Smt. Ratpalkaur vs Assistant Commissioner Of Income ...
2007 Latest Caselaw 356 Bom

JUDGMENT

J.P. Devadhar, J.

1. This appeal is filed by the legal heir/wife of Sardar Inderjeet Singh Osan who died on 11th Aug., 1999 (hereinafter referred to as 'the assessee').

2. This appeal is directed against the order passed by the Tribunal dt. 29th July, 2005 in ITA No. 919/Nag/1996 relating to block assessment period 1st April, 1985 to 23rd Oct., 1995.

3. According to the assessee, following questions of law do arise out of the aforesaid order of the Tribunal:

(a) Whether in a search proceedings unaccounted cash which is found in possession of some other person, other than assessee, then on mere admission by assessee that out of the said cash some belongs to him, can be a basis of initiating proceedings under Section 158BC against him?

(b) Whether under given facts and circumstances of the case the assessment made under Section 158BC was valid, legal and in conformity with the provisions of law, where the tax liability and its payment attracts separate rates/slab?

(c) When unaccounted cash was found in the custody/luggage of Hemubhai and Krishna Shetty in the course of security check up at Sonegaon airport, whether Inderjeet Singh, on his admission that out of total cash of Rs. 34,65,000 an amount of Rs. 23,65,000 belongs to him, can be assessed for block period under Section 158BC or can be treated as any other person and be assessed under Section 158BD of IT Act and whether assessment under Section 158BC against Inderjeet Singh is legal and proper?

(d) When admittedly cash was found in the custody/luggage of Hemubhai and Krishna Shetty can the same be shown as seized from Inderjeet Singh and whether alleged warrant of authorization under Section 132 and alleged Panchanama showing seizure from Inderjeet Singh is legal and proper?

(e) Where IT Act provide for and empowered the authorities upon whom Board can delegate power under Section 132, the name of Asstt. Director of Investigation does not appear for the purpose of Section 132 of IT Act, therefore, whether the warrant of authorization alleged to be issued by Asstt. Director of Investigation is legal and proper?

4. On 23rd Oct., 1995, two warrants of authorization were issued under Section 132 of the IT Act, 1961; one in the name of Hemubhai Raichure and Krishna Shetty and another in the name of the assessee. In execution of the first warrant of authorization Hemubhai Raidhure and Krishna Shetty were searched at Sonegaon airport, Nagpur on 23rd Oct., 1995 and the search ended with recovery of cash of Rs. 34,65,000. As it was contended by the said two persons that out of the sum of Rs. 34,65,000, a sum of Rs. 23,65,000 belongs to the assessee, in execution of the warrant issued against the assessee, his statement was recorded under Section 132(4) of the IT Act, 1961. In his statement, the assessee admitted that he and his family members had given cash amount of Rs. 23,65,000 to Hemubhai Raichure and the said amount of Rs. 23,65,000 recovered from Hemubhai Raichure represented undisclosed income of the assessee and agreed to offer said amount for taxation in his name and his family members as income in addition to the income as per the books maintained by the assessee.

5. On 31st Oct., 1995, notice under Section 158BC was issued to the assessee. In response to the notice, the assessee filed return for the block period 1st April, 1985 to 23rd Oct., 1995 disclosing undisclosed income of Rs. 23,65,000. Accordingly, block assessment order was passed by the AO.

6. The assessee filed appeal against the said order. Subsequently, an application was made to raise an addition ground to the effect that the warrant of authorization for search issued against the assessee under Section 132 r/w Section 132BC (sic) of the IT Act, 1961 was void, illegal and bad in law and consequently, the assessment made under Section 158BC of the Act is illegal and void. The said application was rejected and the appeal filed by the assessee was dismissed by the Tribunal. Hence, this appeal.

7. Mr. Mani, learned advocate appearing on behalf of the appellant, submitted that the warrant of authorization issued against the assessee was illegal because, firstly, the amount of Rs. 34,65,000 recovered from Hemubhai Raichure was already seized and, therefore, authorization could not be issued for searching or seizing the very same amount which was already seized. Secondly, since the amounts were not seized from the assessee without issuing a notice under Section 158BD block assessment could not be made under Section 158BC. Mr. Mani submitted that the statement recorded in the Panchanama that the amounts were seized from the assessee is totally incorrect. Accordingly, Mr. Mani submitted that the Tribunal committed an error in sustaining the block assessment order and this Court be pleased to set aside the same.

8. The first contention that the cash was seized from Hemubhai Raichure and Krishna Shetty cannot be accepted because in the present case, although during the course of search Rs. 34,65,000 were recovered from Hemubhai Raichure and Krishna Shetty as they had stated that out of Rs. 34,65,000 a sum of Rs. 23,65,000 belongs to the assessee, the statement of the assessee was recorded under Section 132(4) of the Act, wherein the assessee admitted that said amount of Rs. 23,65,000 recovered from Hemubhai Raichure belongs to him. Thereafter, under a Panchanama the said amount of Rs. 23,65,000 was seized. In these circumstances, the finding recorded by the Tribunal that from the sequence of events from the stage of serving warrant, recording of statement of the assessee, and drawing Panchahama to seize the amounts establish that the amount was seized from the assessee cannot be faulted.

9. Once it is held that the Tribunal was justified in holding that the amounts were seized from the assessee, the second argument of the assessee loses its force, and accordingly the block assessment order passed after issuing notice under Section 158BC cannot be faulted.

10. For all the aforesaid reasons, we see no merit in the appeal and the same is hereby dismissed with no order as to costs.