1993 (1) TMI 132 - AT - Income Tax

Summary

Issues Involved:
1. Admission of additional grounds of appeal.
2. Addition of Rs. 84,233 as income from undisclosed sources.
3. Legality of proceedings under Section 147(a).
4. Ownership and possession of the seized amount.
5. Application of Section 132(4A).
6. Validity of affidavit evidence.
7. Relevance of case laws cited by the assessee.

Detailed Analysis:

1. Admission of Additional Grounds of Appeal
The assessee filed additional grounds of appeal challenging the charge of interest under Sections 139(8) and 217, arguing that these grounds did not require investigation. The Tribunal rejected this request, stating that the additional grounds did not arise from the order of the AAC and would require factual investigation. Therefore, the additional grounds were not admitted for consideration.

2. Addition of Rs. 84,233 as Income from Undisclosed Sources
The primary issue was the addition of Rs. 84,233 as income from undisclosed sources following a search at the assessee's residence. The assessee contended that the amount belonged to Anand Marg Pracharak Sangh (AMPS) and not to him. The Income Tax Officer (ITO) and the Appellate Assistant Commissioner (AAC) held that the amount was unexplained and represented the assessee's income from undisclosed sources. The Tribunal upheld this view, noting that the amount was found in the assessee's residential premises and was not accounted for in the books of AMPS. The Tribunal also dismissed the plea that the amount belonged to the assessee's wife, as there was no supporting evidence.

3. Legality of Proceedings Under Section 147(a)
The Tribunal affirmed the legality and validity of the proceedings under Section 147(a), citing the discovery of a substantial unexplained amount in the assessee's premises. The Tribunal held that possession is prima facie evidence of ownership, and since the amount was found in the assessee's possession, it was presumed to be his income unless proven otherwise.

4. Ownership and Possession of the Seized Amount
The assessee argued that possession does not amount to ownership and that the amount belonged to AMPS. The Tribunal rejected this argument, stating that the books of AMPS did not support this claim. The Tribunal emphasized that the burden of proof was on the assessee to show that the amount belonged to someone else, which he failed to do.

5. Application of Section 132(4A)
The assessee contended that Section 132(4A) did not apply retrospectively. The Tribunal held that Section 132(4A) is procedural and retrospective, thereby applicable to the case. The section presumes that any document or asset found in possession of a person during a search belongs to that person unless proven otherwise.

6. Validity of Affidavit Evidence
The assessee submitted an affidavit from the General Finance Secretary of AMPS, stating that the amount belonged to AMPS. The Tribunal dismissed this affidavit as a self-serving document, citing the Supreme Court decision in CIT vs. Durga Prasad More, which held that uncontradicted affidavits are not necessarily true and reliable. The Tribunal found no corroborating evidence to support the affidavit's claims.

7. Relevance of Case Laws Cited by the Assessee
The Tribunal examined the case laws cited by the assessee and found them irrelevant to the facts of the case. The Tribunal noted that the facts in the cited cases were entirely different from those in the present case.

Separate Judgments:
The Judicial Member dissented, arguing that the facts were not properly appraised and required further investigation. He suggested setting aside the AAC's findings and remanding the case for a fresh appraisal. However, the Third Member agreed with the Accountant Member, upholding the view against the assessee. The Third Member emphasized that possession of cash is strong evidence of ownership, especially when the explanation provided by the assessee was not supported by any evidence.

Conclusion:
The Tribunal dismissed the appeal, upholding the addition of Rs. 84,233 as income from undisclosed sources in the hands of the assessee. The proceedings under Section 147(a) were deemed legal, and the affidavit evidence was not accepted due to lack of corroboration. The Tribunal also held that Section 132(4A) was applicable and retrospective.