Case Law Details
Hon’ble Delhi High Court in the case of R.K. Jain (supra) has observed that in case of search material, the same is to be assessed by way of block assessment under Chapter XIV-B. Similar view is echoed by Hon’ble Bombay High Court in the case of Dr. M.K. E. Menon and by Hon’ble Gujarat High Court in N.R. Paper & Board Ltd. & others (supra). A similar view has been upheld by Hon’ble Supreme Court in the case of Manish Maheshwari (supra). In view of above, we are of the view that the impugned addition of Rs. 83 lacs cannot be made in the hands of the assessee on protective basis by taking recourse to sec. 143(3). Thus, the additional ground of the assessee is allowed. ITAT Further held that :-
(i) Assessee’s stand was examined in the course of block assessment of RC, there also he denied having any connection with the diaries cash entries made in the handwriting of RC.
(ii) During the course of search in RC’s premises and in subsequent search of the assessee’s premises, no corroborative incriminating evidence was found to suggest such cash payments or assets of said firm M/s Dev Yogi Developers.
(iii) Lower authorities have solely relied on various uncorroborated evidence including the fact that in the diary two cheuqe entries match with assessee’s record in respect of his capital contribution in the firm M/s Dev Yogi Developers, therefore, it is to be inferred that all the cash entries mentioned in RC’s seized diary belonged to the assessee. Had the paper been in the handwriting of assessee, this presumption could have some relevance, but with stark reality of the diary being written in the hand of ‘RC’ and found in his premises during the course of search; in our view, such inferences are shaky and have no legs to stand except creating a suspicion.
(iv) The statutory presumption u/s 132(4A) has been raised against RC and addition confirmed in his hands by block assessment u/s 158BD.
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