Undisclosed income assessed on the basis of loose sheets of papers

The Jharkhand High Court was seized of a matter wherein the Income Tax Department assessed the income of an assesses on the basis of entries on the loose sheet of papers

The Jharkhand High Court was seized of a matter wherein the Income Tax Department assessed the income of an assesses on the basis of entries on the loose sheet of papers. The High Court observed as under: • Under section 158B(b) of the Income Tax Act, the undisclosed income would include any money, bullion, etc. or any income based upon any entry in the books of account or other documents or transactions representing wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act. • Section 132(4A) of the Act draws a presumption in relation to any books of account or other documents, money, etc. which are found in possession or control of any person in the course of a search. The contents of such books of account and other documents are true and also signature and every other part of such books of account and other documents relating to its execution of any particular person. • The above provision raises presumption concerning correctness of contents of the documents (seized), author of the documents or it being executed, attested and stamped by the person as purported by it and propriety of the documents, money, valuable article or things vesting in the person through whom it was seized. • The above is a rebuttable presumption available to the Revenue and the Assessee has to rebut the said presumption. • In view of the provisions contained in section 158B(b) read with section 132(4A) of the Income Tax Act, the addition of undisclosed income on the basis of entries made in the loose sheet is dependent upon the investigation of facts and cross verification by the Assessing Officer. [Sri Sanjay Rungta vs. Office of the Commissioner of Income Tax (Appeals), Ranchi and Anr.] (Jharkhand HC, 16.01.2014)