Law:

Section:

Section 69B of the Income-tax Act, 1961 - Undisclosed investments - Assessment year 1977-78 - In a search conducted at shop and residential premises of assessee, a cash book revealing entries relating to certain borrowings as well as purchase of silver ornaments was seized - ITO examined cash book of assessee and held that said entries were bogus and not backed by any real transaction and had been interpolated after cash book had been written in normal course and further as assessee had failed to explain source of silver ornaments found in search, he valued same and included it as assessee's income from undisclosed sources - On further appeal, Tribunal agreed with findings of ITO and held that entries in books of account had been manipulated and could not be relied upon - Whether since finding of Tribunal was based on material on record, it could not be said to be perverse and it required no interference - Held, yes FACTS In the search conducted at the shop and residence of the assessee, considerable ornaments and bullion were found and cash book of assessee revealing entries relating to certain borrowings as well as purchase of silver ornaments was also found. The ITO examined the said cash book and noticed that the entries had been interpolated after the cash book had been written in the normal course. The assessee submitted that it had borrowed funds from various parties and affidavits of concerned parties were produced. On examination, most of them stated that they held agricultural land and had deposited their savings with the assessee. According to the ITO, none of the parties was in a position to make deposits with the assessee and the affidavits were stereotyped giving somewhat similar narrations. With regard to the purchase of silver ornaments, the ITO found that there were no details of purchase of the same, which went to show that all those entries had been interpolated in the cash book either after it was seized in the search or before that, in order to create funds for the huge unaccounted stocks found in the search. Thus, the ITO finally held that the entries in the cash book relating to borrowings and relating to the purchase of silver ornaments…

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