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TMI Blog2013 (11) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer in the hands of assessee partnership firm cannot survive - Decided against Revenue. - ITA Nos. 5340, 5341 & 5342/D/2012 - - - Dated:- 7-2-2013 - Shri S. V. Mehrotra And Shri Chandra Mohan Garg,JJ. For the Appellant : Smt. Priya Sahu, DR For the Respondent : None ORDER Per Chandra Mohan Garg, Judicial Member These appeals have been filed by the Revenue against the consolidated order of Commissioner of Income Tax(A)-XXXI, New Delhi for AYs 2004-05, 2007-08 and 2008-09 dated 20.01.2012. 2. The grounds raised in these appeals read as under:- ITA No.5340/D/2012 A.Y. 2004-05 "On the facts and in the circumstances of the case, the ld. Commissioner of Income Tax(A) has erred in deleting the addition of Rs.24,00,000/- made by the Assessing Officer on protective basis on account of unaccounted in case on the basis of documents and seized during the course of search and seizure operation u/s 132(1) of I.T.Act, 1961." ITA No.5341/D/2012 A.Y. 2007-08 "On the facts and in the circumstances of the case, the ld. Commissioner of Income Tax(A) has erred in deleting the addition of Rs.84,42,000/- made by the Assessing Officer on protective ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als are being adjudicated in the absence of respondent assessee and his representative. 6. We have heard arguments of ld. DR and carefully considered submissions and the record placed before us in these appeals. Admittedly, the Assessing Officer made protective additions in the relevant assessment years under calculation of unaccounted profits and investments. We also observe that the assessee partnership firm was asked to file return of income under the notice u/s 153C of the Act which was issued subsequent to the search and seizure operation u/s 132 of the Act in Shri Mukesh Garg group of cases. 7. In the impugned order, the Commissioner of Income Tax(A) has observed that the Assessing Officer has assessed the appellant firm and made protective additions on the ground that the family of the assessee is a joint family. As per observations of the Assessing Officer, the assessee M/s Yash Pal Narender Kumar is a regular supplier of Katha (catechu) to RMD Group, therefore, transaction in question is considered to be of the nature of trading transaction. The Assessing Officer also observed that though on the documents in question, the name of Shri Mukesh Garg is mentioned but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lwani Rai [2007] 17 SOT 380 (Chd.), it has been held that though the diary seized enable the revenue to presume that its contents are true, such presumptions is available only against the person to whom it belongs and this is a rebuttable Presumption. (i) Presumption u/s 132(4A) is not available, when the seized papers is recovered from third party and not from the assessee. Sheth Akshay Pushpavadan v Dy. CIT [2010] 130 TT J 42 (Ahd. UO) (ii) The addition is made by the AO based on third party evidence and not on the basis of any sound evidence collected during the search. A bunch of loose papers were seized from the premises of the third party which indicated the alleged unrecorded sales made to that party by the assessee. Variation in month-wise and other allied enterprises did not indicate that the assessee made any sales to 'H'. Average yield of the assessee was higher than that in comparable cases. The AO relied only on the entries of the said diary and did not bring on record any corroborative material to prove that such sales were made outside the books. It was held that mere entries in the accounts of a third party were not sufficient to prove that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "It has been held that loose papers and documents seized from premises of third parties and statement recorded at back of assessee without it being afforded opportunity to interrogate said documents and without bringing on record any supporting evidence, could not be made basis for adding undisclosed income in hands of assessee". c. Additional Commissioner of Income Tax Vs. Miss Lata Mangeshkar (1974) ITR 696 (Mumbai) "It has been held that on appreciation of evidence on record, that entries in the ledger of a firm (third party) did not represent assessee's income from undisclosed sources, was finding of the fact not giving rise to any referable question of law". d. Amarjit Singh Bakshi (HUF) Vs. Assistant Commissioner of Income Tax (2003) 86 ITD 13 (Delhi) "It has been held that where document in question was not recovered from assessee's possession but was recovered from N's possession, and assessee was not allowed any opportunity of cross- examination and further, N's testimony was not found credible at all, it could not be said that there was any iota of evidence to support revenue's case that a huge figure over and above figure booked in records and accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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