TMI Blog2012 (7) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... IKRI A. K., INDERMEET KAUR MS., JJ. JUDGMENT Ms. Indermeet Kaur J.- 1. These appeals filed by the appellant Mr. S. K. Bahadur have impugned the orders of the Income-tax Appellate Tribunal dated July 28, 2006, and thereafter the subsequent order dated February 27, 2009. I. T. A. Nos. 363 of 2009, 532 of 2009, 533 of 2009 and 534 of 2009 have impugned the later order, i.e., order dated February 27, 2009. The other appeals have impugned the order dated July 28, 2006. 2. On December 4, 1984, the Anti-Corruption Wing of the Central Bureau of Investigation (CBI) conducted a house search of the appellant. Incriminating documents were seized. 3. Since the assessment filed by the appellant for the assessment year 1985-86 was pending, the Assessing Officer took into consideration the documents forwarded to him by the CBI and on that basis added certain incomes as unaccounted income of the appellant. The appellant preferred an appeal before the Commissioner of Income-tax (Appeals), as also before the Income-tax Appellate Tribunal but was unsuccessful. Appeals impugning the order of the Income-tax Appellate Tribunal were registered as I. T. A. Nos. 1604 of 2006, 1691 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The following substantial question of law was accordingly formulated : "Whether the order of the learned Income-tax Appellate Tribunal is perverse in so far as it takes into consideration irrelevant facts in determining the undisclosed income in the hands of the assessee ?" 8. The appellant S. K. Bahadur was a Member of the Indian Legal Services and was working as Joint Secretary and Legal Advisor in the Department of Legal Affairs, Ministry of Law, New Delhi. On December 4, 1984, the CBI made a search in his house, i.e., house No. D1/153, Satya Marg, Chanakyapuri, New Delhi. His office was also searched on December 5, 1986. In the course of search, the CBI recovered incriminating documents relating to immovable and movable properties ; unaccounted sets were found and seized. Lockers in the joint names of the appellant and his wife Smt. Asha Bhatnagar were also seized. The search list was prepared on the same day, i.e., on December 4, 1984. 9. The assets which were seized pursuant to this house search were divided into the following three groups : Group I (1) Cash of Rs. 14 lakhs seized from the assessee's residence ; (2) Foreign exchange of US$ 2596 sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s raised by the assessee that the items in group II and group III belonged to his wife and treated it as income in the hands of the assessee S. K. Bahadur ; the Commissioner of Income-tax (Appeals) had confirmed the findings of the Assessing Officer ; additions made in the income of the assessee were reaffirmed. 11. This order was impugned before the Income-tax Appellate Tribunal who, vide the impugned order dated July 28, 2006, dismissed the appeals of the assessee. The cross-appeal filed by the Revenue also stood dismissed. 12. The items in group I have not been challenged. The items in group III pertained to earlier years and were not directly relevant to the assessment year under consideration. This has been noted by the Assessing Officer in his order dated March 30, 1988. It has been urged by the assessee that his wife, Asha Bhatnagar, had her independent sources of income ; there was sufficient evidence led before the Assessing Officer to establish her plea that besides her prior marriage savings, she had income from tuitions ; she had also been bequeathed substantial sums of money by her father-in-law, Ram Bahadur, in terms of his will which had enabled her to purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income-tax and wealth-tax returns submitted by the accused prior in time to the search conducted by the Anti-Corruption Branch in his house, it was held that the burden of proof in disproving the claim of the accused had to be discharged by the prosecution. The apex court had returned a finding that the wealth-tax and the income-tax returns which had been filed prior in time to the search conducted had become unimpeachable documents, they could not have been manipulated or concocted prior in time anticipating a prosecution which was subsequent in time. 18. In the instant case as well when the wealth-tax return was filed on October 30, 1984, by Smt. Asha Bhatnagar, there was no conceivable reason to entertain even a suspicion or surmise that one month and four days later, the Anti-Corruption Branch would make a house search of the husband of the assessee. These wealth-tax returns having attained a finality and which wealth-tax having being paid for the assets mentioned in groups II and III, the same could not have been the subject-matter of additions made by the Income-tax Appellate Tribunal in the impugned order. This is an illegality and liable to be set aside. 19. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n her affidavit dated May 9, 1985, and her subsequent statement dated November 4, 1985. If the story was concocted and sham as has been concluded by the Assessing Officer, the same narration would not have been found in her statement which was recorded on May 7, 1985, which was less than six months after the search conducted in the house of her husband. It is difficult to believe that a lady in that emotional turmoil of mind could have fabricated a story which is not only reflected in the wealth-tax returns which have been filed prior in time but the same story is affirmed and re-affirmed in subsequent years. She had further explained that out of the amount of Rs. 13.5 lakhs which had been given by Sq. Leader R. K. Bhatnagar (her nephew) for keeping in safe custody, she had taken a loan of Rs. 71,000 from the said amount. She had further explained that since her father had not given her any immovable property, she was, however, compensated on various occasions with monetary gifts which included cash and jewellery which had become a part of her savings. 21. The Assessing Officer had cursorily and illegally ignored this statement of Asha Bhatnagar. His finding that she did not ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion on the will is clearly based on surmises and conjectures. 23. The further conclusion drawn was that the income received by Asha Bhatnagar from tuitions must have been consumed as it was only a pocket money. This source of income of Asha Bhatnagar had been rejected for the reason that there was no documentary evidence. Smt. Bharti Bhatnagar wife of Sq. Leader R. K. Bhatnagar, i.e., (nephew's wife) had also come into the witness box. She had affirmed on oath that her jewellery (which was recovered from the house of Mr. S. K. Bahadur on December 4, 1984) had been given by her to Asha Bhatnagar for safe custody because her husband was in the Air Force and had to be transferred from time to time and she did not wish to carry her jewellery as she had to travel along with her husband ; for convenience she had kept her jewellery weighing 50 tolas with Asha Bhatnagar. This same statement and details of the jewellery given in safe custody to Asha Bhatnagar had been given by Bharti Bhat- nagar to the CBI as early as May 9, 1985. She had come before the Revenue in the year 1988 when this stand was again reiterated. This version was, however, rejected summarily on the ground that Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT [1959] 37 ITR 288 (SC) the Supreme Court in this context had held as under (headnote) : ". . . when a court of fact arrives of its decision by considering material which is irrelevant to the enquiry, or acts on material, partly relevant and partly irrelevant, and it is impossible to say to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its decision, a question of law arises ; whether the finding of the court of fact is not vitiated by reason of its having relied upon conjectures, surmises and suspicious not supported by any evidence on record or partly upon evidence and partly upon inadmissible material. Where, however, the fact finding authority has acted without any evidence or upon a view of the facts which could not reasonably be entertained or the facts found are such that no person acting judiciously and properly instructed as to the relevant law could have found, the court is entitled to interfere. A finding on a question of fact is open to attack under section 66(1) as erroneous in law when there is no evidence to support it or if it is perverse. The Income-tax Appellate Tribunal is a fact finding tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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