9911796707
TMI Blog1994 (1) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... eys from Kenya sometimes through banking channels and sometimes otherwise. The moneys were deposited in banks and invested in NSCs. etc. For asst. yrs. 1980-81 to 1984-85 assessee was called upon to file the returns of income which were filed. It was submitted on behalf of the assessee that books of accounts were not maintained but on the basis of information available from bank accounts etc., some sort of cash books and ledgers were prepared. It was submitted that cash books and ledgers constituted the basis for the returns filed. Originally assessments for all the five years involved were made by adding back disbelieved items of receipt of cash e.g. alleged sale of gold ornaments, etc. On appeal, the first appellate authority passed a consolidated order dt. 25th July, 1985 holding that various aspects required "deep verification" by the Assessing Officer. He ultimately set aside the assessment orders with certain directions. In the second round of assessments the Assessing Officer changed the very basis of quantification of additions. He picked up the unexplained investments. In other words, against additions made in the first round on the basis of disbelieved credits he made add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further discussion statement No. 3 should form the basis. This is so because the difference of total addition is less than Rs. 8,000 (difference between Rs. 1,05,175 and Rs. 97,374) and secondly because apart from the fact that Department has not questioned small deposits made in the banks some benefit of availability of cash of labour charges, etc., should be given to the assessee. 4. Even at the cost of repetition it'may be mentioned that in quantifying the additions in the second round of assessment orders the Assessing Officer has not taken into account even the proved bank withdrawals and moneys available on maturity of NSCs, etc. We agree with the learned advocate for the assessee that for making additions even on the basis of unexplained parts of investment, the availability of money from the bank withdrawals and on maturity of NSC, etc. cannot and should not be ignored. 5. We further note that statement No. 3 on whose basis we have decided to proceed starts with an opening balance of cash of Rs. 5,000 on 1st April, 1979. This is claimed to be inclusive of bank withdrawals of about Rs. 4,700. Otherwise also we would hold that assessee's claim of having about Rs. 5,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he end of statement No. 3 the possible addition after setting off the proved withdrawals, etc. would be Rs. 30,800. Subject to verification of figures if considered necessary by the Department, this addition of Rs. 30,800 is required to be upheld and nothing more. The reason is that the CIT(A) has given cogent reasons for deleting the addition of Rs. 5,600 and we agree with him. On this basis Department's appeal for asst. yr. 1981-82 is dismissed and assessee's appeal is partly allowed to the extent that against addition upheld by the CIT(A), the addition to be upheld by us and that too subject to verification of figures by the Department would be Rs. 30,800. This is on the basis that the assessee's claim for receipt of money from sale of articles and sale of gold ornaments is rejected by us. For this we shall give the reasons subsequently. For asst. yr. 1982-83 assessee's appeal being ITA No. 1635/Ahd/1989 and Department's appeal being ITA No. 1822/Ahd/1989 11. As per synopsis given, addition made by the Assessing Officer was Rs. 1,09,000 of which CIT(A) deleted Rs. 50,475. The assessee is challenging the addition to the extent upheld by the CIT(A) in a sum of Rs. 58,525. De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee's appeal, the further availability of money is shown at Rs. 20,905 on 29th.Sept., 1981 and Rs. 15,620 on 15th Dec., 1981 primarily from opening balances of cash. Then there is another alleged receipt of money of Rs. 10,000 on 30th Nov., 1981 from sale of gold of Ratna's wife. These three items have been rightly disbelieved by the Department and the addition envisaged in the synopsis at the end of statement No. 3 of the assessee emerges primarily from these three items. In effect the addition envisaged in the synopsis given at the end of the statement No. 3 of the assessee for asst. yr. 1982-83 in a sum of Rs. 58,075 deserves to be upheld. We do so, but the correctness of the figures would he subject to verification by the Assessing Officer. For asst. yr. 1983-84 assessee's appeal being ITA No. 1636/Ahd/1989 14. This involves only the addition of Rs. 50,000 which was made for the remittances detected by the authorities of the foreign Exchange Regulation Act (FERA) through havala racket. We would agree with the assessee's counsel that the receipt of this money has been reasonably proved by the assessee. The point is that the FERA authorities conducted search and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons concerned inspite of Assessing Officer's specific requirement. The assessee chose not to produce the persons concerned for cross-examination by the Department. 19. This leaves one point in regard to taxability of interest in the hands of the assessee. For all the years, assessee contends that interest on all the investments proved to be out of the sums received from the assessee's sons should not be taxed in the hands of the assessee. This is a reasonable request. Therefore, interest attributable to the sums proved to have been received by the assessee from his sons and interest on such interest would not be taxed in the hands of the assessee. This is so because once it is conclusively proved that the money was received from the sons, merely management of that money in India by the assessee does not make the assessee the owner of that money. We are clearly given to understand that such moneys received from the sons have been invested and reinvested always in the names of the senders or their family members. However, we may clarify that the interest on the investments in respect of the items for which assessee's version has not been accepted would be taxed in the hands of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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