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TMI Blog2015 (12) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... vide notice dated 10.4.2015 for 09.6.2015, sent through RPAD, came back unserved with the postal remarks 'Not claimed, return to the sender' on 15.4.2015. The hearing of this group of appeals, outstanding for long, was accordingly proceeded with, so as to adjudicate these appeals after hearing the party before us and considering the material placed on record by the parties, including the assessee, who has filed a paper-book containing 31 pages, and which includes written submissions before the Assessing Officer (A.O.). In addition, the assessee has also made an Application vide letter dated 01.10.2013 for admission of additional evidence under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963 (containing 79 pages), which is a combined one for assessment years 2001-02 to 2007-08, through one, Shri Nand Kishore of HSA Advocates. The said application contains a letter dated 29.2.2008 by UBS AG, Zurich (a bank in Switzerland) to the Enforcement Directorate (ED) in respect of its letter dated 11.2.2008 (at PB pgs.64-65, reproduced again at pgs.66-69 of the application). Para 2 of the said letter reads as under: '2. We have reviewed the copy of the facsimile dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment in this case was made u/s. 143(3) r/w s. 147 of the Act, with the proceedings initiated on the basis of information found by the Revenue during searches u/s.132 of the Act carried at the residences of the assessee as well as that of Shri Kashinath Tapuriah and others on 05.01.2007, continuing up to 06.1.2007. The assessee, in response to notice u/s.148 dated 23.5.2007, furnished a return declaring an income of Rs. 1,50,000/-, as income from horse betting (Rs.9,950/-) and from business (Rs.1,40,050/-). The said incomes, in the absence of any material found in relation thereto in search as well as the non-furnishing of any books of account in respect thereof by the assessee, were retained by the A.O. as such, making the following additions: (Amt. in Rs.) a) Income from undisclosed sources by way of pay orders from Union Bank of Switzerland (UBS) - AG for US $ 4 million 17,14,00,000 b) Income from undisclosed sources 28,50,000 c) Income from undisclosed sources by way of unexplained capital 17,29,051 The assessee failing to make any improvement in his case; rather, exhibiting un-cooperative behavior in the appellate proceedings, the addition was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s name as the beneficiary of one of the pay orders, to be forged. Various documents seized during search also reveal close association between him and KT, Chairman (of the Board of directors) of Robert Mclean & Co. Ltd., as well as of them indulging in cross border transactions. The document was duly signed by the Chief Manager, also giving his name, and the assessee did not lead any evidence to rebut the presumption u/s.292C of the Act (refer para 7.7 of the assessment order). The pay orders received (or receivable) by the assessee in lieu of pay orders bearing Nos. 004 07192013276543 and 004 06298027432895, i.e., the first two pay orders mentioned in the letter, were, accordingly, brought to tax as his income and, in appeal, confirmed for assessment. 5. Before us, the assessee was unrepresented in person or through an Authorized Representative (AR), relying on the contents of the paper-book referred to earlier, which also contains the written submissions before the Revenue authorities. The ld. DR vehemently argued the Revenue's case, relying on the orders by the authorities below. 6. We have heard the parties, and perused the material on record. Our first observation is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o merely because the pay order, per which it was conveyed to the assessee, gets lapsed by time (stipulated for its encashment) or due to the validity of the relevant instrument having expired. The assessee's right would subsist, resulting in the relevant amount being remitted to him vide a fresh instrument, which is precisely what the letter states. Then, it is said that the amount has in fact not been received by the assessee at any time subsequent to 12.4.1999. Why, he does not answer, and which is the next logical question that arises. The fresh pay order/s is, and as per the letter itself, which would be governed by the presumption of section 292C, i.e., with regard to the truth of its' contents, to follow. Why, rather, should it not be so, allowing for the things to take their normal, regular course? There is no explanation in this regard. The assessee's case rests on a bald statement as to the ignorance of the transaction/s, and who does not even explain as to why, or on what account, or under what circumstances, was the amount due to or receivable by him in the first place? The charge of forgery is, again, without any basis. Rather, the letter itself may have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as of no consequence in-as-much as the pay order stands already issued in assessee's favour, with the letter dated 12.04.1999, to which the presumption of section 292C shall apply, being issued only in view of the same having lapsed, i.e., in consequence, so that the payment shall have to be effected by issuance of a fresh pay order. It is only on its receipt that the payment could be said to have been received by the assessee. The concept of income under the Act is vast, so that anything corresponding with the notion of income or gain qualifies to be 'income'. The exception would be where the amount is received on capital account, where, again, that received/receivable on transfer of a capital asset would stand to be assessed, to the extent of the gain embedded therein, as capital gains. There is nothing to suggest that the amount is on capital account, or in lieu of a capital asset. Why, any unexplained deposit or money, etc., is, by virtue of the provisions of the Act, and for the same reason, also deemed as income. That is, the onus to establish the nature (as well as the source) of the money, i.e., as being not in the nature of income, is on the assessee, and whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny case, to be satisfactorily explained. The same being submitted during penalty proceedings, much after the conclusion of the quantum proceedings before the ld. CIT(A), could not form part of the record. The least that the assessee was, even so, required to do was to advert to the relevant statement/s, or even to the relevant part of the said deposition/s, including the same in his compilation. There is no reference to the date/s thereof, or even the authority before whom the same had been made, stating to be explaining the source. We have, on our part, perused the assessee's statements recorded on oath u/s. 131 of the Act on 27.4.2007 (continued from 26.4.2004) and 01.5.2007 (APB pgs. 11-27), forming part of the paper-book. Both the statements are before the investigating authority, being ADIT (Inv.), Unit-VIII(2), Mumbai, duly signed by him as well as the assessee. There is no reference therein to the said jewellery or watches. The assessee speaks of a rich ancestry (refer answers to Q. Nos. 16-20 of his deposition u/s.131 dated 26.4.2007). That may rather be responsible for his venturing into antique business (refer answer to Q. No.15 of the said statement), also returning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even otherwise found to be leading a lavish lifestyle, travelling abroad, gifting luxury cars to his relatives, etc. All this lends credence to the statement u/s. 132(4)(supra), stating his annual earning to be to the tune of Rs. 30 lacs. The assessee having, however, returned his income at Rs. 1.50 lacs only, the balance Rs. 28.50 lacs was assessed as his income for the year (refer para 8 of the assessment order). The same came to be confirmed in first appeal on the same basis; the assessee having not improved his case before the ld. CIT(A) in any manner; rather, exhibiting un-cooperative behavior, not responding to the notices of hearing issued to him time and again (refer para 3.2 of the impugned order). 10. We have heard the parties, and perused the material on record. It is nobody's case that the assessee had been disclosing his correct or true income from year to year; rather, he had not disclosed any income from A.Y. 2000-01 onwards, i.e., prior to the initiation of the assessment proceedings for these years by issue of notices u/s.148 or, as the case may be, section 153A, with that returned for the years preceding thereto being also for paltry sums, not sufficient to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... answer to Q. No.12 of statement u/s. 132(4) dated 05.01.2007). The same, also noted by the ld. CIT(A), translates into a sum of Rs. 7.20 lacs to Rs. 8.40 lacs p.a. The Revenue, on its part, has not impugned the same; rather, relies on the said statement. Though the assessee subsequently, vide his statement u/s.131 dated 01.5.2007, does state that the said estimate by him was only for the current year f.y. 2006-07, and that the household expenditure earlier was much lower at Rs. 20,000/- p.m., there is nothing to indicate that his lifestyle of few years earlier was any different, or any less ostentatious. Why, the letter under reference by UBS AG is itself of April, 1999, suggesting links abroad even at that time. Rather, he shifted to Mumbai and Pune from Hyderabad, whereat he filed his returns up to A.Y. 1999-2000, so that his reference to an earlier living could, then, only be to that at Hyderabad. The said estimate, to be valid in law, has to be an informed one, taking into account the different variables or attributes on which it depends, viz. the number of family members, their living style, including expenditure on food, clothing, domestic helps, etc.; the expenditure on thei ..... 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