TaxTMI 
TaxTMI 
1989 (6) TMI 86
X X X X Extracts X X X X
X X X X Extracts X X X X
....o his wife who after selling some ornaments about 30 years ago started money lending business. He also stated that the ornaments belonged to his wife and daughters. Ultimately the ITO made the following additions to the income of Malti Prasad HUF. . Rs. Unexplained cash 1,13,085 Cost of unexplained silver 22,500 Cost of unexplained pawned ornaments 4,100 As is evident from the assessment order the assessee's stand about the cash was as under: (i) Rs. 15,000 belonged to assessee's daughter Smt. Pushpa Mittal (ii) Rs. 9,000 was cash in hand of pawning business of Bhanu Devi (mother of Smt. Janki Devi) (iii) Rs. 8,085 was cash, being savings of Janki Devi, wife of assessee's karta Malti Prasad (iv) Rs. 96,000 belonged to Smt. Janki Devi and was offered for tax in her case (v) Rs. 1,758 Savings of Smt. Usha Rani wife of Ram Prasad Rs. 1,29,843 The ITO treated the three sums at serial numbers (ii), (iii) and (iv) as having not been explained and treated their total Rs. 1,13,085 as the assessee's income. 3. In the search, silver ornaments valued at Rs. 48,380 was found in the premises occ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is order that the assessee and the Revenue are in appeal before us. 8. We have heard the learned counsel for the assessee and the learned Departmental Representative and have perused the material placed before us. 9. At the hearing the learned counsel for the assessee moved an application for admission of an affidavit sworn by Malti Prasad, the assessee's karta to state that he had surrendered Rs. 96,000 for assessment in the hands of the HUF on an understanding given by the IAC in proceedings under s. 144B that no penalty would be levied. No such assertion appears to have been made before the authorities below. In its reply dt.23rd Dec., 1982filed in the penalty proceedings the assessee had stated "the only other items which has been added as income in my case is Rs. 96,000. This amount was in fact the property of my wife Smt. Janki Devi and was also shown in the return of income filed by her. However, during the course of hearing under s. 144B before the IAC,Moradabadthe petitioner had agreed that it should be assessed in his case. This agreement was subject to the specific condition that no penalty was to be levied in this respect". In these averments there is no mention t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....against the assessee and in any case in view of the Explanation 1 to s. 271(1), there was presumption of concealment which the assessee had failed to rebut. The learned Departmental Representative also relied upon a full bench judgment of Hon'ble the Patna High Court in CIT vs. Nathu Lal Aggarwal & Sons (1985) 47 CTR (Pat) (FB) 258 : (1985) 153 ITR 292 (Pat) (FB), in which it has been held that in view of explanation to s. 271(1)(c) there was no burden on the Revenue to prove that the difference between the returned income and the assessed income was the undisclosed income of the assessee but the burden lay on the assessee to prove that there was no concealment. 12. We have given our careful consideration to the respective argument and the material placed before us. Admittedly the assessee right from the beginning has been contending that the amount found in cash or the gold and silver ornaments did not belong to it but to various members of the family. Rs. 15,000 was said to belong to Smt. Pushpa, Rs. 8,085 and Rs. 96,000 were said to belong to Smt. Janki Devi, wife of the assessee's karta. With regard to the sum of Rs. 96,000 originally Malti Prasad had stated that the amount ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n in the case of Smt. Janki Devi and Rs. 1,758 represents the savings of Smt. Usha Rani w/o Shri Ram Prasad. The assessee has filed affidavits of Smt. Janki Devi. The assessee was required vide this office letter dt.1st Feb., 1980to prove the contention that Rs. 9,000 belonged to Smt. Bhanu Devi and Rs. 8,085 represents the savings of Smt. Janki Devi and why the sum of Rs. 96,000 which has been surrendered in the case of Smt. Janki Devi should not be considered in the hands of the assessee. The assessee has filed a reply vide letter dt.20th Feb., 1980and produced Smt. Pushpa Mittal and Smt. Janki Devi for examination. The contention of the assessee cannot be accepted in view of the under mentioned discussions: (i) Rs. 9,000 alleged to be belonging to the money-lending business of Smt. Bhanu Devi. This aspect has already been considered in the case of the firm M/s Malti Prasad Ram Prasad and hence here too the explanation cannot be accepted. It has further been mentioned that Smt. Bhanu Devi had given to Smt. Janki Devi 100 tolas of gold at the time when her husband was declared insolvent. Reliance has been placed on the copy of the Will. It is further stated that this amount has....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee has no explanation to offer regarding the source of acquisition of Rs. 96,000. It may also be mentioned that there is no evidence to show that a sum of Rs. 96,000 was an earning of Smt. Janki Devi. Smt. Janki Devi is also a member of the assessee family. Before the learned IAC the assessee has showed inclination that the amount may be added in the assessment of the family and gave in writing in his later dt.5th Sept., 1980before him as under: "There is nothing to prove that the amount in question belongs to the assessee but in order to purchase peace and get the matter solved the assessee is agreeable to the addition of the above amount in his own assessment on the understanding that no penalty will be imposed on the assessee". The above sum was recovered from the assessee family and there was no evidence that this was an individual income of Smt. Janki Devi There is also no satisfactory explanation to explain the same. In these circumstances the amount is being assessed as income of the assessee family and no understanding about imposition of penalty could be given to the assessee". The ITO's presumption that the various assets were recovered from the assessee family....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... initially accepted by the IAC under s. 144B and later on by the ITO in the proceedings under s. 271(1)(c) on the ground that having made the disclosure in December, 1975 the lady could not have earned any further amount between December, 1975 and August, 1975. While assessing the evidence under the Explanation to s. 271(1)(c), the explanation has to be judged on the standard of probability and it could not be considered that it was absolutely improbable for the assessee to have this additional money after the disclosure was made in December, 1975. Since the explanation furnished by the assessee is substantiated with the help of disclosure made in December, 1975 establishing certain sources of income with her, these two amounts would be considered as explained in terms of Explanation to s. 271(1)(c)". Smt. Janki Devi was married in a well to do family and also appears to come from an affluent family. She had made a disclosure of Rs. 50,000 much before the search in question and the learned Departmental Representative could not show to us why it was not probable for her to possess the amounts. Regarding silver ornaments, a portion thereof was accepted by the ITO himself to belong....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Malti Prasad also. In 1965, however a partition took place in the said family and on Diwali, 1965, the sons separated from Shri Malti Prasad. Three of the sons have since been married and have families. Their names are Jagdish Prasad, Ram Prasad and Vijay Prasad. One son, Shri Sudhir Kumar, is minor and unmarried and lives with his father Sh. Malti Prasad. All the aforesaid members of the family, namely, the three married sons who have already been separated, and the fourth son, alongwith the wife and unmarried daughters of the assessee live in one two-storeyed house in Dhampur. The first storey is in the occupation of the three separated sons; the lower portion i.e. the ground floor, is in the occupation and possession of Shri Malti Prasad, who lives therein with his wife, three unmarried daughters and the minor son. In the said ground floor, there is a common strong room, wherein the various family members are alleged to be keeping their precious possessions, like ornaments, cash etc. 3. On 20th Aug., 1976, the aforesaid residential premises, as also the business premises of the firm Malti Prasad Ram Prasad and Malti Prasad Jagdish Prasad, in which the assessee and his sons ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The Panchnama thus clearly indicated the places of recovery of the various items, and it will, in my opinion, be correct to infer that what was recovered from searched premises was (sic). 4. With regard to seizure made from the residential premises of the assessee family, as per Annexure 'A' to the Panchnama, statement of the karta of the family, Sh. Malti Prasad was recorded on the date of the search itself, i.e., on 20th Aug., 1976, in terms of s. 132(4) of the IT Act, 1961. With regard to the source of the aforesaid discovered cash, gold and silver ornaments the statement of the said Sh. Malti Prasad was, inter alia, to the following effect: "Free English translation from Hindi to English: I live in the ground floor of this house, the entire ground floor is in my possession. I, my wife Janki Bai, my three daughters, Prabha, Vibha and Sudha and my youngest son Sudhir live in it. On the first floor live my three married sons, Jagdish Prasad, Vijay Prasad and Ram Prasad with their respective families. The cash, ornaments and documents which have been found on the ground floor belong to my wife Smt. Janki Bai. They are her individual property. Her father Rai Sahib Seth Ram ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y, Sh. Malti Prasad under s. 132(4) on20th Aug., 1976was altogether abandoned with regard to the source of cash acquisition. The new explanation given before the ITO by the assessee family was that the cash of Rs. 1,28,085 which was recovered from the assessee family premises (presumably the strong room) belonged to the following persons: (1) Rs. 15,000 belonged to the assessee's married daughter Smt. Pushpa Lata Mittal. (2) Rs. 9,000 belong to the pawning business carried on by the mother-in-law of Sh. Malti Prasad Smt. Bhano Devi. (3) Rs. 8,085 belong to Smt. Janki Devi, being her savings. (4) Rs. 96,000 belong to Smt. Janki Devi in respect of which she had filed a separate return after the aforesaid search had taken place at the residential premises of the assessee. In respect of the source of Rs. 96,000, Smt. Janki Bai was examined by the ITO on19th March, 1980. Her statement was, inter alia, as follows: "When I had gone to Haridwar, there at Har Ki Pauri, my younger daughter found a bag. When we returned home and opened the bag, there were currency notes in it". On being asked as to when this event had taken place, Smt. Janki Bai said that it happened in June....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to purchase peace and get matters sort, the assessee is agreeable to the addition of the above amount in his own assessment on the understanding that no penalty will be imposed on the assessee". The sum was recovered from the assessee family; there is no evidence that this was the individual income of Smt. Janki Bai. There was also no satisfactory explanation to explain the sum. In these circumstances, this amount has got to be assessed as income of the assessee family and no understanding about the imposition of penalty could be given to the assessee. Another sum of Rs. 9,000 is stated to belong to Smt. Bhano Devi, the mother of Smt. Janki Bai. It was explained that Smt. Bhano had given to Smt. Janki Bai 100 tolas gold and Rs. 20,000 at the time when her husband was declared insolvent (in 1965). Reliance is placed on the copy of the will. The amount was stated to have been invested in pawning business and this sum is explained as out of money having been remained in cash over and above the pawned articles. The pawned articles were found at the business premises of the firm M/s Malti Prasad Ram Prasad and the matter has been discussed in that case. There is no evidence to prove....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o contradictory explanation for the cash found at the time of search and none of them can be believed. 1.7 Since the contention that Smt. Janki Devi was carrying on any business had been disbelieved, the only conclusion that can be drawn is that the entire cash belongs to the appellant HUF and the taxation of the above mentioned sum in the hands of the HUF, is justified although a part of it has been surrendered in the case of Smt. Janki Devi. In this connection reference has to be made to the case of Lalu Mal vs. CIT,Lucknow(1979) 9 CTR (All) 54 : (1980) 126 ITR 42 (All). In this case, there were deposits in a bank in the names of the wife and minor son of the assessee. The wife and the minor son had no independent means. The Court held that there was ample evidence on record to sustain the finding of the Tribunal that the deposits in dispute in the names of the wife and son were really the income of the assessee. The facts are not different here and the ratio of the ruling of the Hon'ble Allahabad High Court would apply equally to the present case. The addition made by the ITO is, therefore, sustained". 9.2 The finding of the ITO regarding Rs. 8,085 and Rs. 9,000 were also ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ddition of Rs. 20,500 for the value of unexplained silver ornaments. The appellant's statement that they belong to ladies of the family and were acquired by them at the time of their marriages and were converted into new ornaments for making them saleable, has been wrongly disbelieved. 2. That there was no justification for not believing the appellant's version that the sum of Rs. 8,085 was from the saving of his wife Smt. Janki Devi". 11. The Tribunal rejected the assessee's appeal and confirmed the additions in question by observing, inter alia, as follows: "The assessee is in appeal and on this issue also we have heard the learned authorised representative of the assessee and the Department. We have also perused the reasoning of the lower authorities and the paper book since placed on our file for and on behalf of the assessee. In the absence of any evidence to the effect and in the face of the statement of Shri Malti Prasad recorded by the Revenue at the time of the search and seizure operation which statement was recorded on oath, this addition of Rs. 20,500 is justified on facts. 16. So is the case with the addition of Rs. 9,000 and Rs. 8,085 since there is no evi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s part of Rs. 1,28,000 recovered from the raid. There was an attempt of theft at the residence of Sh. Malti Prasad few days from the date of search and, therefore, the pawned ornaments were transferred to the shop for safe custody, and that there was a Will dt.15th Feb., 1963, written by Smt. Bhano Devi, mother-in-law of the karta of the assessee family, and from that Will, it would be clear that the aforesaid statement of the assessee was correct. The theory of will was put to test by the ITO by summoning Smt. Vidyawati sister of Smt. Janki Devi who was supposed to be in the know of the will, as per the statement of Smt. Janki Devi and Sh. Malti Prasad. Though direct question with regard to the existence of the will was put to her several times by the ITO in the presence of the assessee's counsel, yet Smt. Vidya Devi did not confirm the execution of the will or its existence. She, of course, stated that her mother had told her that she had given Rs. 20,000 cash and gold weighing 100 tolas to Smt. Janki Bai with the instructions that the amount should be invested in money lending business, but when questioned as to what were the items of jewellery given to Smt. Janki Bai, she said ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng before the Settlement Commission. That apart, there is no evidence to prove that Smt. Janki Devi received Rs. 20,000 from her parents and further that she was carrying on any business of pawning for and on behalf of her parents and yet further that the said amount swelled to the present figure since no books of account are produced and no evidence is there to warrant the inference that Smt. Janki Devi was doing any pawning business. Yet that apart, the contention of the assessee that Smt. Janki Devi received Rs. 20,000 in cash from her mother and that from the said capital and the alleged income she was to remit amounts to her parents is also not proved by evidence as to any remittance. The all important 'will' since relied upon by the assessee speaks of the fact that after the death of the parents, the alleged amount was to be shared by all the daughters of the said Smt. Bhanu Devi, that all the sisters of Smt. Janki Devi were to share the amount but Smt. Vidya Devi, the sister of Smt. Janki Devi, however, pleaded ignorance about any will. Another sister of the said Smt. Janki Devi (Smt. Sushila Devi) filed an affidavit, but did not come forward for cross-examination when requi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....room of the family that the cash in question was discovered. That Sh. Malti Prasad was not only the karta of the family but the lone male member of the family earning the livelihood for the family. (3) That the unmarried daughters and the wife did not carry on any independent business and that it was the assessee and the firm in which he was a partner that were carrying on the business of pawning ornaments and money-lending etc. (4) That the story of pawning business being done by Smt. Janki Bai as a trustee of her sisters was found not only by the lower authorities but by the Tribunal also totally unreliable and improved. (5) That the additions made to the income of the assessee family by the ITO with regard to the cash and jewellery have been confirmed by the Tribunal, after detailed examination of the assessee' case. (6) That, while finalising the assessment of the family, part of the silver ornaments and all of the gold ornaments were excluded, as proper evidence had been led to show that the same were the Stri Dhan either of Smt. Janki Bai or the wives of the married sons of the assessee, and the married daughter of the assessee. (7) That with regard to the sum ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an explanation which is found by the ITO to be false, or (B) such person offers an explanation which he is not able to substantiate, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of cl. (c) of this sub-section be deemed to represent the income in respect of which particulars have been concealed: Provided that nothing contained in this Explanation shall apply to a case referred to in cl. (b) in respect of any amount added or disallowed as a result of the rejection of any explanation offered by such person, if such explanation is bona fide and all facts relating to the same and material to the computation of his total income have been disclosed by him". 17. The aforesaid provisions of law provide for imposition of penalty on the assessee for concealment of particulars of income or furnishing inaccurate particulars of income. Explanation I explains as to what may amount to concealment and furnishing of inaccurate particulars of income. According to it if an amount is added to the total income of a person, such addition shall, for the purposes of cl. (c), be "deemed to represent the income in respe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e onus was on the Revenue to prove that the assessee had furnished inaccurate particulars or had concealed the income. Difficulties were found in proving the positive element required for concealment under the law prior to the amendment and this had to be established by the Revenue. To obviate that difficulty, the Explanation was added. The effect of the Explanation was that where the total income returned by any person was less than 80 per cent of the total income assessed, the onus was on such person to prove that the failure to file the correct income did not arise from any fraud or any gross or wilful neglect on his part and unless he does so, he should be deemed to have concealed the particulars of his income or furnished inaccurate particulars, for the purpose of s. 271(1). The position is that the moment the stipulated difference was there, the onus to prove that it was not the failure of the assessee or fraud of the assessee or neglect of the assessee that caused the difference shifted to the assessee but it has to be borne in mind that though the onus shifted, the onus that was shifted was rebuttable. If in an appropriate case, the Tribunal or the fact-finding body was sat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e presumption raised becomes absolute, and imposition of penalty on the assessee for concealment without anything further to be done by the ITO is justified. If, however, the assessee gives any explanation, which is not false, on the face of it, but which he is not able to substantiate the presumption of concealment would still arise, but it will be rebutted and no penalty will be imposed on the assessee if the said explanation is found to be bona fide and if all the facts relating to the explanation and material to the computation of his total income have been disclosed by the assessee. Thus, under the new law, the onus is on the assessee and that onus can be discharged by him by either giving an explanation which he is able to substantiate, or by giving an explanation which though he is not able to substantiate, is bona fide and placing all the facts relating to the said explanation and material to the computation of his total income on record. 21. In the light of the aforesaid law, the facts of the present case have to be viewed with a view to find out whether the assessee has been able to discharge the burden, which was on him of giving an explanation, which though he is not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....him in 1946 and that the sale proceeds were thereafter, lent by his wife on interest and that it was the said money which had over a period of 30 years, grown into the present amount. This explanation of the assessee i.e. the karta of the family was palpably false and as such it was altogether given up during the course of assessment proceedings and it was later explained by the family that Rs. 9,000 belonged to Smt. Bhanu Devi, the mother-in-law of the karta, that Rs. 8,025 represented the savings of Smt. Janki Devi, that Rs. 15,000 represented the money of Smt. Pushpa which was left by her with her mother Smt. Janki Bai, and that Rs. 96,000 belonged to Smt. Janki Bai, who had shown the same in her return. When Smt. Janki Devi was examined to indicate the source of the acquisition of the said sum of Rs. 96,000, the totally unsubstantiated and unbelievable explanation came from her that she had got a bag lying at the bank of Ganges in Haridwar, which was picked up by her and was taken to her home and when opened was found to contain the currency of Rs. 96,000 therein. She was examined about the said explanation by the ITO and it was found out as a result of her examination that she....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mining the facts of the case, given the finding that Smt. Janki Devi carried out no business, as alleged by her of pawning the ornaments. It is the final finding of fact and cannot be ignored. Even if she had done the business of pawning, it was never the case of the lady that Rs. 96,000 had been earned by her out of the aforesaid alleged business. The case of the assessee, on the other hand, to begin with, was that the aforesaid amount, which was discovered from the strong room of the family, belonged to Smt. Janki Devi, as she had been doing business with the sale proceeds of the gold ornaments allegedly sold in 1946. The said explanation of the assessee was palpably false and, therefore, was given up later. 23. It may be of interest to note at this point the guidelines provided by the Hon'ble Supreme Court in the case of CIT vs. Mussadilal Ram Bharose at page 22 for evaluating the explanations given by the assessee. Their Lordships were considering the observations of the Full Bench of the Patna High Court in the case of Nathulal Agarwala & Sons, and while doing so, they approved of the following observations of the Hon'ble Patna High Court: "The Patna High Court emphasise....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as the saving of Smt. Janki Devi. This explanation was rejected because it was not substantiated. It is, however, not possible to say that the said explanation is not bona fide because the said lady did make a declaration under Voluntary Disclosure Scheme of 1975 of being in possession of Rs. 50,000. Income from the aforesaid amount could arise to Smt. Janki Devi and, therefore, so far as HUF was concerned, the money stood explained in its hands. It belonged to Smt. Janki Devi and, therefore, if any action was warranted on account of the discovery of the aforesaid amount, it would be in the hands of Smt. Janki Devi and not in the hands of the HUF. 26. The finding of the learned CIT(A) with regard to the sum of Rs. 9,000 however, is not correct. The aforesaid sum was stated to be part of the alleged business of pawning, which was alleged to have been done by Smt. Janki Devi as a trustee of the pawned ornaments which were discovered from the business premises of M/s Malti Prasad Ram Prasad. The above theory of Smt. Janki Devi doing business as a trustee was considered by the Tribunal at length in the case of the firm and the entire theory has been discarded by the Tribunal, vide t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ove amount amongst the alleged beneficiaries as per the will". The theory of the will was thus totally discarded by the Tribunal. In the face of the above finding of the Tribunal, I find myself unable to hold that the assessee has been able to discharge its burden in terms of the proviso to Expln. I of s. 271(1)(c) in regard to the addition of Rs. 9,000. The sum did not belongs to Smt. Janki Devi. The explanation in this regard is bona fide; nor all the relevant facts pertaining to this sum have been put forward by the assessee family either during assessment proceedings or in the present proceedings. The sum in question, cannot therefore, be regarded as have been explained by the assessee in terms of Expln. (1) to s. 271(1)(c). I, therefore, hold that so far as the sum of Rs. 9,000 is concerned, it belonged to the family and no acceptable explanation with regard to it has been put forward by the assessee. Penalty, should, therefore, be imposed with regard to this sum. 27. The next contention of the Revenue in its appeal was that in this case, penalty should be imposed more than the minimum laid down in the statute. Even the minimum amount would be considerable and, therefore, i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rs. In the ground floor there was a common strong room, wherein the valuables belonging to the family were kept for safe custody. 3. On 20th Aug., 1976, the residential premises as also the business premises of the firm of Malti Prasad Ram Prasad and another firm called Malti Prasad Jagdish Prasad, in which the assessee and his sons were partners, were searched by the IT Department under s. 132 of the IT Act, 1961. The search warrants were in the names of the firms and the partners of the said firms. From the portion occupied by the members of the joint family, following cash and ornaments were recovered as per Annexure 'A' to the Panchnama: . Rs. 1. Cash 1,28,500 2. Gold ornaments valued in 2,06,500 3. Silver ornaments valued at 48,380 In the course of the search on 20th Aug., 1976 a statement was recorded from the karta of the family Shri Malti Prasad under s. 132(4) of the IT Act, in which he stated with regard to the source of the above said cash, gold and silver ornaments as under: "I live in the ground floor of this house, the entire ground floor is in my possession. I, my wife Janki Devi, my three daughters, Prabha, Vibha and Sudha and my you....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ITO treated the three sums at serial numbers 2, 3 and 4 as not having been properly explained and added the same amounting to Rs. 1,13,085 as the assessee's income. In regard to the silver ornaments, the ITO treated that about half of the quantity of silver could belong to the ladies and the other half, which he worked out at Rs. 22,500 was added to the assessee's income as unexplained investments. Besides there were pawned ornaments worth Rs. 4,100. In view of the fact that the assessee was unable to explain the source for these ornaments, the value of these ornaments also was added as the income of the assessee from undisclosed sources. 5. On appeal before the CIT(A), the addition on account of unexplained cash of Rs. 1,13,085 was sustained. The addition on account of unexplained silver also was sustained except that its extent was reduced by Rs. 2,000. The addition of Rs. 4,100 was, however, deleted. 6. In further appeal before the Tribunal, though the addition of Rs. 96,000 was not contested, the additions of Rs. 9,000, Rs. 8,085 and the addition of Rs. 20,500 were contested. However, the Tribunal dismissed the assessee's appeal and confirmed the additions. 7. Here I m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cealed income of the assessee. Stress was laid on the fact that though the sum of Rs. 96,000 was added as income of the assessee family, it in truth belonged to Smt. Janki Devi but the same was offered in the hands of the assessee family only to purchase peace and there was no admission that this represented the income of the joint family from concealed sources and that amount should not in any manner be considered as concealed income. Reliance was placed upon the decision of the Allahabad High Court in the case of CIT vs. Mansa Ram & Sons 1975 CTR (All) 163 : 106 ITR 307 (All) and another decision of the same High Court in the case of Addl. CIT vs. Kishan Singh Chand 1975 CTR (All) 194 : 106 ITR 534 (All) and another decision of the Gujarat High Court in the case of CIT vs. Vinay Chand Hira Lal (1981) 128 ITR 752 (Guj) and lastly on a judgment of the Punjab and Haryana High Court in the case of Sohinder Singh & Bros. vs. CIT (1979) 9 CTR (P&H) 23 : (1980) 121 ITR 834 (P&H). The ITO rejected these submissions and held the assessee to guilty of concealment of income. He stated that the raid was conducted on the residential premises of the assessee and the impugned cash was found in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase and the submissions made, agreed with the view that the assessee's contention that the sum did not belong to it could be believed although the assessee had made an admission for the purposes of taxation of the sum of Rs. 96,000 that this was its income. For this purpose, he placed reliance upon the admission made by Smt. Janki Devi that the sum belonged to her. According to him the ITO's presumption that the various assets recovered from the house belonged to the assessee had no basis, whatsoever. At the very first instance Shri Malti Prasad submitted that the cash and jewellery belonged not to the assessee family but to his wife and daughters. According to him if property was found in a house, in which members of the family live jointly, the person contending that those articles belonged to the individual or the family had to prove it beyond doubt. He also observed that from the various things that were found in the house occupied by the members of the family, no circumstances existed to connect the family as a unit with those properties. According to him the statements of Smt. Janki Devi and Shri Malti Prasad were sufficient to discharge the onus that lay upon them to shift t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns made in the case of the firm Malti Prasad Ram Prasad he drew support for his view that the sum of Rs. 96,000 did belong to the assessee as its concealed income. He observed that when the assessee accepted the decision that the sum of Rs. 96,000 belonged to it, nothing more remains to show that this sum represented the assessee's income from undisclosed sources. According to the learned Accountant Member the assessee is not saved by the Explanation to s. 271(1)(c) because this is a case where it could not be said that the assessee had made a bona fide explanation by disclosing all the facts and materials necessary for the computation of its income. He also could not agree with the placement of burden on the Revenue as was done by the learned Judicial Member. He was emphatic that the omission on the part of the assessee to question the addition of Rs. 96,000 to the total income of the assessee before the Tribunal had its own tell tale. He observed that it was also significant to note that the Tribunal gave a finding that Smt. Janki Devi, wife of Shri Malti Prasad, carried on no business. By referring to the decision of the Supreme Court in the case of CIT vs. Mussadilal (1987) 60 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... view. It is ordinary human conduct to deny the possession of money as soon as a search takes place by a law enforcing agency much more so by the IT authorities. The statement given under those circumstances no doubt can be prima facie evidence but cannot be said to be conclusive. That it could not be true and conclusively absolve the assessee-HUF from this guilt of concealment of income was fortified by the fact that Smt. Janki Devi gave a different version for the acquisition of the money, namely, finding it on the banks of the river Ganges when she went on pilgrimage. As against the explanation of Shri Malti Prasad that that sum represented the accumulation out of money lending business carried on by him with the money provided to Smt. Janki Devi by her father on the eve of his insolvency and the sale of jewellery received by her at the time of marriage and subsequently on child births far from corroborating this statement, she put up a different story for that money did represent the find on the banks of the river Ganges. Thus the statement of Shri Malti Prasad was not corroborated and it was deviated from in all material particulars. Although Smt. Janki Devi admitted the owner....