INCOME TAX ACT, 1961

--Search and seizure--Block assessmentEffect of presumption under section 132(4A)--A search and seizure operation was conducted at the business premises of assessee firm as well as residential premises of partners. During the course of search, same incriminating documents showed that partners of the firm had acquired certain movable and immovable properties. In one of the partner's diary, value of a certain property was showed at higher value whereas assessee stated that property was purchased at lesser value. AO, then, raised presumption under section 132(4) with regard to seized diary and proceeded to include the difference value of property as unexplained investment in block assessment. Held: Was justified. As per section 132(4A), where any books of account or other document is found in the possession of any person in the course of a search, it has to be presumed that such document belongs the said person and the contents of such document are true and the handwriting found in such document should reasonably be assumed to have been signed the said person. Therefore, the presumption raised by AO under section 132(4A) with regard to seized diary was valid.

Income Tax Act, 1961 Section 158BC

Income Tax Act, 1961 Section 132A(4)

IN THE MADRAS HIGH COURT

ELIPE DHARMA RAO & M. VENUGOPAL JJ.

CIT v. Ambika Appalam Depot

Tax Case (Appeal) No. 151 of 2008

7 July, 2011