TMI Blog1988 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... YASACHI MUKHARJI J.- This petition for leave to appeal is directed against the judgment and order dated December 10, 1985, of the High Court of Madhya Pradesh, Jabalpur Bench. The High Court upheld the imposition of penalty as well as the addition of alleged concealed income in the income-tax assessment of the petitioner. The relevant assessment year with which we are concerned in this application is 1974-75. It appears that the petitioner had submitted his return of income for the assessment year 1974-75 showing a total income of Rs. 3,113 in response to a notice issued under section 143(2) of the Income-tax Act, 1961 (hereinafter called " the Act "). According to the petitioner, he had derived his income from 2 stores, i.e., M/s. Mohana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the records of the customs case, with which we will have to deal later in S.L.P. No. 1008 of 1986, the petitioner was given show-cause notice as to why the period of six months fixed under section 110(2) of the Customs Act, 1962, should not be extended but no reply was given by the petitioner till November 10, 1973, or even thereafter. Hence, by an order dated November 10, 1973, before the expiry of six months, time was extended by the Collector of Customs for a further period of 6 months for giving a notice as required under section 124(a) of the Customs Act, 1962. Under the proviso to sub-section (2) of section 110 of the Customs Act, 1962, a show-cause notice, specifying the requisite particulars, was given to the petitioner on May ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 90,000, the minimum imposable being Rs. 87,455 and the maximum imposable being Rs. 1,74,910. Being aggrieved thereby, the petitioner filed two appeals before the Income-tax Appellate Tribunal. The Tribunal, by its order dated August 19, 1980, dismissed these appeals. The petitioner has further stated that in the meanwhile, the State of Madhya Pradesh initiated criminal proceedings under section 125 read with section 111 of the Customs Act, 1962, and the learned Chief judicial Magistrate, Durg, by his order convicted the petitioner and awarded one years rigorous imprisonment. Thereafter on November 2, 1982, the petitioner filed an appeal in the Court of the Additional judge in the Court of Sessions, who, by his judgment, allowed the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... established, title always follows possession. In the facts of this case, indubitably, possession of the wrist-watches was found with the petitioner. The petitioner did not adduce any evidence, far less discharge the onus of proving that the wrist-watches in question did not belong to the petitioner. Hence, the High Court held, and in our opinion rightly, that the value of the wrist-watches is the income of the assessee. In this connection, reference may be made to the views expressed by Justice Tulzapurkar, as his Lordship then was, of the Bombay High Court in the case of J. S. Parkar v. V. B. Palekar [1974] 94 ITR 616, where, on a difference of opinion between Justice Deshpande and justice Mukhi, justice Tulzapurkar agreed with justice Des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High court in the instant case was right in holding that the value of the wrist-watches represented the concealed income of the assessee. Section 69A of the Act was inserted in the Finance Act, 1964, and it came into force with effect from April 1, 1964. The High Court has rightly held that the expression " income " as used in section 69A of the Act has wide meaning which meant anything which came in or resulted in gain. Hence, in the facts of this case, a legitimate inference could be drawn that the assessee had income which he had invested in purchasing the wrist-watches and, as such, that income was subject to tax. In this view, the High Court was justified in justifying the Tribunal's holding that the assessee was the owner of the wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereinafter in this Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this sub-section." From the facts found by the Revenue, the assessee had shown only a total income of Rs. 3,113 and subsequently the raiding party ..... X X X X Extracts X X X X X X X X Extracts X X X X
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