9911796707
TMI Blog2011 (10) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... g search operations, particularly, disregarding statement of the assessee recorded under s. 132(4) of the Act ? Whether, in law, in respect of hundies/promissory notes recovered and seized during the course of search the onus is cast on the AO to prove that the amount shown in such hundies/promissory notes was actually advanced by the assessee ?" 4. The facts, in brief, in IT Appeal No. 17 of 2004 are relevant for proper adjudication of the appeals, are that the search was conducted at the residential premises of the assessee situated at G.E. Road, Rajnandgaon during the period from 11th Nov., 1997 to 14th Nov., 1997. During the course of search, certain incriminating documents including promissory notes/hundies were found in addition to cash and jewellery. Consequent thereupon, a notice under s. 158BC was issued by the AO to the assessee on 30th Dec., 1998. The assessee filed return, in response, on 22nd March, 1999 declaring his undisclosed income for the block period 1st April, 1987 to 14th Nov., 1997 to the tune of Rs. 11,44,218. The total amount involved in the transaction reflected in the promissory notes/hundies papers found during the search was Rs. 41.25 lakhs. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned persons. It was further held that denial by both the parties of having no transactions as stated in the promissory notes/hundies was done, as per the convenience and, as such, the AO declined to assign any evidentiary value to the affidavits of the concerned parties filed by the assessee. 7. The AO further found that there was no correlation between the promissory notes/hundies found during the course of search with the corresponding trade/loan transactions for which the assessee had claimed to have obtained the same as security. It was found that the assessee had fabricated bogus evidence in order to support his explanation and the same was not accepted by the AO. The AO held that the contents of the promissory notes/hundies very clearly denoted money advanced in cash by the assessee to the respective parties and the counter-guarantee against outstanding trade/loan transactions were not acceptable in the absence of correlation. The AO treated the amounts of hundies as investment made by the assessee from his undisclosed income and the same was added to the undisclosed income of the assessee for the block period. In the search, cash amounting to Rs. 16,16,363 was also fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said promissory notes/hundies to the concerned parties and/or received interest from the said parties on the amount allegedly advanced. Ultimately, the CIT(A) recorded the conclusion that the explanation of the assessee of having obtained the relevant promissory notes/hundies as collateral security/guarantee for the trade/loan transactions already recorded in the regular books of account was duly supported and substantiated. The AO without taking steps to revert the same wrongly held that the explanation of the assessee was not correct. Similarly, the addition of Rs. 7.50 lacs in respect of the cash found during search was also deleted holding that cash found during the course of search observing that the cash found and seized was fully explained by the assessee to be belonging to others and the said persons have explained in their affidavits filed before the AO. Thus, the CIT(A) vide its order dt. 29th Feb., 2000 (sic). 13. There against, the Department has preferred appeal before the Tribunal. In the appeal, six grounds were raised by the Department as under: (1) Deleting the addition of Rs. 1,62,790 made by the AO as undisclosed income for asst. yrs. 1994-95 to 1998-99 with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduring the assessment proceedings. The affidavits submitted by the assessee were doubtful and, as such, the same were rightly rejected. The Tribunal committed error in accepting the affidavits as true. The Tribunal has placed an impossible burden on the AO to examine each case and to produce proper and cogent evidence to disprove and discredit the affidavit. If the proposition is accepted as it is, the assessees would succeed in all cases by filing affidavits. The AO was rightly made the assessment following common practice prevailing in the money lending business. 17. Shri Shrivastava in support of his contention placed reliance upon the decisions of this Court rendered in Asstt. CIT v. Hukum Chand Jain [2011] 337 ITR 238/[2010] 191 Taxman 319 (Chhattisgarh) and Dhanush General Stores v. CIT [2011] 339 ITR 651/[2012] 20 taxmann.com 853 (Chhattisgarh). 18. On the other hand, Shri Harsh Wardhan, advocate for the respondents, would submit that since the question of law starts with 'whether under the facts and circumstances of the case' that means the facts and circumstances of the case have been accepted as it is and in the light of the said facts, the question has to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon his statement. The retraction should be made at the earliest opportunity and the same should be established by producing any contemporaneous record or evidence, oral or documentary, to substantiate the allegation that he was forced to make the statement in question involuntarily." 21. In Dhanush General Stores (supra), the issue involved was as to whether the income offered in return of income as business can be assessed as deemed income under s. 69B, without holding that under which head of income it is assessable. This Court held that since the income surrendered was shown in the trading account, but not in computation of income for the purpose of taxation. 22. In Sardar Machhisingh (supra), the learned Division Bench of the High Court of Madhya Pradesh held that the finding of facts as recorded by the AO, CIT (A) and Tribunal cannot be examined by the High Court in an appeal under s. 260A. 23. The Supreme Court in P.R. Metrani (supra), while considering the statement under s. 132 held as under : "A presumption is an inference of fact drawn from other known or proved facts. It is a rule of law under which Courts are authorized to draw a particular inference from a par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any substantial question of law had arisen for consideration of the High Court. The High Court misdirected itself and committed error in disturbing the concurrent findings of facts." 26. In P.V. Kalyanasundaram (supra), the Supreme Court observed as under : "The fact as to the actual sale price of the property, the implication of the contradictory statements made by Rajarathinam or whether reliance could be placed on the loose sheets recovered in the course of the raid are all questions of fact. We therefore find no infirmity in the order of the High Court." 27. In Micro Melt (P.) Ltd. (supra), the Gujarat High Court observed as under : "Thus it is apparent that the genuineness of the transactions and the identity of the depositors have been established and nothing has been brought on record to contradict the findings of fact recorded by the CIT(A) as noted by the Tribunal. In the circumstances, the issue being a pure issue of facts and appreciation of evidence, no question of law, much less a substantial question of law, as proposed or otherwise, arises out of the impugned order of the Tribunal." 28. This Court in Vijay Kumar Kesar (supra) held that the findings of fact recor ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
