TMI Blog1991 (2) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... one Shri Pawan Parwal and lives at Star Mansion, 16A, Koloon, Hongkong. She was married in Feb., 1982 and her husband and father-in-law have been doing cloth business in Hongkong. It is also an admitted fact that the assessee's elder son Shri Pradeep Somani had gone to Hongkong from where he came back on 24th Dec., 1984 and that the assessee himself had been to Hongkong four times in 1984, i.e. Sl. No. Date of Going Date of Return Stay 1. 12.9.1982 24.9.1984 2 years 2. 25.7. 1984 28.7. 1984 3 days 3. 22.8. 1984 25.8. 1984 3 days 4. 30.11. 1984 4.12. 1984 4 days 5. 16.12. 1984 20.12. 1984 4 days 1. 1 The Customs authorities are said to have conducted a search of Somani Bhawan on 1st Jan., 1985 and to have recovered the following from the possession of the assessee, which were seized: Sl. No. Items seized Value From where recovered 1. 36 Gold biscuits with Chinese markings(6735.600 gms) 13,40,384.40 Iron box 2. 2100 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation was passed on by the customs authorities to the ITO. The ITO issued a notice dt. 7th Jan., 1986 to the assessee under s. 139(2) calling upon him to file his return for the asst. yr. 1985-86 in question. The return was, however, filed by the assessee on 28th Jan., 1988 declaring an income of Rs. 22,369 as share from two firms M/s Ramgopal Radheshyam and M/s Badrinarain Sitaram. No personal set of books were maintained by the assessee. The ITO asked the assessee to state as to why unrecorded expenditure on four foreign trips made during the year including stay abroad (estimated at Rs, 50,000) should not be taxed under s. 69C of the IT Act, 1961. He was also asked to state as to why unexplained and unrecorded monies, i.e., 12100 US dollars (equivalent to Rs. 1,57,300 @ Rs. 13 per US dollar) should not be taxed as the assessee's income from undisclosed sources under s. 69A. He was similarly asked to state as to why the value of 36 gold biscuits found in his possession should not be added as his income under s. 69A. Another statement of the assessee seems to have been recorded on 25th Feb., 1985. On 13th March, 1985 the assessee again wrote to Asstt. Collector, Customs reiterat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossession of the assessee and he had failed to establish that they belonged to some body else, there was a presumption that they belonged to the assessee. He upheld the ITO's view that the decision of the Supreme Court in the case of Piara Singh could not be taken advantage of by the assessee. However, he deleted the addition of Rs. 50,000 on account of four foreign trips. But he upheld the addition of Rs. 11,800. He deleted the addition of Rs. 5,500 made by the ITO on account of low withdrawals. 3. That is how the assessee as well as the Department are in appeal. 4. The first ground in the assessee's appeal is to the effect that the assessment order should have been set aside by the learned CIT(A) as it sic provide reasonable and proper opportunity to put up his case and that proper enquiries were not made and the order had been passed hurriedly. This ground would be dealt with while dealing with the merits of the appeal. 5. So far as the additions are concerned, namely, Rs. 7,02,000, Rs. 1,57,300 aggregating to Rs. 8,59,300, it was submitted on behalf of the assessee before us by Shri. N.M. Ranka that on the customs side the assessee's appeal was pending and without examini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. The second point is that the assessee had 1/4th share in Somani Bhawan alongwith three brothers. Thirdly the assessee had challenged soon after being freed on bail on 17th Jan., 1985, the correctness of the statement recorded as also the seizure of US dollars and gold biscuits from his possession. The assessee's case was that the case was framed on him and that no recovery actually took place from his house at all. However, no enquiries were made in this regard. No doubt, adjudication order was passed by the customs authorities but that order is admittedly pending in appeal and has not become final. Notice under s. 139(2) was given to the assessee by the ITO on 7th Jan., 1986 and his statement was not recorded by the ITO. Thereafter the return was filed by the assessee on 28th Jan., 1988. Since this was not a case of search under the IT Act, 1961 s. 132(4A) was not applicable and no presumption regarding ownership could be raised. As already stated above the possession of the assessee in respect of the US dollars and gold biscuits had been assumed and that too of the nature of exclusive possession. The ITO had not asked anything from the assessee regarding the possession. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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