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(vii) Gaurishankar Omkarmal v. ITO (1990) 37 TTJ (Ahd) 353.

8. The learned Departmental Representative contended that the statement of Shri D.N. Shah, one of the partners of the assessee-firm recorded under Section 132(4) of the Act, during the course of search operation was without any pressure or duress as has been contended by the learned counsel. He argued that while computing the undisclosed income, reliance has been placed on the seized material and not on the appraisal report prepared by the search party. He invited our attention to pp, 13 to 16 of the paper book filed by the Department. On page No. 13, the documents seized from the residence of Shri D.N. Shah have been discussed. Annexure-A is a bunch of 13 loose papers, pp. 1 and 2 contained rough scribblings which according to the learned Departmental Representative are connected with the films made by the group. He referred to the notings mentioned on the front side of page No. 1 as follows:

"10 Sargam-Bangalore 14,7 1.20 Pravin a/c 18.80 3.80 Salim -
Bombay 55.00 5.00 S.B.K. (Subse Bada Khiladi) 75.00 18.80 3.57 Maidane-E-Jung 55.00 Venus On the reverse of page No. 1, the following scribblings/notings are made in figures:
Thus, the learned Departmental Representative contended that Shri D.N. Shah admitted that the loose papers seized from his residence belongs to his business and all calculations made on the paper pertains to his business transactions. The learned Departmental Representative also made reference to question No. 18 wherein though Shri D.N. Shah has admitted that the papers are written in his own handwriting but regarding the contents, he did not make any categorical statement. Similarly, Shri D.N. Shah has not clearly mentioned regarding the entries on page No. 1 of the seized paper in response to question No. 20 when he was asked by the search party. The learned Departmental Representative contended that writing Rs. 5 or Rs. 3.5 on these papers are quite irrelevant. According to him, the assessee had not given proper answers to the questions put to him during the course of search which also goes to prove that the statement of Shri D.N: Shah was recorded without any duress or pressure, otherwise Shri D.N. Shah could not have escaped by giving irrelevant replies even to very straight questions. According to the learned Departmental Representative, the entries on the seized papers are nothing but cash collections from various territories. The learned Departmental Representative also invited our attention to page No. 34 of the Departmental paper book and contended that the assessee had made payment in cash of Rs. 3,91,800 as per Annexure-A of p. 97 of seized papers. He argued that it is obvious from the above that the assessee was making large amount of payment in cash which had not been reflected in the books of account. Shri D.N. Shah did not give any explanation regarding this cash payment and the explanation given after the search was only an after-thought. The learned Departmental Representative also made reference to p. 35 of the Departmental paper book and argued that Annexure A-2 of seized papers consists of internal debit vouchers serially numbered from 301 to 601 in the name of M/s Time Video (P) Ltd. on a similar pattern as the vouchers which have been identified in Annexure-A. Annexure-3 is a bunch of debit vouchers of M/s Time Video (P) Ltd. serially numbered , from 1 to 300 and these are made on the same pattern as the debit vouchers in Annexures A-1 and A-2. Annexure A-4 is a bunch of debit vouchers serially numbered from 261 to page No. 541. These are in the names of M/s Time Magnetic (India) Ltd. All the vouchers in the bunch do not have any details therein including the amount, dates, purpose or mode. Only some names are scribbled across column No. 3 and signatures have also been made across a revenue stamp affixed at the place meant for the receiver's signatures. Thus, the learned Departmental Representative contended that the books of account maintained by the assessee are defective. The learned Departmental Representative also referred to page No. 37 of the Departmental paper book and argued that the assessee was keeping blank vouchers for the purpose of introduction of bogus expenses whenever assessee desires and in the name of whichever entity of the group, they find convenient. He, therefore, contended that the assessee was in the practice of inflating expenses at their own convenience with the intention to avoid the payment of taxes. The statement of Shri D.N. Shah was also recorded on 13th Sept., 1995, under Section 132(4) of the Act. In question No. 24, he was asked to explain regarding the blank debit vouchers which were having stamps and signatures over them, Shri D.N. Shah did not give any explanation, instead he claimed that he was concluding his statement. Thus, the learned Departmental Representative contended that there was explanation whatsoever in the incriminating documents found by the Department. He further contended that under the circumstances, the allegation that the statement was recorded under duress is without any basis. The learned Departmental Representative also invit,ed our attention to p. 54 of the assessee's paper book and contended that the scribblings pertain to the film 'Humse Hai Muqabala' and the figures mentioned over there are regarding the payment in cash. He also referred to pp. 57 and 58 of the assessee's paper book and contended that there are cash payment of Rs. 1 lakh for the film 'Humse Hai Muqabala' on page No. 57 and on page No. 58, cash being received in connection with the same film. The learned Departmental Representative, therefore, Contended that as per the seized material, huge amount of cash has been paid and received. Therefore, the declaration made by Shri D.N. Shah of Rs. 2 crores of undisclosed, income in his statement under Section 132(4) of the Act was made in the background of seized material. He also argued that no pressure was applied on Shri D.N. Shah for making the declaration of undisclosed income from both the films. He invited our attention to pp: 59,13 and 22 of the Departmental paper book and contended that blank cheques were found during the course of search, cash payments have been made which runs into several lakhs, therefore, the disclosure is fully supported by these documents. The learned Departmental Representative also made reference to the film distribution in Dubai by the brother of Shri D.N. Shah who is staying in Dubai. He also referred to Rs. 15 to 20 crores hawala done by Shri D.N. Shah for which the evidence is available in the seized documents. He also referred to the blank debit vouchers with revenue stamps which were found during the course of search, cash written on various seized papers which had either been received or paid and contended that the assessee was indulging in the evasion of tax on large scale. The learned Departmental Representative also contended that the statements recorded from Shri D.N. Shah were quite evasive, Shri D.N. Shah also did not show any co-operation, hence, his statements were not properly recorded, Keeping in view all these facts, the learned Departmental Representative contended that the disclosure made of Rs. 2 crores is quite insignificant and the same should be confirmed. The learned Departmental Representative placed his reliance on the following Court cases :

13. Now the only point remains for consideration is whether the disclosure made is supported by the various documents seized during the course of search. Annexure-A is a bunch of 13 loose papers, pp. 1 and 2 contains rough scribblings which are actually connected with the films made by this group. These papers were seized from the residence of Shri D.N. Shah. Page No. 1, on the front side, contains certain notings as we have mentioned above. The nothings on this page indicate payment out of business receipts in India by Shri D.N. Shah. These figures cannot be in one or two digits as explained by Shri D.N. Shah. These transactions are among the film producers and distributors, therefore, such transactions must be in lakhs only as contended by the learned Departmental Representative. These accounts had been maintained very systematically. The various amounts mentioned appears to be collection made or to be made from various territories which would normally be in lakhs of rupees. Shri D.N. Shah also admitted in his statement that part of the writing on page Nos. 1 and 1A which are in blue ink are written by him. It appears from the notings that page Nos. 1 and 1A are related to each other as figures of 3.8 lakhs, 55 lakhs, 14 lakhs and 76 lakhs are there in both pages. This is quite obvious from these pages that the assessee is having unaccounted transactions running into crores in his film business. Annexure-A to p. 97 seized from Ratnajyoti Industrial Estate (Departmental paper book p. 34) indicates that the assessee, was making large amount of payment in cash which have not been reflected in the books of account. It was brought to our notice by the learned Departmental Representative that no explanation was given at the time of search with respect to these cash payments. This also supports the view that the assessee was indulging in cash transactions on a large scale. It was also found during the course of search that the assessee was having large number of vouchers for expenditure which were signed but the amount of disbursement was not mentioned. This evidence also establishes the modus operandi of the assessee for manipulating the expenditure. The assessee did not give any explanation of these vouchers during the course of search. Annexure-I, pp. 58, 66 to 69 (assessee's paper book, p. 54 to 58) also reveals large amount of transactions in cash being received and paid in cash on exhibition of films at various picture halls. Page No. 58 refers to assessee's paper book page 54. On the top of this page the name of the film is written as 'Humse Hai Muqabala' in front of 12 cinema halls Savitri and Alankar and against that 20 cash and 35 cash is written These are obviously the coded figures related to cash receipts on exhibition of picture at Savitri and Alankar picture halls. Similarly, page Nos. 68 and 69 of seized material pertains to cash receipts and payments with respect to the film 'Humse' Hai Muqabala'. It was also contended by the Department that the picture 'Sabse Bada Khiladi' was produced by Keshu Ramsae, proprietor of D.M.S. Films. The film was financed by Times Group and was controlled also by Times Group. During the course of search, it was found that M/s D.M.S. Film was a benami for Times Group. It was also ascertained that most of the expenditure for the film was done from the office of Times Group. All the cheques, drafts etc., were sent and received from the office of the Times Group. The papers seized from the residence of Shri Pravin Shah revealed the payment of Rs. 45,000 cash and Rs, 45,000 by cheque. Similarly, other papers seized also revealed the payments by the assessee group in cash. In view of the aforesaid discussion, it appears that the assessee-firm was indulging in cash transactions which run into crores. The documents seized during the course of search also revealed that Shri Ramesh N. Shah, brother of Shri D.N. Shah has a large number of bank accounts in Dubai and Zurich in which huge cash deposits are being made. The total deposits for certain period for which pass books were found at the time of search was in excess of Rs. 35 crores. Shri Ramesh N. Shah made a gift of Rs. 4.58 crores to various individuals and concerns of Times Group in India. The assessee group was having blank signed cheque books of Shri Ramesh N. Shah and amounts were withdrawn by them by filling in the amounts at will. Thus, the learned Departmental Representative contended that the assessee perhaps, was indulging in Hawala transactions i.e., the assessee was sending cash abroad and bringing the money back to India in the form of NRI gifts. It was also revealed that one of the main persons of the group was booked under FERA/COFEPOSA and was behind bar for a long-time. The various documents mentioned above are quite indicative regarding the large scale indulgence of the assessee in cash transactions which runs into crores of rupees. Therefore, the disclosure made by Shri D.N. Shah of Rs. 3 crores under Section 132(4) of the Act, is fully supported by the documents seized during the course of search. After going through the facts and circumstances of this case, we find that the addition made by the AO at Rs. 1,83,50,000 is quite insignificant and the same does not require any interference from our side.