TMI Blog2006 (5) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and Shri R.N. Parbat, ld. D.R. for the revenue. 3. The brief facts of the case are that assessee is a Class-IV employee in the Bombay Municipal Corporation. The Bombay Police got an information that assessee belong to Chhota Shakeel Gang and possessing a fake currency of Rs. 16 to Rs. 17 lakhs, having denomination of Rs. 500, which is going to be transferred from his residence of some other place. Therefore, the search was conducted at his residence on 19-5-2001 by the Police. During the course of search cash of Rs. 80,57,650 and gold ornaments worth Rs. 2.90 lakhs were found and seized from his house. The assessee was chargesheeted under section 124 of the Bombay Police Act for possessing stolen property or property fraudulently obtained. A chargesheet under section 124 of the Bombay Police Act was filed in the Court of Additional Chief Metropolitan Magistrate, Explanade. A trial was started in the case bearing No. 272/P/03. In order to explain the possession over the cash it was contended by the assessee that it belong to 35 persons including assessee for constructing community hall at Kurla in the name of Shahpur Sadan and most of the people who have contributed for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Bombay Police Act, 1951. He also took us through the order of the Additional Chief Metropolitan Magistrate, wherein assessee has been acquitted from the charges. He pointed out that addition is made on the basis of the Police raid, therefore, it should be deleted in view of the finding given by Additional Chief Metropolitan Magistrate, wherein ld. Magistrate accepted that the cash found at the premises of the assessee belong to the 34 persons and not to the assessee. In support of his contention he cited 11 judgments placed in the paper book. He further submitted that apart from the Magistrate s order assessee has filed affidavit of 34 persons as well as their statement recorded before the DDI and, therefore, it should not be construed that assessee is the owner of money found from his residence under the deeming provisions of section 69A. He also contended that applicability of section 69A as well as section 68 operate in different fields and certain presumptions propounded in section 68 would not be made applicable while invoking section 69A of the Act, because under section 68 of the Act assessee is supposed to explain creditworthiness of the creditor apart from demonst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee over the cash within the scope of section 69A of the Income-tax Act. 8. We have duly considered the rival contention and gone through the record carefully. The first argument of ld. counsel for the assessee is that Police has conducted a search and recovered the cash from his residence. He has been charge sheeted under section 124 of the Bombay Police Act. The Ld. ACMM but ld. Court has acquitted him and therefore, in view of the ACMM s order the cash found at the premises of the assessee should be treated of 34 persons and no additions should be made. On due consideration of this argument we do not find any substance in it because section 124 of the Bombay Police Act and section 69A of the Income-tax Act operate in different fields. Let us take note of both the provisions. Section 124 of Bombay Police Act : Possession of property of which no satisfactory account can be given. "Whoever has in his possession or conveys in any manner, or offers for sale or pawn, anything which there is reason to believe is stolen property or property fraudulently obtained, shall, if he failed to account for such possession or to act to the satisfaction of the Magistrate, on convic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the Assessing Officer. No doubt the acquittal order as well as the statement of alleged 34 persons before the Court can be good piece of corroborative evidence for explaining the possession over the cash. 10. On reading of section 69A it revealed that if a person is found to be the owner of any money, bullion, jewellery or other valuable articles and such money is not recorded in the books of account, if any maintained by him for any source of income and he failed to explain about the nature and source of acquisition of such money, bullion, etc. or the explanation offered by him is not in the opinion of the Assessing Officer satisfactory the money would be deemed to be the income of the assessee for such financial year. No doubt assessee was found to be in possession of money. He has not denied the possession over the money. Therefore, it is the assessee who has to explain his position with regard to the possession over the cash, whether he can be considered as owner of the money or not. Section 110 of the Evidence Act provide that where a person is found in possession of anything the burden of proving that he is not the owner is on the person who affirms that he is not th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demonstrating that it belongs to other persons then Assessing Officer can examine the other persons and whether they had explained the source of such money, if not then tax can be levied from those persons, wherein the criminal proceedings in the Bombay Police Act, there was no such scope of enquiry. The next evidence produced by the assessee is the affidavit of alleged 34 persons. But the Assessing Officer emphasized to produce all those 34 persons before him so that he can contradict them on the deposition made in the affidavit by cross examining them. In the absence of those persons and in the absence of cross examination the affidavit simply cannot be accepted as gospel truth. So in our opinion ld. Assessing Officer has rightly directed the assessee to produce all 34 persons before him. The next argument advanced by ld. Counsel for the assessee was that the statement of those 34 persons were recorded by the DDI. In this connection we find that ld. revenue authorities below have recorded a finding that enquiry at the level of DDI is at initial stage, whereas the assessment is going to be time-barred and that enquiry would in itself not make an addition because the income can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mag.). 10. J.S. Parkar s case ( supra ). 11. Mohan B. Samtani v. CIT [1993] 199 ITR 370 (Cal.). 12. CIT v. K.A. Abdul Kareem [1996] 88 Taxman 323 (Ker.). 13. CIT v. C.P. Sarathy Mudaliar [1972] 83 ITR 170 (SC). 14. CIT v. Khimji Nenshi [1992] 194 ITR 192 3 (Bom.). 15. Jawahar Lal Oswal v. Asstt. CIT [1999] 71 ITD 324 (Chd.). 16. Bafakyh Export House v. ITO [1995] 53 TTJ (Coch.) 293. 17. ITO v. Nagardas Jashraj [1989] 28 ITD 386 (Ahd.). 18. Sitaram Somani v. Asstt. CIT [1991] 39 TTJ (Jp.) 609. 19. Hanutram Ramprasad v. CIT [1978] 114 ITR 19 (Gauhati). 20. CIT v. Sardar Gurudev Singh Gill [1995] 212 ITR 85 (Ori.). However on facts none of the judgment is applicable in the case of assessee such as Mohd. Massoom s case ( supra ). In this case on the basis of the orders of Customs Authorities it emerges out that assessee was not the owner of the gold ornaments. It is purely the conclusion arrived on appreciation of the facts that case and it does not lay down any proposition of law. Similarly J.S. Parkar s case ( supra ) goes against the assessee, wherein the Hon ble Bombay High Court has observed that under section 110 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt rendered in the case of Smt. P.K. Noorjha ( supra ). We do not find force in this contention of the assessee because during the search by the Police Authorities money lending licence in the name of his wife was found. Certain rubber stamps indicating that assessee is attorney for his wife was found. Thus these materials indicate that apart from working as IV Class employee assessee is doing other activities. He is not a pardanaseen lady like Smt. P.K. Noorjha. Rather, he is an able bodied person who can earn money. Therefore, on the basis of Expression "may" employed in section 69A, prima facie, assessee is precluded to raise the presumption of his inability to earn this much of money. This argument is also rejected. Thus on the basis of our findings recorded in para 12 be set aside all the issues to the file of Assessing Officer for fresh examination. 15. As regards the ground relating to charging of interest under sections 234A, 234B and 234C, this is consequential to the main issue and therefore, it is also set aside to the file of Assessing Officer. 16. In the result, the appeal of the assessee is allowed for statistical purpose. - - TaxTMI - TMITax - Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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