Even though assessee might have committed a serious economic offence, yet he could not be charged to income unless it was proved beyond doubt that said income was generated to him alone.

10. (2009) 119 ITD
    71 (Bang.)

Ibrahim Vittal
v. ITO, Ward 2(3), Mangalore

A.Y. : 2003-04.
Dated : 25-4-2008

Even though
assessee might have committed a serious economic offence, yet he could not be
charged to income unless it was proved beyond doubt that said income was
generated to him alone.

Facts :

A search was made in
the residence of appellant u/s.37(3) of Foreign Exchange Management Act, 1999
(FEMA) on the basis of certain information by Directorate of Enforcement
(DOE). During search, some documents were seized which disclosed that assessee
had received a cash of Rs.23,15,000. The contention of assessee that it was
received from his brothers and brother-in-law working abroad for construction
of their houses was rejected by DOE and penalty was imposed on him. On this
basis, AO treated the said money as unexplained and taxed it u/s.69A. On
appeal to CIT(A), it confirmed the addition. On appeal to Tribunal, it held
that the AO did not make any independent enquiries. Rather he relied upon the
letter received from one of the brothers-in-law which was signed by him on
behalf of all the other persons and hence was not having any evidential value.
In a search conducted under FEMA, no other property was confiscated from
assessee. Hence, the assessee had received the amount on behalf of his
brothers and brothers-in-law.

It was not the case
of the AO that the assessee had made any investments or the assessee was found
to be the owner of any bullion, jewellery or other valuable articles. So, the
AO was not right, in law, in completing the assessment u/s.69A.