By K. B. Bhujle, Advocate
70. Sunil Kumar Sharma and Anr. vs. Dy. CIT
[2022] 448 ITR 485 (Kar.)
A.Ys.: 2012-13 to 2018-19
Date of order: 12th August, 2022
Sections: 127, 132 and 153C of ITA, 1961
Search and seizure — Assessment of undisclosed income — Meaning of “books of account” — Loose sheets and diaries do not constitute books of account — Assessment based only on evidence available in loose sheets and diaries — Not valid.A search was conducted at the premises of the assessee and similar search also took place at premises of one R at New Delhi. During the search at the premises of R, certain diaries and entries relating to the affairs of the assessee were recovered and statements of both the assessee and R, came to be recorded. Notices were issued to the assessee u/s 153C of the Income-tax Act, 1961.
The assessee filed a writ petition and challenged the notice. The Karnataka High Court allowed the writ petition and held as under:
“i) S ection 132 of the Income-tax Act, 1961, enables seizure of books of account. “Book” ordinarily means a collection of sheets of paper or other material, blank, written, or printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed ”book” for they can be easily detached and replaced. Section 34 of the Evidence Act, 1872 provides that entries in book of account, regularly kept in the course of business, are relevant when
