9911796707
TMI Blog1992 (1) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... ued with a view to extend the proceedings under the Act to the newly discovered properties of the appellant, consequent upon the appellant's filing his returns of income and wealth under the Amnesty Scheme of the Income-tax Department. After completion of investigation and trial, the Competent Authority came to the conclusion that the appellant's properties, mentioned below, were illegally acquired properties in terms of section 3(1)(c)(ii) and (iv) of the Act: (1) All assets and properties held by the affected person in the proprietary business done under the name and style of Messrs. Kosi Steel Industries, Katihar. (2) All assets and properties held by the affected person in the business done under the name and style of Messrs. Baij Nath Aggarwalla, Siliguri. (3) Gold jewellery and silver. (4) Life Insurance Policy No. 34815671 with the Life Insurance Corporation of India for Rs. 1,00,000, and another life insurance policy of unspecified number with the Life Insurance Corporation of India. The Competent Authority has consequently passed the impugned order forfeiting the abovementioned properties of the appellant against which the appellant has filed the present appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act as well apply to the relatives of such person as detailed in section 2(2)(c) of the Act. Sawarmal Aggarwalla is the detenu in the instant case. The provisions of this Act apply to him under section 2(2)(b). The appellant is the brother of the detenu. The provisions of the Act apply to him under section 2(2)(c). Section 3(1)(c) defines "illegally acquired property". It declares a property "illegally acquired" if it has come out of the earnings of an illegal activity which is prohibited under law. The illegal activity has to be on the part of the holder of the property and it has not to be necessarily linked to a relation indulging in smuggling. There is nothing in section 3(1)(c) to suggest that the source of the money utilised for the acquisition of "illegally acquired property" has to be linked to the relative indulging in smuggling. Section 6(1) of the Act makes it obligatory for the Competent Authority to record "reasons to believe" before issuing a notice thereunder. This provision further provides that the "reasons to believe" are to be formulated by taking into consideration the value of the property and the known sources of income, etc., of its owner as also any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Competent Authority to pass the impugned order against the appellant from the date of passing of the order of detention of the appellant's brother in 1975. In this connection, our attention has been drawn by him to the decision of this Tribunal in Md. Golam Rasul Mia v. Competent Authority [1990] 181 ITR 206 (ATFP). This objection was raised before the Competent Authority as well and it has duly been taken notice of in the impugned order. The Competent Authority has observed that various reasons had contributed to the delay. The Act came into force in 1976-77 and the Competent Authority organisation was set up in 1977. The first notice under section 6 of the Act was issued in October, 1980, when this case came to the notice of the Competent Authority. The following reasons contributed to the delay thereafter till the passing of the final order : (i) Frequent adjournments sought by or on behalf of the appellant in the course of the proceedings ; (ii) frequent changes of officers posted as Competent Authority, Calcutta ; and (iii) disclosure of properties (not known to the Competent Authority till then) made by the appellant under the Amnesty Scheme introduced by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. The impugned order is liable to be set aside on this ground. In support of this contention, learned counsel has added that the Competent Authority has nowhere referred to the last notice issued in 1988 under section 6(1) of the Act in the impugned order. Further, it has been brought to our notice that in the very first paragraph of the order under reference, the Competent Authority has observed that it has become necessary for him to issue the notice under section 6(1) of the Act and this reference to the "necessity" shows that the Competent Authority has not properly applied his mind to the facts of the case before initiating the proceedings against the appellant. On a careful consideration of the submissions made by learned counsel, we are of the opinion that the same are without substance. The impugned order of the Competent Authority is a detailed one with proper marshalling of all the facts and submissions made before him. We may also point out that even if the Competent Authority does not make any specific reference to the notice(s) issued under section 6(1) of the Act, it would not vitiate the forfeiture order passed by him. It is not necessary that the Competent Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Officer had made this assessment accepting the applicant's version, after the passing of the impugned order by the Competent Authority. The appellant did not produce the alleged creditors either before the Competent Authority or before the income-tax authorities. There is nothing on record to show that the Income-tax Officer, while accepting the appellant's version, had investigated the matter thoroughly to satisfy himself that the alleged creditors, who were in the employment of a business concern closely connected with the appellant, could, in fact, lend a loan of Rs. 15,000 each to the appellant as alleged. The Income-tax Officer concerned should have all the more looked into this case carefully in view of the claim that each of the alleged creditors was stated to have advanced an identical sum of Rs. 15,000 as loan to the appellant. The appellant has also not brought on record any evidence to show that the alleged creditors have been paid back the loans allegedly raised from them with or without interest. In a case like this where the alleged creditors got their respective assessments finalised under the summary scheme (without any investigation), it is curious that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the sum of Rs. 4 lakhs appearing in the appellant's balance-sheet for the assessment year 198485 remains unproved and unaccounted for. The finding of the Competent Authority is justified and the same is affirmed. All the aforesaid unproved borrowings have been used by the appellant in acquiring the assets of Messrs. Kosi Steel Industries. It is thus clear that from out of the total value of the assets aggregating to Rs. 10,06,460 forfeited by the Competent Authority, assets valued at Rs. 6,33,000 remain unproved and unaccounted for and constitutes the "illegally acquired properties" held by the appellant. The other business of the appellant is also the proprietary business run under the name and style of Messrs. Baij Nath Aggarwalla, Siliguri. At the time of passing of the impugned order, the appellant, in this business, was dealing in gold under licence held by him from the Gold Control Authority. The Competent Authority forfeited all the assets found in this business as on March 31, 1986, for reasons given by him in his order. It is the appellant's case, as could be seen from his written representations dated September 22, 1988, and dated September 30, 1988, before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1985-86. The Competent Authority has found that the appellant had introduced in the said assessment year, by way of "sundry credits", a sum of Rs. 16,79,371, for which no proof has been furnished. The return of income for the assessment year 1985-86 was filed by the appellant under the Amnesty Scheme and as such the Income-tax Officer had no option whatsoever to determine the genuineness or otherwise of the appellant's claim while completing the assessment, while accepting the appellant's return of income for that assessment year. The Competent Authority has held that out of the aggregate value of the assets held on March 31, 1986, of Rs. 16,66,100 (inclusive of investment of Rs. 1,50,000 in Messrs. Kosi Steel Industries), the source to the tune of Rs. 14,19,078 shown as loans and credit balances from sundry parties remains unproved and the same are liable to be forfeited. The appellant has not produced any evidence to prove that the conclusion arrived at by the Competent Authority is not well founded. It is clear that the provisions of section 9 of the Act are of no avail to the appellant as well. The finding of the Competent Authority is, therefore, upheld. The Competent Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore disclosed the said gold jewellery and silver before the Income-tax Department and further the appellant would not disclose under the Amnesty Scheme jewellery which did not belong to him. The appellant had in fact declared the jewellery as owned by him in the return of wealth filed by him under the Amnesty Scheme of 1985. The Competent Authority has rightly ordered the forfeiture of the gold jewellery and silver detailed above. The Competent Authority has held that the appellant had taken Life Insurance Policy No. 34815678 with the Life Insurance Corporation of India, Jalpaiguri Division office, Siliguri branch, for an assured sum of Rs. 1 lakh in respect of which premium of Rs. 5,330 was paid by making withdrawals from the capital account for the assessment years 1982-83 to 1986-87. The Competent Authority has taken note of the fact that the appellant had raised a loan of Rs. 40,000 from the Life Insurance Corporation of India by pledging his policy with them. This policy has been directed to be forfeited free from all encumbrances, i.e., by ignoring the payment of loan by the Life Insurance Corporation to the appellant. The order of forfeiture of this policy is liable to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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