TaxTMI 
TaxTMI 
2005 (4) TMI 22
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....der section 143(1) of the Act vide order dated September 15, 1987. Just after the filing of the return a search was conducted under section 132(1) of the Act, at the business as well as residential premises of the assessee. During the course of search four FDRs in the name of four minor children of the assessee were found and seized from the locker of the bank, owned by the assessee. The total investment in those four FDRs was to the extent of Rs. 3,45,000. In the statement recorded on August 18, 1988, at the time of opening of the locker, Mohan Lal Sharma stated that the FDRs in the name of four children, namely, Master Ravish Sharma, Manish, Vishal and Baby Namrata Sharma, are kept in a locker and they were all disclosed under the income-tax/wealth-tax. During the course of the proceedings under section 132(12) of the Act the Commissioner of Income-tax had held that there was no source of income with the minors and thus the source of FDRs were not proved and it being relatable to the assessee, directions were issued to the Assessing Officer to assess these FDRs in the hands of the assessee. Thereafter, the assessee to buy peace filed a revised return including the alleged FDRs of....
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.... or rule 112A of the Rules.' The decision of the hon'ble Madras High Court in the case of I. Devarajan v. Tamil Nadu Farmers Service Co-operative Federation [1981] 131 ITR 506 relied upon by the learned Departmental Representative and also by the learned Commissioner of Income-tax (Appeals), in our opinion does not much help the Department. In that case, the point involved was of attachment and in the said order it was held that FDRs could be attached through the bank to whom the FDRs pertained. In that case too, the hon'ble Madras High Court had held that the fixed deposit receipt itself is not a negotiable instrument and has no value as these deposits generally carry a term that they are not transferable. The fixed deposit receipts cannot as such be assigned without the concurrence of the bank, though the receipt by itself cannot be said to be an asset. So in this way although even that subsequent order of the hon'ble Madras High Court also goes to support the case of the assessee that these fixed deposit receipts were not valuable assets found from the possession of the assessee. Hence, we are of the opinion that mere recovery of these FDRs, from the locker of the assessee st....
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....ment in the return filed by the minor. The Government/C.B.D.T. had given a concession to the assessee to file returns of income which will be accepted without any enquiry and the assessee will not be required to give the details of their income. This is a special concession given by the law and the Department is bound by these concessions. In view of these concessions if the minors of the assessee had surrendered certain gifts in the form of income and duly assessed as such and purchased FDRs in the names, the said income and the FDRs now cannot be questioned in the hands of the minors. Once that income cannot be questioned in the hands of minors, then we do not understand as to how the said income can now be questioned in the hands of the assessee. No doubt, the assessee after the order passed under section 132(12) surrendered the said amount as his income in the revised return, but that mere surrender can be for hundred and one reasons. In view of the hon'ble Supreme Court's decision in the case reported in Sir Shadilal Sugar and General Mills Ltd. v. CIT [1987] 168 ITR 705 the mere fact of surrender cannot go to prove the concealment of income by the assessee. That surrender may....
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....ssed by the learned Accountant Member that, when the explanation offered by the assessee was not found to be false, the difference between the income returned and the income estimated cannot be regarded as concealed income.' Here, in this case there is no positive finding at any stage that the explanation offered was false, while, in our opinion, on the other hand the explanation offered appears to be more plausible and more true at least for the purposes of penalty provisions. As the assessee had surrendered the amount in its revised return, the Department was justified in adding the same in his income in the assessment, but the facts of the case did not give rise to penalty under section 271(1)(c). The surrendering of the amount stood covered by the decisions of the hon'ble Supreme Court which provide that surrender can be because of a hundred and one reasons but the mere surrender does not go to prove the concealment of income. In fact, as the circumstances stand if the assessee would not have surrendered the amount, it might have been difficult by the Department to add the said income in the hands of the assessee because of the overwhelming evidence filed by the assessee to ....
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....course of a search under section 132, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereinafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilizing (wholly or in part) his income,- (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such income has not been declared therein ; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of subsection (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, unless,- (1) such income is, or the transactions resulting in such income are recorded,- (i) in a case falling under clause (a), before the date of the search; and (ii) in a case....
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....e assessee right from the beginning contended that the FDRs belong to the minors and have been disclosed in income-tax/wealth-tax. It was also found as a fact that these FDRs have been disclosed by the minors in their assessment proceedings under the Amnesty Scheme. Therefore, merely because the assessee surrendered the amount in the return, it cannot be said to be concealed income of the assessee. The finding of the Tribunal in this regard is a finding of fact and there appears to be no reason to interfere with such finding which is based on the material on record. In the case of Sir Shadilal Sugar and General Mills Ltd. v. CIT reported in [1987] 168 ITR 705 (SC) while dealing with the provisions of section 271(1)(c) of the Act, the apex court held that, from the assessee agreeing to addition to his income, it does not follow that the amount agreed to be added was concealed income. There may be a hundred and one reasons for such admission. The apex court further held that the assessee had only accepted certain amounts as taxable, it has not been accepted by the assessee that it had deliberately furnished inaccurate particulars or concealed any income. The apex court had upheld ....