COMMISSIONER OF INCOME-TAX Vs. SAVITRI DEVI SHUKLA

JUDGEMENT

(1.) THIS appeal by the Revenue under Section 260A of the Income -tax Act, 1961 ('the Act' for short), relates to the assessment year 1992 -93. The appeal was admitted on the following two questions of law raised by the Revenue: 1. Whether the Income -tax Appellate Tribunal was justified in law in holding that the addition of Rs. 4,056 cannot be made in the income of the assessee on account of unexplained deposits in the savings bank account No. -13272 in the State Bank of India, Hamidiya Road, Bhopal, held by the assessee jointly with Smt. Kashibai even though Smt. Kashibai did not sign the account opening form nor operated the bank account at all?

(2.) WHETHER the Income -tax Appellate Tribunal was justified in law in holding that the addition of Rs. 2,56,102 cannot be made to the income of the assessee on account of unexplained investment in purchase of US dollars 10,000 even though the entries in the diary marked as document No. 1 -2 seized during the course of search at the premises of the assessee on October 30, 1992, clearly indicated that these dollars were purchased in India out of undisclosed income of the assessee and the same were not in the nature of foreign remittance entitled for immunity under the Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991? 2. The matter arises out of the order of assessment dated September 28, 1995, passed by the Assessing Officer whereby he added as income of the assessee, the following: (i) Rs. 4,050 deposited to the account No. 13272 in the joint names of Kashibai and assessee and Rs. 21,415 being the interest that accrued on the credit balance in that account; and (ii) Rs. 2,56,102 being the amount allegedly spent by the assessee for purchase of US dollars 10,000 received by the assessee as foreign remittance. The Commissioner of Income -tax (Appeals), Bhopal, by order dated April 17, 1997, in IT -29/95 -96 deleted the said additions and the Income -tax Appellate Tribunal, Indore Bench, dismissed ITA No. 721/IND/97 filed by the Revenue upholding the deletion. Re: Question No. (1)

(3.) THE Assessing Officer has added a sum of Rs. 2,56,102 under Section 69 of the Income -tax Act on the ground that the same represented unexplained investment in purchase of US dollars 10,000 which was received by the assessee, during the year in question under the remittances in the Foreign Exchange (Immunities) Scheme, 1991, ('the Scheme' for short). A diary L -2 seized from the business premises of Shukla group contained following notes: '3,70,000 Ke 10000 Dollar Liye' and '6,85,000 Ke 18500 Dollar Liye' total 'Rs. 10,55,000 = Dollars 28500'. The Assessing Officer also found that the Shukla group had withdrawn Rs. 6,00,000 from Bombay on November 26, 1991. Linking the two factors, the Assessing Officer inferred that the assessee and other family members must have purchased US dollars in the Indian unofficial market by using the amount so withdrawn and other amounts and subsequently obtained it by way of foreign remittance. In view of it, he added the rupee equivalent of US dollars 10,000', that is Rs. 2,56,102 (as unexplained investment from undisclosed income) to the income of the assessee.