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TMI Blog1991 (8) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee on advances and investments made out of the funds belonging to it. It was also found that the assessee was not in the habit of maintaining proper accounts. The Managing Partner, Shri G. Sahadeva Panicker, was examined and his statements were recorded. He admitted that the assessee was charging interest at 36% to 48% on gold loans and 36% on promissory notes, as shown in the slips. 3. The assessee filed a return of income on 5-8-1985 admitting an income of Rs. 1.5 lakhs and Rs. 2.5 lakhs for the assessment years 1984-85 and 1985-86 respectively. The Income-tax Officer completed the assessments on 27-9-1985 accepting the returned income for both the assessment years under consideration. The penalty proceedings under section 271(1)(c) were initiated for both these assessment years. The assessee filed written objection stating that the returns were filed to purchase peace with department, though the assessee had legal and factual points in its favour. It was further stated that 'some liabilities were omitted to be mentioned at the time of furnishing the sworn statement, and the cost of assets such as furnishing of the firm's offices were overstated. This resulted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is stated that the unaccounted consideration admitted to have been paid for acquiring immovable properties which are given in Annexure-II to the assessment order. The excess of payments over receipts on the basis of the statement of Annexure-I is worked out at Rs. 5.54 lakhs as on the date of search. While the Managing Partner was examined, he was admitted that the South Indian Chit Funds was in the name of his way, B. Thamarakshy, for which proper books of accounts were maintained. After the finance business of South Indian Finance was started, various assets have been purchased in his name, in the name of his wife and in the name of his children. As on the date of search all the assets and liabilities of the South Indian Finance were also deposed by him and he had agreed to be assessed on the excess of assets over liabilities. Hence, in this case, there is ample proof to show that the assessment was on the basis of returned income by the assessee. Though the acquisition of some of the assets is not relevant for the impugned assessment years, the assessee had offered and had been assessed on the same in the years under appeals on spreadover basis. Hence, we have to hold that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein ; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, unless,-- (1) such income is, or the transactions resulting in such income are recorded,-- (i) in a case falling under clause (a), before the date of the search, and (ii) in a case falling under clause (b), on or before such date, in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Chief Commissioner or Commissioner before the said date ; or (2) he, in the course of the search, makes a statement under sub-section (4) of section 132 that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as ascertained from his undisclosed income. Therefore, by using the words 'valuable article or thing' what the Legislature has intended to imply is that the assets covered by these words should be such as could be converted into cash so that the tax liability of the assessee concerned, as revealed from his undisclosed income, could be duly satisfied. In other words, the thing or article which can be retained under section 132(5) should be one which is carrying its own intrinsic value in terms of money. A document of title relating to an immovable property or even a fixed deposit receipt issued by a bank does not possess any intrinsic market value. They can neither be negotiated nor be transferred for valuable consideration. Thus, they are not covered by section 132(5) of the Act or rule 112A of the Rules." The learned Senior Departmental Representative, Shri C. Abraham, contended that the document of title would establish the ownership of the assessee in respect of the assets and, therefore, the title deed itself would come under the expression "valuable article or thing". 9. We have carefully considered this submission. The expressions used in the Explanation 5 to section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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