Contention of the Assessee :- The alleged Pen drive is not an admissible evidence, therefore the recording of reasons and consequent 148 proceedings based on the reasons of such unreliable evidence are bad in law.
Held by ITAT
6.1. It is apparent that many of the transactions recorded in the alleged pen drive belong to various concerns and bank accounts of the assessee. Thus prima facie the pen drive and its contents have a relationship with the assessee, the burden to disprove the same is on him. Assessee has raised various objections about the intentions and irregularities committed by Punjab Police while carrying out the search and seizure of the alleged pen drive and taking out printouts as per the Cr. P.C., IPC , Indian evidence Act and Cyber Laws, which in our view have no effect on recordings of reasons for forming a belief about escapement.
6.2. Income Tax proceedings are non adversarial in nature and the entire exercise is directed to ensure a fair and proper assessment on the assessee. It is trite law that technical rules of Evidence Act and Cr. P. C. are not applicable to these proceedings. An evidence which indicates the income of the assessee is admissible in Income Tax proceedings. From the record it emerges that many of the entries mentioned in the pen drive belonged to various business concerns of the assessee in which he is associated in the capacities of director or partner. Similarly many entries pertained to his bank accounts and other persons. They are explained by the assessee though on prejudice basis, but the fact remains that the entries have correlation with assessees activities. In this view of the matter the contents of the pen drive become admissible evidence in Income Tax proceedings and form a basis for investigations and additions. Consequently we hold that pen drive and print outs thereof constitute admissible evidence in these proceedings. The reasons for reopening were recorded on the basis of these contents. In view of the fore goings the reasons recorded for escapement of income and the material available on record with AO have a live link with each other. Thus, we hold that the reasons for reopening the assessments were properly recorded by AO. This question is answered against the assessee.