1992 (8) TMI 131 - AT - Income Tax

Summary

Issues Involved:
1. Addition under Section 69 of the Income-tax Act, 1961.
2. Legality of action under Section 148 read with Section 147.
3. Jurisdiction and limitation under Section 153.
4. Charge of interest under Sections 139(8), 215, and 217.
5. Taxation of interest on fixed deposits on receipt vs. accrual basis.
6. Additions on account of gifts received.

Issue-wise Detailed Analysis:

1. Addition under Section 69 of the Income-tax Act, 1961:
The primary controversy revolves around the addition of Rs. 21.67 lakhs found in the name of the assessee and her minor children during a search operation on December 10, 1987. Initially, the assessee admitted ownership of the deposits but later retracted, claiming the deposits did not belong to her. The Assessing Officer (AO) rejected the retraction, considering it an afterthought, especially since the revised statement came after the death of the assessee's father-in-law. The AO emphasized that the assessee was educated, had income from tuitions, and had signed the application forms for the fixed deposits. The Commissioner (Appeals) upheld the AO's decision, citing Section 132(4A) and the factual aspect that the revised returns were filed only after the father-in-law's death. The Tribunal also upheld this view, noting that the initial admission during the search should be treated as evidence under Section 132(4).

2. Legality of action under Section 148 read with Section 147:
The assessee contested the action taken under Section 148 read with Section 147 as irregular. However, this ground was rejected by the Commissioner (Appeals) because the assessee could not specify the grievance. The Tribunal also treated this ground as not pressed since no submissions were made.

3. Jurisdiction and limitation under Section 153:
The assessee challenged the completion of the assessment based on lack of jurisdiction and limitation under Section 153. The Commissioner (Appeals) held that the assessments were completed within the time frame, and no fatal mistake regarding jurisdiction was brought to notice. The Tribunal treated this ground as not pressed since no submissions were made.

4. Charge of interest under Sections 139(8), 215, and 217:
The assessee raised a ground against the charge of interest under Sections 139(8), 215, and 217. The Commissioner (Appeals) observed that the assessee had remedies under the Act and did not provide specific findings. The Tribunal also rejected this ground as it was not pointed out how the Commissioner's order was erroneous.

5. Taxation of interest on fixed deposits on receipt vs. accrual basis:
The assessee claimed that interest on fixed deposits with NCBE should be taxed on a receipt basis rather than an accrual basis. However, this claim was not accepted by the tax authorities, drawing guidance from the Supreme Court's decision in State Bank of Travancore v. CIT. The Tribunal presumed that the assessee accepted this position since no contention was made before it.

6. Additions on account of gifts received:
In the assessment years 1985-86 and 1986-87, the assessee contested additions made on account of gifts received amounting to Rs. 63,500 and Rs. 5,000, respectively. The Tribunal upheld the appellate order, applying the same reasoning as for the addition on account of deposits in NCBE.

Conclusion:
The Tribunal dismissed all appeals, upholding the Commissioner (Appeals)'s order. It emphasized the significance of initial admissions during the search, the lack of satisfactory explanation for the source of the deposits, and the assessee's engagement in income-earning activities. The Tribunal also noted that the retraction of the initial statement was an afterthought, especially since it came after the death of the father-in-law.