TMI Blog1993 (1) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... . The main contention in this appeal is against the addition of a sum of Rs. 84,233 as income from undisclosed sources. The facts may be mentioned here in short. There was search in the residential premises of the assessee on 24th Oct., 1971. The residential premises of the assessee were at 176, Patliputra Colony, Patna. As a result of the raid and search the following amounts were recovered and seized: 1. Rs. 56,000 recovered from the Godrej Almirah found in the bed room of the assessee. 2. Rs. 28,233 recovered from the Godrej Almirah found in the bed room of the assessee's wife. 84,233 At the time of search statement of one Shri Sarveshwaranand, the then Joint Secretary of Anand Marg Pracharak Sangh (hereinafter to be mentioned as 'Anand Marg') was taken and he deposed that he did not know the nature and source of the amounts seized. He did not at all say that the amount belonged to Anand Marg. The ITO in his order under s. 132(5) held that these amounts were unexplained and it was the income of the assessee from undisclosed sources. It would be also relevant to mention here that the wife of the assessee Smt. Uma Sarkar had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts: (1) That the amount seized did not belong to the assessee and that the whole of it belonged to the Society, Anand Marg. (2) That if the criteria is taken that the amount is to be taxed according to the possession, the amount of Rs. 28,233 which was seized from the Godrej Almirah in the bedroom of the assessee's wife should not have been assessed in the hands of the assessee, as it was her money according to the contention raised by her before the Department. (3) That the assessee was a saint after he left his service with the railways in financial year 1968-69 and thereafter the assessee does not have any income or assets whatsoever. He is only a religious head and whatsoever funds were found belonged to charitable society, Anand Marg and not to the assessee. (4) Possession itself does not amount to ownership. (5) Sec. 132(4A) does not apply to this year and being a substantive provision of law it cannot be held that it was retrospective. (6) Affidavit of Acharya Sradhanand Awadhoot, General Finance Secretary of Anand Marg dt. 28th Dec., 1978 was filed before the ITO in which it has been stated that the amount of Rs. 84,233 belongs to Anand Marg and it represents vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount is undisputed and is admitted by the assessee. The assessee has not been able to prove that the amount though in his possession belonged to somebody else. The contention that it belonged to Anand Marg is wholly disproved by the books of Anand Marg in which there is no such cash balance showed. At the time, the search was conducted, the Secretary of Anand Marg did not point it out and instead he said that he was not aware of the nature and source of this amount. (vi) Sec. 132(4A) is a procedural section and is retrospective. As the amount was found from the possession of the assessee it has to be held that the assessee was the owner of this amount. The assessee had not been able to prove that it was not so. (vii) That no doubt the affidavit of Shri Sradhanand Awadhoot has been filed, but this affidavit has no leg to stand. It is a self-serving document which cannot be taken to be conclusive according to the leading decision of Supreme Court in the case of CIT vs. Durga Prasad More 1973 CTR (SC) 500 : (1971) 82 ITR 540 (SC). Reliance was also placed by the Departmental Representative in this connection, on the decision of Allahabad High Court reported at Sri Krishna (by LRs) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and seized from the possession of the assessee is not disputed. The only plea taken by the assessee is that the amount belonged to Anand Marg. Anand Marg maintains books of account but from those books of account the contention of the assessee is disproved wholly. The plea of the assessee that his then Private Secretary Shri Vishokanand disappeared with the books of Anand Marg and some cash cannot be accepted as there is no evidence for the same and as per reasons mentioned in the order under s. 132(12) quoted above. The another plea taken by the assessee that the assessee was a complete saint and he had no assets or income of his own is not established by any evidence. This plea also does not arise out of the order of AAC. Anand Marg may be receiving donations, contributions, but the assessee was the President of Anand Marg and it cannot be denied that he may have been receiving amounts from the devotees for his own purposes. The affidavit on which reliance has been placed viz., the affidavit of Shri Acharya Sarveshwaranand was filed very late after the search, seven years after the search and is clearly without any supporting or corroborating evidence. It is in the nature of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pear from the description given in the search list prepared by the SPE Branch. It appears that the Spl. Police Establishment undertook a search of the two premises on 24th Oct., 1971 at 9 A.M. to 7.30 P.M. where Shri M.P. Sinha, Inspector, Central Excise and Md. Hasan, Income-tax Inspector, Patna, were also associated as witnesses. In the remarks column, the following entry was made: "House No. 160, Patliputra Colony, Patna Office of A.M.P.S. (Shri Sarveshawanand Avadhut Genl. Secy. Shri Hiraji, s/o Shri Musafirji, Sasaram, Shahabad (Bihar) at present 160, Patliputra Colony, Patna remained present all through during the search). The search of the premises 160, Patliputra Colony was taken in compliance of the warrant of search issued by the Court of Special Magistrate, Patna dt. 22nd Oct., 1971. Before entering the premises the warrant was shown to Shri Sarveshawaranand Avadhut, Genl. Secy., A.M.P.S. who signed the warrant. The Police party comprising of myself, Insp. Md. Taiyab and Insp. Shri Rameshwar Jha and S.I. N.N. Singh accompanied by the witnesses named above entered the premises after giving personal searches to Shri Sarveshawaranand Avadhut. No documents or any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2x1 2 . 1x11 11 . 5x104 520 . . 28,233 Total (1) 56,000 . (2) 28,233 . 84,233 Pancha's Signatures (1) Sd/- Sd/- 24th Oct., 1971 24th Oct., 1971 (2) Sd/- Authorised Official 24th Oct., 1971 24th Oct., 1971 The assessee Shri Prabhat Ranjan Sarkar contended again and again that the amount of Rs. 84,233 found by the Department did not belong to him. The same belonged to Anand Marg Pracharak Sangh yet the ITO nevertheless rejected the plea and treated the amount as income from undisclosed sources. His cryptic finding is as under: "The assessee's representative Shri R.N. Rai appeared and filed in written statements that Shri P.R. Sarkar stating therein the consolidated amount of Rs. 84,233 found by the Department did not belong to him and the same amount belong to Anand Marg Pracharak Sangh. But no evidence such as account books showing the entries of the amount was produced. In the circumstances, it is evident that Sri Sarkar who has earned income from undisclosed sources tried to pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nand Marg Pracharak Sangh while 176, Patliputra Colony was taken on rent by the Anand Marg Pracharak Sangh for accommodating its President the assessee. A perusal of the two the search list by the Police and the Panchnama by the IT personnel makes it abundantly clear who were found at the time of the search. It was not the assessee at either of the two premises but only Sarveshwaranand Avadhoot, Genl. Secretary, Anand Marg Pracharak Sangh who had received the personnel from the Police and other Departments which had raided the two premises for the purpose of taking the search, at both the places leading to the unmistakable conclusion that both the premises at the moment were under the control and dominion of the Secretary Sarveshawaranand. It is the admitted position also that the assessee was not present at the time of the search at any of the two premises. The question arises as to how it was determined that the amount of Rs. 84,233 recovered from the two cupboard lying in the two different rooms at the premises at 176, Patliputra Colony was found to belong to the assessee. Was there any material discovered which led to this finding that the cash found in the two cupboards found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were found in 160, Patliputra Colony. There is no evidence brought on record to show that there were cots or cushions or any personal articles which belonged to the assessee and which were used during his stay in the premises. Even there is no evidence on record to show that the two cupboards belonged to the assessee. What I have pointed out in respect of the rooms has to be repeated in the case of the two cupboards also. The Panchnama is completely silent whether the cupboards were open or locked. If the cupboards have been locked, Panchanama should have described that the key had been obtained from the assessee or from some one else who held it on his behalf or in the alternative locks were broken open. In the absence of any such material I am not able to appreciate how the possession of the cupboards could be attributed to the assessee. If the cupboards were open as appeared to be the case in absence of any description I fail to atribute possession of the sum discovered during the search to the assessee. No one will leave such a huge amount in an open Almirah when he was not present if the sum belonged to him. Therefore, while I have on the one hand the evidence of Anand Marg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he plea of the assessee that the two amounts represented the cash belonging to the Anand Marg Pracharak Sangh only. That the assessee could not leave the two amounts in two open cupboards which were not locked in a premises which was accessable to others including Sarveshwaranand, Secretary of Anand Marg Pracharak Sangh, if they belonged to the assessee as his fund. The circumstances found at the time of search accords more with the claim of the assessee that the two amounts belonged to Anand Marg Pracharak Sangh than with the finding of the Revenue that the two amounts did not belong to the Anand Marg Pracharak Sangh. No doubt, Revenue raised a plea that the plea of the assessee found no support from the entries appearing in the books and accounts of Anand Marg Pracharak Sangh. But in my view the Revenue was not justified in rejecting the plea of the assessee that prior to the search the erstwhile Secretary Vishokanand had disappeared alongwith the papers and documents containing an account of the sums together with his spouse Uma Devi. It was a fact that Vishokanand at whose instance it was alleged searches had taken place had disappeared from view altogether. Revenue had no go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ordinary course of post. The Departmental Representative, was, therefore, heard. Subsequently, on 13th Jan., 1993 the notice sent by speed post was received back undelivered with the remark of the postal authorities "unclaimed Refused". 3. The relevant facts and the evidence, direct and circumstantial, are elaborately stated in both the orders passed by two members and, therefore, repetition of the same is avoided. The orders of both the members are to be treated as part of this order. On going through the orders and after hearing the Departmental Representative, I am of the opinion that the view taken by the Accountant Member, which is against the assessee, is required to be upheld. I am also in agreement with the reasons recorded by the learned Accountant Member. I would, therefore, proceed to record my reasons as to why I do not agree with the view expressed by the learned Judicial Member. 4. In para 2 of the order passed by the learned Judicial Member, a reference is made to a letter from the assessee dt. 13th Jan., 1979 appearing at page 22 of the paper books, where the assessee claimed that the sum of Rs. 84,233 did not belong to him but was held in trust by him for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not complete and full because to make it complete and full the explanation given by the assessee with regard to the source of cash was required to be considered and the same was considered and only thereafter the possession of the cash was taken equivalent to the ownership by the assessee. The question whether the assessee's explanation regarding the source was acceptable or not was purely one of fact, keeping in mind the nature of the property, that is to say, the cash found as also there being clear evidence on the basis of which it was found that the explanation offered by the assessee regarding the source could not be accepted. The circumstance that prior to the search the erstwhile Secretary of the Sangh had disappeared alongwith the papers and documents becomes irrelevant because the fact remains that entries were not found in the books of accounts of Sangh. If the cash was received by the Sangh, then instantly the entries are normally made in the cash book but no such entry was found. If the cash was held by the assessee in trust for the Sangh, then after recording the receipt of cash in the books of the Sangh there could have been corresponding entry for payment of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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