INCOME TAX ACT, 1961

Section 132

Search and seizure under section 132 - Presumption as to documents seized - Seizure from third party of drafts on foreign bank in name of company -

During the search operation at the residence of one Mr. K, three bank drafts of Union Bank of Switzerland were found and seized. AO added Indian rupees, equivalent of such sums in the hands of the assessee. Tribunal confirmed the addition in relation to bank draft in the name of the assessee, whereas addition in connection with one bank draft was deleted. Search was not conducted at the premises of the assessee but at the residence of the third party from where, the bank drafts were recovered. The draft in question did not contain the name of the assessee as payee. It was in this background that, the Tribunal refused to accept the Revenue's contention that, the assessee was the beneficiary of this payment. The Tribunal noted that there was no material on record to suggest that, such a company did not exist nor there was any evidence of any link between the said company and the assessee. Held: Revenue vehemently contended that, during the search operation, the Revenue authorities had found a document in the nature of letter from the bank, pointing out that, the last date for presentation of the draft in question had expired and that the assessee should get the draft revalidated. Mere letter from the bank would not establish a relation between the payable amount and the assessee, particularly when the draft was in favour of a limited company. As recorded, documents were not seized from the possession of assessee but during the raid from a third party. Thus, addition was liable to be deleted.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2000-01

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