unaccounted transactions, but was a mere co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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