9911796707
TMI Blog1992 (2) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 132 in the residential premises of the assessee on 28-1-1987. During the course of search the authorised officer found an unsigned typed sheet of paper styled as "Memorandum of Understanding" (for short MOU) the gist of which is as under : (1) Date of joining around 1-10-1982 (2) Salary (a) Rs. 5000 p.m. + reimbursement of medical expenses (b) Rs. 13,750 extra p.m. together with 2(a) (c) Annual leave as per company's rule (3) Car with chauffeur at company's cost (4) Residential facilities at Kyd St., Calcutta--transfer of tenancy to be arranged. Monthly rent to be recovered from 2(a) and extra for Rs. 3 lakhs from (5) (5) Share in G.P. The Assessing Officer noted that the assessee joined Naihati Jute Mills Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the contents of MOU are not true. In short, according to the learned departmental representative the assessee has not rebutted the presumption as laid down under section 132(4A)(ii). It is also submitted by Sri Sen that the CIT (Appeals) is not correct in stating in the impugned order that the assessee was not questioned on the date of search regarding MOU. He has drawn our attention to question No. 15 in the statement recorded by the authorised officer on the date of search and which is at page 3 of the paper book filed. He submits that the terms of employment of the assessee with Naihati Jute Mills Co. tally with the terms contained in MOU found during the course of search. The power of CIT (Appeals) is co-terminus with that of the ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o those letters. The learned counsel for the assessee submits that the said sheet of paper styled as "Memorandum of Understanding" did not mention any names either of the employer or of the employee and the same is not signed by any party or person. In such an event it would be preposterous to attach credence to such paper and make huge addition to the income returned. There is no presumption whatsoever under section 132(4A) that if any unsigned paper or document is found in the course of search it may be presumed that the same is signed. According to Shri Banerjee any paper or document not having signature is of no value and consequence. It is the signature he further submits, which gives life and validity in law, to any paper or document. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of section 132(4A)(ii), when any document is seized pursuant to search it may be presumed that the contents of such documents are true. We have examined a copy of MOU filed before us in this appeal and we find that the same, is not signed either by the assessee or by any person for and on behalf of Naihati Jute Mills. No names whatsoever are also mentioned in the said MOU on the basis of which the Assessing Officer has made the addition of Rs. 4,93,900. We entirely agree with the assessee's counsel that under section 132(4A) there is no presumption that if an unsigned paper or document is found during the course of search it has to be presumed that it is signed. We find in section 132(4A)(ii) that if there is signature on any document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of section 132(4A) will become oppressive if applied in this manner and surely this is not the purpose or intention of the Legislature in enacting section 132(4A) in Income-tax Act. Like any other provision of a statute the provisions of section 132(4A) also have to be applied and interpreted in very reasonable manner and in consonance with justice. We say so on the basis of judgment of Hon'ble Supreme Court in the case of R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 at p. 575. 6. A reading of section 132(4A) reveals that the words used therein are "may be presumed". It is thus clear that the drawing of presumption in such cases depends upon particular facts and circumstances of each case. The officer is not justified to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes as mentioned in its letter dated 30-9-1982. All these letters are on record. We also find much force in the contention of the assessee's counsel that in law no cause of action can lie in any court of law on the basis of such unsigned MOU. The Hon'ble Calcutta High Court has laid down in the case of CIT v. Burlop Commercial (P.) Ltd. [1988] 173 ITR 522 p. 525 that if in law the cause of action does not arise it cannot be said that the liability to pay has accrued. Apparently no cause of action can lie between the assessee and Naihati Jule Mills Co. on the basis of such unsigned MOU and, therefore, there is no obligation or liability on the part of the company to pay to the assessee all those amounts mentioned in the unsigned MOU nor the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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