Tc/51/2006 Of M.sundaram v. The Asst. Commr. Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE MR.JUSTICE P.D.DINAKARAN M.Sundaram..Appellant The Assistant Commissioner of Income Tax,Central Circle II,Coimbatore. ..Respondent Appeals under Section 260A of the Income Tax Act, 1961 against theorder of the Income Tax Appellate Tribunal, Madras, 'D' Bench in I.T.A.Nos.1579 & 1580(Mds)/96 for the assessment years 1991-92 and 1992-93against the order dated 10.6.1996 and made in IT Appeal Nos.313-C & 314-C/96-97 on the file of the Commissioner of Income-Tax (Appeals) Coimbatoreagainst PAN/GIR.No.S-702/Cent.Cir.II/CBE dated 29.3.1996 for the Assesmentyears 1991-92 & 1992-93 on the file of The Assistant Commissioner ofIncome Tax, Central Circle-II, Coimbatore. (Judgment of the Court was delivered by P.P.S.Janarthana Raja, J.) The present appeals are filed under Section 260A of the Income TaxAct, 1961 by the assessee against the order passed in I.T.A. Nos.1579 &1580(Mds)/96 by the Income Tax Appellate Tribunal, Madras, 'D' Benchraising the following substantial questions of law. "1. Whether the Tribunal is correct in confirming theaddition made in the respective assessment yearsinvoking Section 69A of the Act in the re-openedassessments? 2. Whether the Tribunal is correct in concluding thatthe Appellant had not discharged his burden in order toestablish on the fact of the ownership of the moniesdeposited in his bank accounts in spite of the swornstatements recorded on oath from the Appellant andother cogent reasons placed on record in support of hisstand?" 2.The facts leading to the above questions of law are as under: The relevant assessment years are 1991-92 and 1992-93. The assesseefiled Return of income declaring salary from M/s.United Bleachers Limited,Mettupalayam and M/s.Sree Kanniamman Cotton Textiles (Pvt.) Ltd., Avanashibesides interest income from bank deposits. On the basis of the newspublished in the newspapers on 23.8.91, the Income Tax authoritiesconducted a search operation at Canara Bank and State Bank of India,Avanashi. The Revenue found a sum of Rs.2,04,27,106/- credited at variousbranches of State Bank of India and Central Cooperative Bank in the nameof the assessee. The assessee explained that the above said amountbelonged to one Mr.Verma and one Mr.Jain who came for bleaching work toM/s.United Bleachers Limited. However, the assessee could not provide theaddress and other details of the said Mr.Verma and Mr.Jain. Therefore,the Assessing Officer added the entire amount as unexplained money underSection 69A of the Income Tax Act to the total income of the assessee. Thefirst appellate authority had confirmed the order of the AssessingOfficer. Aggrieved by the order, the asessee filed an appeal to the IncomeTax Appellate Tribunal. The Income Tax Appellate Tribunal dismissed theappeal and confirmed the order of the lower authorities. 3.We heard the counsel appearing for the assessee. Admittedly, asum of Rs.2,04,27,106/- was credited in six bank accounts maintained bythe assessee at State Bank of India, Avanashi, Central Cooperative Bank,Avanashi and Primary Agricultural Co-operative Bank, Mettupalayam. Theassessee through his father Mr.Mariappa Goundar withdrew all the moneyjust prior to the date of raid. Therefore, the assessee could haveexplained before the Assessing Officer to whom the money was paid afterthe same was withdrawn from the banks. The only claim by the assesseebefore the Assessing Officer was that the entire money belonged to oneMr.Verma and Mr.Jain of Ahmedabad. According to the assessee, the abovesaid two persons came for bleaching work to M/s.United Bleachers Limited.When the assessee claims that Mr.Verma and Mr.Jain, who came for bleachingwork to M/s.United Bleachers Limited, handed over the huge sum of moneyfor safe custody, he might have known the address, telephone number andother particulars. No businessman will receive a sum of Rs.2 Croreswithout knowing the identity and address. When the assessee claimed thathe did not know the address of Mr.Verma and Mr.Jain, it was obvious thatthe assessee wanted to suppress something from the knowledge of theAssessing Officer. The admitted facts were that the entire sum wascredited in the bank accounts of the assessee by cash and the assesseethrough his authorised representative, Mr.Mariappa Goundar, who is noneother than the father of the assessee, withdrew the entire money from thebanks just prior to the date of the raid. It is clear that the entire money was in possession of the assessee. The assessee is receiving asmall amount as salary. The assessee was not disclosing the true pictureof how he came into possession of such huge amount. Since the entireamount was deposited in the assessee's accounts and the assessee was notprepared to disclose the source of its receipt, the natural presumptionwould be that the assessee was the owner of the entire money. It was, forthe assessee, to prove that the money did not belong to him. The assesseefailed to prove that the money does not belong to him and hence, theauthorities were right in assessing under Section 69A of the Income TaxAct. 4.In view of the foregoing conclusions, we find no error in theorder of the Income Tax Appellate Tribunal and requires no interference.Hence no substantial questions of law arise for consideration of thisCourt. Accordingly, the above tax case is dismissed. Consequently theconnected TCMP No.45 of 2006 is closed. No costs. km Sd/Asst.Registrar /true copy/ Sub Asst.Registrar To 1. The Assistant Registrar,Income Tax Appellate Tribunal,Rajaji Bhavan, Besant Nagar, Chennai-90. 2. The Assistant Commissioner of Income Tax,Central Circle II,Coimbatore. 3. The Commissioner of Income-Tax (Appeals),Coimbatore. 1 cc To Mr.S.Sridhar, Advocate, SR.6184. GM(CO)RVL 03.03.2006 Tax Case (Appeal) Nos.51 & 52 of 2006