High Court Of Delhi
CIT vs. Anand Kumar Deepak Kumar
Section 4
Asst. Year 1995-96
Madan B. Lokur & Vipin Sanghi, JJ.
IT Appeal No. 50 of 2006
25th August, 2006
Counsel Appeared
Ms. P.L. Bansal, for the Appellant : K. Sampath, R.K. Raghwan & Manu K. Giri, for the Respondent
ORDER
By the court :
The Revenue is aggrieved by an order dt. 11th May, 2004 passed by the Tribunal, Delhi Bench ‘A’ in ITA No. 1035/Del/1999 relevant for the asst. yr. 1995-96. A search was carried out in the premises of the assessee on 9th Aug., 2004. As a result of the search, some documents were recovered which led the AO to believe that there were unaccounted sales to the extent of Rs. 19,89,807 between 1st April, 2004 and 9th Aug., 2004. On this basis, he assumed that the unaccounted sales for the entire accounting year are of Rs. 55,86,766. Feeling aggrieved, the assessee preferred an appeal before the CIT(A) and the CIT(A) found that there were two distinct periods that were involved, namely, the period from 1st April, 1994 to 9th Aug., 2004 in which there was definite evidence regarding unaccounted sales and the second period was from 10th Aug., 2004 to 31st March, 2005 when even though the account books were examined, the AO could not find any defect in them. On this basis, the CIT(A) was of the view that mere rejection of the books of account, without any basis, for the post-search period was not warranted, particularly in the absence of any facts to show unaccounted sales and, therefore, the AO had wrongly assumed that unaccounted sales would continue even in the post-search period. Against the order of the CIT(A), the Revenue preferred an appeal which was dismissed by the Tribunal and that has led to the present appeal being filed under s. 260A of the IT Act.
Learned counsel for the Revenue has contended that the books are liable to be rejected for the entire year and this the AO has done and, therefore, he was justified in estimating the unaccounted sales on the basis of material that was recovered during the search on 9th Aug., 2004 and by assuming that such unaccounted sales would continue for the entire year. We are of the opinion that no such presumption can be drawn on the facts of this case. The CIT(A) as well as the Tribunal found that in fact there was no discrepancy noted in the books of account in the post-search period. The assumption of the AO may have perhaps been valid if the AO had found some discrepancy in the books of account or if the search had been conducted after the accounting year and the books of account had brought out some discrepancies. But in the present case, the books of account were examined by the AO in the middle of the accounting year. Merely because there were some discrepancies in the pre-search period, it cannot lead to any presumption that the discrepancies would have continued in the post-search period particularly when there was factually no evidence at all as found by both the authorities below to support such a view.
8. In our opinion, the Revenue has not been able to make out any substantial question of law that would require our consideration on the facts of this case. Dismissed.
[Citation : 294 ITR 497]
