TMI Blog2005 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 1987-88. The brief facts of the case are as follows: The assessee-respondent (hereinafter referred to as "the assessee") is an individual and was doing proprietary business of purchase and sale of silver ornaments in the name of Mohan Lal Narendra Kumar. The original return was filed on July 20, 1987, disclosing the income of Rs. 36,890. The income declared in the return was accepted under section 143(1) of the Act vide order dated September 15, 1987. Just after the filing of the return a search was conducted under section 132(1) of the Act, at the business as well as residential premises of the assessee. During the course of search four FDRs in the name of four minor children of the assessee were found and seized from the locker of the bank, owned by the assessee. The total investment in those four FDRs was to the extent of Rs. 3,45,000. In the statement recorded on August 18, 1988, at the time of opening of the locker, Mohan Lal Sharma stated that the FDRs in the name of four children, namely, Master Ravish Sharma, Manish, Vishal and Baby Namrata Sharma, are kept in a locker and they were all disclosed under the income-tax/wealth-tax. During the course of the proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which can be retained under section 132(5) should be one which is carrying its own intrinsic value in terms of money. A document of title relating to an immovable property or even a fixed deposit receipt issued by a bank does not possess any intrinsic market value. They can neither be negotiated nor be transferred for valuable consideration. Thus, they are not covered by section 132(5) of the Act or rule 112A of the Rules.' The decision of the hon'ble Madras High Court in the case of I. Devarajan v. Tamil Nadu Farmers Service Co-operative Federation [1981] 131 ITR 506 relied upon by the learned Departmental Representative and also by the learned Commissioner of Income-tax (Appeals), in our opinion does not much help the Department. In that case, the point involved was of attachment and in the said order it was held that FDRs could be attached through the bank to whom the FDRs pertained. In that case too, the hon'ble Madras High Court had held that the fixed deposit receipt itself is not a negotiable instrument and has no value as these deposits generally carry a term that they are not transferable. The fixed deposit receipts cannot as such be assigned without the concurrence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. Even in the subsequent year the Department had assessed the interest of these FDRs in the hands of those minors under section 143(3) (copy of the assessment order filed in the compilation) the assessee even at the time of search and seizure had disclosed the said fact that the FDRs are lying in the locker and they stood in the names of minor sons, which already stands disclosed to the Department in the return filed by the minor. The Government/C.B.D.T. had given a concession to the assessee to file returns of income which will be accepted without any enquiry and the assessee will not be required to give the details of their income. This is a special concession given by the law and the Department is bound by these concessions. In view of these concessions if the minors of the assessee had surrendered certain gifts in the form of income and duly assessed as such and purchased FDRs in the names, the said income and the FDRs now cannot be questioned in the hands of the minors. Once that income cannot be questioned in the hands of minors, then we do not understand as to how the said income can now be questioned in the hands of the assessee. No doubt, the assessee after the order pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'There is another important point to be borne in mind, viz., the explanation offered by the assessee must be found to be false before the penal provisions of section 271(1)(c) as amended with effect from April 1, 1976, are applicable. As I have endeavoured to point out above, the falsity of the explanation was not proved or not even attempted to be proved. I therefore, agree with the view expressed by the learned Accountant Member that, when the explanation offered by the assessee was not found to be false, the difference between the income returned and the income estimated cannot be regarded as concealed income.' Here, in this case there is no positive finding at any stage that the explanation offered was false, while, in our opinion, on the other hand the explanation offered appears to be more plausible and more true at least for the purposes of penalty provisions. As the assessee had surrendered the amount in its revised return, the Department was justified in adding the same in his income in the assessment, but the facts of the case did not give rise to penalty under section 271(1)(c). The surrendering of the amount stood covered by the decisions of the hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure to furnish returns, comply with notices, concealment of income, etc.-(1) If the Income-tax Officer or the Appellate Assistant Commissioner or the Commissioner (Appeals) in the course of any proceedings under this Act is satisfied that any person- ... (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, ... Explanation 5.- Where in the course of a search under section 132, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereinafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilizing (wholly or in part) his income,- (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such income has not been declared therein ; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the minor in the Amnesty Scheme. It appears that when in the proceedings under section 132(12), which were summary proceedings, the Commissioner of Income-tax has issued the direction to treat the FDRs as belonging to the assessee, the assessee in order to buy peace surrendered the amount of FDRs as income in a revised return. The totality of the circumstances shows that the assessee right from the beginning contended that the FDRs belong to the minors and have been disclosed in income-tax/wealth-tax. It was also found as a fact that these FDRs have been disclosed by the minors in their assessment proceedings under the Amnesty Scheme. Therefore, merely because the assessee surrendered the amount in the return, it cannot be said to be concealed income of the assessee. The finding of the Tribunal in this regard is a finding of fact and there appears to be no reason to interfere with such finding which is based on the material on record. In the case of Sir Shadilal Sugar and General Mills Ltd. v. CIT reported in [1987] 168 ITR 705 (SC) while dealing with the provisions of section 271(1)(c) of the Act, the apex court held that, from the assessee agreeing to addition to his inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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