TMI Blog2006 (4) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... . Parmar and IDBI Deep Discount Bonds for ₹ 5,300 in assessee's name were found. 3.1 Assessee's statement was recorded in which he admitted to have claimed the ownership of aforesaid instruments. 3.2 The return of income for block period in response to notice under s. 158BC r/w s. 158BD dt. 15th May, 2001 was furnished declaring undisclosed income at Nil, on 3rd Sept., 2002. During the course of proceedings for block assessment, the assessee was called upon to explain the source of investment in aforesaid instruments. However, the assessee had enclosed the following explanation along with statement of total income filed along with the return of undisclosed income : Its forming part of statement of total income for the block period in case of Jaswant D. Parmar The search proceeding under s. 132 of the IT Act, 1961 was carried out on 8th April, 1999 at the residential premises of Dr. Harshad R. Shah situated at Ambawadi, Ahmedabad, as well as his clinics situated at Sahyog Building, Laldarwaja, Ahmedabad, and White House Building, Panchvati, Ahmedabad, which finally concluded on 26th April, 1999. The assessee was serving as a technician in clinic of Dr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h party had not seized any of the assets found during the course of search except KVP worth ₹ 3,10,000 after satisfying with the explanation. The search party seized KVP of ₹ 3,10,000 in spite of his statement that the same were purchased out of all family members contributions/accumulated savings of last many years. The search party seized KVP in the absence of evidences regarding source of investment. The assessee is staying in a joint family in a very small rented premises since years. The details of family members, age, occupation etc. are as under : Name Age Relationship Occupation 1. Dhanjibhai T. Parmar 71 Father Retired in 1989 from Tata Advance Mills Ltd., thereafter he helped in Pan house run by son Prahladbhai, he expired in 1999. The amount received on retirement and savings given to the assessee for investment in KVP. 2. Maniben D. Parmar 65 Mother Worked as a construction labourer (Kcidia Work) She is of 65 year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an explanation to the search party at the time of search on 8th April, 1999 but without considering the explanation and in absence of evidences, the search party seized KVP of ₹ 3,10,000. An affidavit of the family members containing the fact of accumulated saving and investment in the KVP in the name of the assessee shall be submitted at the time of assessment proceedings. 11. Though the assessee had operated bank account in his name, it should be considered as that of family members, In view of above facts the deposit of cash should be considered as cash funds of the whole family and investment out of the funds can also be considered as that of the whole family. Though investment in KVP stands in the name of the assessee, it should be considered as investment out of the funds/accumulated savings of all family members with a particular object to purchase a residential house and/or to meet with an exceptional expenditure in the family. 12. It is to be taken note of that whenever the assessing authority proposes to compute the undisclosed income on the basis of source of income, the corresponding unexplained asset/identification against the source of income is requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s confirming their monthly income and savings. However, the CIT(A) also did not find the assessee's explanation as fully acceptable. The CIT(A), therefore, allowed a relief of ₹ 1,02,800 with respect to investment in instruments during the financial years 1993-94, 1994-95 and 1995-96. In financial year 1996-97, the CIT(A) considered the savings of ₹ 15,000 as reasonable. Similarly, he considered savings of ₹ 15,000 each for financial year 1997-98 and financial year 1998-99, investment of fixed deposit of ₹ 20,000 with Dena Bank was accepted to be investment by assessee's father. Ultimately, the assessee got a relief of ₹ 1,02,800. 6. The assessee is stated to have taken the matter to the Hon'ble Tribunal, but could succeed only on the point of levy of surcharge. So far as undisclosed income is concerned, the Hon'ble Tribunal rejected the assessee's plea of further relief as per observations contained in para No. 3 of its order dt. 30th Aug., 2004 which reads as under : 3. We have heard the parties and considered their rival submissions. The assessee reiterated the same arguments which were advanced before the CIT(A). We howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MC' Bench, in the case of Dy. CIT vs. Prakash C. Shah in ITA No. 1463/Ahd/2001, asst. yr. 1987-88, passed on 27th Aug., 2003. 8. The learned Departmental Representative, on the other hand, in addition to supporting the order of the CIT(A), submitted that if assessee's explanation of having savings of ₹ 7,000 to ₹ 9,000 per month is accepted, then sufficient cash should have been available with the assessee, at the time of search, and it is so because the assessee is claiming that the instruments found during the search were kept by him at the place of service for safety reason, the cash also should have been with him. The learned Departmental Representative further submitted that decision in the case of B.A. Balasubramaniam Bros. Co. vs. CIT (1999) 157 CTR (SC) 556: (1999) 236 ITR 977(SC) wherein the Hon'ble Supreme Court has held that in case of difference in returned and assessed income, onus to establish that difference is not due to any fraud or mala fide intention is on the assessee which has not been discharged in the present case, he, therefore, pleaded that order of the CIT(A) be confirmed. 9. I have considered the rival submissions, facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven otherwise, the Revenue, on one hand, has disputed the savings claimed by the assessee and his family members, but, on the other hand, has considered the investment in those instruments as that of the assessee which is very astonishing. If one cannot have savings more than the savings presumed by the Revenue authorities, then how he can be alleged to have any other income liable to be assessed as undisclosed income. The undisclosed income is only that part of income which the Revenue accepted to be the income of the assessee, but either not disclosed to the Revenue or not liable to be disclosed to the Revenue; meaning thereby that the factum of assessee having income has to be first accepted and it is only, then that Revenue can tax it as undisclosed income. 10. So far as present case is concerned, I am, once again, constrained to restate that though the undisclosed income assessed in the present case has been sustained upto the level of Hon'ble Tribunal but that factor cannot be used against the interest of the assessee with respect to the point that the Revenue having rejected the claim of savings without any basis could not consider the same as undisclosed income so as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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