TaxTMI 
TaxTMI 
2002 (8) TMI 33
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....n, Jaipur, wherein the assessee has stated that the cash belongs to his brother, brother-in-law and some cash belonging to him. The assessee could not give details how much amount belongs to his brother, how much amount belongs to his brother-in-law and how much amount belongs to him. On April 9, 1992, the assessee has surrendered the said cash of Rs. 5,92,340 for inclusion in his income for the assessment year 1993-94. The return of income was filed on April 26, 1993, declaring the income of Rs. 6,09,620. This includes the seized cash of Rs. 5,92,340. The assessment was completed and the income was assessed at Rs. 6,13,940 as against the income of Rs. 17,280 declared by the assessee in the original return. The part of the income on accoun....
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....elf has surrendered it for taxation, it amounts to admission of guilt and after amendment in the section 271(1)(c), the ratio laid down in the case of CIT v. Anwar Ali [1970] 76 ITR 696 (SC) does not help the assessee. Mr. Jhanwar, learned counsel for the assessee-respondent, submits that the assessee has surrendered the amount seized for taxation to buy peace and if any addition is made, the penalty under section 271(1)(c) is not automatic on the basis of such addition. He placed reliance on the following decisions (1) CIT v. Suresh Chandra Mittal [2001] 251 ITR 9 (SC); (2) CIT v. Suresh Chandra Mittal [2000] 241 ITR 124 (MP) (3) Chikkam Koteswara Rao v. Chikkam Subbarao, AIR 1971 SC 1542 (4) CIT v. Gurudayalram Mukhlal [1991] 190 ITR....
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....sertion of the Explanation to section 271(1)(c) reads as under: "Where in respect of any facts material to the computation of the total income of any person under this Act,-- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) to be false or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this subsection, be....
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....e income but this presumption can be rebutted. The rebuttal must be on materials relevant and cogent...." In the case of CIT v. K. R. Sadayappan [1990] 185 ITR 49, 55 (SC), their Lordships observed as under: "In our opinion, it cannot be said that, in this case, the Tribunal was justified in rejecting the claim and penalty may be imposed. The presumption raised as aforesaid, that is to say that the assessee was guilty of fraud or wilful neglect as a result of which the assessee has concealed the income, would be there. This presumption could have been rebutted by cogent, reliable and relevant materials. There was none, at least neither the Tribunal nor the High Court has indicated any." In the case of Addl. CIT v. Jeevan Lal Sah [1994] 2....
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.... how much belongs to him, how much to his brother and how much to his brother-in-law, jointly or separately. He has not even given the purpose such as whether the amount was carried for or relates to any specific transaction to pay that amount to any specific person for any transaction. It is unbelievable that any person who carries this huge amount does not know the exact purpose to whom the amount is to be paid and for what purpose or in respect of which transaction the amount was being carried. Therefore, it left no doubt that the explanation furnished by the assessee at the time of seizure is false. The penalty is not automatic but the penalty can be levied on considering the facts on record of a case. It is not necessary that some mor....