TMI Blog2008 (4) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... the asst. yr. 2003-04. The AO initiated assessment proceedings under s. 147 of the IT Act. Notice under s. 148 was issued and it was returned unserved twice with endorsement 'absent/intimation served not claimed/returned to sender'. Despite notice by affixture, no return was furnished by the assessee. Though the brother of assessee Shri Abdul Hameed, sought time for reply within 30 days there was no response, so the AO made assessment under s. 144 of the Act. 3. From the documents seized, it is clear that the assessee had received Rs. 23,15,000 from Shri Mohd. Imran between November, 2002 and January, 2003. In the statement made before Enforcement Directorate, the assessee stated that he was holding about 6 acres of agricultural land from which he was getting an annual income of Rs. 30,000. He also stated that his eldest brother Shri Adam Kunhi is employed as a cook in Alain, UAE, for the past 15 years, that his sister's husband, Shri Aboobaker is also employed as cook in Dubai for the last 10 years, that Shri Abdul Rahiman, his another brother is also working as a cook in Abudabi. He further stated that his brother, Shri Adam Kunhi has constructed a house measuring 600 sq. ft. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... others, brother-in-law or from assessee. So the statement of the assessee that he had utilized some amount: for the construction of residence of Shri Abdul Hameed Musaliyar was found to be incorrect. During the course of assessment proceedings, details have been called for under s. 133(6) of the IT Act from Shri Adm Kunhi, Abdulla, Shri Aboobaker (brothers and brother-in-law of assessee). All the three have filed letters signed by Shri Abdul Hameed stating that their remittance to India were utilized for the construction of their houses year back. In short in the letter signed by Abdul Hameed, all the three disowned of having sent any money to assessee through anybody. 6. From the statement of Shri Adm Kunhi, Abdulla, Shri Aboobaker, and Shri Hameed, the AO concluded that the assessee had not received the amount under instruction from his relatives from abroad for their house construction. It was, therefore, held that the amount of Rs. 23,15,000 was unexplained money belonging to the assessee and the same was assessed as such under s. 69A of the IT Act to the asst. yr. 2003-04. 7. Being aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A). The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , bullion, jewellery or unaccounted investments were found with the assessee. The learned Authorised Representative also placed a paper book containing copy of show-cause notice, copy of penalty order both issued by Directorate of Enforcement and copy of reply by the counsel of the assessee. 11. On the other hand, learned Departmental Representative relied on the view taken by the AO and then by the CIT(A). He vehemently argued that the amount of Rs. 23,15,000 that assessee had received from Shri Mohd. Imran was to be treated as the income of the assessee for the financial year and thus s. 69A could be rightly applicable. 12. It is obvious that the Directorate of Enforcement, Bangalore searched the residence of Shri Md. Ibrahim and seized documents in sheets. In furtherance of the document, the Directorate of Enforcement found that assessee had received the amount of Rs. 23,15,000 between November, 2002 to January, 2003 at the instance of Shri Adam Kunhi, Abdulla and Shri Aboobaker. So, the Dy. Director of Enforcement proceeded with penal action against the assessee under s. 3(c) of FEMA, 1999. 13. Before going deep into the various grounds of appeal, let us examine s. 3(c) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the AO had done was under s. 133(6) by calling details from Shri Adam Kunhi, Abdulla and Shri Aboobaker. But it can be seen that the letters of the said brothers and brother-in-law were all signed by Shri Hameed. The only evidence, the AO relied, is the letter signed by Shri Hameed on behalf of his brothers and brother-in-law. We do not see any sanctity or evidential value in the letter signed by said Shri Hameed for and on behalf of his brothers and brother-in-law. No serious effort was made by the AO in finding out whether the amount received by the assessee was diverted to those three persons for the asst. yr. 2003-04, or appropriated for himself. 17. It is true that the assessee might have committed a serious economic offence, but we do not think that assessee being committed an economic offence, should be charged to income unless, it is proved beyond any doubt that income was generated to him, and to him alone for the asst. yr. 2003-04. 18. We understand that s. 2(24) is an inclusive provision to attract different receipt in the ambit of income. The assessee, as a conduit might have received the amount, but that itself will not make him liable to be taxed. As we already ..... X X X X Extracts X X X X X X X X Extracts X X X X
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