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TMI Blog2019 (2) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by Principal Commissioner of Income Tax-I, Indore against order dated 21.9.2016 passed in Income Tax Appellate Tribunal in I.T.A. No.585/Ind/2015 for the assessment year 2009-10. 2. The facts of the case reveal that the respondent-assessee has filed his return of income for the assessment year 2009-10 on 29.9.2009 declaring total income as ₹ 2,05,230/-. There is no dispute about the aforesaid fact. Facts further reveal that a search operation was carried out on 19.11.2009 by the Investigation Wing, Indore of the Income Tax Department on the Satellite Group of companies and one of the assessees M/s. Phoenix Devcons Pvt. Ltd. was also subject to proceedings under Section 132. Several incriminating documents were recovered from the premises of the M/s. Phoenix Devcons Pvt. Ltd., Indore in which there was a reference of Mr. Pukhraj Soni. In a diary there was an entry in respect of amount given to Mr. Pukhraj Soni and, therefore, a notice was issued under Section 148 to the assessee and the case was re-opened as there was a reason to believe escapement of income of ₹ 2,50,00,000.00 and the interest thereon amounting to ₹ 9,37,500/-. After concluding the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of the assessee on the basis of notings found in the books of third person. 4. The Tribunal has held that the Commissioner (Appeal) was justified in allowing the appeal as the Assessing Officer has done the addition on the basis of notings found in the books of third person. It is again an undisputed fact that the assessment has been done on the basis of notings found in the books of third person. 5. Shri Sumit Nema, learned Senior Counsel with Shri A. Gupta, learned Counsel for the respondent has placed reliance upon a judgment delivered in the case of Central Bureau of Investigation Versus V. C. Shukla and others reported in (1998) 3 SCC 410. Paras 17, 18, 24, 25, 26, 27, 34, 37 and 39 reads as under:- 17. From a plain reading of the Section it is manifest that to make an entry relevant thereunder it must be shown that it has been made in a book, that book is a book of account and that book of account has been regularly kept in the course of business. From the above Section it is also manifest that even if the above requirements are fulfilled and the entry becomes admissible as relevant evidence, still, the statement made therein shall not alone be suffi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut not the loose sheets of papers contained in the two files (MR 72/91 and MR 73/91). 24. It cannot be gainsaid that the words 'account', 'books of account', 'business' and 'regularly kept' appearing in Section 34 are of general import. necessarily, therefore, such words must receive a general construction unless there is something in the Act itself, such as the subject matter with which the Act is dealing, or the context in which the words are used, to show the intention of the legislature that they must be given a restrictive meaning. 25. Indubitably, the Act lays down the rules of evidence to be applied and followed in all judicial proceedings in or before any Court including some Courts - martial. Keep in view the purpose for which the Act was brought into the statute book and its sweep, the words appearing in Section 34 have got to be given their ordinary, natural and grammatical meaning, more so, when neither the context nor any principle of construction requires their restrictive meaning. While on this point we may refer to Section 209 of the Companies Act, 1956 which expressly lays down what 'books of account' to be maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the prosecution now on the basis of the materials collected during investigation (detailed earlier) would, therefore, be 'business' for they were being carried on continuously in an organised manner, with a set purpose (be it illegal) to augment their own resources. mr. 71/91 is, therefore, a book of account kept in the course of business. 34. The rationale behind admissibility of parties' books of account as evidence is that the regularity of habit, the difficulty of falsification and the fair certainty of ultimate detection give them in a sufficient degree a probability of trustworthiness (wigmore on evidence $ 1546). Since, however, an element of self interest and partisanship of the entrant to make a person - behind whose back and without whose knowledge the entry is made - liable cannot be ruled out the additional safeguard of insistence upon other independent evidence to fasten him with such liability, aha been provided for in Section 34 by incorporating the words such statements shall not alone be sufficient to charge any person with liability. 37. In Beni Vs. Bisan Dayal [ A. I. R 1925 Nagpur 445] it was observed tat entries in book s of account ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of of reliability of the entries so far they are concerned and not others. In other words, the statements of the above witnesses cannot be independent evidence under Section 34 as against the above two respondents. So far as Shri Advani is concerned Section 34 would not come in aid of the prosecution for another reason also. According to the prosecution case itself his name finds place only in one of the loose sheets (sheet No. 8) and not in MR 71/91. Resultantly, in view of our earlier discussion, section 34 cannot at all be pressed into service against him. 6. The Tribunal has considered the aforesaid judgment while dismissing the appeal of the Revenue. The Apex Court in the case of Common Cause (A Registered Society) Versus Union of India reported in [2017] 77 taxmann.com 245 (SC) 22, 24 and 27 has held as under:- 22. In case of Sahara, in addition we have the adjudication by the Income Tax Settlement Commission. The order has been placed on record along with I.A.No.4. The Settlement Commission has observed that the scrutiny of entries on loose papers, computer prints, hard disk, pen drives etc. have revealed that the transactions noted on documents were not ge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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