| Question And Answer | |
|---|---|
| Subject: | DOCUMENT FOUND DURING INCOME TAX SEARCH WHICH IS NOT ACCEPTED BY ASSEESEE |
| Category: | Income-Tax |
| Querist: | KARAN |
| Answered by: | Dr .K. Shivaram Senior Advocate |
| Tags: | documents, Search and Seizure, search assessment |
| Date: | May 17, 2022 |
- DURING THE COURSE OF SEARCH AT ASSESSEE’S PREMISE (LET SAY ABC PVT LTD BEING A JEWELLER), CERTAIN INFORMATION WAS EXTRACTED FROM COMPUTER/HARDISK SEIZED WHEREIN IT WAS MENTIONED IN EXCEL FILE – DETAILS OF OTHER PERSON (SAY XYZ), HIS ADDRESS, DATE OF CASH RECEIPT FROM XYZ FOR PURCHASE OF JEWELRY. IT WAS A EXCEL DOCUMENT AND DID NOT CONTAIN ANY SIGNATURE.
2. CONSIDERING THE ABOVE EXCEL FILE EXTRACTED AS INCRIMINATING MATERIAL PERTAINING TO OTHER PERSON (XYZ), ASSESSMENT PROCEEDINGS U/S 153(C) WERE UNDERTAKEN OF XYZ. XYZ HAD CLEARLY DENIED SUCH INFORMATION AND TAKEN STAND THAT HE HAS NOT PURCHASED ANY SUCH JEWELRY AND NOT PAID ANY SUM IN CASH TO ABC PVT LTD. THE ASSESSEE HAS NO OTHER STAND OR DOCUMENTARY PROOF TO PROVE HE HAS NOT PURCHASED SUCH JEWELRY.
3. THE ITO HAS REJECTED THE GROUND AND MADE ADDITION AS UNEXPLAINED INVESTMENT IN HANDS OF XYZ.
4. IS ACTION OF ITO JUSTIFIED. WHAT STAND OR JUDGEMENTS ARE IN FAVOUR OF ASSESSEE FOR FILING APPEAL AGAINST THE ASSESMENT ORDER.
Merely on the basis of certain documents found in the third party premises the addition cannot be made . The provision of section 132 (4A) and section 292C is not applicable in respect of documents found in the third party premises . In Dy.CIT v .GSNR Rice Industries Pvt. Ltd (2021) 90 ITR 114 / 213 TTJ 17( Chennai ) ( Trib) held that diary, notebook and data of deleted entries retrieved from computer central processing unit is not books of account. Addition cannot be made without any corroborative evidence . Presumption u/s 292C is rebuttable . In PCIT v. Hassan Ali Khan (2020) 426 ITR 556 (Bom.)(HC) the Court held that when documents are not seized from possession of assessee. Amount of draft cannot be treated as unexplained expenditure .
The assessee can ask for cross examination of persons from whom the documents are found . In Anadaman Timber Induatries v. CCE ( 2015) 127 DTR 241/ 281 CTR 241 ( SC) held that ; failure to give the assessee the right to cross -examine witness whose statements are relied up results in breach of principles of natural justice . It is a serious flaw which renders the order nullity .