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TMI Blog2005 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT was legally correct to cancel the additions of Rs.1,35,000/- and Rs.14,645?" 2.Whether, on the facts and in the circumstances of the case the ITAT is legally correct to hold that the assessee has successfully discharged its initial onus to prove that the paper found and seized from its premises does ot belong to it and the contents thereof do not relate to the assessee in any way?" The present Reference relates to the Assessment Years 1983-84. 3.Briefly stated the facts giving rise to the present Reference are as follows:- 4.The respondent assessee has been assessed to income tax in the status of a registered firm. It is engaged in the money lending business on pawn broking and pledges. It had declared the income at Rs.25,843/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following grounds:- "4.4. Now, in the light of the aforesaid principles of law, let us examine the seized paper in question. The aforesaid seized paper merely contained certain figures, rate and and consequent calculation. It does not bear the name of the assessee or any one else. It is not in the handwriting of any of the partners or employees of the assessee as per replies submitted by the assessee in response to the show cause dated 9.9.1985 issued by the I.T.O. In relation to the aforesaid seized paper, the assessee clearly stated that the said paper does not belong to the assessee firm or its partners or any connected person. He also explained that this is written in english and none of the partners or employees of the firm know en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of proceedings u/s 132(5). The statements of the partners S/Sh.Rajpal Singh and Ram Autar were recorded on 18.1.1984. The I.T.O. did not put any question relating to the aforesaid seized paper during the course of aforesaid statements recorded in the year 1984. Even after receiving the assessee's entries dated 27.9.1985 and 3.3.1987, the I.T.O. did not choose to examine the partners or the employees of the assessee firm in relation to the aforesaid seized paper. The paper found and seized from the premises of the assessee nowhere contains any description that this represents the amount of loan given by the assessee to any person. After receiving the reply from the assessee in response to the show cause notice dated 9.9.198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated totalling to Rs.14,400 it would be interest for one full year. This necessarily implies that the investment, if any, was made by any person as recorded in the aforesaid seized paper, it must have been made in the month of July, 1981 as interest for one full year has been calculated and thereafter interest for the remaining period 12-7-1982 to 12-9-1982 has been worked out. This indicates that the figure of Rs.1,35,000 recorded in the seized paper cannot be said to represent an unexplained investment made in the financial year 1982-83. On this account also, the addition made by the Assessing Officer and confirmed by the CIT(A) deserves to be cancelled. 4.6. Taking an overall view of the facts and circumstances of the case, we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the debris in the shop premises and might have been left by someone and it did not belong to them. The Tribunal has further found that when the partners and the employees had made a statement that they did not know English, no attempt was made by the Assessing Officer to cross examine the partners or their employees to extract the truth and, therefore, the explanation offered by them was to be believed. The approach of the Tribunal is in accordance with law and calls for no interference. The Tribunal has further held that aforesaid Rs.1,35,000/- in any event represented principal amount, could not have been earned during the assessment year in question even if it is assumed that the investment belonged to the respondent, it might have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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