TaxTMI 
TaxTMI 
2011 (1) TMI 774
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....Commissioner of Income Tax (Appeals) CIT (A) as also before the Income Tax Tribunal ITAT but was unsuccessful. Appeals impugning the order of the ITAT were registered as ITA Nos. 1604/2006, 1691/2006, 1692/2006 & 1693/2006. The order of the ITAT was questioned on merits. The alternative argument was the challenge to the jurisdiction on the ground that since a criminal case was pending under the Prevention of Corruption Act, 1988, the income tax authorities had no jurisdiction to pass assessment orders. 4. Simultaneously, the appellant had also filed a writ petition being W.P.(C) No. 9262/2006 raising the issue of want of jurisdiction on the part of the Income Tax Department to proceed with the matter. Vide order dated 26.05.2006, the petitioner was permitted to withdraw the writ petition with liberty to raise all these issues before the Tribunal. On 12.06.2006, an application was filed by the appellant before the Tribunal for deciding the issue of jurisdiction which was raised as a preliminary issue. This was on the strength of the order of this Court dated 26.05.2006. On 02.07.2008, this Court permitted the appellant to withdraw the pending ITA Nos. 1604/2006, 1691/2006,....
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....nd (3) cash amounting to Rs.12,78,900/- seized from lockers held jointly by Sh. S.K. Bahadur and Smt. Asha Bhatnagar as per details given below:- a) Locker No. 63-B, PNB Gurgaon Rs.6,44,200/- b) Locker No.38-C, PNB Gurgaon Rs.3,84,700/- c) Locker No. 369, Allahabad Bank, Parliament Street, New Delhi Rs.2,50,000/- ....
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....bsp; 1122.95 Grs 2,88,405 b) Jewellery seized from locker No. 38-C, PNB Gurgaon 457.8 " 84,675 c) Jewellery seized from locker No. 369, Allahabad Bank, Parl. St. New Delhi 704.85" 1,57,65....
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....; Rs.6,14,847 (3) House at KD-63, Kavi Nagar, Ghaziabad in the name of Smt. Asha Bhatnagar, wife of the assessee (4) Flat No. 402, DDA (Multi-storeyed), East of Kailash, New Delhi in the name of Sh. S.K. Bahadur. (5) Valuables s per items No. 3 of search list dated 04.12.1984, found at the assessees residence. GROUP-III (i) FDRs in various banks of total face value of Rs.1,94,000/- in the name of the assessee, his wife and three daughters. (ii) Deposits of Rs.15,000/- each in the names of the assessees daughters, Km. Taral Bahadur and Viral Bahadur in June, 82 for booking of DDA flats. (iii) Deposits of Rs.10,000/- made in the names of Km. Taral Bahadur and Km. Viral Bahadur for the booking of two Maruti Cars in May, 1983. (iv) Flat No. 93, Block „B, Sector 27, Noida, purchased in the name of Smt. Asha Bhatnagar on 27.04.1983. 10. The Assessing Officer on the basis of the oral and documentary evidence led before it vide its order dated 30.03.1988 repelled the contentions raised by the assessee that the items in Group II & Group III belonged to his wife and treated it as income in the hands of the assessee S.K. Bahadur; CIT (Appeals) had confirm....
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....ct document; these returns cannot now be reopened which had been affirmed thereafter in appeal on 30.03.1989 by the Commissioner of Income Tax (Appeals) and thereafter reaffirmed by the ITAT. The same property which had been the subject matter of the wealth tax returns filed by Smt. Asha Bhatnagar cannot become the subject matter of the additions made by the ITAT in the impugned order. The same property cannot be assessed twice for tax. It is also not the case of the Revenue that the assets which were the subject matter of the wealth tax returns had earned any income for which it was incumbent upon Smt. Asha Bhatnagar to file income tax returns. 17. In (1992) 4 SCC 45 titled M. Krishna Reddy Vs. State Deputy Superintendent of Police, Hyderabad on the question of benami transaction alleged by the CBI and where there was evidence of income tax and wealth tax returns submitted by the accused prior in time to the search conducted by the Anti-Corruption Branch in his house, it was held that the burden of proof in disproving the claim of the accused had to be discharged by the prosecution. The Apex Court had returned a finding that the wealth tax and the income tax returns which had b....
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....ar dated 22.11.1985 (sister of her husband), affidavit of Smt. Rani Bhatnagar dated 03.06.1985 (another sister of her husband) as also the details annexed along with the Will of her father-in-law i.e. Annexure „A‟ which had bequeathed the aforenoted properties to her. It is also not in dispute that in the wealth tax returns filed by Asha Bhatnagar for the assessment year 1984-85, the same aforenoted assets have been detailed on which she has paid wealth tax; net taxable wealth was Rs. 7,11,000/- It is also relevant to point out that the details as aforenoted and given by Asha Bhatnagar before the Income Tax authorities on 25.02.1988 were the same details which had been given by her on 07.01.1985 when her statement was recorded by the Enforcement Directorate and thereafter in her statement before the CBI on 07.05.1985; in her affidavit dated 09.05.1985 and her subsequent statement dated 04.11.1985. If the story was concocted and sham as has been concluded by the Assessing Officer, the same narration would not have been found in her statement which was recorded on 07.05.1985 which was less than six months after the search conducted in the house of her husband. It is....
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....clusion that the Will did not bequeath anything to the second son Mr. Inderjeet Bahadur or his wife Smt. Suraj Bhatnagar or to Kumari Rani Bhatnagar was the other another reason to reaffirm this conclusion that this document was fabricated. This was a perversity. The Assessing Officer could not have ignored the affidavits of facts which had been filed by Rani Bhatnagar & Suraj Bhatnagar who were admittedly closely related to the deceased being his daughters; yet they had chosen to support the stand of Asha Bhatnagar. The Will had stipulated that the marriage expenses of Rs. 50,000/- for his unmarried daughter Kumari Renu Bhatnagar would be borne by Asha Bhatnagar and she would also give her a part of the jewellery. The interest of his only unwed child had been taken care of. Yet this document was rejected. The lengthy discussion on the Will is clearly based on surmises and conjectures. 23. The further conclusion drawn was that the income received by Asha Bhatnagar from tuitions must have been consumed as it was only a pocket money. This source of income of Asha Bhatnagar had been rejected for the reason that there was no documentary evidence. Smt. Bharti Bhatnagar w....
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....re the evidence had substantiated that this money had in fact belonged to the wife, it has to be treated as money in the hands of the wife especially keeping in view the fact that this money had been reflected by her in her income tax returns. This was not withstanding of the fact that husband and wife were admittedly living together in the same house. 26. In Vol. XXVI ITR 74 Dhirajlal Girdharilal Vs. Commissioner of Income Tax, the Supreme Court has held that a finding by the ITAT which is based on mere surmises and conjectures is perverse and is liable to be set aside. In the said case, it had been conceded by the Attorney General that the Tribunal had drawn upon its own imagination and had made use of a number of surmises and conjectures. 27. In Vol. XXXVII ITR 288 Lalchand Bhagat Ambica Ram Vs. Commissioner of Income Tax, Bihar and Orissa, the Supreme Court in this context had held as under:- "When a court of fact arrives of its decision by considering material which is irrelevant to the enquiry or acts on material, partly relevant and partly irrelevant, and it is impossible to say to what extent the mind of the court was affected by the irrelevant material used by....