9911796707
TMI Blog1978 (4) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... Thodukandathil House, Vellukutta Puthupally, Kottayam. (2)Smt. Mariamma Mathai, Mother 51 years, residing at the above address. (3)Shri. T.K. Philipose, brother 30 years, residing at the above address. (4)Shri. T.k. Kuriakose, brother 23 years, residing at the above address. (5)T.M. Roji, 11 years, residing at the above address. (6)Mrs. Saly Thomas, wife 24 years, residing at the above address. (7)Rohi Thomas, son 4 years, residing at the above address. (8)Smt. Molly Philippose, 22 years, wife of T.M. Philipose, residing at the above address. Of these eight persons the father and the two brothers filed their three Income-tax Returns for 1973-74 on 21st Dec., 1974 showing for the father a taxable income of Rs.9,313 (with agricultural income Rs. 3,500 extra), for Philipose Rs. 9,763 (with agricultural income Rs.1,000 extra) and Kuriakose Rs.12,500 as taxable income. The assessments of these two brothers for this assessment years were completed on 15th Dec.,1975 and that of the father on 6th March, 1976. The Income-tax Officer believed that the assessee is a smuggler. The house where he resided had been repaired or renovated, The Income-tax Officer believed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disputed additions are dealt with as follows:— (i) Addition of Rs.10,000 as the money spent by the assessee in the relevant accounting year for renovation of the house belonging to the father and for which amount the assessee has no explanation for the source : The house is admittedly in the name of the father. Even the valuer says so. The father of the assessee had returned income from this house property. It had been assessed only in father's hands. It had not been assessed in the hands of the assessee. So the house belongs to the father where the assessee and others stay. The case of the Income-tax Officer seems to be that even though the house belongs only to the father since all are staying together and since the assessee only earns income (because according to the Income-tax Officer other had no source of income or earning capacity) it is the assessee who spent for the renovation. But no such question is seen put either to the father or to the assessee when he was examined in 1973 and later in the central prison in 1976. In fact, the assessee is not even called upon to explain the nature and source of this Rs.10,000. However, we will ignore all these vital defects and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t accounting year 1st April, 1972 to 31st March, 1973. So, the assessee could not have, in the relevant accounting year, contributed Rs.10,000 or any amount to the renovation or repair of the house. There is not even a remote possibility of such contribution in the relevant accounting year, So this addition of Rs.10,000 has only to be deleted. Rs.10,000 addition deleted. (ii) Rs. 1,100 invested in garden lends purchased on 26th Feb., 1978: The garden land is purchased by the assessee in his own name. Of course, the assessee had not been even called upon to explain the nature and source or informed of the proposal to make this addition. It is a grave defect. So the addition has only to be deleted. But the representative of the assessee stated before us that he has no objection to that addition and that may stand. Hence addition confirmed. (iii) Rs. 8,414 added out of the income assessed in the hands of the father : The father of the assessee filed for the first time two income-tax returns on 21st Dec., 1974 for assessment years 1973-74 and 1974-75. For 1975-76 and 1976-77 he furnished it on 21st Dec.,1976 at a time when the assessee is in prison. The computation of income for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Officer has taken only the half share belonging to the father as that of the income of the assessee. Of course, the other half is also included as the income of the assessee when the Income-tax Officer taxed the income of the brother, Philipose as the income of the assessee. In coming to the conclusion that all these investments and personal expenditure are financed by the assessee, the Income-tax Officer has relied only on circumstantial evidence. Of course, in a case like this direct evidence is not possible, nor will it be available. One can go only by circumstantial evidence. But circumstantial evidence should be rather conclusive. It should conclusively point out to only to this possibility and should not point out any other reasonable possibility. If it does not point out to this possibility then the apparent tenor of the transactions should prevail. It cannot be helped. Otherwise it would amount to speculation or guess work. Perhaps, it is this defect in the ordinary laws of the land which stood in the way of getting at the truth and realities of life that made the Government enact more stringent laws with various presumptions in favour of the Government for acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only earning member who can make such investments is not conclusively made out. This assessee was in central jail for about 30 months. even then the other people were living comfortably. This appeal itself is one of the instances. The appeal before the Appellate Assistant Commissioner was prosecuted by engaging a chartered accountant at a time when the assessee was in central prison. We find that the assessment for asst. yr. 1972-73 was also completed at a time when he was in central prison but with a chartered accountant appearing for the assessee. This appeal before the Tribunal is also arranged to be filed when he was in central prison. So all these go to show that there is some other means for those people for supply of funds. One other important circumstance against this benami nature is this. These investments were made at a time when there was no COFEPOSA laws. Such a law was not even then thought of. Why should the assessee under such circumstances invest in the name of his father (really it is in the name of the mother where the father says that he supplied the funds to his wife and one of the younger brothers, a boy aged about 10 or 11. The assessee can as well invest it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Officer could have atleast examined the vendor of the property to ascertain as to who paid the purchase price and who was taking lead in the negotiations for the purchase. A reading of the deposition of the father shows that he had sufficient means. In fact, he stated before the Income-tax Officer that in 1973 he had purchased property worth Rs.11,600 and another item worth Rs.6,000. These two vendors of the properties also could have questioned by the Income-tax Officer on the fact as to who paid the money or who took a leading part in the negotiations. So, as we said earlier. This case was also not put to the father of the assessee and the brothers whose assessments were completed earlier to that of the examination of the assessee. Those are real infirmities which go to the root of the matter. But we are not taking all those infirmities of law and procedure because on merits of the case itself it is not a probable one because the circumstances that relied on or that could be relied on are neither conclusive nor decisive. Of course, one possible argument for the Department is that in matters like this where a smuggler is involved it would be impossible to gather such evidenc ..... 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