2006 (6) TMI 77 - HC - Income Tax

Addition made under section 69A of the Act on account of cash found during the course of search - expression income as used in section 69A of the Act, has wide meaning which meant anything which came in or resulted in gain - Initially, the assessee denied possession of the cash but later on he admitted his possession in a statement recorded on oath. The statement was not retracted and, therefore, the Tribunal proceeded on the basis that the cash amount was under the control and in the possession of the assessee. - held that the assessee had not been able to rebut the statutory presumption under section 132(4A) of the Act and, therefore, the addition made under section 69A were justified

Summary

Issues:
1. Addition made under section 69A of the Income-tax Act on account of cash found during a search.

Analysis:
The appellant challenged the addition made under section 69A of the Income-tax Act regarding the cash found during a search at the residential premises in New Delhi and Mandi. Initially, the assessee denied possession of the cash but later admitted it in a recorded statement. Despite the opportunity to rebut the statutory presumption under section 132(4A) of the Act, the assessee failed to substantiate his claim that the cash belonged to a political party. The Tribunal noted that the assessee did not provide any material to support his claim, while statements from party officials denied any connection to the cash. Consequently, the Tribunal held that the statutory presumption was not rebutted, leading to the addition under section 69A of the Act.

In the appeal, the court declined to reevaluate the evidence as the assessee failed to demonstrate any flaws in the Tribunal's decision. The court emphasized that the issue was decided based on facts, and no substantial question of law was raised for consideration. Referring to previous judgments, the court highlighted the principle that possession is evidence of ownership, especially in the case of cash, where the presumption of ownership is strong. The burden of proof lies on the person in possession to show they are not the owner, as demonstrated in various cases cited by the court.

The court also cited a case where the High Court upheld the view that the expression 'income' in section 69A of the Act has a broad meaning, encompassing gains or investments leading to income subject to tax. The court reiterated that in cases where an assessee is found in possession of currency or assets, the onus is on them to prove they are not the owner, shifting the burden away from the Revenue to establish ownership. Ultimately, the court found no merit in the appellant's arguments and dismissed the appeal, concluding that no substantial question of law arose for consideration in this matter.