1981 (6) TMI 59 - AT - Income Tax

Summary

Issues:
1. Jurisdiction of the assessing officer to make the assessment.
2. Ownership of the currency seized from the assessee.
3. Residency status of the assessee.
4. Applicability of deductions as a loss in the assessment.

Detailed Analysis:
1. The first issue in this case revolves around the jurisdiction of the assessing officer to make the assessment. The appellate tribunal noted that the assessing officer's jurisdiction was questioned by the assessee, but it was found that no evidence was presented to show that any order of detention under Misa or Confeposa was passed against the assessee. The tribunal cited legal precedents to support its decision, emphasizing that objections regarding the place of assessment cannot be raised in an appeal after the assessment has been made. Therefore, the tribunal rejected the contention that the assessing officer lacked jurisdiction to assess the assessee.

2. The second issue concerns the ownership of the currency seized from the assessee. The tribunal analyzed the legal provisions and relevant case law to determine the burden of proof regarding ownership. The tribunal highlighted that the burden of proving ownership lies with the revenue authorities and cannot be shifted to the assessee based solely on possession. The tribunal considered the circumstances of the case, including the status of the assessee as an illiterate housewife with no apparent source of income. Ultimately, the tribunal concluded that the assessment of the currency in the hands of the assessee was not legally justified as the revenue failed to prove her ownership. Citing a judgment from the Kerala High Court, the tribunal emphasized that mere investment by the assessee does not necessarily warrant an addition in her hands without proper evidence of ownership.

3. The third issue raised was the residency status of the assessee. The tribunal found that the material on record did not support the conclusion that the assessee was a non-resident, thus affirming the correctness of her status as a resident.

4. The final issue addressed the applicability of deductions as a loss in the assessment. The tribunal discussed a Supreme Court ruling and concluded that since the assessee was neither proven to be the owner of the seized currency nor engaged in smuggling activities, the amount could not be assessed in her hands. Therefore, the tribunal set aside the order of the Commissioner (Appeals) and deleted the addition made in the assessment, ultimately allowing the appeal in favor of the assessee.