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TMI Blog2008 (4) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... caped income for the asst. yr. 2003-04. The AO initiated assessment proceedings under s. 147 of the IT Act. Notice under s. 148 was issued and it was returned unserved twice with endorsement 'absent/intimation served not claimed/returned to sender'. Despite notice by affixture, no return was furnished by the assessee. Though the brother of assessee Shri Abdul Hameed, sought time for reply within 30 days there was no response, so the AO made assessment under s. 144 of the Act. 3. From the documents seized, it is clear that the assessee had received Rs. 23,15,000 from Shri Mohd. Imran between November, 2002 and January, 2003. In the statement made before Enforcement Directorate, the assessee stated that he was holding about 6 acres of agricultural land from which he was getting an annual income of Rs. 30,000. He also stated that his eldest brother Shri Adam Kunhi is employed as a cook in Alain, UAE, for the past 15 years, that his sister's husband, Shri Aboobaker is also employed as cook in Dubai for the last 10 years, that Shri Abdul Rahiman, his another brother is also working as a cook in Abudabi. He further stated that his brother, Shri Adam Kunhi has constructed a house measuri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he used the entire amount for the construction of the three houses owned by his brothers and brother-in-law. 5. Since the assessee was stated to be working abroad at the time of assessment, the AO proceeded with the assessment as per the documents available from the records of Directorate of Enforcement. The AO recorded the statement of one Shri Abdul Hameed Musaliyar, brother of the assessee. He stated before the AO that he had constructed the house costing Rs. 2 lakhs with loan from local people for an amount of Rs. 93,440 and donation of Rs. 25,000 from the Jumma Masjid and balance amount by his own savings. He has denied receiving of any money from his brothers, brother-in-law or from assessee. So the statement of the assessee that he had utilized some amount: for the construction of residence of Shri Abdul Hameed Musaliyar was found to be incorrect. During the course of assessment proceedings, details have been called for under s. 133(6) of the IT Act from Shri Adm Kunhi, Abdulla, Shri Aboobaker (brothers and brother-in-law of assessee). All the three have filed letters signed by Shri Abdul Hameed stating that their remittance to India were utilized for the construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-in-law. He emphasized the very document seized from the premises of Shri K. Mohd. Imran to substantiate his case. The learned Authorised Representative further stated that these persons had denied receipt of money through non-bank channel by fear of being penalized by the Directorate of Enforcement. The learned Authorised Representative also submitted that the information gathered by the AO was not furnished to the assessee and in fact the assessee was not offered any opportunity to cross-examine the persons whose statements were relied by AO. According to the Authorised Representative, s. 69A of the IT Act cannot be invoked in this case, since no money, bullion, jewellery or unaccounted investments were found with the assessee. The learned Authorised Representative also placed a paper book containing copy of show-cause notice, copy of penalty order both issued by Directorate of Enforcement and copy of reply by the counsel of the assessee. 11. On the other hand, learned Departmental Representative relied on the view taken by the AO and then by the CIT(A). He vehemently argued that the amount of Rs. 23,15,000 that assessee had received from Shri Mohd. Imran was to be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had received total payment of Rs. 23,15,000 by order of his brothers and brother-in-law. In the statement on oath given before the Directorate of Enforcement, the assessee also stated that he had received the amount from unknown person for and on behalf of his brothers and brother-in-law. In short s. 3(c) of FEMA is attracted in a case where a person receives any payment by order or on behalf of any other person residing outside India. 16. It can be very well seen that the AO has not made any independent enquiry about the cash balance, investments or any assets owned or acquired by the assessee for the asst. yr. 2003-04. The only enquiry the AO had done was under s. 133(6) by calling details from Shri Adam Kunhi, Abdulla and Shri Aboobaker. But it can be seen that the letters of the said brothers and brother-in-law were all signed by Shri Hameed. The only evidence, the AO relied, is the letter signed by Shri Hameed on behalf of his brothers and brother-in-law. We do not see any sanctity or evidential value in the letter signed by said Shri Hameed for and on behalf of his brothers and brother-in-law. No serious effort was made by the AO in finding out whether the amount rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s assessed under s. 69A of the IT Act but it is not the case of the AO that the assessee had made any investments or assessee was found to be the owner of any bullion, jewellery or other valuable articles. So, we are of the view that the AO is not right in law in assessing under s. 69A of the Act. 21. In short, the Directorate of Enforcement had no case that the assessee had received any amount for the assessment year. But the charge against the assessee is that he had received some amount by order or on behalf of his brothers and brother-in-law and accordingly the assessee was charged under s. 3(c) of FEMA. In the first statement given before the Directorate of Enforcement, the assessee made it clear that the amount that he received was for and on behalf of his brothers and brother-in-law. The AO could not find out any investments/property owned by the assessee during the relevant assessment year. The AO has not made any independent enquiry regarding the income of the assessee, instead the AO relied on the letter of one Shri Hameed to gather that the amount received by the assessee was not diverted to three brothers. 22. On going through the entire facts and the submissions made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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