TaxTMI 
TaxTMI 
2017 (4) TMI 414
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....lished that they had no known source to have accumulated so much of cash and jewellery whereas the assessee had huge undisclosed professional income.? 2. Whether on the facts and circumstances of the case the Hon'ble ITAT has erred in law in ignoring the fact that the Assessing Officer had initiated the proceedings u/s 158BC to conduct enquiry as to whether the alleged owner had the capacity to accumulate so much of undisclosed income but they did not co-operate despite the fact that Hon'ble High Court had given specific direction while admitting their writ petition that the asstt. proceedings will continue without passing the final order? 3. Whether on the facts and circumstances of the case the Hon'ble ITAT was justified in law in deleting the addition of Rs. 8,44,294/- on account of cash found from the lockers by accepting the availability Judicial member & the CIT(A) that the cash book was an after thought as no cash book was found either during the course of search or, from the possession of counsel / accountant as claimed by the assessee during search and the cash book produced subsequently was not even supported by vouchers? 4. Whether ....
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....er No. 645, PNB, Surya Nagar, Agra in the name of Smt. Vijay Dhir and Sri Udgeath Dhir 21,00,000 - - 11. Locker No. 59 SBI, Sadar Bazar, Agra in the names of Vibha and Raman 5,62,800 - - 12. Locker No. 98, PNB, Surya Nagar, Agra in the name of Sri Ushast Dhir 16,64,900 231.140 10275 Total 1,44,00,820 5013.740 2343563 Simultaneously, a survey u/s. 133A(1) of the I.T. Act, 1961 was carried out at the assessee's clinic. No regular books of account for the current year or for the preceding years were found either at the clinic or at the residence. The assessee stated that books of accounts were with the counsel. In order to obtain the books, summons were issued to the counsel of the assessee during the course of search itself to produce the books but no books were produced. At the residence only the cash book and the ledger for the F.Y. 97-98 were found and seized. The assessee's family comprises of his wife Smt. Vijay Dhir and two sons Udgeath Dhir and Ushast Dhir. While the assessee's wife Smt. Vijay Dhir was, at the relevant time ....
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.... (ix) Rs. 5,30,000/- on account of excess gold jewellery found. It was added as undisclosed income in A.Y. 2003-04. (x) Rs. 11,600/- expenditure on account of purchase of tyres and tubes. It was added as undisclosed income in A.T. 2003-04. (xi) Rs. 1,11,916/- on account of visit to foreign sponsored by M/s Aventis Pharma Ltd, Mumbai. It was added as undisclosed income in A.Y. 2002-03. (xii) Rs. 19,800/- on account of undisclosed receipt of liquor. It was added as undisclosed income in A.Y. 2004-05." Against the assessment order dated 27.6.2005 the assessee had preferred the first appeal which was dismissed by the CIT (Appeal), Agra vide his order dated 30.3.2006. Against the first appellate order the assessee filed the appeal before the Tribunal which has vide its impugned order granted partial relief to the assessee. Hence this appeal. In the appellate proceedings before the Tribunal, there arose a difference of opinion between two members who first heard the appeal in respect of various additions made at the hands of the assessee. While the accountant member granted relief to the assessee, the judicial member had denied the same. Resultantly,....
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....MBBS study during the period 1998-99. Further, the assessing officer found that the elder son of the assessee namely Udgeath Dhir filed his return for the assessment year 2002-03 disclosing the income of Rs. 92,810/- only including his professional income of Rs. 30,000/-. The Assessing Officer also relied on the statement on oath recorded during the investigation proceedings wherein upon being specifically confronted as to the source of professional income, Sri Udgeath Dhir only furnished evasive replies and could not substantiate in any manner, the cash claimed by him. Thus the Assessing Officer disbelieved the claim of Sri Udgeath Dhir having earned professional income in any proportion of the cash seized as during the financial year 1997-98 he was in the midst of his MBBS course. The assessee's second son Ushast Dhir had filed only one return of income for the assessment year 2003-04 that is after the search date and disclosed only interest income only Rs. 5,000/-. As is apparent, in this case large amounts of cash were found in different bank lockers all traceable to the assessee inasmuch as it has been further found by the Assessing Officer that the assessee wa....
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.... discard the ownership of cash as that of the lady and to treat the same as the property and the income of the assessee." Similar reasoning has been given by the third member of the Tribunal while deleting similar additions on account of cash and jewellery found from the lockers. On the other hand the judicial member had while deciding this issue reasoned that sons of the assessee were students at the time of search and had no source of income to justify or explain the amounts of cash claimed by them and that even after completion of study they had meager incomes which were wholly insufficient to justify the cash found in the lockers. Also, he had similarly disbelieved the case of the assessee's wife having regard to her known source of income and lack of any books of account. In this light the judicial member reasoned that it was necessary for the assessee to demonstrate that the persons had the capacity to account for the cash and they were not benami-name lenders. In the facts of the case, he held the assessee had failed to demonstrate that the sons and wife were not name-lenders, whereas the department had demonstrated on facts and evidences duly confronted to the ....
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....e instant case there was a complete lack of any plausible explanation as to the source of acquisition of money either by the assessee's wife or by his two sons from any source and in any case, the first, and at times the only presumption that may arise upon lack of financial capacity of a person being proven be that such a person was not at all possessed of the money being claimed by him. A very heavy burden would then be on such persons to explain the source of money being claimed by them. It was never discharged in the instant case. In fact, to the contrary, the said three persons only sought to explain the source through their own earning and from no other source which issue stood determined against them upon finding of lack of financial capacity recorded by the all members of the Tribunal. From perusal of their returns as also from their status namely Smt. Vijay Dhir being a partner in a partnership firm with declared income of Rs. 2 lacs per annum and the assessee's two sons being student at the relevant time, it is clear that they had no means to come in possession of such large amount of cash or jewellery. Clearly they had claimed the money and jewellery only to c....
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....rse of search of proceedings. In this regard also the case of the assessee did not inspire any confidence as some of the statements and explanation smacks of intention to evade tax. Sri Shubham Agarwal, learned counsel for the department has submitted that cash book was not found during search proceedings and it was first produced during the course of assessment proceedings. He has also submitted that none of the entries in the cash book is supported by any voucher and that the entries in the cash book are merely self-serving statements made by the assessee as a mere after thought. Alternatively, he also submits that cash sought to have been explained by the assessee through the production of cash book was found in various bank lockers. The last operation of the bank lockers was admittedly done by the assessee on 27.6.2002 whereas the cash balance of Rs. 8,44,294/- figured on 31.3.2003. Therefore, the cash book is even otherwise not related to the cash found in the bank lockers for the reason that the cash earned up to 31.3.2003 could not have been placed in the bank lockers in June, 2002. In this regard we find that the third member of the Tribunal has recorded a finding ....
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....n 145 of the Act and have not passed a best judgment assessment order under Section 144 of the Income Tax Act, we are unable to accept the submission made by Sri Suyash Agarwal as in the instant case the department had found and seized the cash from the bank lockers operated and maintained by the assessee. The assessee was required to explain the source of acquisition of such money. It was for the assessee to offer such explanation as was true and correct to explain source of cash found in the lockers, the cash having been found placed in the lockers that were last operated on 27.6.2002. Thus the source of acquisition of cash found in lockers could be only for up to 27.6.2002 and not 31.3.2003. The assessee tried to explain the same by means of the cash book entries which show the cash balance on 31.3.2003. Clearly this explanation is an eye wash. It may, in fact have been open to the department, in such a situation to have made further addition of Rs. 8,44,294/- disclosed in the cash book as on 31.3.2003 or considered it to be part of the regular assessment of the assessee. The departmental authorities have in fact been lenient to such an assessee. We leave the matter at that w....