Dharmraj Prasad Bibhuti, Son Of Late Rambrichh Sah, Resident Of Machuatoli,P.s. Kadamkuan, Distt. Patna v. Income Tax Appellate Tribunal Patna, Bench, Patna

IN THE HIGH COURT OF JUDICATURE AT PATNAMiscellaneous Appeal No.245 of 2008 ====================================================== Dharmraj Prasad Bibhuti, son of Late Rambrichh Sah, resident of Machuatoli,P.S. Kadamkuan, Distt. Patna. ... ... Appellant/s Versus 1. Income Tax Appellate Tribunal Patna, Bench, Patna. 2. The Commissioner of Income Tax (Appeals) Patna. 3. Dy. Commissioner of Income Tax, Central Circle 1, Patna. ... ... Respondent/s ======================================================Appearance :For the Appellant/s: Mr.D.V. Pathy, Advocate Ms. Manju Jha, AdvocateFor the Respondent/s: Ms. Archana Sinha, Sr. SC Mr. Sanjeev Kumar, Jr. SC ====================================================== CORAM: HONOURABLE MR. JUSTICE JYOTI SARAN and HONOURABLE MR. JUSTICE PARTHA SARTHYORAL JUDGMENT(Per: HONOURABLE MR. JUSTICE PARTHA SARTHY) Date : 08-08-2019 Heard Mr. D.V. Pathy, learned counsel assisted by Smt.Manju Jha, learned Advocate for the appellant and Smt. ArchanaSinha, learned Sr. Standing Counsel appearing for the IncomeTax Department, Bihar assisted by Shri Sanjeev Kumar, JuniorStanding Counsel. The appellant has preferred this appeal against the orderdated 14.12. 2007 passed in IT (ss) A. No. 106/Pat/05 passed bythe Patna Bench of the Income Tax Appellate Tribunal. The facts in brief are that pursuant to search and seizureoperation carried out on the residential premises of the father-in-law of the appellant namely, Deo Lal Sah, notice under section 158BC of the Income Tax Act, 1961 (hereinafter referred to as‘the IT Act’) was issued to the assessee i.e. the appellant herein.The assessment order dated 28.01.2004 (Annexure 3 to the writapplication) was passed by the Assistant Commissioner ofIncome Tax holding that the undisclosed income for the blockperiod is assessed under section 158BC read with section 144 ofIT Act to be Rs. 14,79, 897/- and tax on the total undisclosedincome to be Rs. 8, 87,938/-. It is against this order dated28.01.2004, that the appellant herein preferred an appeal beforethe Commissioner of Income Tax (Appeals) – 1, Patna whichwas registered as Appeal no. 264/A-I/03-04. By order dated03.02.2005 (Annexure 4 to the writ application), theCommissioner of Income Tax (Appeals)-1, Patna was pleased tohold that the parents-in-law of the appellant had substantialrental income and possession being evidence of ownership andthis presumption being strongest in case of cash found, theaddition of Rs. 6,18,850/- was deleted. The respondent no. 3preferred an appeal against the order dated 03.02.2005 passed bythe Commissioner of Income Tax (Appeals) before the IncomeTax Appellate Tribunal, Patna Bench. The Appellate Tribunalwas pleased to set aside the order impugned, restored the orderof the Assessing Officer and held that the learned Commissioner of the Income Tax appeals was not justified in deleting theabove addition as Section 292C had been introduced by theFinance Act, 2007 with retrospective effect from 01.10.1975 andthe presumption under section 292C had not been disclosed bythe assessee. It is against this order dated 14.12.2007 of theAppellate Tribunal that the instant appeal has been preferred bythe assessee - appellant. of the Income Tax appeals was not justified in deleting theabove addition as Section 292C had been introduced by theFinance Act, 2007 with retrospective effect from 01.10.1975 andthe presumption under section 292C had not been disclosed bythe assessee. It is against this order dated 14.12.2007 of theAppellate Tribunal that the instant appeal has been preferred bythe assessee - appellant. As per the case of the appellant a search was conducted on29.01.2002 in the residential premises of his father-in-law DeoLal Sah situated at East Lohanipur, Patna. Besides papers anddocuments, cash to the tune of Rs. 6,18,850/- was found out ofwhich a sum of Rs. 6 lacs was seized and the balance released.An inventory was prepared which is at Annexure 2 to theapplication which categorically states that the same has beenfound in the case of Deo Lal Sah (Father-in-law of the appellant)at East Lohanipur, Patna. At the same time, a search was alsoconducted at Machua Toli, the other premises of Deo Lal Sah,where the appellant, was residing and the Panchanama of whichis Annexure 1 to the application. A cursory glance of thePanchnama at Annexure-1 would transpire that no cash orjewellery etc., was found in the said search at the house wherethe appellant was residing. Pursuant to the search, notices under section 158BC of the IT Act was issued directing the appellant tofile return of the undisclosed income. The appellant filed thereturn on 09.07.2002. He also filed explanations to substantiatehis return. The assessment was completed ex-parte by orderdated 28.01.2004 of the Assessing Officer who made variousadditions and dis- allowances and also made addition in respectof the cash found to the tune of Rs. 6,18,850/- in the residentialpremises of Deo Lal Sah at East Lohanipur. It was furthersubmitted that appellant had given a statement on oath to theauthorized officer conducting search on 29.01.2002. The saidstatement on oath of the appellant is at Annexure 8 to the writapplication. In his statement the appellant had categoricallystated that the said premises where he was living belongs to hismother-in-law and father-in-law. Besides this, writtensubmissions were also filed on behalf of the appellant. A return of income for block assessment was filed onbehalf of Deo Lal Sah for the period from 01.04.1995 to29.01.2002 i.e. for assessment year from A.Y 1996-97 to 2002-03. Along with the return of income dated 25.03.2004 (Annexure10 to the application), a cash flow statement was enclosed. Itwas explained by Deo Lal Sah in reference to his cash flowstatement as to how he had accumulated the sum of Rs. 6,13,000/- from his rental income. The Assessing Officer waspleased to pass assessment order dated 28.01.2004 in case of theappellant for the assessment year from A.Y 1996-97 to 2002-03. From perusal of the order dated 28.01.2004 of theAssessing Officer it would transpire that with respect to the cashso found, the appellant in his submission dated 09.05.2003 hadasserted that the cash to the tune of Rs. 6,18,850/- had beenfound at the East Lohanipur residence of his father-in-law DeoLal Sah; that the seized money belonged to Deo Lal Sah and thatthe assessee-appellant was not residing with his father-in-law atLohanipur. It was further stated that the appellant’s father-in-lawin his submission dated 09.10.2003 had also informed regardingthe source of his cash flow to the tune of Rs. 6,18,850/-.However, for the reasons stated in paragraph 10.5 of the orderdated 28.01.2004, the contention of the appellant with respect tothe ownership of the cash being that of Deo Lal Sah was rejectedinter alia on grounds that, the assessee’s father-in-law neverappeared in response to the two summons issued under section131 of the IT Act; that his father-in-law never filed his return ofincome; that he failed to furnish a balance sheet or the cash flowstatement for any assessment year falling in the block period andthat it could not be expected that a 76 years old person would keep his entire life saving of Rs. 6,18,850/- in cash in view of thepoor law and order condition. It was further stated that thoughthe assessee was not the owner of the residential houses, hismother-in-law owned the house at Machuatoli where theassessee resided and father-in-law owned the house at Lohanipurwhere the parents-in-law resided and the cash was found. It wasobserved that the assessee used to live with his father-in-law andmother-in-law at Lohanipur and that when the cash was seized,the wife of the assessee was present in the house at Lohanipur. In view of the above facts, the total undisclosed income,after adding the unexplained cash to the tune of Rs. 6,18,850/-was assessed as Rs. 14,79,879/- and tax on total undisclosedincome for the block period at the rate of 60 % was assessed asRs. 8,87,938/-. The appellant herein preferred an appeal whichwas registered as Appeal No. 264/A-I/03-04 before theCommissioner of Income Tax (Appeals) -1, Patna. With respectto the addition of Rs. 6,18,850/- which was the cash found at theresidential premises of the appellant’s father-in-law, theCommissioner of Income Tax (Appeals), Patna in his order dated03.02.2005 held as here under :- “Regarding the addition of Rs.6,18,850/- in respect of cash found at theresidential premises of the appellant’sfather-in-law, I find that the parents-in- law of the appellant were having only theappellant’s wife as the only issue and atthe same time they had substantial rentalincome which is evident from thecommercial location of the building atMain Road, Lohanipur, Patna. Moreover,possession is evidence of ownership andthis presumption is strongest in the case ofthe cash found. For this view the relianceplaced on Ashok Kumar v CIT 160 ITR497(MP), CIT v. K.T.M.S. Mahmood 228ITR 130 (Mad), Kantilal Chandulal &Company v CIT 130 ITR 898 (Kol) andChuharmal v. CIT 172 ITR 250 (SC). In view of the above judgments, itcannot be said that the assesse was merelyin possession without background proof ofownership potential. The rental incomefrom the immovable property and the factthat the appellant's parents-in-law neveropened any bank a/c in their life time go toshow that the appellants parents-in-lawhad the potential to accumulate cash out oftheir income earned not only during theBlock Period but also before the BlockPeriod. In view of this position of factsand circumstances, the addition of Rs.6,18,850/- is deleted. …” The respondent no. 3 feeling aggrieved by the orderdated 03.02.2005 of the C.I.T (A), Patna preferred an appealbefore the Income Tax Appellate Tribunal, Patna Bench. A crossobjection was also filed on behalf of the assessee. Both theappeals of the revenue and cross objections filed by the assesseewere partly allowed by order dated 14.12.2007 passed by theIncome Tax Appellate Tribunal. However, with respect to thecash seized from the residential premises of the father-in-law of the appellant at Lohanipur, the learned Appellate Tribunal inparagraph 15 of its order dated 14.12.2007 was pleased to holdas here under :- “15. We find that the factsnarrated by the AO have not beendisproved by the assessee by producingany cogent evidence. It is also to benoted that section 292 C has beenintroduced by the Finance Act, 2007with retrospective effect from01.10.1975. Thus, the presumption ofownership is attracted. We have alsogone through the assessment order inthe case of Shri Deo Lal Sah.Consideringthefactsandcircumstances of the case and also theassessment order of Shri Deo Lal Sah,we are of the considered view that thepresumption u/s 292C has not beendisclosed by the assessee. We,therefore, hold that the learned CIT (A)was not justified in deleting the aboveaddition. We, therefore, set aside theorder of the learned CIT(A) and restorethat of the AO on this issue. Thisground of the revenue is allowed”. It was submitted by learned counsel for the appellant that It was submitted by learned counsel for the appellant that admittedly both the houses at Lohanipur as also Machuatoliwere owned by the appellant’s parents-in-law. While his father-in-law was residing in the house at Lohanipur and the cash of Rs.6,18,850/- was also seized from the said residential premises atLohanipur, the appellant was residing in the house of his mother-in-law situated at Machuatoli, Patna. Admittedly, from thePanchnama dated 29.01.2002 which is signed both by theauthorities of the Income Tax as also the appellant and which hasbeen brought on record as Annexure 1 to the application, no cashwas seized from the residence at Machuatoli where the appellantwas residing. Referring to the submissions made by the appellant’sfather-in-law and which has been recorded in paragraph no. 10 ofthe assessment order dated 28.01.2004, it is submitted that theappellant’s father-in-law had filed his written submissions on22.12.2003. Even earlier in response to the notice under section131 of IT Act dated 27.08.2003 his father-in-law had in hissubmissions dated 09.10. 2003 already informed regarding thesource of cash of Rs. 6,18,850/-. The cash of Rs. 6,18,850 wasfurther dealt with in detail in grounds 7 on page 13 of the orderdated 03.02.2005 of the CIT(A), Patna. However, not taking thematerial fact into consideration that the recovery of cash to the tune of Rs. 6,18,850/- had taken place from the house of theappellant’s father-in-law at Lohanipur where admittedly theappellant was not residing and that the appellant’s father-in-lawhad filed the return of income for the block period explaining thesaid cash by a cash flow statement showing the same to havebeen accumulated from the rental income, nevertheless theIncome Tax Appellate Tribunal committed an error in holdingthat pursuant to the introduction of section 292C of the IT Act,the presumption of ownership was attracted and that theappellant not having disclosed the same the C.I.T (A) was notjustified in deleting the above addition of the recovered cash tothe tune of Rs. 6 lacs. On the other hand, Ms. Archana Sinha, learned Sr.Standing Counsel for the Income Tax Department contended thatthe wife of the appellant happens to be the only child of herparents. Although on the search and seizure, the cash to the tuneof Rs. 6,18,850/- of which Rs. 6 lacs was seized is said to havebeen recovered from the residential premises at East Lohanipur,Patna, but the appellant herein had in his statement on oath on29.01.2002, which has been brought on record as Annexure 8 tothe application admitted that he was “Ghar-jamai” and thatbesides his wife, his father-in-law has no other legal heir. Further the appellant’s wife was present at her parent’s place when theseizure of Rs. 6,18,850/- in cash took place from the house atEast Lohanipur. It was further submitted that the assessmentorder had been rightly passed and there was no illegality in thesame. The Commissioner of Income Tax (Appeals) in theappellate order dated 03.02.2005 had committed an error inrelying upon the unsupported affidavit of the appellant. the appellant’s wife was present at her parent’s place when theseizure of Rs. 6,18,850/- in cash took place from the house atEast Lohanipur. It was further submitted that the assessmentorder had been rightly passed and there was no illegality in thesame. The Commissioner of Income Tax (Appeals) in theappellate order dated 03.02.2005 had committed an error inrelying upon the unsupported affidavit of the appellant. It was further submitted on behalf of the respondents thatfor good reasons as narrated in the assessment order, the cashfound was held to be the amount belonging to the assessee -appellant and not of his father-in-law. Thus, this beingunexplained money under section 69A of the IT Act, as the samehad neither been explained by the appellant nor his father-in-law,it was correctly deemed to be the income of the assessee -appellant for such financial year. It was further submitted thataccording to section 132(4A) of the IT Act where any books ofaccount, other documents money etc., are found in possession orcontrol of any person in course of search, it may be presumedthat the same belongs to such person and as such it was correctlypresumed in the instant case that the seized cash belonged to theappellant. It was further submitted that as per section 158BB(3)of the IT Act, the burden of proving that any undisclosed income had already been disclosed in any return of income filed by theassessee before the commencement of search or of therequisition shall be on the assessee himself. This burden, nothaving been discharged by the assessee, the recovered cash to thetune of Rs. 6,18,850/- had rightly been added to the income ofthe assessee for the concerned block period. The learned Sr. Standing Counsel for the Income TaxDepartment, in support of her submissions had relied on thejudgments rendered in the case of Daya Chand v. Commissionerof Income Tax reported in 250 ITR 327; Sukh Ram v. AssistantCommissioner of Income Tax reported in 285 ITR 256 andChuharmal v. Commissioner of Income Tax, MP reported in 172ITR 250 (SC). In his reply Mr. D.V. Pathy learned counsel appearing forthe appellant submitted that Chapter 14-B deals with the specialprocedure for assessment in search cases. Section 158B definesblock period to mean the period comprising previous yearsrelevant to six assessment years preceding the previous year inwhich the search was conducted. Further, section 158B(b)defines undisclosed income to include any money which has notbeen or would not have been disclosed for the purposes of thisAct or any expense, deduction or allowance claimed under this Act which is found to be false. The learned counsel also relied onthe judgments in the case of Chuharmal v. Commissioner ofIncome Tax, MP reported in 172 ITR 25 and Commissioner ofIncome Tax v. Ravikant Jain reported in 250 ITR 141. It wasfurther submitted that although the father-in-law of the appellantcould not appear before the A.O. for reasons already explained,nevertheless he had filed his written submissions through hisadvocate. Concluding it is submitted that even for the sake ofargument if the charge made is accepted, section 113 of the ITAct provides that the total undisclosed income of the blockperiod, determined under section 158B(C) shall be chargable totax at the rate of 60 %. It is after having heard learned counsel for the parties, thatthis court by order dated 04.12.2014 condoned the delay in filingof instant appeal and by order dated 26.02.2015, the appeal wasadmitted for hearing on the following substantial questions oflaw: “(i) Whether in view of ownership andpossession of all immovable properties byDeo Lal Sah, cash found and seized incourse of search at his residence areattributable to him alone particularly, inabsence of any material or evidence havingbeen found in course of search indicatingderivation or ownership thereof by theappellant ? It is after having heard learned counsel for the parties, thatthis court by order dated 04.12.2014 condoned the delay in filingof instant appeal and by order dated 26.02.2015, the appeal wasadmitted for hearing on the following substantial questions oflaw: “(i) Whether in view of ownership andpossession of all immovable properties byDeo Lal Sah, cash found and seized incourse of search at his residence areattributable to him alone particularly, inabsence of any material or evidence havingbeen found in course of search indicatingderivation or ownership thereof by theappellant ? (ii) Whether the presumption by therespondent no. 1 under Section 292C of theAct that the cash found and seized belongsto the appellant stand rebutted byacceptance of ownership of such money asundisclosed income by Deo Lal Sah coupledwith the ownership of all the immovableproperties by him ? (iii) Whether in view of Section 292Cof the Act cash found in the residenceowned by Deo Lal Sah is necessarilypresumed to be his undisclosed income ?(iv) Whether in view of the offer made byDeo Lal Sah to tax the entire cash found incourse of search as his undisclosed income,the refusal to do so in absence of anymaterial to the contrary is illegal ?” The relevant facts for the purposes of the instant appealare that admittedly the two houses, one at East Lohanipur, Patnaand the other at Machuatoli, Patna are owned by Deo Lal Sahand his wife who are the parents-in-law of the appellant. Searchand seizure took place at the residential premises at both placeson 29.01.2002. From perusal of the Panchnama which wasprepared in-triplicate and is signed by the authorized officer ofthe Income Tax Department as also the appellant herein, ittranspires that the appellant was residing in the said house atMachuatoli, Patna and that admittedly no cash etc., was found incourse of the search which is also confirmed from paragraph 5 ofthe said Panchnama. Further, from paragraph 8 thereof, it would transpire that the search commenced at 8.30 AM on 25.01.2002and closed after eight hours at 4.30 PM on the same day. Further,from perusal of the inventory of cash found/seized in case ofDeo Lal Sah, father-in-law of the appellant at his residentialpremises at East Lohanipur, Patna, dated 29.1.2002, copy ofwhich has been brought on record as Annexure 2 to the writapplication, it would transpire that a total sum of Rs. 6,18,850/-in cash was found out of which Rs. 6 lacs in cash was seized andthe balance sum of Rs. 18,850/- was released. It would also be relevant to state that Deo Lal Sah, inresponse to summons issued under section 131 of the IT Actfiled his written submissions categorically stating that the cashfound at his Lohanipur residence belonged to him. The writtensubmissions so filed, while admitting ownership of the cash ofRs. 6,18,850/-, also explained the same with reference to cashflow statement. It would be relevant to take note of the fact that admittedlyboth the houses, at East Lohanipur as also at Machuatolibelonged to Deo Lal Sah and he had rental income from thesame. The undisputed facts which emerge in this case are: (a) the house at Lohanipur belonged to Deo Lal Sah; (b) Deo Lal Sah was residing in the said house at Lohanipur; (c) the recovery of Rs. 6,18,850/- was made from thehouse at Lohanipur; (d) Deo Lal Sah admitted that the seized cash belonged tohim and also filed a tax return for block assessment along withthe cash flow statement explaining the recovered cash (Annexure10 to the application). It would be relevant to take note of the fact that admittedlyboth the houses, at East Lohanipur as also at Machuatolibelonged to Deo Lal Sah and he had rental income from thesame. The undisputed facts which emerge in this case are: (a) the house at Lohanipur belonged to Deo Lal Sah; (b) Deo Lal Sah was residing in the said house at Lohanipur; (c) the recovery of Rs. 6,18,850/- was made from thehouse at Lohanipur; (d) Deo Lal Sah admitted that the seized cash belonged tohim and also filed a tax return for block assessment along withthe cash flow statement explaining the recovered cash (Annexure10 to the application). All these facts go to show that the recovered cash in nocase could be added to the total income of the appellant since notonly it was recovered from a house which belonged to theappellant’s father-in-law Deo Lal Sah, the father-in-law of theappellant also laid claim to it and there is no other evidence onrecord to attach the cash recovered, with the appellant. In suchcircumstances, it was Deo Lal Sah alone who would bechargeable to tax at the rate of 60 % as provided under section113 of the IT Act after determination of the same under section158 BC of the IT Act. A lot of stress has been laid by learned Sr. StandingCounsel appearing for the Income Tax Department on the factthat the father-in-law of the appellant Deo Lal Sah had nosource of income which could explain the large-sum of Rs.6,18,850/- in cash being recovered from his residential premises. It was also contended that the daughter of Deo Lal Sah i.e. thewife of the appellant was present when the cash was recoveredfrom the house at Lohanipur and that the appellant had in hisstatement on oath (Annexure 8 to the writ application) made on29.01.2002 had accepted that besides his wife who was the onlychild of her parents, there were no other legal heir and that hewas a “Ghar-jamai”. By stressing on these facts, learned Sr. Standing Counselhas tried to convince the Court that even though the recovery hastaken place from Lohanipur where Deo Lal Sah was residing andnot from Machuatoli where the appellant was residing,nevertheless it was the appellant who was accumulating theamount seized and the cash found at the residence of Deo LalSah belonged to the appellant. The submissions made by the learned Sr. StandingCounsel for the Income Tax Department in justification of theimpugned orders fails to persuade us. Besides that the reasonsnarrated above are merely conjectural, it is admitted that the wifeof the appellant was the only child of her parents and thedistance between the two houses at Lohanipur and Machuatoli,both in the town of Patna is not much. In such circumstances itcannot be a matter of surprise if the daughter was present at her parent’s place when the search and seizure by the I.T.Department took place. It is not the case of the department thatthe house where the appellant and his family is residing does notbelong to the appellant’s mother-in-law. As such, where theappellant admittedly is living in the house belonging to hismother-in-law, it was natural for him to make the statement onoath on 29.01.2002 that he was a “Ghar-jamai” meaningthereby, that the appellant was living in a property/residentialpremises in Machuatoli which belonged to his parent’s-in-law. Inour opinion nothing more can be drawn/deduced from the saidstatement of the appellant. In view of the above as also in view of the substantialquestion of law framed, it would be relevant to quote section292C herein below for ready reference :- “Presumption as to assets, books of account,etc.’ 292C. [(1)] Where any books of account,other documents, money, bullion, jewellery orother valuable article or thing are or is found inthe possession or control of any person in thecourse of a search under section 132 or surveyunder section 133A, it may, in any proceedingunder this Act, be presumed- In view of the above as also in view of the substantialquestion of law framed, it would be relevant to quote section292C herein below for ready reference :- “Presumption as to assets, books of account,etc.’ 292C. [(1)] Where any books of account,other documents, money, bullion, jewellery orother valuable article or thing are or is found inthe possession or control of any person in thecourse of a search under section 132 or surveyunder section 133A, it may, in any proceedingunder this Act, be presumed- (i) that such books of account, other documents,money, bullion, jewellery or other valuablearticle or thing belong or belongs to such person; (ii) that the contents of such books of accountand other documents are true; and (iii) that the signature and every other part ofsuch books of account and other documents which purport to be in the handwriting of anyparticular person or which may reasonably beassumed to have been signed by, or to be in thehandwriting of, any particular person, are in thatperson's handwriting, and in the case of adocument stamped, executed or attested, that itwas duly stamped and executed or attested by theperson by whom it purports to have been soexecuted or attested. (2) Where any books of account, otherdocuments or assets have been delivered to therequisitioning officer in accordance with theprovisions of section 132A, then, the provisionsof sub-section (1) shall apply as if such books ofaccount, other documents or assets which hadbeen taken into custody from the person referredto in clause (a) or clause (b) or clause (c), as thecase may be, of sub-section (1) of section 132A,had been found in the possession or control ofthat person in the course of a search undersection 132.” Submissions of learned Sr Standing Counsel for theIncome Tax Department is that the seized cash was unexplainedmoney in terms of section 69A of the IT Act and the same hadnot been explained either by the appellant or his father-in-law. Itwas further submitted that in terms of section 158BB(3) of the ITAct, the burden of proving to the satisfaction of the AssessingOfficer that any undisclosed income had already been disclosedin any return of income filed by the assessee before thecommencement of search was on the assessee. These two objections are answered in the writtensubmission filed by Deo Lal Sah before the Assessing Officer inwhich, not only he accepted that the cash recovered in the search on 29.01.2002 at his residential premises in Lohanipur belongedto him but also filed his return of income for block assessment inform 2(b) (Annexure 10), showing the aforesaid seized amountand enclosing with his return, the cash flow statement explainingthe seized cash. Thus, in so far as Section 69A of the IT Act isconcerned, in view of the facts explained, it was not a case wherethe assessee offered no explanation, in stead Deo Lal Sah, fromwhose house the said cash was seized, accepted the same to behis cash and the assessee who is the appellant herein alsocategorically stated that the said cash was of his father-in-lawDeo Lal Sah. In so far as section 158BB(3) is concerned, theundisclosed income had already been disclosed in the return ofincome filed by Deo Lal Sah who also accepted it in his writtensubmissions. In our opinion thus, this section 158BB(3) has noapplicability in the present case. Section 132 (4A) of the I.T. Act provides that where anybooks of Accounts, other documents, money etc. is found inpossession or control of any person in course of search, it may bepresumed that the same belongs to such person. It is apparentfrom the facts of the present case that not only has the seizedcash been found from the house of Deo Lal Sah, father-in-law of the appellant, the said Deo Lal Sah in his written statement hasalso claimed ownership of the said cash. Thus, even in law as persection 132 (4A) of the I.T. Act the cash seized at the Lohanipurresidence would be presumed to belong to Deo Lal Sah and notthe appellant. Section 132 (4A) of the I.T. Act provides that where anybooks of Accounts, other documents, money etc. is found inpossession or control of any person in course of search, it may bepresumed that the same belongs to such person. It is apparentfrom the facts of the present case that not only has the seizedcash been found from the house of Deo Lal Sah, father-in-law of the appellant, the said Deo Lal Sah in his written statement hasalso claimed ownership of the said cash. Thus, even in law as persection 132 (4A) of the I.T. Act the cash seized at the Lohanipurresidence would be presumed to belong to Deo Lal Sah and notthe appellant. The judgments cited by the respondents are being dealtwith herein below :- (1) Daya Chand v. Commissioner of Income Tax (supra) :-In this case the cash credit were found in the books of accountseized under section 132. It was held that the requirement ofsection 68 has to be fulfilled by the assessee, even where cashcredit are found in the books seized under section 132 (4A). Thefacts of the said case and the case in hand being absolutelydifferent and distinguishable, the ratio of the said judgment hasno applicability here. (2) Sukh Ram v. Assistant Commissioner of Income Tax(supra) : In this case large amount of cash was recovered fromthe residential premises of the assessee. The tribunal noted thatthe books of account did not show any connection with the cashrecovered from the assessee. The tribunal held that the assesseehad not been able to rebut the presumption under section 132(4A) of the I.T. Act and held that the addition made under section 69A of the Act was justified. It was held that when anassessee is found in possession of currency, it is for him to provethat he is not the owner of the currency and it is not for therevenue to prove that the assessee is the owner of the currencyfound in his possession. In our opinion, the position settled in case of Sukh Ram(supra), in fact supports the case of the appellant because in thepresent case it is Deo Lal Sah, from whose residential premisesthe cash was seized who is also claiming to be the owner of thesaid seized cash but is not being believed by the Revenue. (3). Chuharmal v. Commissioner of Income Tax, MP(supra) : This case was cited with reference to pages 254 and 255by the learned Sr. Standing Counsel for the Income TaxDepartment dealing with the section 110 of the Evidence Act.From perusal of the relevant pages it would transpire that section110 of the Evidence Act stipulates that when the question iswhether any person is owner of anything of which he is shown tobe in possession, onus of proving that he is not the owner is onthe person who affirms that he is not the owner. It was observedthat it is well settled principles of law, unless contrary isestablished, that title always follows possession. In our opinion this judgment also is of no assistance to the respondents as the seizure of the cash has taken place in thehouse of Deo Lal Sah, who happens to be the father-in-law of theappellant and resides at Lohanipur, whereas the appellant residesat Machuatoli. Thus, even with the assistance of the said section110 of the Evidence Act, the seized cash cannot be presumed tobe that of the appellant as he was not in possession thereof, andas such the onus of proving that he is not the owner would alsonot be on the appellant. Having considered the submissions made on behalf of theappellant and the respondents and on going through the materialsavailable on the record of the case, we, in absence of anyevidence present connecting the money seized with theappellant, come to the following conclusions : (i) The cash found and seized in course of searchon 29.01.2002 at the East Lohanipur residentialpremises of Deo Lal Sah (father-in-law of theappellant) belongs to Deo Lal Sah alone and notthe appellant. Having considered the submissions made on behalf of theappellant and the respondents and on going through the materialsavailable on the record of the case, we, in absence of anyevidence present connecting the money seized with theappellant, come to the following conclusions : (i) The cash found and seized in course of searchon 29.01.2002 at the East Lohanipur residentialpremises of Deo Lal Sah (father-in-law of theappellant) belongs to Deo Lal Sah alone and notthe appellant. (ii) The respondent authorities in drawingpresumption in terms of section 292C of the ITAct that the cash found and seized belongs to theappellant, have committed serious error in law as section 292C provides that if money is found inpossession of any person in course of searchunder section 132, it may in any proceedingunder the Act be presumed that such moneybelongs to such person and thus in the instantcase since the money/seized cash was found inpossession of Deo Lal Sah, it could not havebeen presumed to belong to the appellant. (iii) The cash was found at the residence wherenot only Deo Lal Sah was residing but he alsoclaimed the said cash and thus it will necessarilyhave to be presumed to be his undisclosedincome in terms of section 292C of the IT Act.(iv) In view of the fact that Deo Lal Sah filedreturn of income for block assessment along withthe cash flow statement explaining the seizedcash, there remains no doubt that the refusal ofthe respondents to not accept the entire cashfound in course of search to be the undisclosedincome of Deo Lal Sah, in absence of anymaterial to the contrary, is illegal. The substantial questions of law so framed, are answered accordingly. In view of the facts and circumstances stated herein above,we find merit in the instant appeal and in view of the findingsarrived at in the preceding paragraphs, we allow this appeal toquash the order dated 14.12.2007 of the Income Tax Tribunal inso far as it restores the order of the Assessing Officer to hold thecase of Rs. 6,18,850/- seized from the house of Deo Lal Sah asundisclosed income of the appellant, to add to his total income. However, in the facts of the case there shall be no order as to costs. (Jyoti Saran, J) ( Partha Sarthy, J) Prakash/- AFR/NAFRAFRCAV DATENAUploading Date16.08.2019Transmission DateNA