TaxTMI 
TaxTMI 
2006 (4) TMI 532
X X X X Extracts X X X X
X X X X Extracts X X X X
....na Bank in the name of Dhanjibhai T. Parmar and Smt. Maniben D. Parmar and IDBI Deep Discount Bonds for Rs. 5,300 in assessee's name were found. 3.1 Assessee's statement was recorded in which he admitted to have claimed the ownership of aforesaid instruments. 3.2 The return of income for block period in response to notice under s. 158BC r/w s. 158BD dt. 15th May, 2001 was furnished declaring undisclosed income at Nil, on 3rd Sept., 2002. During the course of proceedings for block assessment, the assessee was called upon to explain the source of investment in aforesaid instruments. However, the assessee had enclosed the following explanation along with statement of total income filed along with the return of undisclosed income : "Its forming part of statement of total income for the block period in case of Jaswant D. Parmar The search proceeding under s. 132 of the IT Act, 1961 was carried out on 8th April, 1999 at the residential premises of Dr. Harshad R. Shah situated at Ambawadi, Ahmedabad, as well as his clinics situated at Sahyog Building, Laldarwaja, Ahmedabad, and White House Building, Panchvati, Ahmedabad, which finally concluded on 26th Apri....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... KVP of Rs. 3,10,000 in spite of his statement that the same were purchased out of all family members contributions/accumulated savings of last many years. The search party seized KVP in the absence of evidences regarding source of investment. The assessee is staying in a joint family in a very small rented premises since years. The details of family members, age, occupation etc. are as under : Name Age Relationship Occupation 1. Dhanjibhai T. Parmar 71 Father Retired in 1989 from Tata Advance Mills Ltd., thereafter he helped in Pan house run by son Prahladbhai, he expired in 1999. The amount received on retirement and savings given to the assessee for investment in KVP. 2. Maniben D. Parmar 65 Mother Worked as a construction labourer (Kcidia Work) She is of 65 years of age having approx. Rs. 2,000 income per month for the many years. 3. Jayantibhai D. Parmar 42 Brother Working as an operating assistant in Usha X-ray and Sonography Clinic, Sahyog, A'bad. Having approx. income of Rs. 4,000 per month. 4. Jaswant D. Parmar 36 Self Working as an operating assistant in Usha X-ray and Sonography Clinic, Sahyog, Whit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the name of the assessee, it should be considered as investment out of the funds/accumulated savings of all family members with a particular object to purchase a residential house and/or to meet with an exceptional expenditure in the family. 12. It is to be taken note of that whenever the assessing authority proposes to compute the undisclosed income on the basis of source of income, the corresponding unexplained asset/identification against the source of income is required to be established by the assessing authority with material and evidence on record and in absence of such asset/identification, the income computed is merely a notional and hypothetical income determined without observing the principle of real income as laid down by Hon'ble Supreme Court and various High Courts. 13. The undisclosed income under this chapter is required to be computed by the AO on the basis of principle of real income as discussed by the Hon'ble Supreme Court and various High Courts. Hence, any undisclosed income computed without following the principle of real income and without corroborative material/evidence brought on record and on the basis of hypothesis would tant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Hon'ble Tribunal, but could succeed only on the point of levy of surcharge. So far as undisclosed income is concerned, the Hon'ble Tribunal rejected the assessee's plea of further relief as per observations contained in para No. 3 of its order dt. 30th Aug., 2004 which reads as under : "3. We have heard the parties and considered their rival submissions. The assessee reiterated the same arguments which were advanced before the CIT(A). We however find that the CIT(A) has dealt with the same in accordance with law and after taking into consideration the fact of earnings of other family members, no further relief is called for and we uphold the order of the CIT(A)." 7. It was in view of above facts and circumstances of the case that the learned counsel for the assessee, first of all, submitted that the additions which have been made by the AO and sustained by appellate authorities, were due to patent miscarriage of justice, because none of the authorities considered it necessary to examine the family members of the assessee, who had filed confirmation before the AO and affidavits before the CIT(A) stating their income and savings, before arriving at the find....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Balasubramaniam & Bros. Co. vs. CIT (1999) 157 CTR (SC) 556: (1999) 236 ITR 977(SC) wherein the Hon'ble Supreme Court has held that in case of difference in returned and assessed income, onus to establish that difference is not due to any fraud or mala fide intention is on the assessee which has not been discharged in the present case, he, therefore, pleaded that order of the CIT(A) be confirmed. 9. I have considered the rival submissions, facts and circumstances of the case and various decisions relied upon by the parties and are of the opinion that scale of substantial justice, on the facts itself, weighs in favour of assessee as explained below : (i) From the facts on records, it is established beyond doubt that the assessee had at the first instance admitted the investment in the instruments as having been made out of savings of all family members consisting of the assessee, his parents and his three brothers for which monthly income of each of the family members was also disclosed (which was never disputed by the Revenue). This admission on the part of the assessee amply establishes the bona fide and truthfulness of the assessee's statement. The assessee&....