COMMISSIONER OF INCOME TAX Vs. D.R. BANSAL

JUDGEMENT

(1.) IN IT Ref. No. 17 of 2002 the INcome Tax Appellate Tribunal, Nagpur Bench, Nagpur (in short "the Tribunal") has made this reference under Section 256(1) of the IT Act, 1961 at the instance of CIT, Jabalpur and referred the following question of law arising out of order dt. 28th June, 1985 of the Tribunal in ITA No. 822/Nag/1984 for our opinion: Whether under the facts and circumstances of the case, the Tribunal is justified in law in not giving finding in its order with regard to applicability of presumption under Section 132(4A) of the IT Act, 1961 to the assessment proceedings?

(2.) THE other connected Income Tax references and Income Tax appeals are also being disposed of by this common order as appeals preferred by the Revenue in the connected cases, have been dismissed by the Tribunal in view of the order dt. 28th June, 1985 passed in ITA No. 822/Nag/1984, D.R. Bansal v. CIT, and the question of law involved in all the references and appeals is the same, which has been referred by the Tribunal for our opinion in IT Ref. No. 17 of 2002.

(3.) BRIEFLY stated, facts of the case are that a search operation under Section 132 of the IT Act, 1961 (in short "the Act") was conducted in the business and residential premises of the respondents-assessees' group on the basis of warrant of authorization issued by the CIT, Jabalpur in the month of July, 1982. During search operations, various documents, books of accounts relating to the firm M/s Bansal Brothers and its sister concerns including the business transactions, the income which is not disclosed by the assessee in their return of income, were seized. 47 loose sheets, typed copy of the financial statement of partnership firms, a bunch of loose papers containing 105 sheets recording cash transactions of partnership firm M/s Chhattisgarh Iron & Steel Works - a sort of cash book for the financial year 1981-82 and 178 loose sheets recording cash transaction of partnership firm M/s Bansal Brothers (in short "M/s BB") - a sort of cash book for financial year 1981-82, were seized from the residence of one partner Smt. C.R. Bansal from the briefcase of her spouse Shri K.K. Bansal. Smt. C.R. Bansal and Shri K.K. Bansal were not present at the time of seizure. In the course of proceedings under Section 132(5) in the case of M/s BB, the documents seized during search proceedings were shown to the assessee as desired and its explanation was sought. In its written explanation, the assessee sought to plead that the papers containing some accounts are fictitious, false and unreliable and non-genuine being irrelevant to the transactions of the assessee firm M/s BB. Since the papers are typed papers found in the residential premises of Mr. K.K. Bansal, therefore, it is not possible for the assessee to understand how and where the papers were found by the searching party unless a copy of the ITO's report or Addl. Director of IT'S report to the CIT concerning the raid is made available to it. Subsequently, copies of the affidavits of the accountants of the group Shri N.B. Lalson and Shri P. Rajan dt. 23rd Oct., 1982 along with a joint confession letter addressed to Shri K.K. Bansal were filed. They also filed affidavits of Shri Lalson and Shri Rajan, who affirmed on oath that they have planted these fabricated documents at the residence of Shri K.K. Bansal when he and his wife had gone to Delhi. Shri Lalson affirmed on oath that he is serving M/s BB as accountant for the last 10 years, he also helps friends and colleagues in other firms; he was a trusted employee and guide of the firm, and he was entrusted with full responsibility the work of maintenance of accounts and other related matters concerning the Income Tax and sales-tax etc. He prepared the loose papers and other documents in connivance with other accountant Shri P. Rajan and placed the same in the residential premises of Shri K.K. Bansal in his absence on the advice of a friend. The loose papers contained bogus and absolutely false, baseless entries in the form of loose sheets typed and handwritten by him and his colleague Shri P. Rajan, pertaining to the firm M/s BB and M/s Chhattisgarh Iron & Steel Works and partners (in short "M/s CISW"), and the same were seized by the IT Department on 20th July, 1982 mentioned in Annex. Al to Panchanama in respect of seizure and search made in the residential premises of Shri K.K. Bansal, partner of M/s CISW. The same are not real, but false and bogus. Similar affidavit was sworn by Shri P. Rajan, accountant of the firm M/s CISW.