Chuharmal S/0 Takarmal Mohnani v. Commissioner Of Income-Tax, M.p., Bhopal

[1989] 1 so fire To 205 ARIAT qaqa Tea aa aT eT aaata aeraral Fast ate Tao CAAT atat gen afafran, 1962, arr 110 (2) aratge aafsa aafan caryferata—ararg ar faaferr afore —saa oige & ate ana daa eater aqaa aa Karz gt agen at ara[g][ waa][ stains][ aa][ F][ guarg faafera]afanie & fagia ar sete ANT | —aafins vata & fagta—gqaang at faafaa afeare aafea degenafafaara, 1962, att 110 (2) et IqaH—TaIA IAT F ala aay dag atecal Aaa aa F ate Rl ASAT TT aTATS TAIT TaltH cata F gaa H faaferaafrate & fagia at sede gat citar gen atferfrre, 1962, ere 112 site 123—aai ‘mre aatait atfee’A tag Ate H Ger Ht seme VN ale eafaa afer Gast aera awa FX aana WAT StI ANT 123 F agar ag aaa ww A wt waawe fe aag waaenfea ata Aglg, Fat Ag ATA F Ae BT aT aaifea at Arar at aAAA ATsMae ae Balal gle Arar areal & HATA HY TAT Ie Jas set a aga-ar ara quae at, fora®aenfea at aT ae aT| lat yew Haat A Ba dagen afefiaa atagree iO at srarer (2) & aga F aatata ‘are sari atfea’ fear, fray qafere faactorat at arg a1 fag arett 9 oafeana garage & aaa ar ara Fedsarar ae at et aa arferayl at sfaacherr ay, fray alsteatt Hoare F afmen %are TaaTAT eae PRAT Tar aT| HaaNT A ara Farge atte afer wr amarat fear! ga area at ae are ada F ate yas cea gavtery FH araAHie srer afagfee HT A TE| TSq egraraqaa H Gree Ht 7E fre Wl aries HTa me fare gated F faq ssaqaH eqrraa FH ofsar grea st as 1 arfaarTAAL HU FT,° afafratica—atar yer afafiay a] are 110 (2) & age ® ata aaa.BT SINT BA TaAaTT F yeqara afrare AY Gla Far 2, feak ara ar—oafagen feat arar seafaa gt ga yoaara afeare & gaat arta afar 206 saqan earataa faa afer [1989] 1 gx fro qo fear arat atfge aeqat gaa aafnecara & fagtat ar afeaarr dartaq eararaar F galat fafeaa F gaearataaT A HABIT Goo eqaTAT Aga na at afugise at ot fie gaa géga % afta afer carfrwaed eft, ar fetwt car Ht rearn ay earfas wr A Hrs Heat afer) FT eAaTAT a Gs: Fa TTqt aa fear ef afaqdta ara se gearada ar afaare fafar afrare 3, Wyahaa 6 ara at safer at carta gt sea alar sare faaat sear facarzHT IT TAHA Be feat Tar 3, Aa A dar freare saa ahaagr st Ta F cHag H Wat aaa a afar eqimraa se aqare HaaTt are THetla Frater F.sear fafeaa UHATH A aT ale aAaT: as aeT F aaa ava at ararfeaala aa ag Ha set Tl aat gfe vant ag frater fe fasars cater saaatfan ¢ ate sfar & ale saa tar ara gaa cares Faas arate 7z faa,fae aearfia wear % fae sae ora arg wt area vel ar, Ta aH fe gat omar”ay vl oF agt HW AT VaR GSA HA HT HaaT aal & feat at? faa gaaaaBreas uw Gear a ag date agafurawt fag Fak afuaaat Fmara & Wt ag Sree HY oT THAT SF 1 (TA 5) afsat ar ger arat wy fae ae “are gata afea” Hun fafszeTy+ \afore frat Tar aT ate ST Wer BT ATA FT ATA SAT A Asa Tal fear war ar|areat + cag fret wt car gc aaa at agra ar fata ag fear ar sae weava feu ae “areer garam ate” F fee ae afywaal at deq ww Haqqe+al ay aal Sorat aT | gaa afafear gr Teal Te Ra aeTs are fase fear,ara atten fe 30 we, 1973 start ar mat afafatad fear war att (TU 6) fag ea cara A ag sere fear fe areal H afaca HT VeHT ay 1973% gar ar ate Heazet FT 1975 F area afer far ar edgar: Hazet F aferafraid Het Barer Saag ay wa 10 area aH arfer at THT aa areaaa wat slag alt sa aaa aeafea ate BT Ae 87,455 BIT AT| ea aaTYar fasta valoi sata afer arr & yerSat aw Fi Iea eqaTAT aag geore frat fis art gre 2,00,000 ere at THA aa ale aH aT PHTTer PRAT TAT ATA ga ara HAHA BaF far gata s fa vat afer el aaaaval Her AT HAT| (TA 7)| fafase facta [1971][1971].3 Gao ato ato 802: AIF BART, AAT AEH TAA ATUL ARIAT.4,5 ate ariten (fafaa) aferarfcat : 1986 at fata goiaa atfaat (fafat) Xo 1008. 1981 at salt afaar qo S51 A wey waa Veq eaITaT Fata25-11-1985 % fasta ate aaa % fase atte arate ar fora earagta aeraral qasit + fear CHUHARMAL S/0 TAKARMAL MOHNANI v. COMMISSIONER OF INCOME-TAX, M.P., BHOPAL MAY 2, 1988 ISABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] Income Tax Act, 1961: Sections 69A and 271(1)(c) Explana-tion-Assessee--Customs authorities seizing foreign watches from assessee's bedroom-Assessee not showing that he was not owner-Value of watches-Whether 'deemed income'-Assessable to tax. Penalty-Income returned less than 80% of income assessed-Penalty can be imposed. Indian Evidence Act, 1872: Section 110-Normally title follows D possession-Person shown to be in possession-Owner-Onus of prov-ing that he is not owner is on person who affirms he is not owner-Applicability of principle to income tax proceedings. Petitioner is the assessee. For the assessment year 1974-75 he submitted his return of income showing a total income of Rs.3, 113 and E stated that he derived this income from two stores which he had been running. On May 12, 1973 in a search by the Customs authorities, 565 watches of foreign make of the value of Rs.87 ,455 were seized from the petitioner's bedroom. A panchnama was prepared. The Income Tax Officer issued a notice dated January 19, 1974 to the petitioner to show cause why a sum of Rs.87 ,455 the value of the watches seized should not be treated as his concealed income and brought to tax under section 69A of the Act. He further directed issuance of notice under section 271(1)( c) of the Act. Being aggrieved the petitioner filed an appeal before the AppeUate Assistant Commissioner who dismissed the appeal holding that in view of the order passed by the Collector of Customs confiscating the watches and levying penalty of Rs.2 lakhs under the Customs Act, the Income Tax Officer was justified in including the cost of watches in the income of the assessee for the assessment year 1974-75. Thereafter on March 29, 1978 the Assistant Commissioner issued a notice of. penalty under section 271(1)(c) of the Act, imposing a pen-alty of Rs.90,000. The two appeals filed by· the petitioner were dismissed by the Income-tax Appellate Tribunal, and the petitioner sought a reference to -)( the High Conrt under section 256(1) of the Act. The High Conrt held that: (i) by virtue of the search in the house of the petitioner the watches were seized and a Panchnama was pre-pared, that under Section 110 of the India~ Evidence Act, 1872 it clearly establishes that the possession of the wrist watches was found with the petitioner, that as the petitioner did not adduce any evidence, he had not discharged the onus by proving that the wrist watches did not belong to him, the Tribunal had rightly held that the value of the wrist watches is the income of assessee, and (ii) that in view of the Explanation to section 27l(l)(c) the Department had discharged the burden of establishing. concealment. The reference was accordingly answered against the assessee. Dismissing the Special Leave Petition, HELD: 1. The expression 'income' as used in section 69A of the ,~ Income Tax Act, 1961 has a _wide meaning which meant any thing which came in or resulted in gain. I 794D I 2. Section 110 of the Evidence Act provides that where a person was found in possession of anything the onus of proving that he was not the owner was on the person who a!Ttrms that he was not the owner. The High Court in J.S. Parker v. V.B. Palekar, 94 ITR 616 held that what was meant by saying that the Evidence Act did not apply to pro-ceedings under the Income Tax Act was that the rigour of the rules of evidence contained in the Evidence Act, was not applicable but that does not mean that when the taxing authorities were desirous in invok-ing the principles of the Evidence Act in proceedings before them, they were prevented from doing so. [793G-H; 794A-B) 3. AU that section 110 of the Evidence Act does is that it embodies a salutary principle of common law jurisprudence which could be attracted to a set of circumstances that satisfy its condition. [7948 I |wage gatt—ag afaar area & afana h ages 136 % aiaada aw S faq gaat s fac’, a qTaaqe FH qeq WAT GeTrqaTTY F25 74az, 1985 % fata ate area F fees arg at TES1 Za ares F arTZTHANA GUSTER BAT aT ATS 26 fadaz, 1975afer va asa stafaerra F rqeayz 226 F aehta qardd at oft, fray are 12 a, 1973 w ara% Her eg atar-qew afafra, 1962 (fk gah aearg ‘afeftan’ wer var 2)alearer lileardta afrqda 565 wag afeat F afagen % fae fazer fearTAT aT AT afar st are 112 F att 2,00,000 aad at arfer afadifaaBet al free fear mer ar aar sea att Margen Fzla TS are ofaAT SAH CATT WITT THT are ara H gatery aaa FY afc Hwa >10 aed, 1979 & sa area wy, Fras are arat st adtera athe we fear ar8 waa, 1981& arte at at qatdt Aas a| 2. tar seta star & fe art aga frat ate areal & ara oPeeara 3AKT ATA A ATT HTT TAT) aE Hag fear mar & fe ara > gtSar qaHare, ofeat aife ar arate arta far ar ate ag areare sar aay aeq & arm we fear arm we fear we fear fear1 areat Fart ag crear fear & fe gaat saw Tar argafeera 8 ar sah fran & Hae S Hag ars dag wel at) sar ae wae Pear zfe ag ag wg ate frataa war Si aia, 1966 F ar sas sraqra arsA aeaed Ua a os creda fasa-fare F reitt we yas (cate) 6250 wayFader ar, feast qaw Fo 1167 at feast dana wie 182 ai de UT |eal THIe OTe & YGS T at ga yas saH argat Fal @dI a) art a ae waafrat a fm 1973 & ag aad arg arer sear waa fata a BAU F UE ET ATare ara BT YAS Arey csr gat ar 12 As, 1973 ar sak area WITSaata seareqes ails F sat afafear at aren 105 % ata ow aarat ard fear an, fae arer waa Fa seqTa-aeH Frday at Tato go fear an, fae arer waa Fa seqTa-aeH Frday at Tato go an, fae arer waa Fa seqTa-aeH Frday at Tato go fae arer waa Fa seqTa-aeH Frday at Tato go arer waa Fa seqTa-aeH Frday at Tato go waa Fa seqTa-aeH Frday at Tato go Fa seqTa-aeH Frday at Tato go seqTa-aeH Frday at Tato go Frday at Tato go at Tato go Tato go gofrarel at areal & aravata oheaee at aaralt AA ® fare othtHa Par ary sealaygt & arareta ofeach at carat aft att ag afaeers fear fe gat ware aT aTati 1 asta, 1974 wr aret ay facet gar fafraaa ate aewdt frarer afufaan,1974 (faa gat gam wear HATTA’ Her TAT 2) Sada freg fear far ar22 a4, 1975 BY ar sas arags, ara HY, Ha ag Fa H a, Haar are SFTafafaaa at are10 (2) & ae are aaralt alfa’ ard Het6 ara eawaa Bl agit F Tae H fae sr fear war wae Tay Tt gat aT, fray cae —wrgat & arm we fear arm we fear we fear fear arte ard fear an, fae arer waa Fa seqTa-aeH Frday at Tato go fear an, fae arer waa Fa seqTa-aeH Frday at Tato go an, fae arer waa Fa seqTa-aeH Frday at Tato go fae arer waa Fa seqTa-aeH Frday at Tato go arer waa Fa seqTa-aeH Frday at Tato go waa Fa seqTa-aeH Frday at Tato go Fa seqTa-aeH Frday at Tato go seqTa-aeH Frday at Tato go Frday at Tato go at Tato go Tato go go 208 seama ara fra afrat [1989] 1 3H0 fito To aafg aY 14-11-74 aa ager fear wat art arty A ae afanaa faa z fe agTa Ba Hal AT area Tal gar) sas afafear 5 saat, 1976 at al gas ara-Te HAT SAMSMCR HART ater Tifea TH ara area g feat ag afataatfcafeat wat at fe saa feat ardt H yea Fat ate saa afsat aeafea ara A,fart TX 2,00,000 eae at afer afaaiaa a ag AT| 3. ST eqraragsy aval ar ga THe Gere faar— 4. In the instant case, possession of the wrist watches was found with the petitioner. The petitioner did not adduce any evidence, far less H [1988] 3 S.C.R. A discharged the onus of proving that the wrist watches in question did not belong to him. Hence, the High Court held, and according to this Court rightly, that the value of the wrist watches is the income of the assessee by virtue of Section 69A of the Act. [7930-E] 5. The amendlnent to the Explanation to section 27l(l)(c) by the B Taxation Laws (Amendment) Act 1975 is prospective in effect. [795G I 6. In the instant case, the assessee had shown only a total income of Rs.3113 and subsequently the raiding party seized wrist watches worth Rs.87 ,455. The value of that income was included in the assess· able income of the assessee. The total assessable income of the assessee came to Rs.90,568 whereas the returned income was Rs.3,113 which c was certainly less than 110% of the total income and, as such, Explana· tion to section 271(1)(c) applied. Accordingly, the Revenue has dis-charged the onus of proving concealment of income. [795E] Vishwakarma Industries v. Commissioner of Income-tax, 135 D ITR 652 and Commissioner of Income Tax v. Bherulal Shrikishan, [1983] 28 Madhya Pradesh Law Journal 162, approved. 7. Though the penalty proceedings are penal in nature, in the facts of this case the onus on the Revenue has been duly dischar-ged. [79SG-H] CIVIL APPELLATE JURISDICTION: Special Leave Petition (Civil) No. 1863of1986. From the Judgment and Order dated 10.12.85 of the Madhya Pradesh High Court in Misc. Civil case No. 297of1981. F Dr. N.M. Ghatate and S. V. Deshpande for the Petitioners. Kuldip Singh, Additional Solicitor General, B.B. Ahuja and Miss A. Subhashini for the Respondents. G The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This petition for leave to appeal is directed against the judgment and order dated 10th December, 1985 of the High Court of Madhya Pradesh, Jabalpur Bench. The High Court upheld the imposition of penalty as well as the addition of H alleged concealed income in the income-tax assessment of the peti- tioner. The relevant assessment year with which we are concerned in this application is 1974-75. 12-5-1973 al gt F aret& aaarHer HT HT TE TaraltF Ha 564Hare afsat art F wey S saat taal F wp qeha, cH aeataseaAae Hyer tara a att aaa F Neupel sa sundsq% a afaardia at we at fa ce faze iarat ar ate farar ger 87,455waa at) uN Taarar vat aaa gare fear var ar, frat ag acaafargt arealt ear wt sa aaa] agar ale wast Hwa F aqaTqrar, feat are & sas Haq Hl areafra Hr fear qatar aarfs, art14-5-1973 a Mat a sat war Tar) 30-5-1973 at Gaal ae gamat Ffagsiaea gar vast wat afafatea fear qari aay aTsaa acl F, fra oe Tar araH ST a geaert feu X, sat aaval ar eaters feat ate ara ga Ufa at orararedy & sarz fear, fratsaa afeat sas TT As AT ara BT TH HTT gaat alfea’ vt fear waraT fe dtar-qen afafaaay ey arer 110 (2) are fraa 6 are at aafizal aat aT aerat a, fg 10-11-1973 aH ar sas ata Wt sad veeqa arate wt arate vet fears gafae 10-11-1973 F cH area are 6ala al var safes at aries & caer Har-aew Haat are Aes sy Ffan safe a, tar fe afafrae at are 124 (a) are afer 2, 6 ataat afafiaa aafa aH age fear mart arer 110 at scare (2) FawgaHala cH ‘HTT Tara fea’ frat attaa faarfrar et 7s ai,ara BY 4-5-1974 at feat war ar) eae Aaa Hardt a cH ararenmeareara ata fear at, ary at safaata ara & fay ata at arte31-10-1975 faze ateatsa atte at arel ar arsaer srfste gar ake20-11-75 aH % cara # far great ast, Tt edly He at TEt carfe,20-11-1975 HT aral & BIsae A age saa fear fe art oafsaraGAAS FH ATAT Bl ATA FSlAT Tel ATeaT aT Sa ATfetay BY afageerr wtwal wear agar, fraal Aira F afeat e ahaa e aaa qaaratware fRat Tat aT | sree ofefeataal Fate are gaat Aiea AH afrafag aeal F ararzqz, fara aay A aia & ana sa far 7G aaat HT AIA WT HUH GeaBUT HL AY Tary aal Hl, HAT FeTIT-eH HAST F ATM 26-12-1975 wr qatad area ofa Peart ge arte al aS are ada Fak sawTANTTAUAT FAA ATHT gre afagfes HT zy Tyr” 4. arate HISIT FW Bey eaTaTAT F ane ag acta aay a feafafaaa at are 124 (%) & ada ard Pear war arde 4 wg, 1974 ar ater12-5-1973 Bara # feu ay afareT a 6 ara a aafe FareA arefear qatar ale gafag anca wrtarfeat afafaarer gras2Z1 agdbecta dt7a fa 6 ara at afer BY are 110 ay sare (2) RataH FATAL 6 ATA|al on ate waft ae faq art at gaat fe faarcaceita era adh aerat aT)THAT# AT|ARIAK BAST, ATAT- NER FATT ALTATA Aeglae H ATAa HZa eaaTaAT fafagaa ar aaa fear mar) sea arataa F ag qiat Pe ag acta faesmifaarieat & amet vat at we ataaift, sea eararag A ag sere frat fh°| HAITTH TVS 26 fata, 1975 H aida F fafatacea: ag acta & fe art Ht afea-fear at arer 110 (2)# agare afer ard wet F fre wafer at 6 Tafaeart agin & fre MrT gaat ate’ fear war ar, fee art gre Tar FTE wtBut aval fear wat at ate gafay Hatt A saat afer a 6 ara H fae aay/aaa are ate war fear | Gea earaiaT & aqare ard H gaye Fy aH HA)i*i*saatqT Fal safe H AHA at 6 ara TEA & H fae AT are TAT 110 HAT a ZI soare aIe F (2) aha BAH & atgn fare Facile gates ar agra fxBT MT aa BY aaAT Aa H geaa oifea Far qa ar sy Baar ara gara F.HABA TAT| aT 110 Ht rare (2) F ga ware ayes a| “set alg ater stare (1) F area afargn fae oa& ate are& afamana 6 are % aex are 124 Fas (wm) F aehha vast araga WEqaa vet a ae 8, sat ara sa safer at aca fae seh, fra avez—& gaat afiaer fear war ar :, aaaTV Taher BER eae wry Te aaTeR HTT 6 mT Agate at 6 are & aafirn arafez & fre ast amar & 1” It appears that the petitioner had submitted his return of income for the assessment year 1974-75 showing a total income of Rs.3,113 in response to a notice issued under section 143(2) of the Act of the Income-tax Act, 1961 (hereinafter called 'the Act'). According to the B petitioner, he had derived his income from 2 stores, i.e. M/s. Moha-nani Fancy General Stores and M/s. Roopkala General Stores, Durg. It, however, appears that on 19th January, 1974 on the basis of the order passed by the Superintendent, Central Excise, Jagpur, dated 25th December, 1975 there was confiscation of foreign watches from the house of the petitioner and levy of penalty of Rs.2 lakhs under the c Customs Act, 1962. Accordingly, the Income Tax Officer issued a notice calling upon the assessee to show-cause why the value of the watches seized from his residence should not be treated as his income from undisclosed sources. In this connection it may be relevant to note that on 12th May, 1973 a search was made of the petitioner's bed-room from where a total of 565 wrist-watches of foreign make valued at D Rs.87,455 were seized from a suit-case and in a secret cavity of a looked steel ahnirah and also behind the almirah there were watches folded in a bundle of waste papers. A Panchnama was prepared at the same time mentioning these facts. According to the Customs Authori-ties, the petitioner found himself unable to make any statement at that time on account of which recording of statements was deferred. How-E ever, it is stated, the petitioner went out of the station on 14th May, 1973. The petitioner's statement was recorded on 13th May, 1973 as • soon as he was available. In his statement Annexure R-111 duly signed by him, he has admitted these facts and merely denied knowledge of the manner in which those watches came to be in his house. It appears from the records of the Customs case, with which we will have to deal later in S.L.P. No. 1008/86, the petitioner was given a show-cause notice as to why the period of six months fixed under section 110(2) of the Customs Act, 1962 should not be extended but no reply was given by the petitioner till 10th November, 1973 or even thereafter. Hence, by an order dated 10th November, 1973 before the G expiry of six months, time was extended by the Collector of Customs for a further period of 6 months for giving a notice as required under section 124(a) of the Customs Act, 1962. Under the proviso to sub-section 2 of section 110 of the Customs Act, 1962, a show-cause notice specifying the requisite particulars, was given to the petitioner on 4th May, 1974. In the reply the petitioner made a general denial. The H SUPREME COURT REPORTS e5. AHA BT ASAT Sa TAHITH ora afsare nt Slat Mar 2, fasara at afacen fear stat seafaa i ga qerart afrare & gaat dacaafaa fear sat afee sear saa aafan cara & fagial ar afar SvarAAR BART, AATYER TAT ALATA Aegrar! F TAs A ga eqrara ¥ gataafafreaa Fea earaTaa AF HAHTT VeaeA Bea AT AY afugfee at at feSAT INTH F eta Alisa earfompeg et, ar feat wt ear F sata Hy earfan wasala BAT AST | RA eaATAT AT ga: ga ata It aa fears fe afardta ara %searadt BT arfrare fafae afrare 8, ot arcPan 6 ata at safz at Aaya Iz mer Sat x ale faat Saar faeare HWA TT HaHa Hr feat star 3, wa A Tat facatt Sat afunant at ade & ua ag H lat dua J) 1 gafaa ea earaaaAFIT HAST SIT THratte fraten a sag fafaera caacar A area atxCHAT: FF TAH TAT aT TT araifea_ aT| aa as HA Her at amar 3 fHsear ag frateo fH faaara cater FaH carfan & ate ofaa 2 afe gat Var asgen unceiia faa & arare ot Pear 8 fad aarfra eed & fac sake ora aEWT aaa Aet aT, Ta aH fe gat gears BY a} SA asl HWA aT GaaT Ser Hwpl aac rel @ fear var ati feg ga ae H avait HH gaat a as at ateag afaae & Wt fag & ate afaaaal & arata & at og soareor Ht ot aad 2qq ATA F eat F oeq eqrarargy are fara war frond aqhad fasad avai artBare Ua H, Vat area rary H fagtat F afew Harfea ad} Pear war ar|a aT Te Ga: get fear arat aifay fa ag ga BAT AAT TAT 110 (2) Fataagents eT Haar at agit F fae agqerra anaes Maz at as ot aaa ae,ay HITTge as a wea g Pe ae are fe saa ata faat qaat & cifea fearTAT AT, SH aT IT J Mr Var PA Hl wea HATS ale ae aeal sr setSL HAMTH ATA FT aT BT TH Teas arate set gress wr Patfafafese ater arer asa aet fear var at att ga qe oe acta 8a Ft aanTwa Tat ag sews west cartal arg feafa F seq cararaa gra frararvar ag fonefe tat quar at ag et,star fe are 110 (2) & asta ageara%, Sara wa F Hanlaa wet ar|, 6. anett acta, TT Sea rarataa H amet et 7g st, ae at fH gaa afeatmT yer aearfea UAH fare arg wt area ae ar, fas afer ay ara Va oerBrae ye eaerhta sal BY ar awdl ftae cate A as at fH arfea a aracat freien AaATAT ar 1 eft, ae Talat tar &, tar fH Vea eqrarag gree Vetafrat wart % fe afsat ar ger areal at far ae ‘MrT gate alfa’ F oa fafafewe F afr Pear aay ar ate ga Wer Hi aval grey saat SAT H dea aah farTaTart areal at cag feat Ty caw Te gaa A agra ar fadta sat fear ar gawqearg sa fag ag are garet afer’ F far ae awful ar asa Hwa FH aazazal aa Aal Gorat ary gam afafad sa ae qe ga aeg Hara faare fRarcat arfad fir 30 a8, 1973 at ardt armas afufafed feat war ari afafraaHl ater 123 Fea THe BIA faa F— “123 (1). sat ag ara, fatal ag ara Adt Beaafafaan & att ga gfaagra faeara & ararcat afanda faraS fat aeafta are g, set ag atfaa wed ar arc fs F aeafeare rat F— (%) tet cara, fart tar afaaeo fat cafes F wayfear aTatT g—: (i) saeater oe atm, frat sorFata afanetafor vate; ae: (ii) fe a cafes &, fora sas & FA ara afaretafu ara &, fret are seq safer Saar carl aI FT Tay| HUA Sha US stem safer TX AT ETT; (a) feat ara car 4, sa safer IX arr, afe alg at, HYafaadta aret BT catay QA BT STAT HAT F |(2) ag ara ata, at, ata ar alt at fafafaat, afsatatc feat aca at RAY array att gat}, Ht Hela gery,TATA H afTAAT Fz, fafafase we 1” Vasu GuptaAdvocate enquiry was fixed on 30th October, 1975 for giving a personal hearing A to the petitioner, when the petitioner's Counsel appeared and sought for an adjournment to 20th November, 1975, which was granted. How-ever, on 20th November, 1975 the Counsel of the petitioner stated that the petitioner did not want to avail of the opportunity of personal hearing or even to cross-examine the witnesses in whose presence the B Panchayatnama was made at the time of the seizure of the watches. It is necessary to bear these facts in mind because it has repercussions to the notice dated 19th January, 1974, as mentioned hereinbefore issued by the Income Tax Officer to show-cause why the aforesaid sum of Rs.90,768 should not be treated as the petitioner's concealed income. The Income Tax Officer further directed issuance of the notice under C section 271(1)(c) of the Act. Being aggrieved by the said order the petitioner prderred an appeal before the Appellate Assistant Commissioner against the order dated 20th February, 1976. The Appellate Assistant Commissioner dismissed the appeal and held that in view of the order passed by the D Collector of Customs, the Income Tax Officer was justified in includ-ing the cost of the watches in the income of the assessee for the assess-ment year 1974-75. Thereafter, on 29th March, 1978 the Assistant Commissioner of the Income-tax issued notice of penalty under sec-tion 271(1)(c) of the Act, imposing penalty of Rs.90,000 minimum imposable being Rs.87,455 and maximum imposable being Rs.1,74,-E 910. Being aggrieved thereby the petitioner filed two appeals before the Income Tax Appellate Tribunal. The Tribunal by its order dated 19th August, 1980 dismissed these appeals. The petitioner has further stated that in the meanwhile the State of Madhya Pradesh initiated criminal proceedings under section 125 read with lll of the Customs• Act, 1962 and the learned Chief Judicial Magistrate, Durg, by his F order convicted the petitioner and awarded one year's rigorous impris-onment. Th~r.eafter, on 2nd November, 1982 the petitioner filed an appeal in the Court of Additional Judge in the Court of Sessions, who by his judgment allowed the appeal and acquitted the petitioner of the said criminal charge. Thereafter, there was a reference to the High Court on two ques-tions against the order of the Income-tax Tribunal under section 256(1) of the Act. The questions are as follows:- "(i) Whether, on the facts and in the circumstances of the case, was the Tribunal justified in holding that the assessee was the owner of the watches and thus including the value thereof in the assessment of the assessee? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal.was justified in holding that the depart-ment had discharged its burden for establishing the conce-alment of income by the assessee for the year under consid-eration and thus confirming the penalty of Rs.90,000 levied by the Inspecting Assistant Commissioner of Income Tax?" (Raifea gat frat 2 1)7. sa sre A 1973 % afafran go 36 arer sfaeaifia az fear qaTa ate ay TELA ATT HT TUT ATT| ATA TaTT- ATT ATT ATT AY aTfaTHLTHaay art at fader wet FH gaHaT CarsAMAT wet, fra gt Sea earaTayana age ¥ r§ at, ag aT fecarfes at Arar ary afew ayfey sea earsag sera Prat fa art & afar ar sera aa 1973 F gar at ate Herat+1975 H arta ofa fear ary eatHaa: HaReTFH AeA afaita aa Faaa Soe Mela 10 ara aH Ukr A Tae are areraad Tal Hy aEot | aeafea ate ar yer 87,455 eTt Ga aAT AT) ga aaa H Mg faare aay |1 agate ares artyer HS TT IH S| Boa earaaa Tag sere fra fHaay rer 2,00,000 ara Fl tea aT 10 aie TF aaa at PCH Sey FHT TarAA ST TT Bl AHI Tr H Ferg gatea a fe saa afer Bl FAATAT Aah FET STama | TIT a, as aaa St Fraga arta faagta aet g fag ga aTae H aayare ofefeafaat § saa arfea ardy vat oy ate Gea earatay ast aT) ag ATsfis ga earmiaa & aegtat! & aaa Hag afeafas far ar fe arler aararat ateaeafas aét a andt| faq ga aaa se avalYar wat g satis afsat srweq 87,455 wr & gafrg ag aaa agt ay qalfe ‘RIT gata afer’ yzTAHT HAT HT faa Hy TT at Gas eesre wet fear war ar 8. tet aeqftafa #, ea eararaa afaara % apegs 226 F aeitaaifaat at qa aT HW H aal arer Alara & aqeas 136 F ela ga AAAHt gers Hear tal aTSNa| fae sarge aaa ATT SY STATS| faye garag aia aATT AT TE 1 To [ta 1 1971 (3) Tao Ato TITo 802. The High Court in its order noted that the raiding party by virtue of the search entered into the bed-ro