BIMAL KUMAR DAMANI Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) In the present case, the question referred is as follows :

(2.) Mr. Khaitan, learned counsel for the assessee, urges that the learned Tribunal was not justified in adding the amount at the hands of the assessee while computing the income of the assessee, inasmuch as, the seizure was made from two persons, namely, Bimal Kumar Damani, the assessee, and Gopal Das Damani. Separate seizure lists were issued. Therefore, according to him, the possession of the amount recovered belonged to two different persons, i.e., US $ 24,500 to the assessee and US $ 23,200 to Gopal Das Damani. Though the assessee had not specified any amount anywhere but still then when he addressed a letter referring to the amount seized from him, that cannot be treated to be an admission that the entire amount belongs to him. However, he points out from the paper book being I. T. R. No. 39 of 1997, at page 94, where a reference has been made that the return submitted by Sri Gopal Das Damani was accepted by the Department. Therefore, according to him, if the amount recovered from Gopal Das is added while computing the income of the assessee, then it will hit the principle of double jeopardy and taxing the same amount at the hands of two persons. Therefore, addition of the whole amount, at least the amount recovered from Gopal Das, is perverse and is wholly unreasonable.

(3.) He secondly contends that even if the amount at the hands of either of these two persons is added as an income, then the assessee would be entitled to a deduction of the said amount as a loss occasioned in the course of the business. He points out that when a person carries on business, even if it is a single adventure, still then the same has to be treated as a business, despite it being an illegal one. He relied on the decision in CIT v. Piara Singh, to support his contention. He further contended that the question of possession gives rise to a presumption of ownership. The possession of the assessee and Gopal Das as evidenced from the seizure lists leads to a primary presumption that the assessee and Gopal Das are the respective owners of the respective amounts seized. Therefore, it is for the Department to prove that the ownership of the entire amount vests in the assessee. Unless the contrary is proved, the presumption of possession has to be accepted. Therefore, the amount sought to be added as a whole, namely, US $ 47,700 cannot be added to the income at the hands of the assessee. He had relied on the decisions in CIT v. Soorajmal Nagarmull 2003 and Ashok Kumar v. CIT, in support of his contention with regard to the presumption of possession and proof of ownership. He had also relied on the decision in Kishinchand Chellaram v. CIT, in support of his contention that the burden of proof in such a case rests upon the Department and not on the assessee. In support of his contention that even a single transaction is also, a business, he relied on the decisions in CIT v. Khairagarh Timber Traders and CIT v. Bharat Insurance Co. Ltd.