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TMI Blog1990 (9) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO also noted the fact that the assessee had not shown any withdrawals. He, accordingly, estimated the income at Rs. 29,000 as against Rs. 10,708 shown by the assessee. 3. In the course of the first appellate proceedings it was contended that the assessee carried on diamond pollution business for parties at Bombay on fixed commission basis. A reference was also made to the "regular" books of account being maintain din this connection as also the bills sent to the parties at Bombay. It was also contented that the replies given to the officers of the raiding party were on a rough recollection of the facts. Attention was also invited to the order of the CIT under s. 132(11) whereby It had been held that the ITO was not justified in seizing and retaining diamonds valued at Rs. 3,93,200. On the basis of the aforesaid arguments, it was urged that the income disclosed at Rs. 10,708 be accepted. 4. The AAC after examining the facts of the case and taking into account the arguments advanced, opined that an estimate at Rs. 20,000 would be fair and reasonable. In coming to this conclusion he took into account the statement given by the assessee to the officers of the raiding party as als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipts from the parties to whom agricultural produce had been sold. He recorded a specified finding that these agricultural lands were owned by the HUF of which the assessee was the Karta. 10. The learned D.R. at the outset stated that the facts considered by the AAC had not been brought forth before the ITO and in all fairness the matter should have been restored to the ITO or an opportunity should have been given to the ITO by the first appellate authority before taking a decision. 11. The learned counsel for the assessee, on the other hand, strongly supported the order of the AAC stating that no specific ground had been raised by the Revenue vis-a-vis the filing of fresh evidence in the light of r. 46A. Without prejudice to this argument it was urged that the facts considered by the AAC were already available on record in the form of the order passed by the Commissioner under s. 132(11). He invited out attention to a copy of the said order appended at page 85 of the paper book. 12. We have examined the rival submissions and in our opinion the order of the AAC requires to be confirmed,. The Commissioner in his order passed under s. 132(11) has recorded clear findings to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses effected during a single day and against this entry the quantity of diamonds purchases was also recorded. (3) That the quantity records has also been furnished to the ITO. (4) That the sales had been accepted by the ITO and this could not have been possible without purchases of adequate quantities having been made. In other words, the purchases stood established beyond doubt. (5) That no bills or vouchers were issued by these petty labourers. (6) In the course of search proceedings for a subsequent year the Department had seized rough papers wherein the assessee's version was borne out, viz., the passing of a single entry in respect of various purchases made during the day. It was, however, admitted that such rough papers for the years under appeal were not available. (7) That, in case the purchases in question were disallowed then the profits disclosed on the trading activities would be abnormally. 16. In respect of asst. yr. 1980-81 the AAC deleted the addition made by the ITO on the following lines: "4.2. The ITO disallowed purchases of Rs. 43,744 under s. 40A(3). He noticed these purchases on certain duties as recorded in para 3 of the assessment order. I have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not found either at the residence or at the business premises in the course of search and they were produced more than three weeks later in response to a summons. In these circumstances it is clear that the particulars regarding purchases must be in the possession of the assessee. Now when the evidence in a particular matter is in the possession of one party and that the party does not produce evidence it can be legally presumed that the evidence must be such that if produced it would go against the party. I, therefore, feel that the assessee cannot be allowed to take advantage of the fact that it has not produced details of the purchases. He cannot, therefore, agree that just because the details of purchases are not produced, the Department must presume that every purchase shown in the cash book as exceeding Rs. 2,500 was in fact consisting of several smaller items which were all of less than Rs. 2,000. 7. I find that the as does have such particulars as to exact total of the turnover amounting to Rs. 2,23,462 as also exact total of the amount of purchases. Details regarding different items of purchases on each day, if at all there were different items of each day, must, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O had accepted the quality and quantity accounts as also the rates at which purchases had been effected. (4) That the explanation given to the ITO and the first appellate authorities was a consistent one taken up all along and there was no variation at any stage. (5) That the premises of the assessee had been raided on 26th April, 1982 when loose papers pertaining to S.Y. 2038 had been seized. That these papers supported the arguments advanced on behalf of the appellant, viz., the passing of a single entry at the end of the day in respect of numerous purchases made during the same day. According to the learned counsel, the question was required to be decided not on the basis of direct evidence which he admitted was not available but on the basis of circumstantial evidence taking into account the nature of the transactions and the background. In support of the various arguments advanced he placed reliance on the following decisions: (1) Hasanand Pinjomal vs. CIT (1978) 112 ITR 134 (Guj) (2) CIT vs. Aloo Supply Co. (1980) 121 ITR 680 (Ori) S.L.P. rejected (143 ITR (statutes) page 67 (3) Patel Bros. Co. Ltd. vs. ITO (1986) 17 ITD 126 (Ahd) (4) Sixth ITO vs. Himatlal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case irrespective of the fact that the assessee's trading account may reveal an "abnormally" high profit. The law has provided sufficient safeguards to an assessee to get out of the rigours of s. 40A(3) but the present assessee has not been able to do so for reasons for which he has only himself to blame. This argument is accordingly rejected. On the facts and circumstances of the case the order of the AAC for asst. yr. 1980-81 is reversed whereas that of the CIT(A) for asst. yr. 1981-82 is upheld. This would mean that ground No. 2 in the Revenue's appeal for asst. yr. 1980-81 would stand allowed whereas the corresponding grounds in the assessee's appeal for asst. yr. 1981-82 stand rejected. 21. In the assessee's appeal pertaining to asst. yr. 1981-82 two other issues remain and the first of these is the estimate of income from "Diamond Majuri Commission" at Rs. 31,000 as against Rs. 254 shown. The ITO recorded the following reasons in arriving at the aforesaid estimate: "As regards diamond commission business, on total Majuri receipts of Rs. 40,000 from M/s J.K.D. Diamond, Bombay, the assessee has shown profit of Rs. 254 only, which is very low in this line of business. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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