BHARATHAN R Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner-assessee conducted a business in arrack in the name of one of his former employees at Kazhakootam. On March 5, 1985, the business premises of the assessee as well as the residence of his daughter who was staying at Trivandrum were searched. Cash amounting to Rs. 85,000 was seized from the bedroom normally used by the assessee in the house belonging to his daughter. Another sum of Rs. 7,500 was also seized from the office of his arrack business at Kazhakootam. It was contended that the residence belongs to his daughter. THE assessee was not there and the daughter is also engaged in business earning income therefrom. THErefore, the daughter claimed not only the amount of Rs. 85,000 but also Rs. 7,500 as her income. It is noted by the Income-tax Officer that the assessee normally resides along with his only daughter, Smt. Indira Rani, at Sreenilayam, Trivandrum. A room in the upstairs of that building is kept under lock and key by the assessee for his own purpose. THE sum of Rs. 85,000 was seized from this room. A notice under Section 132(5) was served on the assessee on March 15, 1985, and he took more than three months to file an explanation as to the source of the amount seized. THE Income-tax Officer found that though Smt. Indira Rani is running a business at Trivandrum, the cash books are not written up to date as seen at the time of search. In that view of the matter, the Income-tax Officer found that the claim of Smt. Indira Rani and that of the assessee that the amount seized belongs to Smt. Indira Rani cannot be accepted. THE Income-tax Officer also found that the amount seized belonged to the assessee. An appeal under Section 132(11) has been filed before the Commissioner and the Commissioner agreed with the findings of the Income-tax Officer. Admittedly, there was a search on March 5, 1985, and the amount of Rs. 85,000 was seized from the bedroom of the assessee. THE cash amounting to Rs. 85,000 was seized from the bedroom of the assessee at Srinilayam, Trivandrum, which is the residence of his daughter and another sum of Rs. 7,500 was seized from the office of his arrack business at Kazhakootam. Thus, source for an amount of Rs. 92,500 had to be explained. Smt. Indira Rani, daughter of the petitioner, claimed the entire amount of Rs. 92,500 as her money. THE assessee also agreed that the amount of Rs. 92,500 belongs to his daughter, though the amount actually recovered from the residence of the daughter is only Rs. 85,000 and Rs. 7,500 was recovered from the business premises of the assessee. THE assessee's daughter claimed ownership after a lapse of three months. THE daughter did not make any attempt to establish ownership before that date. THE assessee's son-in-law, the husband of Smt. Indira Rani, who is a Professor in the Medical College, Trivandrum, had admitted at the time of search that the room from which the amount was seized was the bedroom of the petitioner which was kept and locked by him. In that view of the matter, the second respondent also found that the order of the Income-tax Officer treating the total of the two amounts aggregating to Rs. 92,500 as the income of the assessee is correct.

(2.) COUNSEL for the petitioner urged before me that in so far as the amount seized from the residence of the assessee's daughter is concerned, Section 132(4A) of the Income-tax Act will apply to presume that the amount belongs to the assessee's daughter. He also contended that the assessee was not on the spot and that the room stated to be in the occupation and possession of the assessee could be opened in the absence of the assessee would indicate that the assessee is not in possession of the room. He also contended that his daughter is a self-employed person and she has an independent source of income, Hence, there is no justification for treating the amount as the income of the assessee.