Presumption of ownership from cash possession under income-tax search law failed where evidence showed the assessee was only carrying others' money.

A presumption under section 132(4A) arises only where possession or control of cash is established in a meaningful sense. On the facts, the surrounding circumstances, contemporaneous statements, account entries and repayment sequence showed that the assessee was merely carrying cash belonging to others, so mere physical possession was insufficient to fasten ownership. Even if the presumption applied, the material on record rebutted it by pointing to the true owners. The Court therefore held that the assessee had successfully displaced the presumption and the issue was decided in favour of the assessee.

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Issues: Whether the presumption under section 132(4A) of the Income-tax Act, 1961 arose on the facts of the case and, if so, whether the assessee rebutted it.

Analysis: The cash was found in the hands of the assessee and his companion, but the surrounding circumstances, the contemporaneous statements, the account entries and the sequence of repayment strongly indicated that the money belonged to other persons and that the assessee was only carrying it. A presumption under section 132(4A) can arise only when possession or control is established in a meaningful sense, and the Court held that the facts here were equivocal and did not justify treating the mere physical carrying of cash as enough to fasten ownership on the assessee. Even assuming the presumption arose, the material on record sufficiently displaced it, because the evidence pointed away from the assessee and towards the true owners.

Conclusion: The assessee successfully rebutted the presumption and the questions were answered against the Department and in favour of the assessee.

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