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TMI Blog2000 (1) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... . Bhatia 25,000 3. Smt. Shashi V. Bhatia 48,000 4. Smt. P.P. Bhatia 47,000 1,10,000 5,000 5. M/s. Acme Sales Corporation 2,00,000 6. Master Deepu Agarwal 75,000 7. Miss Namita Agarwal 1,40,000 8. Miss Puja Agarwal 55,000 Total 7,55,000 3. Out of the above, loans of ₹ 3,15,000 from persons mentioned at serial numbers 4 and 5 were treated as explained. The remaining loans of ₹ 4,40,000 were treated as unexplained. However, in case of late P.S. Bhatia, HUF, only the peak amount of ₹ 50,000 was considered for addition. Accordingly, Assessing Officer made a total addition of ₹ 4,15,000. Out of the total addition of ₹ 4,15,000, additions in case of Deepu, Namita and Puja Agarwal aggregating to ₹ 2,70,000 were made on the basis of the decision of the Supreme Court in the case of Jam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals) agreed with the findings of the Assessing Officer and the conclusion arrived at by him and thus confirmed the addition of ₹ 2,75,000 plus interest thereon. 6. Shri Hiro Rai, the learned Advocate, appeared for the assessee. After having narrated the facts in detail and as summarized by us above, he contended that the parents of the creditors appeared before the Assessing Officer, produced their pass-books and confirmed having given the loans. However, since the returns of the children were accepted under the Amnesty Scheme, the parents were of the view that they need not give the details. In any case, it was contended by the learned counsel that the assessee had discharged its onus by explaining the source and the Assessing Officer could not go into the sources of source. 7. Distinguishing the case of Jamnaprasad Kanhaiyalal, Shri Rai submitted that in that case the disclosure was in the name of the children of the partners of the assessee firm itself. On the other hand, in the present case, the amnesty returns were filed by outsiders with whom the assessee had no connection at all. It was further contended that in that case, the disclosure was un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the assessee firm and treated it as its income. 11. Three fold contentions were made before the Supreme Court on behalf of the assessee : (a) It is not permissible for the department to go into the question of the nature and source of the amount so declared in a voluntary disclosure under section 24 of the Finance (No. 2) Act, 1965, and to say that it does not represent the income of the declarant. (b) Section 24(1) read with section 24(3) of the said Finance Act has an overriding effect over section 68 of the Act, and therefore, the ITO could not make any investigation as to the nature and source of the cash credits. (c) There cannot be double taxation of the same income, once in the hands of the creditors and again in the hands of the assessee. 12. As regards the first contention, the Supreme Court referred to the provisions of section 24(3) of the Finance Act which contained a legal fiction to the effect that Income-tax shall be charged on the amount of the voluntarily disclosed income as if such amount were the total income of the declarant (underline by us). It then observed that neither the Act of 1922 nor the Act of 1961 required a person to return an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to execute orders which do not have formal legislative approval. Nonetheless, certain principles and features may be common. Thus, keeping these observations in view, let us examine the present case in the light of the decision in Jamnaprasad Kanhaiyalal';s case (supra). 16. Taking the last contention first, there cannot be any quarrel with the principle that in cases of such description, there is no question of double taxation. Under the 1985 scheme also it was only his own income which a person was supposed to declare. Hence if a false declaration was made by the person, and such income was found to be the income of some other person, the latter could be taxed on that income even if it was already taxed in the hands of the declarant. 17. This leads us to the second principle laid down by the Supreme Court, and that is, the declaration does not have an over-riding effect over section 68 of the Act. In other words, Assessing Officer can enquire into the genuineness of a credit appearing in the books even if the said credit is the subject of declaration under the Amnesty Scheme. In this regard also there is no distinction between the 1965 scheme and 1985 scheme. 18. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Jamnaprasad Kanhaiyalal (supra). The Supreme Court also observed in no uncertain terms, in the case of Jamnaprasad Kanhaiyalal (supra) as follows : The scheme of the Act makes it abundantly clear that it was to protect only those who preferred to disclose the income they themselves had earned in the last and which they had failed to disclose at the appropriate time. It is undoubtedly true that the Act was brought on the statute book to unearth the unaccounted money. But there is no warrant for the provision that by enacting the scheme, the Legislature intended to permit, or connive at, any fraud sought to be committed by making benami declarations. If the contentions were to be accepted, it would follow that an assessee in the higher income group could, with impunity, find out a few near relatives who would oblige him by filing returns under section 24 of the Act disclosing unaccounted income of the assessee as their own and claiming that the said income was kept by them in deposit with the assessee. 21. As against the above normal circumstance, in the present case, the assessee has no relationship at all, business or otherwise, with the Agarwal family. This is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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