Opinion Of Eminent Legal Luminaries On Controversial Issues

How To Rebut Presumption U/s. 292C?

QUERY: In the course of search under section 132 or survey under section 133A of the Act, entries of cash loans, expenditure and investments are generally found. Can the correctness of the entries be disregarded in computing the total income of the assessee under section 153A who is required to rebut the presumption as to truth of the assets, entries in seized documents raised in section 292C of the Act?
ANSWER: Section 292C deems that when any material is found in premises of a person searched or surveyed, it may be presumed that material belongs to the person, that the contents of such material is true and handwriting in that document is of that person. This section only shifts the burden of proof on the searched person to show that the document did not pertain to him, or that the contents of the document are not true or that handwriting is not his.

Thus, at the time of survey or search if entries of cash loans, expenditure and investments are found in the possession or control of any person it may be presumed to be his unless he proves that it does not belong to him. Section 153A authorises the Assessing Officer to consider the said material, while making the assessment or reassessment of such person.

The Supreme Court in Fifth Avenue v. CIT [319 ITR 132] held that, where the partners of the assessee firm did not contend that a print out found at the premises, concerns the business of the firm, the presumption that the contents of the print out related to unaccounted money belong to partners was justified.
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