COMMISSIONER OF INCOME TAX Vs. J DINESH MEHTA

JUDGEMENT

(1.) This Tax Case (Appeal) has been filed by the Revenue challenging the order passed by the Commissioner of Income Tax (Appeals) viz., the Appellate Authority as confirmed by the Income-tax Appellate Tribunal "D" Bench, Chennai, dated 10.07.2009 in IT(S.S.)A.No.107/Mds/2007 for the assessment period 01.04.1996 to 29.01.2003.

(2.) This tax case (appeal) has been admitted on the following substantial question of law:-

(3.) The assessee is a Firm doing Jewellery business under the name and style of M/s Jaswant Singh & Sons (in his individual capacity) and M/s Gems Palace (in his HUF status). A survey under Section 133-A of the Act was conducted followed by search on the office and the residence of the assessee. No undisclosed asset was found from the premises of the assessee. However, search was made in the premises of Pathers, who are stated to be the job workers, from the diaries maintained by them, in which, entries were stated to have been made by the assessee. Additions were made through block assessment. The statements were also taken by them in tune thereon. The Commissioner of Income Tax(Appeals) allowed the appeal by taking note of the subsequent sworn statements of Pathers, by which, the assessee was permitted to cross examine holding that the statement made being contradictory and they also indicated the factum of being job services to other jewellers similarly placed assessee, the order of assessing Officer cannot be sustained in the eye of law. Incidentally, it was held that in the absence of any corroborative evidence to substantiate the diaries even assuming they are true notwithstanding the denial made by the assessee, the additions cannot be sustained. Challenging the same, the Revenue field the appeal. The Tribunal was also pleased to hold that there is no sufficient material to sustain the assessment made. There was no unamended purchases and sales found are deducted during search of the assessee. Inasmuch as the assessee had denied the handwriting and the Assessing Officer did not send it to the Handwriting Expert, it would not safe to rely upon them. The Pathers are not employees of the assessee. Therefore, they being independent job workers, their earlier statement cannot be taken as the gospel truth, especially in the light of the statements given contradicting the earlier one. Challenging the same, the present appeal has been filed.