9911796707
TMI Blog2012 (4) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of the assessee having earned such income in the absence of any specific source, without taking into consideration the provisions of section 68, 69 and 69A of the Income Tax Act ? 2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that a sum of Rs.2.25 lakhs given by Shri. J.A.Richards could not be assessed as undisclosed income for the block period even though the said person has admitted the payment to the assessee specifying the purpose of payment, in the statement made under oath, the payment was corroborated by the entries in the diary of the then Chairman of Tamil Nadu Mineral Corporation and the assessee also did not avail of the specific opportunity to examine the records and furnish evidence to rebut the inference ?" " 1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the block assessment under Section 158BC could not be made unless the assessment is based only on materials, valuables etc found during the course of such search ? 2. Whether in the facts and circumstances of the case, the Tribunal was right in holding the infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Tax case appeal viz., T.C(A).No.1202/2005, it is against the earlier order of the Income Tax Appellate Tribunal dated 01.04.1986 raising the above questions of law. 3. The Standing Counsel appearing for the Revenue vehemently contended that the order passed by the Tribunal is not in accordance with law and it is illegal, wrong and without justification. It is further contended that the Tribunal was wrong in deleting Rs.75 lakhs and 2.25 lakhs made in the block assessment being unexplained donation to the party and the amount received from J.A.Richards. It is further contended that the Tribunal ought to have appreciated the four receipts each of Rs.25 lakhs in the course of search in the residence of the former Personal Assistant of the assessee. Therefore, only the donations directly paid by the assessee to the extent of Rs.75 lakhs was treated as undisclosed income. He further contended that the Tribunal ought to have considered that the assessee had not furnished the list of donors and the donors were not identified. The Tribunal ought to have appreciated that these donations were collected in cash and address of the donees were not available. Further there was a cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donation are as follows:- Name of the Donor Receipt No. Date Donation amount 1.Mr.M.Chinnasamy 87 31.12.1993 25 lakhs 2. -do- 187 01.03.1994 25 lakhs 3. -do- 430 01.11.1994 25 lakhs In addition to the above sum of Rs.75 lakhs, the assessee also paid another sum of Rs.25 lakhs to AIADMK on 13.07.1995 as is evidenced by the statement of his Bank Account. It is the case of the assessee that the entire sum was collected by party functionaries of Karur District from the party cadre and various sister concerns of the AIADMK. It is also pertinent to note that no amount was paid from his income. It is relevant to note that the Assessing Officer himself had issued a letter to the AIADMK Head Quarters and received a confirmation from the Head Quarters vide letter dated 24.11.2001 stating that the respondent/assessee is a District Secretary and from him they received Rs.25 lakhs each on following dates viz., 31.12.1993, 01.03.1994, 01.11.1994 and 13.07.1995 totalling Rs.1,00,00,000/-. Further it is stated that the said sum was collected by the assessee from various party workers and the same was given to the Head Quarter through M.Chinnasamy. The said letter was written by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has earned this income from any undisclosed source. Therefore, it should be treated that that the donation was collected from the party workers only and the version of the assessee believed to be true and the benefit of doubt has to be given to the assessee only. The affidavits were produced by the assessee as well as confirmation letter collection from the party Hqrs., confirmed the receipt of money which is in writing, the Assessing Officer should have considered it. Moreover, as rightly pointed out by the Tribunal on the earlier occasion, if the assessee is not in a position to generate Rs.7 lakhs over a period of 10 years and his other sources of income are also not to that extent to have given him the credibility to the extent of Rs.75 lakhs, it is obvious that Rs.75 lakhs must have been collected from various party workers of the political party. This view of the Tribunal is also supported by the judgment of Hon'ble Supreme Court in the case of CIT Vs. Smt.P.K.Noorjahan (237 ITR 570) wherein it was held that in the very nature of things and by no stretch of imagination it can be held that assessee earned huge sums in a short span of time. In the light of the aforesaid obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclosing draft assessment order, proposed to be passed in consequence to the orders passed by Hon'ble ITAT, Chennai proposing to assess my undisclosed income at Rs.77,93,730/- for the block assessment years 87-88 to 97-98. The proposed assessment is objected to on the following among other grounds. 1. I have placed before you a letter from the party headquarters and affidavits from various party functionaries to demonstrate that my party collected donation for the building fund and as district secretary of the party I acted as an agent of the party. You have also independently ascertained from my party headquarters that the party collected donations through me during the relevant period of time to the tune of Rs.One crore. This facts was also not disputed in the original assessment completed. Therefore, the Hon'ble Tribunal observed that "if the assessee is not in a position to generate Rs.7,00,000/- over a period of ten years and his other sources of income are also not to that extent to have given him credibility to the extent of Rs.75,00,000/-, it is obvious that this would have been collected only from various workers of the political party and this appears to be the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized paper contains details regarding the company quaries and he has handed it over to the Assessee and the denomination was not written by Richards. But as per observation in the assessment order in Page 10, the answer to Question No.7 does not contain any information that a sum of Rs.2.25 lakhs was paid by the assessee. Therefore, in our opinion, the Assessing Officer did not have concrete reason for drawing the conclusion that Richards has paid the sum of Rs.12.25 lakhs to the assessee, as Richards has never mentioned in his answer to Q.No.7 that he has paid money to the assessee and categorically mentioned that the denomination was not written by him. Under these circumstances, we delete the addition on this account." From the reading of the above, it is clear that the above conclusion was based on material evidence. It is question of fact. In these circumstances, we also answer the second question in favour of the assessee and against the Revenue. 7. In view of the above findings, T.C.No.799/2005 is devoid of merits and the same is dismissed. No costs. 8. In respect of T.C.(Appeal)No.1202/2005, the learned counsel appearing for the Revenue fairly submitted that no ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
