ASHOK KUMAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference under Section 256(1) of the Income-tax Act, 1961, is at the instance of the assessee for decision of the following question of law, viz. :

(2.) THE relevant assessment year is 1975-76. THE assessee is a partner in various firms and also derives income from house property. In a search of his premises by the Central Excise Department on October 11, 1974, the assessee was found in possession of cash amounting to Rs. 21,090 in addition to gold ornaments, primary gold, silver articles and other valuables. THE assessee's explanation for cash in his possession was that it comprised of house rent amounting to Rs. 17,251 belonging to different co-owners and not the assessee alone in addition to the agricultural income and some cash belonging to his sister. This reference relates only to the amount of cash found in the assessee's possession and, therefore, the facts relating to the other valuables, etc., are not material.

(3.) LEARNED counsel for the assessee, however, contended that the requirement of Section 69A is that the assessee should be found to be the owner of the money and his mere possession of the cash does not indicate that he was its owner. On this basis, it is contended that a question of law arises inasmuch as Section 69A has not been properly construed or applied to the facts found proved. We are unable to accept this contention. It is settled that possession is evidence of ownership and the strength of the presumption of ownership arising from the fact of possession depends on the nature of property involved. This presumption is one of the strongest in case of cash found in the possession of a person since cash is one of the properties of which title is transferable by mere delivery of possession. In such a situation, unless any cogent explanation is given by the person in the possession of cash to explain his possession and show that someone else was the owner of that amount of money, it is reasonable to assume that the cash belonged to the person from whose possession it was found as its owner. 'In view of the assessee's explanation for possession of the cash being rejected, it logically follows that the assessee was the owner of that unaccounted cash found in his possession and this is the conclusion reached by the Tribunal.