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2008 (7) TMI 978 - HC - Income TaxAssessment of undisclosed income u/s 158B - No incriminating material found in search - NRI gift receipts - undisclosed jewellery - Proceedings initiated under Chapter XIV-B is erroneous or perverse - HELD THAT:- In CIT vs. Chandra Chemoux [2007 (9) TMI 184 - RAJASTHAN HIGH COURT] held that under the provisions of s. 158BB of the Act, the addition can be made only when evidence is available as a result of search or requisition of books of account, documents and other material, however, addition cannot be made on the basis of inferences. In CIT vs. R.M. Patel (HUF) [2007 (4) TMI 181 - MADRAS HIGH COURT] held that what is contemplated u/s 158BB is that the undisclosed income shall be computed only in accordance with the provisions of the Act on the basis of evidence found as a result of search and such other material or information which are related to such material. If the material seized does not, in any way, connect the assessee indicating that the assessee had any undisclosed income it may not be proper to proceed against the assessee u/s 158BD r/w ss. 158BC and 143(3) of the Act without any basis whatsoever. In the case at hand, the AO has not connected any undisclosed income with anything that has come in search and seizure. The AO has himself recorded with regard to the gifts made by Dr. Jaiswal that the assessee had denied of having made any compensatory payments. He has also found that the statements recorded of Dr. Jaiswal were not clear and he has not specifically mentioned anything about the gifts made to the assessee. The AO has proceeded with regard to the onus on the assessee to prove the genuineness of the transaction and on that basis, he has held it to be non-genuine. But the fact remains that how no nexus has been established with any document or evidence collected during search and seizure with regard to the gift made. There is no finding as to how the gifts are not genuine except stating about the onus. Be that as it may, in the absence of any document during search or seizure, it is difficult to accept the submission of the learned counsel for the Revenue that the conclusion arrived at by the Tribunal to the effect that the proceedings could not have been initiated under Chapter XIV-B is erroneous or perverse. At this juncture, we are obliged to refer to the instructions which relate to guidelines for seizure of jewellery and ornaments in the course of search. The said guidelines pertain to search and seizure u/s. 132 of the Act. The Tribunal has aptly referred to the circular and recorded a finding. The same being in the realm of fact, we do not perceive any substantial question of law. Therefor, we find that the finding of the Tribunal that the Revenue could not have proceeded under Chapter XIV-B of the Act and could have proceeded u/s. 148 of the Act cannot be found fault with. That apart, from the search and seizure of jewellery, the finding of the Tribunal being in the realm of fact does not warrant any interference. Similarly, the analysis made by the Tribunal as regards other spectrums, as is evincible from the analysis of the order of the Tribunal which we have referred to while dealing with the findings, are also in the realm of facts and hence, there is no justification to interfere. Consequently, the appeals being sans substance, stand dismissed. There shall be no order as to costs.
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