Section 132(4A) of the income tax Act, 1961 — Search and Seizure — Tribunal only on basis of presumption under Section 132 (4A) reversed the finding of CIT (A), without recording any finding as to how the loose sheets which were recovered during search, were linked with the assessee, thus, in the absence of corroborative evidence, the Tribunal was not justified in reversing the finding by the CIT (Appeals).
Facts: Being aggrieved of the order of Tribunal, assessee went on appeal before High Court and raised the question of law that “ Whether the presumption under Section 132(4A) of the Income Tax Act can be raised in the assessment proceeding? and Whether apart from section 132(4A) of the Income Tax Act, the burden to explain the documents seized from the possession of the assessee during search is upon him and if it so, then has he discharge the burden.”[2019] 52 ITCD 76 (ALL)
Held, that we have heard counsel for the parties and perused the material on record. It is not in dispute that two loose papers were found during search from the premises of assessee, however, during block assessment proceedings, the assessee had denied the documents and statement was recorded by Deputy Director of Investigation. he had submitted that he had no concern with the said documents, so seized. Further, the A.O. while passing the assessment order had only on basis of the loose papers found during search made addition to the undisclosed income of assessee while the entries of said papers remained uncorroborated.As, Section 132(4A) provides that any books of account, documents, money, bullion, jewellery or other valuable articles or things found in possession or in control of any person in course of search may be presumed to be belonging to such person, and further, contents of such books of account and documents are true. But this presumption is not provided in absolute terms and the word used is “may” and not “shall”, as such the revenue has to corroborate the entries made in the seized documents before presuming that transactions so entered were made by the assessee. Presumption so provided is not in absolute terms but is subject to corroborative evidence.In the present case, Tribunal only on basis of presumption under Section 132 (4A) reversed the finding of CIT(A), without recording any finding as to how the loose sheets which were recovered during search, were linked with the assessee. In the absence of corroborative evidence, the Tribunal was not justified in reversing the finding by the CIT (Appeals). In view of the above, we are of the considered view that order passed by Tribunal reversing the finding of CIT(A) in regard to deletion of addition made of Rs. 5,58,870/- and restoring the order of A.O. on mere presumption is unsustainable. The order dated 12th March, 2010 is set aside to that extent, and the matter is remitted back to Tribunal to decide afresh, as far as addition of Rs. 5,58,870/- is concerned, within a period of three months from today.