MAHAVIR WOOLLEN MILLS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an appeal under S. 260A of the INCOME TAX ACT, 1961 (in short, the Act), challenging an order of the Income -tax Appellate Tribunal Delhi Bench -C (in short, the Tribunal). According to the assessee, the following question needs to be adjudicated :

(2.) FACTUAL position as noticed by the Tribunal is as follows : On 16th Nov., 1995, search operations were carried out under S. 132(1) of the Act at the business premises of the concerns of a group known as Mahavir Woollen Group which included four assessees including the appellant and at the residential premises of the partners also. During the course of search, certain incriminating documents were found and seized. In response to notices under S. 158BC of the Act, all the four assessees filed returns declaring that there was no undisclosed income. Assessments were concluded on positive income after considering the seized documents by the Dy. CIT, Special Range -36, New Delhi. Four appeals were filed by the four assessees. Appeal IT (SS) A No. 32/Del/1996 relates to the present appellant. During the course of search and seizure proceedings certain slips were found, which, the AO concluded, contained details of payment beyond those which were made by cheques and drafts and were duly reflected in the books of accounts. The assessee's stand before the Tribunal was that the documents were "dumb documents" which did not contain full details about the dates of payment and its contents were not corroborated by any material and could not be relied upon and made basis of an addition. Tribunal considered this aspect and observed that on comparison of the seized documents and ledger accounts of the parties, seized documents could not be regarded as 'dumb document'. Basis for coming to such a conclusion was that some of the entries reflected in the seized document tallied with the entries in the ledger accounts maintained by the assessee. It also noticed that there was no denial of the fact about the seizure of the documents. Merely because a denial was made by the assessee that no cash payments were made or regular account books should be taken to reflect the true state of affairs, the seized documents could not be ignored. A positive finding was recorded that there was no denial of the position that the documents were seized during the course of search and its ownership was not disputed. It did not also accept the stand that the writer of the document was under some misconception about the mode of payment. It was the sole and exclusive knowledge of the assessee as to who was the person who had written the document and, therefore, the onus was on the assessee to bring some material on record to rebut and contradict the correctness of the entries about cash payments. Consequently, it was observed that assessee has miserably failed to discharge the onus. Therefore, the AO's conclusion that cash payment represented unexplained investment of the assessee which was liable to be assessed under S. 69 of the Act in the asst. year 1996 -97. Accordingly the assessee's appeal on that score was not entertainable.

(3.) AS indicated above, the Tribunal has come to certain factual conclusion about the nature of paper seized. On the question whether the document did or did not contain the particulars, Tribunal observed that it did contain certain materials which were sufficient to come to a conclusion about cash payment having been made in addition to those made by cheques and drafts. The conclusion is essentially factual. Sec. 260A(1) of the Act reads as follows :