Sh. Shiv Kant Sharma, Mathura V. The I.T.O.-3(4), Mathura

ITA 208/AGR/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2145 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-07-2013
• Assessment Year: 1996-1997
• Appeal Filed On: 06-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L MAURYA
• Assessee Lawyers: MAHESH AGARWAL
• Keywords: Unexplained investment; Business income; Salary income; Opportunity of being heard; Corroborative evidences
• Section: 142(1); 69; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 208/AGRA/2011 ASSTT. YEAR : 1996-97 SHIV KANT SHARMA, VS. INCOME-TAX OFFICER, 1736, GALI RAWALIA, 3(4), MATHURA. KACHCHI SARAK, MATHURA. (PAN: CBLPK 2902 D) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MAHESH AGARWAL, C.A. RESPONDENT BY : SHRI S.L. MAURYA, SR. D.R. DATE OF HEARING : 11.07.2013 DATE OF PRONOUNCEMENT OF ORDER : 19.07.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-I, AGRA DATED 09.02.2011 FOR THE ASSESSMENT YEAR 1996- 97. 2. THIS APPEAL WAS EARLIER DISMISSED IN DEFAULT OF ASSESSEE IN PUTTING APPEARANCE ON THE DATE OF HEARING. HOWEVER, EXPARTE ORDER DATED 02.04.12 WAS RECALLED BY ALLOWING MISCELLANEOUS APPLICATION OF T HE ASSESSEE. WHEN THE APPEAL WAS RE-FIXED FOR HEARING, THE LD. COUNSEL FOR THE A SSESSEE TWICE SOUGHT ADJOURNMENTS. HOWEVER, ON THE DATE OF HEARING ON 02 .01.2013, NONE APPEARED AT THE TIME OF HEARING OF APPEAL, THEREFORE, THE APPEA L WAS HEARD IN ABSENCE OF ITA NO. 208/AGRA/2011 2 ASSESSEE. THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE WAS ALSO EXPARTE BEFORE THE AO AN D DID NOT COMPLY WITH THE STATUTORY NOTICES AND ALSO FAILED TO PRODUCE THREE PERSONS EVEN BEFORE THE LD. CIT(A), WHO HAVE CLAIMED OWNERSHIP OF THE SILVER AR TICLES IN QUESTION DESPITE GIVING OPPORTUNITY BY THE LD. CIT(A). THEREFORE, TH E APPEAL OF THE ASSESSEE HAS NO MERIT AND THE SAME MAY BE DISMISSED. THE APPEAL WAS DECIDED AGAINST ASSESSEE VIDE ORDER DATED 11.01.2013. THE ASSESSEE AGAIN MOV ED MA NO. 09/2013 FOR RECALLING OF EXPARTE ORDER DATED 11.01.13 WHICH WAS ALLOWED VIDE ORDER DATED 17.05.13 AND APPEAL WAS AGAIN FIXED FOR HEARING ON MERITS. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT IN THIS CASE, ASSESSMENT WAS COMPLETED EXPARTE U/S. 144 OF THE IT ACT VIDE ORDER DATED 24. 03.1999 ON THE BASIS OF THE SEIZURE OF SILVER ARTICLES VALUED AT RS.5,01,273/- FROM THE ASSESSEE, WHICH WAS FOUND IN HIS POSSESSION WHILE TRAVELING FROM DELHI TO AGRA ON 26.06.1995 AT HAZRAT NIZAMUDDIN RAILWAY STATION ALONG WITH HIS ANOTHER C OMPANION SHRI JAI PRAKASH. THE ASSESSEE WAS FIRSTLY APPREHENDED BY HAZRAT NIZA MUDDIN POLICE, NEW DELHI AND LATER ON THE SILVER ARTICLES WERE SEIZED BY ADI T (INV.), NEW DELHI CONSEQUENT TO WARRANT OF AUTHORIZATION ISSUED U/S. 132A. ON TH E BASIS OF THE ABOVE SEIZURE, INITIALLY, ORDER U/S. 132(5) WAS PASSED BY ACIT, CI RCLE-1, MATHURA AND THE SILVER ARTICLES FROM THE POSSESSION OF THE ASSESSEE WERE S EIZED BY THE DEPARTMENT. THE ASSESSEE IN RESPONSE TO NOTICE U/S. 142(1) FILED TH E RETURN OF INCOME SHOWING ITA NO. 208/AGRA/2011 3 RS.5,370/- AS INCOME FROM SALARY RECEIVED FROM SHRI KAILASH CHAND CLAIMING TO BE HIS EMPLOYEE. IN THE INITIAL PROCEEDINGS BEFORE THE DEPARTMENT, THE ASSESSEE TOOK THE PLEA THAT HE WAS CARRYING THE SILVER ARTICLES F ROM CERTAIN ANGARIAS (CARRIER) OF DELHI TO MATHURA ON THE INSTANCE OF HIS EMPLOYER SH RI KAILASH CHAND. HOWEVER, NO SUPPORTING EVIDENCE COULD BE PRODUCED BY THE ASSESS EE AS TO THESE SILVER ARTICLES BELONGING TO WHOM. THOUGH THREE AFFIDAVITS CLAIMING OWNERSHIP OF THESE SILVER ARTICLES WERE FILED OF SHRI JITENDRA KUMAR, SHRI RA J KUMAR AND SHRI MAHESH KUMAR, BUT THE ASSESSEE FAILED TO PRODUCE THESE PER SONS ALONG WITH BOOKS OF ACCOUNT FOR NECESSARY VERIFICATION OF ACTUAL OWNERS HIP OF THESE SILVER ARTICLES. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED THAT TH ESE SILVER ARTICLES DO NOT BELONG TO HIM. THE ASSESSEE WAS GIVEN VARIOUS OPPORTUNITIE S TO ESTABLISH THE OWNERSHIP OF THE SILVER ARTICLES SEIZED FROM HIS POSSESSION BUT NO COMPLIANCE WAS MADE BY HIM. DUE TO FAILURE OF ASSESSEE TO ESTABLISH THE OWNERSH IP OF SILVER ARTICLES, EXPARTE ASSESSMENT ORDER WAS FRAMED AND IT WAS CONCLUDED TH AT THE SILVER ARTICLES BELONG TO THE ASSESSEE AMOUNTING TO RS.5,01,273/- AND ADDITIO N WAS ACCORDINGLY MADE AGAINST HIM AND FURTHER FROM THE SAME BUSINESS ACTI VITIES INCOME WAS ESTIMATED AT RS.50,000/- AND ADDITION WAS ALSO MADE ACCORDINGLY AND TOTAL INCOME OF THE ASSESSEE WAS DETERMINED AT RS.5,56,640/-. 3.1 IT IS STATED THAT EARLIER APPEAL OF THE ASSESSE E WAS DECIDED BY THE LD. CIT(A) AND LATER ON TRIBUNAL RESTORED THE MATTER TO THE LD . CIT(A) FOR GIVING FURTHER ITA NO. 208/AGRA/2011 4 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDI NGLY, THE MATTER WAS AGAIN TAKEN UP FOR HEARING AND THE ASSESSEE REITERATED TH E SAME SUBMISSIONS BEFORE THE LD. CIT(A) THAT HE IS EMPLOYEE OF SHRI KAILASH CHAND AN D CARRYING THE GOODS FROM DELHI TO MATHURA AND AGRA FOR FURTHER DELIVERY TO T HE RECIPIENTS. THE ASSESSEE ALSO RAISED ADDITIONAL GROUNDS. THE LD. CIT(A) FURTHER N OTED THAT AT THE APPELLATE STAGE, THE ASSESSEE WAS GIVEN FURTHER OPPORTUNITY TO PRODU CE THESE THREE PERSONS, WHO HAVE CLAIMED OWNERSHIP OF THE SILVER ARTICLES AND F ILED THEIR AFFIDAVITS, I.E, SHRI JITENDRA KUMAR, SHRI RAJ KUMAR AND SHRI MAHESH KUMA R, BUT NONE OF THEM HAVE BEEN PRODUCED EVEN AT THE APPELLATE STAGE BY THE AS SESSEE BECAUSE THE ASSESSEE CONTENDED THAT AFTER A GAP OF 12 YEARS IT IS DIFFIC ULT TO TRACE THE WHEREABOUTS OF THESE PERSONS. THE LD. CIT(A) DISCUSSED ALL THE ISS UES IN THE APPELLATE ORDER AND FOUND THAT VALID PROCEEDINGS HAVE BEEN INITIATED AG AINST THE ASSESSEE UNDER THE INCOME-TAX ACT AND THAT THE STATUTORY NOTICES U/S. 142(1) AND 143(2) HAVE BEEN PROPERLY ISSUED AND SINCE THERE WAS NO COMPLIANCE T O THE STATUTORY NOTICES, THEREFORE, EXPARTE ASSESSMENT ORDER U/S. 144 OF THE IT ACT WAS CORRECTLY PASSED IN THE MATTER. THE LD. CIT(A), AS FAR AS ADDITIONS ON MERITS ARE CONCERNED, HAS ALSO CONSIDERED THE ISSUE IN DETAIL AND CONFIRMED THE AD DITION OF RS.5,01,273/-, BUT AS REGARDS THE ESTIMATE OF BUSINESS INCOME AT RS.50,00 0/-, THE ADDITION WAS REDUCED TO RS.25,000/-. THE FINDINGS OF FACT RECORDED BY THE L D. CIT(A) ON MERITS IN PARA 5.4 AND 5.5 OF THE APPELLATE ORDER ARE REPRODUCED AS UN DER : ITA NO. 208/AGRA/2011 5 5.4. IN GROUND NOS. 6 & 7, THE APPELLANT HAS DISPU TED THE ADDITION OF RS.5,01,273/- FOR ALLEGED UNEXPLAINED S ILVER ARTICLES WITHOUT PROVIDING AN OPPORTUNITY TO PRODUCE THE WIT NESSES. IN THIS REGARD THE APPELLANT HAS MADE SUBMISSION THAT THE W ITNESSES COULD NOT PRODUCED AT THE TIME OF PROCEEDINGS U/S. 132(5) BEC AUSE OF PAUCITY OF TIME. HOWEVER, THIS CONSTRAINT WAS NOT THERE WHEN R EGULAR ASSESSMENT PROCEEDING WAS INITIATED. THEREFORE, IT IS ARGUED T HAT THE ADDITION MADE WITHOUT REQUIRING THE ASSESSEE TO PRODUCE EVID ENCE TO PROVE THE OWNERSHIP OF SILVER ARTICLES IS ARBITRARY AND JUST NOT SUSTAINABLE. THIS OBJECTION OF THE APPELLANT WAS NOT FOUND TO BE CORR ECT AS ALREADY DISCUSSED IN PREVIOUS PARAS OF THIS ORDER BECAUSE T HE AO ISSUED A NOTICE U/S. 142(1) DATED 10.04.97 GIVING OPPORTUNIT Y TO THE APPELLANT TO PRODUCE THE NECESSARY EVIDENCE TO PROVE THE SOUR CE OF ACQUIRING SILVER ARTICLES SEIZED FROM HIS POSSESSION EVEN DUR ING THE APPEAL PROCEEDINGS, I HAVE ASKED THE LD. AR TO PRODUCE THR EE PERSONS TO VERIFY THE GENUINENESS OF THE CLAIM MADE BY THEM IN THEIR AFFIDAVITS AND LETTER THAT THE SILVER ARTICLES BELONGED TO THE M BUT THE LD. AR STATED THAT AFTER A GAP OF 12 YEARS, IT IS DIFFICUL T TO PRODUCE THESE PERSONS FOR EXAMINATION. UNDER THESE FACTS AND CIRC UMSTANCES, IT IS VERY CLEAR THAT APPELLANT IS NOT IN A POSITION TO E STABLISH THE OWNERSHIP OF THE SILVER ARTICLES SEIZED FROM HIS POSSESSION. THEREFORE, AS PER THE PROVISIONS OF SECTION 132A, IF ANY ARTICLE IS SEIZE D FROM THE POSSESSION OF ANY PERSON, IT WOULD BE DEEMED TO BE BELONGING T O THAT PERSON UNLESS HE PROVES THAT THE SAID ARTICLE BELONGS TO S OMEBODY ELSE. IN THE PRESENT CASE, THE APPELLANT HAS FAILED TO PROVE THA T THE SILVER ARTICLES SEIZED FROM HIS POSSESSION BELONGED TO SOME OTHER P ERSON. THEREFORE, VALUE OF THESE SEIZED SILVER ARTICLES AMOUNTING TO RS.5,01,273/- HAS BEEN RIGHTLY ASSESSED AS UNEXPLAINED INVESTMENT IN HIS HAND. IN THE EARLIER ORDER PASSED BY THE THEN CIT(A)-II, AGRA VI DE HIS ORDER DATED 23.04.99, HE HAS HELD TO ASSESS ONLY HALF VALUE OF THE SILVER ARTICLES I.E. RS.2,50,636/- ON SUBSTANTIVE BASIS IN THE HAND OF T HE ASSESSEE AND REMAINING TO BE TAXED ON PROTECTIVE BASIS. IN HIS O PINION, THE HALF AMOUNT SHOULD BE TAXED ON SUBSTANTIVE IN THE HAND O F THE CO-OWNER SHRI JAI PRAKASH. INITIALLY, THE ORDER DATED 18.10. 95 WAS PASSED U/S. 132(5) IN THE STATUS OF AOP COMPRISING SHRI JAI PRA KASH AND THE APPELLANT SHRI SHIV KANT. THEREFORE, IN MY OPINION, THE CORRECT WAY OF ASSESSING THE SEIZED SILVER ARTICLES IS TO TAX THE WHOLE VALUE OF THE SILVER ARTICLES IN THE HAND OF AOP COMPRISING THE A BOVE MENTIONED BOTH PERSONS AS IT WAS RIGHTLY DONE IN THE ORDER U/ S. 132(5). HOWEVER, NEITHER IN THE GROUNDS OF APPEAL TAKEN BY THE APPEL LANT NOR DURING THE DISCUSSION IN THE HEARING OF APPEAL, THE LD. AR HAS TAKEN ANY ITA NO. 208/AGRA/2011 6 ARGUMENT ABOUT THE ASSESSABILITY OF SILVER ARTICLES AMOUNTING TO RS.5,01,273/-, WHETHER IT SHOULD BE TAXED IN THE HA ND OF APPELLANT ONLY OR HALF AMOUNT SHOULD BE TAXED IN THE HAND OF OTHER COLLEAGUE SHRI JAI PRAKASH OR IT SHOULD BE TAXED IN THE STATUS OF AOP. IT IS ALSO NOT KNOWN AS TO WHAT IS THE FATE OF THE OTHER ORDER PAS SED IN CASE OF THE OTHER COLLEAGUE SHRI JAI PRAKASH AND THEREFORE IN M Y CONSIDERED OPINION AT THIS STAGE, IT WOULD BE RIGHT DECISION T O TAX THE WHOLE AMOUNT OF RS.5,01,273/- IN THE HANDS OF THE APPELLA NT ONLY AND UNEXPLAINED INVESTMENT MADE IN THE SILVER ARTICLES SEIZED FROM HIS POSSESSION AND THIS AMOUNT SHOULD BE TAXED U/S. 69 OF THE IT ACT AND ADDED TO THE INCOME OF THE APPELLANT. THEREFORE, BO TH THE GROUNDS 6 & 7 ARE DISMISSED. 5.5 IN THE GROUND NO. 8, THE APPELLANT HAS DISPUT ED ESTIMATION OF THE BUSINESS INCOME AT RS.50,000/- WITHOUT THERE BEING ANY MATERIAL ON RECORD. DURING THE DISCUSSION OF HEARING OF APPE AL, THE LD. AR HAS ALSO ARGUED THAT NO EVIDENCE HAS BEEN BROUGHT IN TH E ASSESSMENT ORDER THAT THE APPELLANT HAS EARNED THIS INCOME. ON GOING THROUGH THE ASSESSMENT ORDER, IT IS QUITE APPARENT THAT ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF THE CASE THAT SILVER ARTICLES WERE FOUND FROM THE POSSESSION OF THE APPELLANT AND HE COULD NOT ESTABL ISH THAT THESE SILVER ARTICLES BELONGED TO SOME OTHER PERSONS, IT CAN BE VERY WELL CONCLUDED THAT HE WAS DEALING WITH SILVER ARTICLES AND, THERE FORE, IN MY OPINION, THE AO HAS NOT MADE ANY ERROR TO ESTIMATE INCOME FR OM THIS BUSINESS. HOWEVER, THE CORRECT QUANTUM OF SUCH INCOME MAY BE IN DISPUTE. SINCE THE LD. AR HAS NOT PRODUCED ANY BOOKS OF ACCO UNT OR ANY OTHER DETAILS SHOWING THE DETAILS OF SUCH BUSINESS BEING CARRIED OUT BY THE APPELLANT. THE ONLY OPTION IS TO REASONABLY ESTIMAT E THE INCOME FROM SUCH BUSINESS. IN MY CONSIDERED OPINION, ESTIMATION OF AN INCOME OF RS.25,000/- FROM SUCH BUSINESS OF DEALING IN SILVER ARTICLES FOR THE APPELLANT WOULD BE QUITE REASONABLE IN ABSENCE OF A NY DOCUMENTS PRODUCED BY HIM. THEREFORE, APPELLANT GETS RELIEF O F RS.25,000/-. ACCORDINGLY, THE GROUND NO. 8 IS PARTLY ALLOWED. 3.2 THE ASSESSEE IN VARIOUS GROUNDS OF APPEAL CHALL ENGED THE ADDITION OF RS.5,01,273/- AND ADDITION OF RS.25,000/- AS BUSINE SS INCOME AND ALSO CHALLENGED THE ORDER OF THE LD. CIT(A) FOR ISSUE OF NOTICE U/S . 142(1) AND 143(2). ITA NO. 208/AGRA/2011 7 3.3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED TH E SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND REFERRED TO PB-116, WHICH IS ASSESSM ENT ORDER IN THE CASE OF JAI PRAKASH IN INDIVIDUAL STATUS DATED 24.03.1999, IN W HICH THE PROTECTIVE ASSESSMENT WAS MADE IN A SUM OF RS.5,01,273/- AND SUBMITTED TH AT NO FURTHER APPEAL HAS BEEN FILED IN HIS CASE. PB-1 IS PANCHNAMA IN THE NAME OF ASSESSEE AND SHRI JAI PRAKASH. PB-5 IS ANNEXURE A1. PB-6 IS ENVELOP HAVING ADDRESS OF ANIL KUMAR AND PB-7 TO 14 ARE THE TRANSIT VOUCHERS KEPT BY THE ASSESSEE. P B-15 IS STATEMENT OF ASSESSEE. PB-72 IS THE ORDER U/S. 132(5), WHICH IS PASSED IN THE NAME OF AOP, I.E., SHIV KANT SHARMA AND JAI PRAKASH. HE HAS, THEREFORE, SUBMITTE D THAT THE ADDITION COULD HAVE BEEN MADE ONLY IN THE CASE OF AOP. HE HAS SUBMITTED THAT EVEN IF ISSUE OF AOP WAS NOT SPECIFICALLY RAISED BEFORE THE LD. CIT(A), BUT THE LD. CIT(A) HAS POWER U/S. 251 OF THE IT ACT TO DEAL WITH THE MATTER. PB 43 & 44 ARE THE CERTIFICATES OF KAILASH CHAND AGARWAL CERTIFYING THAT THE ASSESSEE AND JAI PRAKASH WERE WORKING WITH HIM AND THEY WERE BRINGING THE ARTICLES FROM ANGARIAS. PB-34 IS AFFIDAVIT OF THE ASSESSEE. PB-54 IS CLAIM MADE BY JITENDRA KUMAR. TH E LD. AR RELIED UPON THE FOLLOWING DECISIONS : (I). R. RAMACHANDRA NAIDU S. CIT, 102 ITR 227 (MAD .) (II). BHAGWAT PRASAD S. CIT, 139 ITR 961 (ALLD.) (III). CIT VS. UNION TYRES, 240 ITR 556 (DEL.) 3.4 ON THE OTHER HAND, THE LD. DR RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT PROCEEDINGS U/S. 132(5) ARE NOT ASSESSMENT ORDER AND THEY ARE ITA NO. 208/AGRA/2011 8 CONCERNED ONLY WITH THE RETENTION OF THE AMOUNT SEI ZED. NOTICE U/S. 142(1) WAS ISSUED TO THE ASSESSEE FOR FILING OF THE RETURN WHI CH GIVES SEVERAL STATUS, BUT THE ASSESSEE FILED RETURN OF INCOME IN THE INDIVIDUAL S TATUS. THE ASSESSEE NEVER DISPUTED THE STATUS AS INDIVIDUAL AND DID NOT RAISE THE ISSU E OF AOP OR HOLDING OF THE SILVER ARTICLES BY AOP EITHER BEFORE THE AO OR CIT(A). THE REFORE, SUCH A CLAIM IS NOT TENABLE AT THIS STAGE. THE ASSESSEE HAS FAILED TO D ISCHARGE THE BURDEN OF PROVING THAT HE IS NOT OWNER. THEREFORE, ADDITION OF RS.5,01,273 /- HAS BEEN CORRECTLY MADE IN THE CASE OF ASSESSEE. 4. ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LIGHT OF SUBMISSIONS OF THE LD. REPRESENTATIVES AND THE FINDINGS OF THE AUTHORITIES BELOW, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE FINDINGS OF THE AUTHORITIES BELOW IN MAKING AND CONFIRMING THE ADDITION OF RS.5,01,273/-. THE AO IS SUED STATUTORY NOTICES AGAINST THE ASSESSEE AT THE ASSESSMENT STAGE WHICH HAVE NOT BEEN COMPLIED WITH BY THE ASSESSEE. THEREFORE, EXPARTE ASSESSMENT HAS RIGHTLY BEEN PASSED IN THIS MATTER. IT IS NOT IN DISPUTE THAT THE SILVER ARTICLES WERE FOUND FROM THE POSSESSION OF THE ASSESSEE WHICH HAVE BEEN LATER ON REQUISITIONED BY THE INCOM E-TAX DEPARTMENT U/S. 132A OF THE IT ACT. THERE IS THUS PRESUMPTION AGAINST THE A SSESSEE U/S. 132A OF THE IT ACT THAT THE SEIZED ARTICLES BELONG TO THE ASSESSEE UNL ESS HE PROVES THAT SAID ARTICLES BELONG TO SOMEBODY ELSE. FURTHER SECTION 110 OF THE EVIDENCE ACT PROVIDES AS UNDER :- ITA NO. 208/AGRA/2011 9 S.110. WHEN THE QUESTION IS WHETHER ANY PERSON IS OWNER OF ANYTHING OF WHICH HE IS SHOWN TO BE IN POSSESSION, THE BURDEN OF PROVING THAT HE IS NOT THE OWNER IS ON THE PERSON W HO AFFIRMS THAT HE IS NOT THE OWNER. 4.1 SINCE THE ASSESSEE WAS FOUND IN POSSESSION OF T HE SILVER ARTICLES WHEN HE WAS APPREHENDED BY HAZRAT NIZAMUDDIN POLICE, THEREFORE, THE BURDEN OF PROVING THAT ASSESSEE WAS NOT OWNER IS ON THE PERSON (ASSESSEE), WHO AFFIRMED THAT HE WAS NOT THE OWNER. THUS, THE BURDEN IS UPON THE ASSESSEE TO PROVE THAT HE WAS NOT OWNER OF THE SILVER ARTICLES, WHICH WERE FOUND FROM HIS POSS ESSION. THE ASSESSEE INITIALLY CONTENDED THAT HE WAS IN POSSESSION OF THE SILVER A RTICLES WHICH BELONG TO CERTAIN ANGARIAS. IN RESPECT OF OWNERSHIP OF SILVER ARTICLE S, AFFIDAVITS OF THREE PERSONS MENTIONED ABOVE WERE FILED, BUT NONE WAS PRODUCED B EFORE THE AO FOR EXAMINATION. THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) THAT NO OPPORTUNITY HAS BEEN GIVEN IN THIS REGARD, THEREFORE, THE LD. CIT(A ) AT THE APPELLATE STAGE DIRECTED THE ASSESSEE TO PRODUCE THESE THREE PERSONS FOR CRO SS EXAMINATION ON BEHALF OF THE DEPARTMENT IN ORDER TO PROVE THE GENUINENESS OF THE CLAIM OF THE ASSESSEE. THE ASSESSEE, HOWEVER, SHOWED HIS INABILITY TO PRODUCE THESE THREE PERSONS EVEN AT THE APPELLATE STAGE. THUS, THE CONTENTION OF THE ASSESS EE COULD NOT BE SUBJECTED TO VERIFICATION / EXAMINATION ON BEHALF OF THE DEPARTM ENT AND THE AFFIDAVITS OF ALL THE THREE PERSONS COULD NOT BE SUBJECTED TO CROSS-EXAMI NATION AND AS SUCH, THESE AFFIDAVITS WOULD NOT BE READ IN EVIDENCE IN FAVOUR OF THE ASSESSEE. NO OTHER EVIDENCE OR MATERIAL WAS PRODUCED BY THE ASSESSEE B EFORE THE AUTHORITIES BELOW TO ITA NO. 208/AGRA/2011 10 SHIFT HIS BURDEN THAT THE SILVER ARTICLES DID NOT B ELONG TO HIM. IN THE ABSENCE OF ANY EVIDENCE IN FAVOUR OF THE ASSESSEE, THE AUTHORITIES BELOW WERE JUSTIFIED IN MAKING THE ADDITION AGAINST THE ASSESSEE. FURTHER, WHEN TH E ASSESSEE DID NOT COMPLY WITH THE STATUTORY NOTICES, THE AUTHORITIES BELOW SHALL HAVE TO DECIDE THE ISSUE AGAINST THE ASSESSEE. EVEN AT THIS STAGE, ASSESSEE DID NOT PROD UCE ANY EVIDENCE BEFORE THE TRIBUNAL TO CONTRADICT THE FINDINGS OF AUTHORITIES BELOW. IN ABSENCE OF ANY MATERIAL ON RECORD IN FAVOUR OF THE ASSESSEE OR REBUTTAL TO THE FINDINGS OF AUTHORITIES BELOW, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSES SEE. DURING ACTION U/S. 132A, ASSESSEE ADMITTED THAT HE DID NOT HAVE ANY BILLS, C HALLANS OR RECEIPT OF SEIZED ARTICLES TO SUPPORT HIS CLAIM TO HAVE RECEIVED SILV ER ORNAMENTS FROM ANGARIAS OF DELHI. THERE WERE CONTRADICTIONS AND DISCREPANCIES IN THEIR STATEMENTS AS REGARDS THE NAME OF PERSONS FROM WHOM SUCH PACKETS OF SILVE R ARTICLES WERE ALLEGEDLY RECEIVED. THE DETAILS ARE NOTED AT PAGE 4 OF THE AS SESSMENT ORDER. IN THIS VIEW OF MATTER IT IS CLEAR THAT THE ASSESSEE AT THE STAGE O F PROCEEDINGS U/S. 132(5) OR AT THE ASSESSMENT STAGE HAS FAILED TO PROVE THAT SILVER AR TICLES FOUND FROM HIS POSSESSION BELONG TO OTHER PERSONS. MERE NAME ON THE ENVELOP, AS IS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE, OR TRANSIT VOUCHERS WOULD NOT PRO VE THAT SOME OTHER PERSONS ARE OWNER OF THE SEIZED ARTICLES UNLESS THEIR CLAIM IS SUPPORTED BY RELEVANT AND COGENT EVIDENCE AND THEY ARE PROPERLY EXAMINED BY THE INCO ME-TAX AUTHORITIES IN ORDER TO FIND OUT TRUTH IN THE MATTER. OTHERWISE, THE POSSES SION OF THE SEIZED ARTICLES BY ITSELF IS SUFFICIENT TO HOLD LIABILITY AGAINST THE ASSESSE E. ITA NO. 208/AGRA/2011 11 4.2 THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ADDITION SHOULD BE MADE IN THE CASE OF AOP AND REFERRED TO THE ORDER U/S. 1 32(5) OF THE IT ACT. THE PROCEEDINGS U/S. 132(5) ARE CONCERNED ONLY WITH RET ENTION OF THE AMOUNT SEIZED. THE REGULAR ASSESSMENT OR RE-ASSESSMENT WILL HAVE T O BE DONE BEFORE THE SAME IS FINALLY APPROPRIATED TO ANY TAX LIABILITY THAT MAY BE FOUND DUE FROM THE ASSESSEE. IN THE REGULAR ASSESSMENT, IT IS OPEN TO THE ASSESSEE TO RELY UPON CERTAIN EVIDENCES IN SUPPORT OF HIS CONTENTION RELATING TO THE PROCEEDIN GS U/S. 132(5) OF THE IT ACT, BUT THE ASSESSEE DID NOT RAISE ANY PLEA BEFORE THE AO A T THE ASSESSMENT STAGE AND CHOSE TO REMAIN EXPARTE. EVEN NOTHING WAS PRODUCED BEFORE THE AO TO SUPPORT HIS CONTENTION IN ANY MANNER. THE OTHER PERSON SHRI JAI PRAKASH WAS ALSO PROCEEDED EXPARTE BY THE AO IN REGULAR ASSESSMENT PROCEEDINGS U/S. 144 OF THE IT ACT VIDE ORDER DATED 24.03.1999. SHRI JAI PRAKASH HAS ACCEPT ED HIS STATUS AS INDIVIDUAL BECAUSE ACCORDING TO THE LD. COUNSEL FOR THE ASSESS EE, NO FURTHER APPEAL HAS BEEN FILED IN HIS CASE. WHEN OTHER PERSON DID NOT CLAIM FORMATION OF AOP ON SUCH MATTER IN ISSUE AND ACCEPTED HIS STATUS TO BE INDIV IDUAL AND PROTECTIVE ASSESSMENT HAS BEEN MADE IN HIS CASE BECAUSE HE WAS ACCOMPANYI NG THE ASSESSEE, WOULD PROVE THAT THERE WAS NO TAX LIABILITY IN HIS CASE, THEREF ORE, SUBSTANTIVE ASSESSMENT HAS TO BE CONSIDERED IN THE CASE OF ASSESSEE ONLY. PB-94 I S NOTICE U/S. 142(1) IN THE CASE OF ASSESSEE THROUGH WHICH ASSESSEE WAS REQUIRED TO FILE RETURN OF INCOME AND IN THE SAID NOTICE VARIOUS STATUS HAVE BEEN MENTIONED BUT THE ASSESSEE CHOSE TO FILE RETURN ITA NO. 208/AGRA/2011 12 OF INCOME ONLY IN THE STATUS OF INDIVIDUAL AND IN T HE RETURN OF INCOME DID NOT CLAIM THAT THE ADDITION SHOULD BE CONSIDERED ONLY IN THE CASE OF AOP. THE ASSESSEE OR SHRI JAI PRAKASH ADMITTEDLY DID NOT FILE ANY RETURN OF INCOME IN THE STATUS OF AOP. THE PROTECTIVE ASSESSMENT IN THE CASE OF SHRI JAI P RAKASH WAS MADE BECAUSE HE WAS ALSO ACCOMPANYING THE ASSESSEE. IN THE PANCHNAMA, N AME OF ASSESSEE IS MENTIONED ON THE TOP WOULD SUPPORT THE FINDINGS OF THE AUTHOR ITIES BELOW THAT ASSESSEE WAS FOUND IN POSSESSION OF UNEXPLAINED SILVER JEWELLERY /ARTICLES, THEREFORE, SUBSTANTIVE INDIVIDUAL ASSESSMENT SHALL HAVE TO BE CONSIDERED I N HIS CASE. PB-72 IS THE ORDER U/S. 132(5) OF THE IT ACT. WE HAVE ALREADY NOTED AB OVE THAT THE SAID PROVISIONS ARE MEANT FOR RETENTION OF THE AMOUNT SEIZED AND THE RE GULAR ASSESSMENT SHALL HAVE TO BE DONE BEFORE THE SAME IS FINALLY APPROPRIATED TO ANY TAX LIABILITY THAT MAY BE FOUND DUE FROM THE ASSESSEE. THE ORDER U/S. 132(5) IS CONCLUDED AT PAGE 82 OF THE PAPER BOOK IN WHICH IN PARA 11, THE AO HAS SPECIFIC ALLY MENTIONED THAT THE ABOVE ORDER HAS BEEN PASSED WITH THE APPROVAL OF THE DCIT , RANGE-II, AGRA, IS WITHOUT ANY PREJUDICE TO ANY FINDINGS THAT MAY BE GIVEN AT THE TIME OF REGULAR ASSESSMENT PROCEEDINGS. THEREFORE, NO BENEFIT COULD BE GIVEN T O THE ASSESSEE IN RESPECT OF THE ORDER PASSED U/S. 132(5) IN THE STATUS OF AOP. THE TAX LIABILITY HAS BEEN DETERMINED ON PASSING REGULAR ASSESSMENT ORDER IN THE MATTER I N ISSUE. THEREFORE, NONE OF THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE ARE APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. THE DECISIONS RELIED UPO N BY THE LD. COUNSEL FOR THE ASSESSEE WOULD NOT SUPPORT THE CASE OF THE ASSESSEE . FURTHER, THE LD. COUNSEL FOR THE ITA NO. 208/AGRA/2011 13 ASSESSEE HAS CONTENDED THAT ISSUE OF AOP SHOULD HAV E BEEN CONSIDERED BY THE LD. CIT(A) WHICH IN OUR OPINION HAS NO FORCE BECAUSE TH E LD. CIT(A) HAS SPECIFICALLY NOTED IN HIS FINDINGS IN PARA 5.4 REPRODUCED IN THI S ORDER THAT NO SUCH GROUND HAS BEEN TAKEN BY THE ASSESSEE IN THIS REGARD. DURING T HE COURSE OF DISCUSSION, NO SUCH ARGUMENTS HAVE BEEN RAISED BY THE LD. COUNSEL FOR T HE ASSESSEE BEFORE HIM ABOUT TAXABILITY OF AMOUNT IN QUESTION IN THE HANDS OF AS SESSEE OR SRI JAI PRAKASH OR IN THE HANDS OF AOP. THEREFORE, THE LD. CIT(A) IS NOT OBLI GED TO TAKE UP ALTOGETHER NEW ISSUE FOR CONSIDERING I.E., THE CHANGE IN STATUS BE CAUSE THE ASSESSEE NEVER DISPUTED HIS LIABILITY IN THE STATUS OF INDIVIDUAL. THE AO M ADE THE ABOVE ADDITION ON ACCOUNT OF THE SAME BEING ASSESSEES INCOME FROM UNDISCLOSE D SOURCES. THEREFORE, THERE WAS NO MOTIVE ON THE PART OF THE ASSESSEE OR HIS CO MPANION TO EARN ANY PROFIT. THE ASSESSEE AND HIS COMPANION MADE A CLAIM THAT THEY W ERE CARRYING SILVER ARTICLES AT THE INSTANCE OF SHRI KAILASH CHAND BY TRAIN. THUS, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE OF FORMATION OF ANY AOP BY HIM AND SHR I JAI PRAKASH. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SUDHIR N AGPAL & OTHERS VS. ITO, 349 ITR 636 HELD IN ORDER TO ASSESS INDIVIDUAL AS AN ASSOCIATION OF PERSONS, THE INDIVIDUAL CO-OWNERS SHOULD HAVE JOINED THEIR RESOU RCES AND THEREAFTER ACQUIRED PROPERTY IN THE NAME OF THE ASS OCIATION OF PERSONS AND THE PROPERTY SHOULD HAVE BEEN COMMONLY MANAGED. ONLY THEN COULD THE INCOME BE ASSESSED IN THE HANDS OF THE AS SOCIATION OF PERSONS. CONVERSELY, THE MERE ACCRUING OF INCOME JO INTLY TO MORE PERSONS THAN ONE WOULD NOT CONSTITUTE THEN AN ASSOC IATION OF PERSONS IN RESPECT OF SUCH INCOME. IN OTHER WORDS, UNLESS T HE ASSOCIATES HAVE DONE SOME ACTS OR PERFORMED SOME OPERATIONS TOGETHE R, WHICH HAVE ITA NO. 208/AGRA/2011 14 HELPED TO PRODUCE THE INCOME IN QUESTION AND THAT H AD RESULTED IN THAT INCOME, THEY CANNOT BE TERMED AS AN ASSOCIATION OF PERSONS. UNLESS THE MEMBERS COMBINE OR JOIN IN A COMMON PURPOSE, IT CANNOT BE HELD THAT THEY HAVE FORMED THEMSELVES INTO AN ASSOCIATIO N OF PERSONS. HELD ACCORDINGLY, THAT THE ASSESSEES, CO-OWNERS, H AD INHERITED THE PROPERTY FROM THEIR ANCESTORS AND THERE WAS NOT HING TO SHOW THAT THEY HAD ACTED AS AN ASSOCIATION OF PERSONS. THUS, THE RENTAL INCOME FROM THE PLINTHS WAS TO BE ASSESSED IN THE STATUS O F INDIVIDUAL. ONCE IT WAS HELD THAT THE INCOME WAS TO BE ASSESSED AS INDI VIDUAL AND NOT AN ASSOCIATION OF PERSONS SECTION 167B WAS NOT APPLICA BLE. THE INCOME IN THE HANDS OF THE ASSESSEE COULD NOT BE ASSESSED IN THE STATUS OF AN ASSOCIATION OF PERSONS. IN THE SAME JUDGMENT, THE DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF CIT VS. INDIRA BALKRISHNA, 39 ITR 546 IS REPRODUCED IN WHICH IT WAS HELD THAT THEREFORE, AN ASSOCIATION OF PERSONS MUST BE ONE IN WHICH TWO OR MORE PERSONS JOIN IN A COMMON PURPOSE OR COMMON ACTION, AND AS T HE WORDS OCCUR IN A SECTION WHICH IMPOSES A TAX ON INCOME, THE ASSOCIATION MUST BE ONE THE OBJECT OF WHICH IS TO PRODUCE INCOME, PROFITS OR GAINS. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. LAXMI PD. AND SONS, 316 ITR 330 HELD AS UND ER : THUS, IT IS APPARENT THAT AN ASSOCIATION OF PERSON S IS A VOLUNTARY ASSOCIATION OF TWO OR MORE PERSONS WHO JO INED TOGETHER FOR A PARTICULAR PURPOSE WHICH MAY NOT NECESSARILY BE W ITH THE OBJECT OF DERIVING OF INCOME PROFITS OR GAINS. IT IS ALSO OBV IOUS THAT ALTHOUGH THE INITIAL OBJECT MAY NOT HAVE BEEN DERIVING OF IN COME, ETC., BUT SUBSEQUENTLY INCOME MUST HAVE ARISEN, BECAUSE OTHER WISE THE ASSOCIATION OF PERSONS WILL NOT BE CONCERNED WITH T HE ACT. WHATEVER THE OBJECT OF ASSOCIATING, THE ASSOCIATION HAS TO B E VOLUNTARY ON THE PART OF THE PERSONS FORMING ASSOCIATION. FORCED ASS OCIATION OF PERSONS BECAUSE OF INHERITING JOINT PROPERTY BY A W ILL OR SUCH OTHER CIRCUMSTANCES NOT BEING VOLUNTARY WOULD NOT CONSTIT UTE SUCH JOINT LEGATEES AS ASSOCIATION OF PERSONS. ITA NO. 208/AGRA/2011 15 IN VIEW OF THE ABOVE PRINCIPLES, WE ARE OF THE OPI NION THAT THE ASSESSEE CANNOT BE SAID TO BE AN ASSOCIATION OF PER SONS BECAUSE OF THE TERMS OF THE WILL UNDER WHICH THE TWO LEGATEES HAVE INHERITED THE ASSETS OF THE TESTATOR JOINTLY, SHARES OF EACH LEGA TEES NOT BEING SPECIFIED. WE ANSWER THE FIRST AND SECOND QUESTION ACCORDINGL Y. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT OF AB OVE DECISIONS, IT IS CLEAR THAT THE ASSESSEE AND HIS COMPANION HAVE NOT VOLUNTARILY ASS OCIATED FOR A PARTICULAR PURPOSE WITH THE OBJECTS OF DERIVING INCOME, PROFITS OR GAI N. THEREFORE, THERE IS NO QUESTION OF PUTTING TAX LIABILITY IN THE NAME OF ALLEGED ASS OCIATION OF PERSONS (IN SHORT AOP). THE CONTENTION OF THE LD. COUNSEL FOR THE ASS ESSEE IS, THEREFORE, REJECTED THAT THE ADDITION IS TO BE MADE IN THE CASE OF AOP. CONS IDERING THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT AUTHORITIES BELOW HAVE CORR ECTLY MADE ADDITION OF RS.5,01,273/- IN THE HANDS OF THE ASSESSEE INDIVIDU AL. THESE GROUNDS OF APPEAL OF THE ASSESSEE ARE ACCORDINGLY REJECTED. 4.3. THE ASSESSEE IN THE GROUNDS OF APPEAL FURTHER CHALLENGED THE ADDITION OF RS.50,000/- TOWARDS BUSINESS INCOME WHICH THE LD. C IT(A) HAS ALREADY REDUCED TO RS.25,000/-. THE AO HAS NOTED THAT SINCE THE ASSESS EE WAS IN POSSESSION OF SILVER JEWELLERY, THEREFORE, CONSIDERING THE VOLUME OF SIL VER, BUSINESS INCOME WAS ESTIMATED AT RS.50,000/-. IT APPEARS TO BE ADDITION MADE MERELY ON PRESUMPTION OF CERTAIN FACTS WHICH ARE NOT PART OF THE RECORD. IN THE ABSENCE OF ANY EVIDENCE THAT ITA NO. 208/AGRA/2011 16 THE ASSESSEE WAS DOING BUSINESS IN SILVER ARTICLES, ESTIMATE OF BUSINESS INCOME IS NOT PROPER. ADDITION OF RS.25,000/- IS, THEREFORE, DELETED. NO OTHER POINT IS ARGUED OR PRESSED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY