TMI Blog1985 (3) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... ried in 1968. 3. There was a search in the premises of the assessee first on 28-4-1973 by the Customs and Excise Department and subsequently on 1-5-1973 and 2-5-1973 by the Income-tax Department. In this search, besides ornaments, a Girvi Bahi was also found. The Girvi Bahi did not bear any name. It was claimed before the ITO that the transactions recorded in the Girvi Bahi belonged to Smt. Kamla Devi and Shri Ashok Kumar Barnwal and that they had nothing to do with the assessee family. It was claimed by Shri Ashok Kumar Barnwal before him that he had been carrying on money-lending and pawning business besides business in bullion with a capital of about Rs. 20,000, which was received by him as gifts from relatives and from various other sources. Smt. Kamla Devi claimed that she had also been carrying on similar business since 1950, with a capital of about Rs. 8,000, which she had received from her mother and other relatives. She was found educated only up to 5th class. She did not know much about the business and stated that it was looked after by one Shri Hira Lal Barnwal. Shri Hira Lal Barnwal was an old associate of the family. He was living with the family along with his wife ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose status has already been described above, was also examined by the ITO. In his statement, dated 20-7-1973, he stated that he was not carrying on any independent business. However, subsequently he filed voluntary returns for the assessment years 1966-67 to 1974-75 in September 1974, i.e., after the search had been conducted. It appears that the assessments had been made on him on the income from business on commission, income from property and undisclosed income being deposits in Hindustan Commercial Bank and Allahabad Bank, Gorakhpur. It was found by the ITO that he had been making deposits in the above banks and the source of some of the deposits could not be explained by him. These facts are given in the order for the assessment year 1972-73 passed by the ITO on 8-9-1975. Subsequently, voluntary return was filed by him for the assessment year 1973-74 also. For this year also, the assessment was made by the ITO on 27-11-1975 in a substantive capacity on income from commission, as well as unexplained investments in the banks. 6. After giving the background of the above three persons, we will not proceed to give the developments in the assessee's own case. In this case, the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases of the above three persons independently in the assessment of the assessee-HUF. Besides, he also made certain other additions on the ground that the business carried on by Shri Hira Lal Barnwal required some funds. He estimated them at Rs. 1,17,000 and held that they represented the income of the assessee from other sources. Although this addition was deleted by the Commissioner (Appeals), but was restored by the Tribunal to the extent of Rs. 45,000. The above findings of the ITO were confirmed by the Commissioner (Appeals) as well as by the Tribunal. 8. The ITO also initiated penalty proceedings under section 271(1)(c), as he was of the opinion that the assessee had concealed the incomes earned in the names of Shri Ashok Kumar Barnwal, Smt. Kamla Devi and Shri Hira Lal Barnwal. In this connection, he also applied the Explanation to section 271(1)(c) as it stood at the relevant time. The Explanation was attracted as the returned income fell short of 80 per cent of the assessed income. Relying on the findings given by the ITO, the Commissioner (Appeals) and the Tribunal, the ITO held that the assessee had failed to account for the income earned in the names of the above thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the same income in the assessment of another person, who was the real owner of that income. 11. On behalf of the assessee, it was submitted that although there was no quarrel about the principle enunciated in the above two cases, but the Commissioner (Appeals) or even the Tribunal were at liberty to admit fresh evidence in the course of the penalty proceedings and then come to a different conclusion than that arrived at in the course of the assessment proceedings either by the ITO or by the appellate authorities. 12. After considering the facts of the case, we are in agreement with the submissions of the learned departmental representative that the person, who, is the owner of a particular income, has to be assessed with reference to that income irrespective of the fact whether that income has been shown and declared by some other person or has been assessed on that income. However, that does not end the matter. The Supreme Court in the case of Anantharam Veerasinghaiah Co. v. CIT [1980] 123 ITR 457 had held that an order imposing a penalty is the result of quasi-criminal proceedings and the burden lies on the revenue to establish that the disputed amount represents income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yet the nature of the onus of proof is as in a civil case and the matter is to be decided on a preponderance of probabilities. This was also the view of the Allahabad High Court in a later case in Addl. CIT v. Lakshmi Industries Cold Storage Co. Ltd. [1984] 146 ITR 492. 14. On the basis of the above principles, we have no hesitation in holding that the approach adopted by the Commissioner (Appeals) was legally correct. He took into account the other evidence which was not admitted or considered by the Tribunal in the appeal against the quantum assessment. We find no flaw in the finding of the Commissioner (Appeals) in this regard. 15. It was contended by the learned counsel for the assessee that in the absence of any positive finding that the HUF's funds had been utilised by any of the above three persons for carrying on the business, it could not be said that the businesses run by them or in their names belonged to the assessee-HUF. In our opinion, there is considerable substance in this submission. The Supreme Court in the case of P.N. Krishna Iyer v. CIT [1969] 73 ITR 539 had held that income received by a member of a HUF, from a firm or a company in which funds of the HU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the financial position of the family and found that it had been assessed on income of more than Rs. 1,58,959 up to the assessment years 1946-47 and on an income of Rs. 1,88,964 for the assessment years 1947-48 to 1951-52. In the opinion of the Commissioner (Appeals), possession of Rs. 8,000 in 1950 with the daughter-in-law of such a well-to-do-family was quite probable. He had further observed that there was no evidence to indicate that the initial investment or any sums had flowed from the family funds to the business done by Shri Ashok Kumar Barnwal and Smt. Kamla Devi. The learned departmental representative was unable to demolish either of these findings of fact. We, therefore, cannot say that the businesses run in the names of Shri Ashok Kumar Barnwal and Smt. Kamla Devi belonged to the assessee-HUF. In this connection, we will refer to another decision of the Supreme Court in the case of Anil Kumar Roy Chowdhury v. CIT [1976] 102 ITR 12. It was held in this case that there was no evidence on record to show that the property from which the income in question accrued, was the property of the HUF and in the absence of any such evidence, the burden was on the department to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was also its claim that similar businesses had been carried on by Shri Ashok Kumar Barnwal and Smt. Kamla Devi. In other words, the assessee himself admits that he had no objection to the carrying on of similar business by other persons. We are in agreement with the findings of the Commissioner (Appeals) that there is no evidence on record to suggest that the business run or carried on by the above three persons either belonged to the assessee-HUF or had any connection with the latter. 19. The learned counsel for the assessee made out another important point. He submitted that the ITO, while computing the income from the business carried on by Shri Ashok Kumar Barnwal and Smt. Kamla Devi had not relied on the transactions in the Girvi Bahi. Instead, he had estimated their investment in the business at Rs. 75,000 and had further estimated incomes of Rs. 18,750 from such investment in each case. In case the ITO was of the view that the Girvi Bahi belonged to the assessee, it was open to him to compute the income on the basis of the transactions found in that Bahi. Any mala fide motive can also not be attached either to Shri Ashok Kumar Barnwal or to Smt. Kamla Devi in getting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be a mere rule of evidence. It merely raises a rebuttable presumption but the basic principle laid down in section 271(1)(c) still remains, namely, that there should have been a concealment of the particular of the income or inaccurate furnishing of such particulars. Whatever view might be taken on the facts of the case, it has to be held that even if the Explanation applies the presumption raised under that Explanation has been rebutted by the assessee. 22. Some other arguments were also placed before us on behalf of the rival parties. On behalf of the assessee, it was submitted that the department having assessed Shri Ashok Kumar Barnwal. Smt. Kamla Devi and Shri Hira Lal Barnwal was bound by the principle of promissory estoppel and, therefore, a different view could not be taken in the case of the assessee. Similarly, on behalf of the department, it was submitted that this was not a case of benami where the burden lay on the department, but that it was the case of a clear finding that certain business carried on in the names of certain persons belonged to the assessee. In our opinion, there is no merit in either of these contentions. The principle of promissory estoppel, no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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