TMI Blog2017 (4) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... their status namely Smt. Vijay Dhir being a partner in a partnership firm with declared income of ₹ 2 lacs per annum and the assessee's two sons being student at the relevant time, it is clear that they had no means to come in possession of such large amount of cash or jewellery. Clearly they had claimed the money and jewellery only to cover the unexplained income of the assessee. The judicial member had rightly rejected the explanation of the claim and accountant member and third member accepted the claim on no evidence. Their findings to that effect are clearly perverse. - Decided against assessee. cash found from the lockers - Held that:- It is an admitted case between the parties that no cash book was found during the course of search and it was not produced in the course of investigation following the search, though again it is a common case between the parties that the search and survey conducted in the case of assessee was quite extensive. The cash book was produced for the first time in the block assessment proceedings itself and it was not the case of the assesse that the cash book had been produced during the search and survey proceedings. This act appears, to u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e admitting their writ petition that the asstt. proceedings will continue without passing the final order? 3. Whether on the facts and circumstances of the case the Hon'ble ITAT was justified in law in deleting the addition of ₹ 8,44,294/- on account of cash found from the lockers by accepting the availability Judicial member the CIT(A) that the cash book was an after thought as no cash book was found either during the course of search or, from the possession of counsel / accountant as claimed by the assessee during search and the cash book produced subsequently was not even supported by vouchers? 4. Whether on the facts and circumstances of the case the Hon'ble ITAT was justified in law in deleting the addition of ₹ 7,80,000/- on account of alleged agriculture income of HUF without appreciating the admitted fact that no evidence could be produced at any stage to establish that agricultural operation was actually carried on either directly or indirectly? Briefly stated facts of the case are that a search was conducted on 24.04.2003 in the case of the assessee during which proceedings a large number of bank lockers in the name of assessee and his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 294.500 123101 10. Locker No. 645, PNB, Surya Nagar, Agra in the name of Smt. Vijay Dhir and Sri Udgeath Dhir 21,00,000 - - 11. Locker No. 59 SBI, Sadar Bazar, Agra in the names of Vibha and Raman 5,62,800 - - 12. Locker No. 98, PNB, Surya Nagar, Agra in the name of Sri Ushast Dhir 16,64,900 231.140 10275 Total 1,44,00,820 5013.740 2343563 Simultaneously, a survey u/s. 133A(1) of the I.T. Act, 1961 was carried out at the assessee's clinic. No regular books of account for the current year or for the preceding years were found either at the clinic or at the residence. The assessee stated that books of accounts were with the counsel. In order to obtain the books, summons were issued to the counsel of the assessee during the course of search itself to produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Smt. Vijay Dhir and Sri Udgeath Dhir. It was added as undisclosed income in A.Y. 2001-02. (viii) ₹ 16,64,900/- found in locker No. 98 PNB, Surya Nagar, Agra in the joint name of Sri Ushast Dhir and Sri G.G. Dhir claimed by Sri Ushast Dhir by filing an affidavit. It was added as undisclosed income in A.Y. (ix) ₹ 5,30,000/- on account of excess gold jewellery found. It was added as undisclosed income in A.Y. 2003-04. (x) ₹ 11,600/- expenditure on account of purchase of tyres and tubes. It was added as undisclosed income in A.T. 2003-04. (xi) ₹ 1,11,916/- on account of visit to foreign sponsored by M/s Aventis Pharma Ltd, Mumbai. It was added as undisclosed income in A.Y. 2002-03. (xii) ₹ 19,800/- on account of undisclosed receipt of liquor. It was added as undisclosed income in A.Y. 2004-05. Against the assessment order dated 27.6.2005 the assessee had preferred the first appeal which was dismissed by the CIT (Appeal), Agra vide his order dated 30.3.2006. Against the first appellate order the assessee filed the appeal before the Tribunal which has vide its impugned order granted partial relief to the assessee. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r son of the assessee Sri Udgeath Dhir was a student of MBBS course at the time of search having completed his study only in 1999 and was working as an intern. Thereafter he joined MS course at Baroda in April 2001 and that he continued his study up to financial year 2003-04. The assessee's second son namely Ushast Dhir started his MBBS study during the period 1998-99. Further, the assessing officer found that the elder son of the assessee namely Udgeath Dhir filed his return for the assessment year 2002-03 disclosing the income of ₹ 92,810/- only including his professional income of ₹ 30,000/-. The Assessing Officer also relied on the statement on oath recorded during the investigation proceedings wherein upon being specifically confronted as to the source of professional income, Sri Udgeath Dhir only furnished evasive replies and could not substantiate in any manner, the cash claimed by him. Thus the Assessing Officer disbelieved the claim of Sri Udgeath Dhir having earned professional income in any proportion of the cash seized as during the financial year 1997-98 he was in the midst of his MBBS course. The assessee's second son Ushast Dhir had filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... member to whom the matter was referred upon difference of opinion. The third member has while deleting the addition in respect of additions of ₹ 5,30,000/-, 11,32,000/- and 5,40,000/- has held: The fact that Smt. Vijaya Dhir was not having capacity to possess cash to the extent it was found in her lockers, by itself could not be a reason to discard the ownership of cash as that of the lady and to treat the same as the property and the income of the assessee. Similar reasoning has been given by the third member of the Tribunal while deleting similar additions on account of cash and jewellery found from the lockers. On the other hand the judicial member had while deciding this issue reasoned that sons of the assessee were students at the time of search and had no source of income to justify or explain the amounts of cash claimed by them and that even after completion of study they had meager incomes which were wholly insufficient to justify the cash found in the lockers. Also, he had similarly disbelieved the case of the assessee's wife having regard to her known source of income and lack of any books of account. In this light the judicial member reasoned th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... member and the third member that are in favour of the assessee. We have perused the record and are of the opinion that the finding recorded by the third member and the accountant member of the Tribunal that the lack of the capacity to possess cash could not be a reason to discard the ownership, in the facts of the case, is wholly erroneous as in the instant case there was a complete lack of any plausible explanation as to the source of acquisition of money either by the assessee's wife or by his two sons from any source and in any case, the first, and at times the only presumption that may arise upon lack of financial capacity of a person being proven be that such a person was not at all possessed of the money being claimed by him. A very heavy burden would then be on such persons to explain the source of money being claimed by them. It was never discharged in the instant case. In fact, to the contrary, the said three persons only sought to explain the source through their own earning and from no other source which issue stood determined against them upon finding of lack of financial capacity recorded by the all members of the Tribunal. From perusal of their returns as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch accounts being maintained would have been found during the search proceedings itself. It is itself difficult to believe that the assessee was under any difficulty to produce prints of cash book maintained on the computer specially when, the computer on which it later claimed to have maintained such cash book) was neither seized nor discovered during the course of search of proceedings. In this regard also the case of the assessee did not inspire any confidence as some of the statements and explanation smacks of intention to evade tax. Sri Shubham Agarwal, learned counsel for the department has submitted that cash book was not found during search proceedings and it was first produced during the course of assessment proceedings. He has also submitted that none of the entries in the cash book is supported by any voucher and that the entries in the cash book are merely self-serving statements made by the assessee as a mere after thought. Alternatively, he also submits that cash sought to have been explained by the assessee through the production of cash book was found in various bank lockers. The last operation of the bank lockers was admittedly done by the assessee on 27.6.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the assessee and have not invoked Section 145 for that purpose. In fact it is his case that the authorities have relied in part of entries found in the cash book. It is therefore his contention the explanation of the assessee as to valuable of ₹ 8,44,294/- was rightly accepted by the Tribunal. While it is true that the authorities have not invoked Section 145 of the Act and have not passed a best judgment assessment order under Section 144 of the Income Tax Act, we are unable to accept the submission made by Sri Suyash Agarwal as in the instant case the department had found and seized the cash from the bank lockers operated and maintained by the assessee. The assessee was required to explain the source of acquisition of such money. It was for the assessee to offer such explanation as was true and correct to explain source of cash found in the lockers, the cash having been found placed in the lockers that were last operated on 27.6.2002. Thus the source of acquisition of cash found in lockers could be only for up to 27.6.2002 and not 31.3.2003. The assessee tried to explain the same by means of the cash book entries which show the cash balance on 31.3.2003. Clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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