TMI Blog1996 (5) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... 987-88 was not due the assessee made declaration of additional income by filing estimate of advance tax in Form No. 29 on 29-9-1986. 2.1 Correspondingly, the assessee also filed his wealth-tax returns for the assessment years 1982-83 to 1986-87 on 30-9-1986 whereby the effect was given in respect of income disclosed in each year under the returns filed under Amnesty Scheme. For the assessment years 1979-80 to 1986-87 these returns were filed on 30-9-1986. The wealth-tax return for the assessment year 1987-88 was filed on 6-7-1987. 2.2 The Assessing Officer completed income-tax assessments as also wealth-tax assessments right up to assessment year 1986-87 under the Amnesty Scheme accepting that the assessee had earned income as disclosed under the income-tax returns and he had also wealth as disclosed by him on the respective valuation date. 2.3 The wife of the assessee Smt. Nayna Rohit Shah who was income-tax assessee in her own rights had filed returns of income for the assessment years 1983-84, 1984-85 and 1985-86 in normal course. The wife Smt. Nayna R. Shah like the assessee, filed return of income from assessment years 1979-80 to 1982-83, and revised returns of income fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the appellant, this amount stands in a different footing inasmuch as the Assessing Officer was empowered to make necessary enquiries this year find out whether the income was really earned by Smt. Nayna R. Shah or it was actually earned by the appellant but declared in the name of his wife in the estimate filed for the purpose of advance tax and then in the return of income. Obviously the immunities provided under the Amnesty Scheme were not available in respect of the return filed for the assessment year 1987-88 or in respect of advance tax paid for this year. However, I find that the appellant was under a bona fide belief that since advance tax has been paid for the assessment year 1987-88 before 31-3-1987 up to which the Amnesty Scheme was applicable, he was not required to furnish the details of the receipts and the information as to the correct source of income in view of the clarification issued by the CBDT. The notice under section 143(2) was issued for the first time on 13-3-1990 and naturally the appellant had just two weeks of time to furnish such details to convince the Assessing Officer that the income could have been earned by his wife in her own right. The time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 1987-88 and accordingly the Assessing Officer rightly selected the case for scrutiny. During the course of assessment proceedings, the Assessing Officer was empowered to go into the source of income of the assessee and his wife and could make detailed enquiries in this connection. The learned DR submitted that since the assessee could not explain the source of income declared by the assessee from assessment years 1979-80 to 1986-87 the Assessing Officer was justified in making the addition of Rs. 5,33,500. 7.1 On the second ground raised by the revenue, the learned DR submitted that the assessee's wife had no independent source of income and she was not competent to declare the sums under the Amnesty Scheme for the assessment years 1979-80 to 1986-87 and as such the Assessing Officer was justified in making the addition of Rs. 5,30,500 in the hands of the assessee. 7.2 On the third ground, the learned DR submitted that during scrutiny of the case, the assessee could not prove any independent source of assessee's wife and as such the Assessing Officer was justified in making the addition of Rs. 2,45,862 on account of alleged income of the wife in the hands o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espective assessment year income was disclosed under the head "Income from other sources", but even this ground is totally without any basis. In this connection, the learned counsel for the assessee relied upon the Circular issued by CBDT being Circular No. 451 dated 17-2-1986 reported at 158 ITR Statute portion 135. 8.1 On the second ground raised by the Revenue, i.e., clubbing of income of assessee's wife, the learned counsel for the assessee submitted that the income cannot be added in the hands of the assessee for the simple reason that no finding has been given that the said lady became a benamidar of the assessee. The wife of the assessee was separately assessed to tax and was filing regular returns of the income and she taking advantage of the Amnesty Scheme made disclosure of additional income in her independent capacity and the income so declared for the assessment years 1979-80 to 1986-87 was accepted by the department under the Amnesty Scheme. The assessments in the hands of the wife have become final and she being not benamidar of her husband there was no justification in adding sums aggregating to Rs. 5,30,500 declared by her under the Amnesty Scheme and accepted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mate simultaneously with filing the returns for assessment years 1979-80 to 1986-87 under the Amnesty Scheme, and thereafter, by duly filing the income-tax returns for assessment year 1987-88, could not have been earned by the assessee's wife and must, therefore, be assumed to have been earned by the assessee, there was nothing whatsoever with the Assessing Officer to show that the income declared by the assessee's wife was not hers but instead, was assessable in the hands of the assessee; that just because the declarant happens to be wife of the assessee, it cannot be concluded, without anything more than the act of her filing the advance tax estimate and her return of income, firstly that the income declared by her did not belong to her and secondly, that it belonged to her husband, i.e., present assessee; that whilst it could very well be that if the department had any evidence showing that the income declared by the assessee's wife did not belong to her but did indeed belong to her husband, i.e, the present assessee, it would just not be possible for the assessee to resist inclusion of that income in his hands and at the same time, it would also not lie in the mouth of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anan, the then Chairman, CBDT. Therefore, lumpsum amounts declared by the assessee and his wife in different years up to the assessment year 1986-87 stood assessed under the Amnesty Scheme as per the assessment orders already passed. Under the circumstances, the Assessing Officer could not have, for this reason, added back the amount of Rs. 5,33,500 in this year. In any case, this issue became insignificant in view of the fact that the assessments for earlier year have not been disturbed and have been taken as final. In fact, any attempt at this stage to permit the department to assess the income earned in the earlier years again in this year would go against the very spirit of the Circular and an executive officer like the Assessing Officer cannot be permitted to act contrary to the promise held out by the Hon'ble Finance Minister on the floor of the Parliament or by the CBDT in its various circulars. The Assessing Officer has nullified the Amnesty Scheme inasmuch as what was declared by the assessee as income of earlier years under the Amnesty Scheme is again brought to tax in this year. In other words, the Assessing Officer has held that this income is income for the current yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added in the hands of the husband and unless there is a positive finding that the funds have flown to the wife from the husband : (1) CIT v. Daya Chand Jain Vaidya [1975] 98 ITR 280 (All.) (2) V. Ramaswami Naidu v. CIT [1974] 93 ITR 341 (Mad.) (3) L. Sheo Narain Lal, In re [1954] 26 ITR 249 (All.) (4) Kurella Pullayya v. CIT [1962] 45 ITR 364 (AP) In view of the above position, the second ground raised by the Revenue, viz., addition of Rs. 5,30,500 of wife of the assessee in the hands of the assessee is without any substance and accordingly fails. The same is accordingly dismissed. 11. Coming to the third ground which has been raised both by the Revenue and the assessee for different reason. We find that there was no Amnesty Scheme in operation for assessment year 1987-88 and the Amnesty Scheme was applicable only up to assessment year 1986-87. We accordingly do not find any merit in the contention of the learned counsel for the assessee that the assessee bona fidely believed that the Amnesty Scheme was still applicable in respect of income estimated on which advance tax was paid not only by him but by his wife, and, therefore, all along he was under the impression tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for assessment year 1987-88. In the facts and circumstances he ought to have deleted the said addition. " This ground has already been dealt with in the Revenue's appeal and for the reasons discussed therein, we dismiss this ground. 14. Ground No. 3 reads as under : " The learned CIT(A) has erred in holding that levy of interest under section 215 of the Act was consequential in nature. " The assessee challenged the levy of interest under section 215. The learned CIT(A) treated this ground as consequential and held that "interest would be automatically reduced while giving effect to the appeal order in view of the relief allowed." 14.1 The learned counsel for the assessee submitted that the CIT(A) has erred in holding that the interest under section 215 of the Act was consequential in nature. If the department's appeal is dismissed and the assessee's appeal on ground No. 2 is allowed, it may become consequential, otherwise it will not become consequential. The learned counsel further submitted that the additions as made hereinabove could never have been envisaged by the assessee and it would be impossible to assume that income earned by the assessee in the earlier years ..... 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