TaxTMI 
TaxTMI 
2003 (1) TMI 76
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....ywhere but still then when he addressed a letter referring to the amount seized from him, that cannot be treated to be an admission that the entire amount belongs to him. However, he points out from the paper book being I. T. R. No. 39 of 1997, at page 94, where a reference has been made that the return submitted by Sri Gopal Das Damani was accepted by the Department. Therefore, according to him, if the amount recovered from Gopal Das is added while computing the income of the assessee, then it will hit the principle of double jeopardy and taxing the same amount at the hands of two persons. Therefore, addition of the whole amount, at least the amount recovered from Gopal Das, is perverse and is wholly unreasonable. He secondly contends that even if the amount at the hands of either of these two persons is added as an income, then the assessee would be entitled to a deduction of the said amount as a loss occasioned in the course of the business. He points out that when a person carries on business, even if it is a single adventure, still then the same has to be treated as a business, despite it being an illegal one. He relied on the decision in CIT v. Piara Singh [1980] 124 ITR 4....
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.... the materials placed before the learned Tribunal. All the questions are to be confined within the scope of the materials that were presented before the learned Tribunal. It cannot look into any piece of material or evidence other than those laid before the learned Tribunal at the time when the order was passed. In case anything else is claimed, in that event, it was the burden of the assessee to prove that the apparent was not the real. From the materials placed before the learned Tribunal, it is apparent that the assessee had admitted the whole of the amount as his income and nowhere he has pointed out that he is the owner of the particular income seized from him and there is no material before the learned Tribunal that Gopal Das has claimed the said amount. Notices were issued on both of them, but Gopal Das had never appeared. Whereas the assessee, in his letter, did not claim that he is the owner of only US $ 24,500. Therefore, on materials, there is no perversity so as to enable this court to intervene in the matter. He had also pointed out, referring to section 37 of the Income-tax Act, that it is only business expenditure, which is deductible, not an amount confiscated. B....
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....stions formulated in the said four points raised by the assessee are to be gone into and considered in this case. He further relied on the decision in CIT v. Nopany Education Trust [1986] 159 ITR 367 (Cal), in support of his contention with regard to the scope of this reference which, according to him, includes all the four questions in respect of which reference was sought for by the assessee were assimilated in one that has been referred before this court and as such this court is free to look into all the four questions sought to be referred by the assessee. According to him, in the order of reference, the learned Tribunal had pointed out that the ground that has been referred is sufficient since the other questions which have not been referred are expansion of the questions referred before this court. Therefore, all the questions, which have since been argued by him, can be gone into. That apart the addition can be made only if the amount is not deductible. As soon the question of addition arises, it includes the question of deduction. On this ground, he contends that the questions referred to should be answered in the negative in favour of the assessee. We may first take....
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....n of another cannot be presumed to be the possession of the assessee. If the ownership is disputed, the burden of proving that his possession was not the possession of the owner and the ownership is of someone else, is on the assessee. If the Department wants to assert that the assessee is the owner of the amount recovered from someone else, then the burden lies on the Department to prove the ownership of the assessee. Therefore, the US $ 23,200 recovered from Gopal Das cannot be attributed to the assessee without any proof adduced by the Department. Even if Gopal Das does not come or disown still then the same would not be a factor to discharge the burden on the Department and shift the same on the assessee when the said US $ 23,200 was not found to be in the possession of the assessee. In Kishinchand Chellaram v. CIT [1980] 125 ITR 713 (SC), it was held that when ownership is sought to be attributed to a person other than one in possession, in that event, the burden of proving such fact lies on the Department. Section 110 of the Evidence Act, might help if the possession is with the person to whom the ownership is attributed. In the present case, the recovery having been made ....
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....of the Act, an income is computable in accordance with the provisions provided in the Act. Section 37 provides for deduction of business expenditure while computing the income. An income can be added if it is found to have accumulated in the hands of the assessee after it is computed. Computation includes consideration of the question of deduction. Therefore, the question of deduction is implicit in the question of addition. Having regard to the facts and circumstances of the case, we do not find any reason to answer the question of deduction in favour of the assessee for the following reasons. Under section 69A of the said Act, a person is liable to taxation in respect of undisclosed or unexplained income. If such income is from a business, then the assessee will be entitled to the deduction of business expenditure available The presumption of possession would stare on the face of the Department in attributing ownership to the assessee when the amount was recovered from Gopal Das. The decision in Soorajmal Nagarmull's case [1990] 181 ITR 340 (Cal), would be relevant to the extent of recovery made from the assessee. It cannot include the amount recovered from Gopal Das at the....
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....see for the following reasons. Under section 69A of the said Act, a person is liable to taxation in respect of undisclosed or unexplained income. If such income is from a business, then the assessee will be entitled to the deduction of business expenditure available under section 37 of the Act. Business expenditure includes business loss. The question of loss is dependent on the question as to whether it is a loss in the course of the business. If it is not a business, then the income is not a business income. If it is not a business income, then it would be an income from other sources. If it is an income from other sources, the loss of such income will neither be a loss in business nor a business expenditure deductible under section 37. When considered in the light of the provisions contained in section 69A, the question acquires a different dimension and it has to be considered in the light of such a proposition whether it could be allowed or not even if it is a loss. In our view, this loss, not being a business loss, cannot attract the principle of section 37 for deduction permissible thereunder. It is a settled proposition of law that whatever is carried on for gain is a....
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....to be an amount wholly and exclusively spent for the purpose of the business of the assessee within the meaning of section 10(2)(xv) of the Indian Income-tax Act, 1922, and a fine paid by the assessee was not liable to deduction under that section. This provision of section 10(2)(xv) of the 1922 Act is pari materia identical with section 37 of the 1961 Act, which was referred to in Piara Singh's case [1980] 124 ITR 40 (SC), and was distinguished to that extent. Relying on the decision in CIT v. Khairagarh Tiinber Traders [1982] 137 ITR 346, Mr. Khaitan had contended that even a single transaction is a business. In that decision, a lease was obtained in respect of a forest land which was let out to a contractor for exploitation of the produce. This act of leasing out of the forest land by the assessee was held to be a business. In this case, it was a business, which he was supposed to carry on but was let out to some other person who carried on the business in terms of the lease executed. The income derived from the granting of such lease is definitely a business in respect of lawful activities at the hands of the lessor assessee. Therefore, this decision is distinguishable havin....