Case Law Details
RELEVANT PARAGRAPHS :
29. We have considered the rival submissions and perused the material on record. In our considered view, the Revenue is basically relying on the presumption as contained in Section 132(4A) read with Section 292C. For the sake of convenience, we reproduce Sections 132(4A) and 292C as under:
132 (4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed –
(i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person;
(ii) that the contents of such books of account and other documents are true; and
(iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person’s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.
Presumption as to assets, books of account, etc.
292C. [(1)] Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132 [or survey under section 133A] it may, in any proceeding under this Act, be presumed –
(i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person;
(ii) that the contents of such books of account and other documents are true; and
(iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person’s handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.]
[(2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub- section (1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132.]”
30. In respect of Section 132(4A), the Hon’ble Supreme Court in the case of P.R. Metrani v. CIT, 287 ITR 609 held that such presumption is restricted to summary assessment under section 132(5) for deciding as to retain or release assets seized in the search for the purposes of determining the estimated tax liability. The presumption does not extend to regular assessment thereafter. In this regard, relevant portion of the judgment may be referred to.
31. In order to overcome this difficulty, Section 292C was inserted with effect from 1-10-1975 which provided raising of presumption in regular assessment in respect of books of account or documents, money bullion, jewellery etc found in the possession or control of any person in the course of search under section 132. However, basic ingredients of these presumptions are contained in Section 132 (4A). These ingredients are (i) books of account, other documents, money, bullion, jewellery or valuable article or things should be found in the search. (ii) they should be found in the possession or control of any person in the course of search (iii) if these two conditions are satisfied then a presumption is raised against the assessee (i) about ownership of the documents/ books of account/money/ bullion/jewellery /valuable articles or things as belonging to such persons, (ii) about truthfulness of books of account and documents; and (iii) about signature or handwriting which is presumed to be of such person. Section 132(4A) or 292C shows that for raising the presumption against a particular person, it is not necessary that search should be carried out against such person. Where a search is carried out against a person and documents, money, bullion, jewellery, valuable articles or things are found in possession/control of another person during the course of the search then such presumption can be raised only against such another person in whose control and possession the valuable assets/documents are found, even though no warrant for search has been issued against him. Carrying out search against the person i.e issuance of warrant of authorization against the person for raising presumption is not necessary. There should be a search and the person is whose control and possession assets/books/ documents are found may be some person or may be other. If these items are found in control and possession of the person searched then presumption would be raised against the person searched in respect of these items. But if these items are found in control and possession of some other person during the course of search then presumption would be raised against that other person.
35. Since in the present case, the Assessing Officer has not given the details of transactions (as he has given the aggregate of different bunches of loose papers in AZ series), it cannot be said that (i) he has worked out the nature of transaction whether it results into a taxable income or not, (ii) the year of taxability as to whether it would fall in the block period, and (iii) the ownership of the transaction as to whether income resulting therefrom could be added in the hands of the assessee. Once complete parameters are not worked out by the Assessing Officer, he does not get authority to fasten the tax liability on the assessee in respect of these documents and particularly when he does not get any help from the presumptions contained under section 292C/132(4A).
