1990 (12) TMI 52 - HC - Income Tax

Summary

Issues: Detention under COFEPOSA Act, Competent Authority's notice under SFEM Act, Forfeiture of properties under SFEM Act, Source of investment for specific properties, Appeal against forfeiture order.

In this case, the appellant was detained under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, making him an affected person under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act. The Competent Authority issued a notice under the SFEM Act regarding various properties owned by the appellant. The Authority was satisfied with the source of investment for most properties but initiated proceedings under section 7 of the Act for three specific properties. The appellant contested the forfeiture of these properties, arguing that his income from agricultural land and a sum received from his brother in Singapore were legitimate sources for the property purchases. The appellant provided evidence of his agricultural income through sale receipts and a bank passbook showing the receipt of funds from his brother. However, the bank could not confirm if the funds were from Singapore due to missing records. Despite this, the appellant had disclosed the property purchase to the income tax authorities, and it was accepted during assessment. The absence of contrary evidence led the court to conclude that the funds for the property purchase were from legal sources. Consequently, the court allowed the appeal, setting aside the Competent Authority's forfeiture order.