Jayanti Lal Patel and Dr. Balvir Singh Tomar Vs. Assistant Commissioner of Income-tax and ors. - Court Judgment

Y.R. Meena, J.

1. These two writ petitions are directed, one against the show-cause notice dated June 6, 1994, and another against the assessment orders dated March 22, 1996, and March 27, 1996, annexures-IX-A to IX-F. In Writ Petition No. 3494 of 1994, the petitioner has prayed that notice be quashed and the respondents be directed to return the FDRs to the petitioner and in Writ Petition No. 2879 of 1997, the petitioner has prayed that the aforesaid assessment orders be set aside. Since the issue of ownership of FDRs is common in both the writ petitions, therefore, both the writ petitions are being disposed of by this common order.

2. The search and seizure operation was carried out by the officials and the Income-tax Department, on September 17/18, 1992, at the residence of Dr. Tomar. The team of a raid party was headed by the DDI, Shri Dilip Shivpuri. In that search operation, jewellery of 12 tola gold and Rs. 7,164 in cash were found. In addition to jewellery of ladies of family and cash amount of Rs. 7,164, 3 FDRS in the name of one Shri Jayanti Lal Patel were also found during the search. The petitioner explained that these FDRs are of Shri Jayanti Lal Patel, a friend of Dr. Tomar. When that search resulted in failure, one FIR No. 124 of 1992 has been lodged on September 23, 1992, against Dr. Tomar for the offences punishable under Sections 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988. In the FIR, the allegation against Dr. Tomar was that he possessed assets disproportionate to his income. The assets consist of a plot and a house raised thereon. Dr. Tomar challenged that FIR and prayed that FIR No. 124 of 1992 be quashed. The submission of Dr. Tomar before the High Court was that Shri Dilip Shivpuri, being a cousin of Dr. Deepak Shiv-puri, who happened to be a colleague and rival in the profession, Shri Dilip Shivpuri has malafidely acted and arranged the first income-tax raid. Then in connivance with his friend, Shri Rohit Mahajan, who was the then Additional S.P. (RSIB), Jaipur City, a FIR has been lodged against Dr. Tomar.

3. The High Court has allowed the petition of Dr. Tomar filed under Section 482 of the Criminal Procedure Code, quashed the FIR and passed strictures against Shri Dilip Shivpuri, the then DDI in the Income-tax Department. After the search by the Income-tax Department and material available on record, order under Section 132(5) of the income-tax Act, 1961 (hereinafter referred as the 'Act'), has been passed and therein the view has been taken that Shri Jayanti Lal Patel is a owner of these 5 FDRs and not Dr. Tomar. Therefore, it was ordered that those FDRs be released. Thereafter, the Commissioner has issued show-cause notice to Dr. Tomar that why the amount of three FDRs Rs. 11,03,811 should not be added in the income of Dr. Tomar. In the notice, it is also stated that valuation report obtained by the ACD, Rajasthan, from the PWD valuing the investment of the house to the tune of Rs. 40,44,329 should not be taken for addition in the income of Dr. Tomar. Similarly, the valuation of the plot has been enhanced. In the notice, some investments are also referred to. According :to the Commissioner of Income-tax, they should also be scrutinised by the officer before passing 'the order under Section 132(5) of the Act and finally, it is stated that in view of these facts, why appropriate directions should not be given for modification/cancellation/ amendment in the order passed under Section 132(5) of the Act.

4. The notice has been challenged on the ground that when the income-tax raid resulted in failure, as well as the FIR which has been lodged at the instance of the Additional S. P. is quashed by this court, Shri Dilip Shivpuri has managed to issue notice under Section 263 of the Act in spite of the fact that some strictures were passed while quashing the FIR and observing that no reliance can be placed on the valuation report of the PWD as against the value estimated by the value of the Income-tax Department and that the order of the High Court has been upheld by the apex court. In spite of that, in the notice under Section 263, the Commissioner has placed reliance on the valuation report which is found baseless by this court in its order dated October 15, 1993. When the proceedings under Section 263 were stayed on June 23, 1994, in spite of. that making base the facts given in the notice under Section 263, six assessment orders are passed, i.e., annexures-IX-A to IX-F dated March 22, 1996, and March 27, 1996. A contempt petition has also been filed by Shri Jayanti Lal Patel that in spite of stay of proceedings under Section 263 of the Act, the aforesaid assessment orders have been passed.

5. Mr. Jain, learned counsel for the Department, has submitted that regular assessment orders under Section 143(3) have been passed after summary order under Section 132(5) of the Act and these assessment orders are not passed in pursuance of a notice under Section 263 of the Act. At present I am not concerned with the fact whether the aforesaid six assessment orders are passed in pursuance of the order under Section 132(5) or in pursuance of the notice under Section 263 of the Act. In these petitions, I am basically concerned whether the additions made are baseless or there is any justification to assess the income as referred to in these six assessment orders.

6. In these six assessment orders, the assessment order for the year 1984-85 which was assessed about 13 years back, has been reopened and the income assessed at Rs. 1,69,174. In the assessment year 1990-91, the amount invested by B.S. Tomar HUF and Dr. Mrs. Tomar to the tune of Rs. 8,34,043 has been added in the income of Dr. B.S. Tomar. The investment and sources shown by Dr. B.S. Tomar out of Rs. 3,32,743, Rs. 1,60,753 are also treated income from unexplained source and added in the income of Dr. Tomar. The addition of Rs. 3,06,350 has also been made doubling the sale proceeds of two plots. Rs. 22,12,500 are added in the income of Dr. Tomar on the basis of some figures on a small piece of paper claimed to be found at the time of the search. Rs. 3,16,000 investment by B.S. Tomar HUF are also treated as the income of Dr. B.S. Tomar in the assessment year 1991-92,

7. In the assessment year 1991-92, Rs. 99,680 which is the sale proceeds of gold ornaments, was received from his mother, Smt. Rajeshwari Devi. Smt. Rajeshwari Devi has shown this in her income-tax return. Dr. Tomar has also shown this in his wealth-tax returns, they are also treated as unexplained income and added in the income of Dr. Tomar. Rs. 11,38,011 investment in FDRs, by Shri Jayanti Lal Patel, was also added in the income of Dr. Tomar in the assessment year 1991-92. In the assessment year 1993-94, Rs. 14,57,611 has been added on the basis of valuation of the house by the PWD, ignoring the valuation report of the Department and the valuation report of the approved value of the Department, in spite of the fact that this house was owned by three owners, namely, Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar, Hindu undivided family.

8. In the assessment year 1993-94, Rs. 1,00,000 has been added on the ground of investment in building material. In the assessment year 1993-94, Rs. 1,31,800 was added in the income of B.S. Tomar Hindu undivided family, though Rs. 75,000 was loan received by a bank draft from one Sarojini Devi. Similarly, Rs. 8,78,609 has also been added as income from unexplained sources in the assessment order of B.S. Tomar Hindu undivided family, Rs. 3,18,439, a carried forward balance of earlier year, i.e., 1992-93 has been added in the assessment year 1993-94. In the case of Dr. Shobha Tomar, Rs. 42,263 a loan amount has been added as income from undisclosed sources. The entire amount shown as investment in the plot B-4, Govind Marg, Jaipur, by Dr. Mrs. Tomar and B.S. Tomar Hindu undivided family, has been treated as income of Dr. Tomar. Again out of total investment in plot, l/3rd amount in the hands of Dr. Mrs. Tomar and l/3rd amount in B.S. Tomar Hindu undivided family has been added. Thus, this is second addition of the same amount.

9. These are the main additions, in all the six assessment orders though the loans taken in the different years are also added as income from unexplained sources, in spite of the fact that the assessees, Dr. Tomar and Dr. Mrs. Tomar and B.S. Tomar Hindu undivided family, have filed the affidavits of the money-lenders and even in some cases, the suit has been filed in the civil court for recovery of the amount and the court has passed a decree against Dr. Tomar for recovery of a loan. The genuineness of the loans are disbelieved and that amount added in the income of Dr. Tomar in different years.

10. The submission of learned counsel for Dr. Tomar is that the departmental officers are biased while passing the aforesaid assessment orders. The Assessing Officer had demanded money. Even some allegations are levelled against the then Commissioner, Shri Kanwar Jeet Singh. Complaints have been made to the Chairman of Central Board of Direct Taxes on December 7, 1993, and March 20, 1995, regarding harassment and demand of money. In spite of that, these baseless additions are made in the income of Dr. Tomar and his wife, Dr. Mrs. Shobha Tomar, and B.S. Tomar Hindu undivided family.

11. Mr. Kasliwal brought to my notice that while making additions on the basis of valuation report of the PWD, the Assessing Officers totally ignored the valuation report given by the departmental value to whom the case of valuation of the house has been referred, as well as, valuation given by the approved value of the Department. The valuation report on which reliance has been placed has been considered by this court while the FIR lodged against Dr. Tomar was challenged and that was found baseless. The FIR was quashed and that order of this court has been upheld by the apex court.

12. On such valuation report, again the additions to the tune of about Rs. 14 lakhs have been made and the source of Rs. 26 lakhs, shown as investment in house, has also been treated as income from unexplained sources. Similarly, after the raid, enquiry has been made by the Assistant Commissioner of Income-tax before order under Section 132(5), the statements of the seller of the plot and the agent through whom the plot was purchased have been recorded. They accepted that they have received only the money shown by the petitioner, Dr. Tomar and Dr. Mrs. Tomar and Tomar Hindu undivided family, but ignoring all this in these assessments, reliance has been placed on a small chit claimed to be found at the time of the search. Even the figures shown in that chit are not tallied with the accounts maintained by the seller and the agent, through whom the plot B-4, Govind Marg, Jaipur, has been purchased.

13. Neither that chit is in the hand writing of Dr. Tomar nor in the hand writing of any member of his family, In spite of that, the addition to the tune of Rs. 22 lakhs has been made, only on the basis of that small piece of paper.

14. Learned counsel for the Department, Mr, Jain, has fairly admitted that on the merits, he has no case for such additions, He only submitted that when alternate remedy is there, the petitioner should avail of that and even he filed the appeal but it was later on withdrawn.

15. Considering the submissions of learned counsel for the parties and the aforesaid acts, the main grievance of the petitioner is that whatever investment has been shown in the plot, as well as in the construction of the house is explained but due to mala fide attitude of the Assessing Officers, that has not been accepted. Not only that, the valuation of the plot, as well as the house has been just made double, The entire investment shown has been treated as income of Dr, Tomar which has no justification. Even when the petitioner sold two plots for Rs. 1,71,000, they have treated Rs, 1,71,000 as the value of one plot and just made it double, i.e., Rs. 3,42,000 and no benefit of Section 54F of the Act has been given, When the appeals have been filed, they have taken one of the grounds in the appeals that the decision in the appeals will be subject to the decision of this court in the writ petition. That shows that the assessees had no faith in the officials after suffering lot in the hands of biased officials in the Department.

16. In reply filed by Dr, Tomar, in the petition filed by Jayanti Lal Patel, he raised all these objections which the petitioner Dr, Tomar has raised in his Writ Petition No. 2879 of 1997. It is also pertinent to note that reply filed by Dr. Tornar is prior to the filing of appeals before the Commissioner of Income-tax (Appeals). The appeals filed before the Commissioner of Income-tax (Appeals) are also withdrawn.

17. When no effective, adequate and efficacious remedy is availed from the authority, there is no bar in entertaining the writ petition under article 226 of the Constitution of India and his petition should be decided on the merits.

18. Considering the submissions and instead of going into the assessment year wise of Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar Hindu undivided family, I prefer to deal with the major items, i.e., the investment made in the plot and construction of house and also the additions made on the basis of the valuation report of the PWD and additions made on the basis of a small chit claimed to have been found by the search party, for investment in the purchase of plot B-4, Govind Marg, Jaipur. Whether the amount of sale proceeds of the two plots shown by the assessee can be added twice treating that amount of one plot instead of two plots. Similarly, the assessment for the assessment year 1984-85 made about 13 years back, when the amnesty scheme was in force, can that assessment be reopened and the additions can be made in the assessment year without any positive finding that income shown by Dr. Tomar is not correct and income of Dr. Mrs. Tomar is income of Dr. Tomar. No additions can be made in respect of the assets which are declared and assessed under the amnesty scheme, in the assessment year 1984-85.

19. First I will take the addition on the basis of the valuation of the house. Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar Hindu undivided family, purchased a plot No. B-4, Govind Marg, Jaipur, and raised construction. All the three assessees have equal share and investment in the plot, as well as in the construction of a house. The total investment in the construction of the house roughly comes to about Rs. 25 lakhs. After search at the residence of Or. Tomar, the matter was referred to the Valuation Cell of the Income-tax Department for estimation of the cost of the house raised by Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar Hindu undivided family. The departmental value, in his report, estimated the cost of the house to the tune of Rs. 26,29,000. These assessees have also obtained a report from the approved value of the Department and he valued the construction cost to the tune of Rs. 24 lakhs. When the value of the PWD estimated the cost of the house to the tune of Rs. 32,35,465 and for the difference for the period from the date of issuing the standing order of the Department to the date of valuation according to him, 25 per cent can be added in the value already assessed and that total value comes to Rs. 40,44,329.

20. On the basis of this valuation report which is obtained by the Additional S. P. to fabricate a false case, from the PWD a FIR No. 124 of 1992 has been lodged against Dr. Tomar for the offences under Section 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988. That FIR has been challenged in this court and this court has quashed the FIR which is mainly based on the valuation report of the PWD which estimated the cost of the house at more than Rs. 40 lakhs. While quashing the FIR, this court has passed strictures against the then DDI, Shri Dilip Shivpuri, and Shri Rohit Mahajan, the then Additional S. P. (RSIB), Jaipur City. The relevant portion of the judgment reads as under :

'From the material placed on record, it stands proved that Shri Dilip Shivpuri being cousin of Dr. Deepak Shivpuri (who, in the circumstances spelt out, from the petition, after his machination to get himself posted as Assistant Professor in Paediatrics for which Dr. B.S. Tomar was to be posted after his return from London, having failed, had been nursing rancour against Dr. Tomar), and being Dy. Director (Investigation), Income-tax, had made firstly raid at the house of the petitioners, and when he failed in his machination in the raid which ended in a whimper after anatomizing income-tax returns and assessment orders of the petitioners and family members, he approached his college mate, Shri Rohit Mahajan who admittedly has been Addl. S. P. (RSIB), Jaipur City I, on or after September 17, 1992, and informed Shri V. K. Thanvi, the then Director General of Police, RSIB, Jaipur, complaining of the property and assets of the petitioners, and in this manner, Shri Dilip Shivpuri was the complainant bearing rancour against the petitioners as a result of rivalry in between his cousin, Dr. Deepak Shivpuri, and Dr. Tomar. Thus, it cannot be denied that Shri Dilip Shivpuri, Deputy Director (Investigation), Income-tax, is the first informant and complainant ; that, he failed in his machination to get a case registered for an offence punishable under the provisions of the Income-tax Act in the income-tax raid supervised, stage-managed by him, against the petitioners, which ended in a whimper obviously after having found no case made out, and that since he failed in his intrigue, so, in order to save their faces and conceal lapses, he informed other administrative authority, i.e., the present investigating authority which has been pursued for their own purpose and wreak rancour which arose also out of their failure in intrigue. The dominant purpose, as I wrung out from the aforesaid facts and circumstances pointed out in regard to the mala fide exercise of power, supra, to register the FIR and investigation thereon after being pursued by Shri Dilip Shivpuri is unlawful and to make the character assassination of the petitioners and family members. Thus, viewed, registration of the impugned FIR and intended follow-up action is manifestly attended with mala fides, with an ulterior motive for wreaking vengeance on the petitioners and with a view to spite them due to private and personal grudge.'

21. The order of this court dated October 15, 1993, has been challenged in the apex court. The apex court has upheld the order of this court dated October 15, 1993, meaning thereby, that the mala fides found on the part of the departmental official, as well as Additional S. P., Shri Rohit Mahajan, stand. Even the complaint has been made by Dr. Tomar to the Chairman, Central Board of Direct Taxes against Shri Dilip Shivpuri, the then DDI that he being cousin of Dr. Deepak Shivpuri has managed this income-tax raid and also instigated Additional S. P., Shri Rohit Mahajan, to lodge FIR against Dr. Tomar and ultimately, this court in its order dated October 15, 1993, observed that the source of income stands fully disclosed in the income-tax or wealth-tax returns spanning over last more than ten years and the FIR lodged was so absurd and inherently improbable, inasmuch as the allegations made in the FIR even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence against Dr. Tomar and that FIR No. 124 of 1992 registered at P. S. Rajasthan State Investigation Bureau, Jaipur, has been quashed.

22. It is an admitted fact that while assessing the value of the house, the Assessing Officer has totally ignored the valuation report of the departmental value who valued the construction at Rs. 26,29,000 and also the report of the approved value of the Department who valued the construction cost of the house to the tune of Rs. 24 lakhs. About Rs. 25 lakhs has been declared by the assessees themselves and the Assessing Officer placed reliance only on the valuation report of the PWD, which is obtained by the Additional S. P. within two days after the income-tax raid and lodged FIR on the basis of that valuation report against Dr. Tomar.

23. Learned counsel for the Department, Mr. Jain failed to show me any justification to make addition on the basis of such valuation report of the PWD, which is the base of the FIR and the FIR has been quashed by this court and the decision of this court has been upheld by the apex court. No other justification has been shown for addition of Rs. 14,57,611 in the hands of Dr, B.S. Tomar for the assessment year 1993-94. On the facts stated above Mr. Jain failed to show me any justification for this addition, the addition as discussed above, should be deleted which has been made on account of valuation of the house based on the valuation report of the PWD which is not even a final report but a provisional report, on the basis of this report, the FIR has been lodged, which is quashed finally.

24. The next item is addition of Rs. 22,12,500 on the basis of some figures on a small piece of paper in respect of purchase of plot No. B-4, Govind Marg, Jaipur. This plot B-4, Govind Marg, Jaipur, has been purchased jointly by Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar Hindu undivided family. They equally shared the investment. This plot has been purchased through Sudershan Housing Corporation from Shri Bhagwan Sahai Ramjiwal. The case of the assessees is that they have purchased this plot for Rs. 15,75,000 and before purchase, NOC has been obtained from the Income-tax Department. They have also paid some commission to Sudershan Housing Corporation, an agent through which this plot has been purchased. The amount for the plot has been paid in different instalments, partly through Sudershan Housing Corporation and partly by cheques issued directly in the name of Shri Bhagwan Sahai Ramjiwal, owner of the plot.

25. During search at the residence of Dr. Tomar, it is claimed that the Department official found a slip containing some figures. This piece of paper claimed to have been recovered at the time of search contains figures under two columns. In one column, the total of these figures comes to Rs. 17,25,000 from May 31, 1989, to December 8, 1989, and in the other column, the total of these figures comes to Rs. 22,12,500.

26. This piece of paper is admittedly neither in the handwriting of Dr. Tomar nor in the handwriting of any member of his family nor is it in the handwriting of an agent through whom the property has been purchased, nor is it in the handwriting of Shri Bhagwan Sahai Ramjiwal, owner of the plot. The exact place of piece of paper has not been shown from which place this paper has been recovered. The statements of Shri Bhagwan Sahai Ramjiwal, as well as the proprietor of Sudershan Housing Corporation have been recorded. They denied that this piece of paper contains the payments made by Dr. Tomar to Shri Bhagwan Sahai Ramjiwal. Even their accounts were seized, but the details given in this piece of paper do not tally with the accounts either of Sudershan Housing Corporation or the accounts of Shri Bhagwan Sahai Ramjiwal.

27. In their statements, they have admitted that the plot was sold to Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar HUF jointly for the amount of Rs. 15,75,000 and about Rs. 1,50,000 has been paid as commission to Sudershan Housing Corporation through whom the plot has been purchased.

28. If we compare the rate in that locality, Rs. 500 per sq. meter has been prescribed by the JDA for the year 1990 and the adjoining plots are sold at the rate of Rs. 1,205 per sq. meter. Dr. Tomar Dr. Mrs. Tomar and B.S. Tomar HUF have purchased this plot at the rate of Rs. 1,458 per sq. metre. In the year 1990, the Sub-Registrar, Jaipur City, has also fixed the rate in this locality of Rs. 1,200 per sq. meter.

29. Mr. Jain was asked to explain and show the justification that whether in these circumstances Rs. 22,12,500 can be added in the income of the assessee on the basis of a small slip of paper claimed to have been found at the time of search though that is not in the handwriting of Dr. Tomar. Ignoring all the detailed facts, how the addition of Rs. 22,12,500 can be made in the income of Dr. Tomar for the assessment year 1991-92. Mr. Jain, learned counsel for the respondents, failed to give any justification for addition of Rs. 22,12,500. In view of these undisputed facts, this addition of Rs. 22,12,500 should be deleted.

30. Now, I come to the additions made on account of not believing and doubting the genuineness of the amount received from N. K. Enterprises and Roopam Corporation. The case of the petitioner is that before construction of the house on plot No. B-4, Govind Marg, Jaipur, B.S. Tomar HUF has sold 3600 sq. feet underground portion of the house for Rs. 9 lakhs to N. K. Enterprises. N.K. Enterprises has paid Rs. 35,000 as earnest money on signing of the agreement and the balance amount has been paid in instalments. Similarly, B.S. Tomar HUF again entered into agreement with Roopam Corporation, Naroda, Ahmedabad, and B.S. Tomar HUF has sold part of underground measuring about 3600 sq. feet to Roopam Corporation for Rs. 9,50,000 and Rs. 50,000 received as earnest money from Roopam Corporation and balance amount has been paid in instalments.

31. Under the agreement B.S. Tomar Hindu undivided family has received the sale proceeds from N. K. Enterprises as under :

(Rs.)28-3-1990To Debit35,00010-4-1990' Debit80,00020-4-1990' Debit60,0004-5-1990' Debit60,00020-5-1990' Debit90,00016-7-1990' Debit30,00025-3-1990' Debit1,55,00012-11-1990' Debit50,0008-1-1991' Debit40,00025-1-1991' Debit75,00010-3-1991' Debit66,000

7,41,000

32. And from Roopam Corporation, Dr. B.S. Tomar Hindu undivided family has received the sale proceeds as under :

(Rs.)13-5-1991To Debit50,00026-5-1991' Debit60,00023-6-1991' Debit1,50,0003-7-1991' Debit1,40,00015-9-1991' Debit1,00,00024-9-1991' Debit1,25,0009-10-1991' Debit1,00,00016-10-1991' Debit1,00,000

8,25,000

33. To this effect, the agreement to sell has been reduced in writing with N.K. Enterprises, as well as Roopam Corporation. That was placed before the Assessing Officer when the order under Section 132(5) has been passed. Similarly, these agreements were made available to the Assessing Officer. Ignoring these agreements and without enquiry, he added whatever amount has been received from N.K. Enterprises and Roopam Corporation treating as income of Dr. Tomar from undisclosed sources.

34. In the subsequent assessment year, in case of B.S. Tomar Hindu undivided family, enquiries have been made through departmental officials in Ahmedabad. They enquired about the genuineness of transactions between N.K. Enterprises and B.S. Tomar Hindu undivided family and the transactions between Roopam Corporation and B.S. Tomar Hindu undivided family and after enquiry, they found that N.K. Enterprises and Roopam Corporation both have capacity to pay the cash to B.S. Tomar Hindu undivided family, and on an enquiry, the officer of the Income-tax Department at Ahmedabad found that the amount has been paid by them, as per agreement of sale of part of the property from the share of B.S. Tomar Hindu undivided family in a house constructed at plot No. B-4, Govind Marg, Jaipur. The Assistant Director of Income-tax (Investigation), Unit 4, Ahmedabad, has also sent the letter dated March 25, 1997, confirming the genuineness of the transaction between Roopam Corporation and B.S. Tomar Hindu undivided family and the transaction between N.K. Enterprises and B.S. Tomar Hindu undivided family.

35. Considering this letter from the ADI (Investigation) written to the Assessing Officer, Jaipur, further strengthens the case of the petitioner that whatever amount B.S. Tomar Hindu undivided family has received on a sale of part of its property in the house situated at plot No. B-4, Govind Marg, Jaipur, is genuine and no addition can be made either in the hands of Dr. Tomar individual, Dr. Mrs. Tomar individual or in the hands of B.S. Tomar Hindu undivided family. That is fully explained. The Assessing Officer has no material. Only on his conjectures and surmises and due to mala fides, he added this entire amount in the income of Dr. Tomar in different years.

36. Not only that, the addition of Rs. 22,12,500 has been made on the ground that the plot has been purchased for about Rs. 40 lakhs and only Rs. 18 lakhs have been shown as cost of the plot. In all, Rs. 22,12,500 has been added in the income of Dr. Tomar for the assessment year 1990-91. Again l/3rd of that amount has again been added in the income of Dr. Mrs. Tomar in 1990-91 and l/3rd of that amount in the income of B.S. Tomar Hindu undivided family in the assessment year 1990-91. For that Mr. Jain has no explanation how the same amount can be assessed in three hands.

37. Dr. B.S. Tomar has also received the loans in different years. In 1991, B.S. Tomar Hindu undivided family received Rs. 45,000 from Ramesh Chandra Sharma ; Rs. 90,000 from Smt. Sarojini Devi in the assessment year 1993-94 ; Rs. 17,500 from Shri Prashant Kumar ; Rs. 19,500 from Sanjiv Kumar ; Rs. 18,000 from Sanjiv Kumar and Prashant Kumar ; Rs. 19,500 from Ram Chandra Shri Bhagwan by Dr. Tomar. Mr. Kasliwal submitted that the creditors are assessees in the Department and they have shown their transactions in their income-tax returns. Dr. Tomar has also taken loans in the assessment year 1993-94, Rs. 60,000 from Ashok Kumar Bansal.

38. All these creditors are assessees in the Department. Even Ashok Kumar Bansal has filed a civil suit against Dr. Tomar and the civil court has decreed the suit for recovery of Rs. 81,600 from Dr. Tomar. All these creditors have filed the affidavits. In spite of that, the Assessing Officer has disbelieved the genuineness of the loans and added those amounts in the income of these assessees as income from undisclosed sources. This attitude of the Assessing Officer further shows prejudice in the mind of the Assessing Officer against these assessees. Without sufficient material, no such additions should be made, but if he has any doubt, he should make enquiry specially when the affidavits are filed and the creditors are assessees of the Department. He can write and enquire from the departmental officials who have assessed these creditors, and if the loan is found genuine, how that can be taken as income of Dr. Tomar. Not only that, in some cases where the jewellery of the family has been sold, that has been disbelieved without taking into consideration the status and financial position of the petitioner and his wife, both are doctors by profession, they also have the ancestral property in the form of jewellery which was declared much before the search in their regular wealth-tax returns.

39. Thus, the sale proceeds of this ancestral jewellery of Rs. 99,680 which has already been declared and assessed in the wealth-tax assessment much before the search, how the sale proceeds of that jewellery can be added in the income of Dr. Tomar. Further, this investment was made in the construction of house, in spite of this, the benefit of the provisions under Section 54F of the Income-tax Act, has not been given. In view of all these aforesaid facts, I find no justification in addition on account of loan amount and sale proceeds of jewellery in the income of the petitioner and his family member.

40. Now it brings me to the three FDRs of Shri Jayanti Lal Patel, whether it can be treated as the property of the petitioner Dr. Tomar During the search at the residence of the petitioner Dr. Tomar, three FDRs No. 0659536/443 of 1990 of Rs. 10,31,158, date of maturity is November 16, 1993 ; the second FDR No. 1350197/426 1350197/426 of 1990 of Rs. 41,000, date of maturity is October 4, 1995, the third FDR No. 0659512/441 of 1990 of Rs. 31,653.40, date of maturity is October 9, 1992. After search, the summary order under Section 132(5) has been passed on January 15, 1993. The petitioner was asked to explain. The petitioner has explained before the Assistant Commissioner of Income-tax (Investigation), Circle-l(3), Jaipur.

41. While passing the order under Section 132(5), the Assistant Commissioner of Income-tax (Investigation), Circle-l(3), has categorically mentioned that :

'These term deposit receipts belong to Shri Jayanti Lal Patel, son of Shri Maganbhai Patel who is a non-resident Indian residing at 115, Grove Lane, Camberwell, London. Shri Patel is stated to be a very close friend of the assessee and whenever he comes here, he stays with the assessee. Therefore, instead of carrying them to U. K. he kept the same with the assessee. All the three term deposit receipts are made out of foreign exchange earnings of NRI, Shri Jayanti Lal Patel.

Necessary enquiries in this regard have been conducted from the various banks. The confirmation of Shri Jayanti Lal Patel to this effect has also been filed in which it has been stated that these deposits were made out of his foreign currency brought in India and converted in Indian rupees. In view of the enquiries and evidence, the TDRs are held to be the property of Shri Jayanti Lal Patel and as such these are to be released.'

42. In a notice to Dr. Tomar under Section 263, inter alia, the Commissioner required from Dr. Tomar to explain why the order under Section 132(5) of the Act should not be, modified wherein the term deposit receipts valuing Rs. 11,03,811 were treated the property of Shri Jayanti Lal Patel. The reason given by the Commissioner for the notice is that on perusal of record, it shows that proper scrutiny has not been done while treating these FDRs of Shri Jayanti Lal Patel, specially the Commissioner has emphasised that the Assistant Commissioner has not enquired whether the foreign currency was brought by Shri Jayanti Lal Patel, whether the money has been converted into Indian currency for the purpose of taking the term deposits. There is no application of Shri Jayanti Lal Patel for taking the aforesaid term deposits.

43. It appears that the Commissioner has not applied his mind while issuing notice under Section 263 nor has he properly seen the record. In the proceeding under Section 132(5) of the Act, the facts have been brought on record that at the time of search, it was explained that these FDRs are of Shri Jayanti Lal Patel NRI (non-resident Indian). He has his account in the State Bank of Indore, account bearing No. NRI-7, Station Road, Jaipur. For opening NRI account, passport and status of NRI is sufficient. Mr. Patel came from London to India and while staying in India, he himself opened this account in the year 1990 and those FDRs were made from this NRI account in 1990. This amount in the State Bank of Indore has been transferred from the account No. 65002 of Shri Jayanti Lal Patel, in the branch of Bank of Baroda, Belgium, which has been operated since 1984. While the money flow from the branch of Bank of Baroda, Belgium, that has come through the Reserve Bank of India. That enquiry has also been conducted and found true.

44. In the proceedings for order under Section 132(5) Shri Jayanti Lal Patel himself has submitted the affidavit. He came personally from London to India three times and met the income-tax authority including the Chairman, Central Board of Direct Taxes, claimed the ownership of these FDRs which were seized by the Department.

45. It is also pertinent to note that for construction of the house by Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar Hindu undivided family, they have sold part of their building to Roopam Corporation and N.K. Enterprises and after receiving the sale price of the building and utilised that sale proceeds about Rs. 15 lakhs in the house construction. They have not utilised these FDRs. If they were the owners of the FDRs, why the amount of these FDRs was not used in the construction of the house On the contrary, they have taken loan from different parties and paid heavy interest on that loan amount. Mr. Jain, learned counsel for the Department, has not explained and there is no material on record, no reason has been given by the Commissioner of Income-tax while issuing the notice under Section 263 that if they were the owners of the FDRs, why the amount of FDRs has not been utilised instead of selling the part of the house by B.S. Tomar Hindu undivided family to Roopam Corporation and N.K. Enterprises.

46. Mr. Ranka, learned counsel for the petitioner, Shri Jayanti Lal Patel, submitted that whether it is a benami transaction, the burden lay on the person/authority who says so. Admittedly, the facts on record are that the FDRs were in the name of Shri Jayanti Lal Patel. At the time of search on the spot, it was pointed out to the departmental officials that Shri Jayanti Lal Patel is the owner of these FDRs. Shri Jayanti Lal Patel has confirmed this fact. He came to India thrice. It has been explained how the money has come to the State Bank of Indore, Jaipur, from Belgium. It has come from the account of Shri Jayanti Lal Patel in the branch of Bank of Baroda, Belgium, which account has been operated by Shri Jayanti Lal Patel since 1984. Shri Jayanti Lal Patel categorically stated that he is a friend of Dr. Tomar, that as no purpose would be served to take these FDRs to London, therefore, he left those FDRs with Dr. Tomar. There is no material with the Commissioner to justify that the money invested in the FDRs is of Dr. Tomar. Apart from that, the Bena'mi Transactions (Prohibition) Act, 1988, further prohibits the benami transactions and now nobody can claim the ownership of the property against the person, in whose name the property stands. These FDRs are taken subsequently, that is in 1990.

47. Their Lordships have considered what are the factual aspects, which should be considered, while deciding the issue of benami transactions.

48. In the case of Jaydayal Poddar v. Mst. Bibi Hazra : [1974]2SCR90 , their Lordships have observed that the burden of proving that a particular sale is benami and the apparent purchaser is not the real owner, always rests on persons asserting it to be so. Their Lordships further observed in para. 6 that, though the question, whether a particular sale is benami or not, is largely one of fact, and for determining this question, no absolute formulae or acid test, uniformly applicable in all situations, can be laid down yet in weighing the probabilities and for gathering the relevant indicia, the courts are usually guided by these circumstances ; (1) the source from which the purchase money came ; (2) the nature and possession of the property, after the purchase ; (3) motive, if any, for giving the transaction a benami colour ; (4) the position of the parties and the relationship, if any, between the claimant and the alleged benamidar ; (5) the custody of the title-deeds after the sale and (6) the conduct of the parties concerned in dealing with the property after the sale.

49. In the case of Laljibhai K. Soni v. Asst. CIT : [1995]213ITR114(Guj) , the assessee had purchased silver from the Customs Department from December 2, 1993, to March, 1994. In the search, this fact came to the knowledge of the search party. The silver was seized. They gave an explanation that the money for purchase of silver had been received from different parties by account payee cheques. The explanation was not accepted. The issue was considered by the Gujarat High Court in the aforesaid case and held that from the record of the case, it was apparent that the petitioner had purchased the silver from the Customs Department during the period from December 2, 1993, to March, 1994. He had produced the extracts of his account with the bank which showed how he got the money by account payee cheques from different parties. Accepting the explanation, the order of the Assistant Commissioner of Income-tax was quashed.

50. In the case of CIT v. Daulat Ram Rawatmull : [1973]87ITR349(SC) , the question before their Lordships that firm had opened an overdraft account with a limit of Rs. 10 lakhs against the collateral security of two fixed deposit receipts of Rs. 5 lakhs each, one of which was in the name of B, son of a partner of the firm, and the other in the name of A, son of another partner. The Assessing Officer has treated the investment in the fixed deposit as investment of the firm. Their Lordships held :

(i) that a person could still be held to be the owner of a sum of money even though the explanation furnished by him regarding the source of that money was found to be not correct. From the simple fact that the explanation regarding the source of money furnished by X, in whose name the money was lying in deposit, had been found to be false, it would be a remote and far-fetched conclusion to hold that the money belonged to Y. There would be in such a case no direct nexus between the facts found and the conclusions drawn therefrom.

(ii) That the circumstance of the transfer of the amount of Rs. 5 lakhs from Calcutta to Jamnagar for fixed deposit in the name of B and the use soon thereafter of the said fixed deposit receipts as security for the overdraft facility to the respondent firm did not justify the inference that the amount belonged to the respondent.

(iii) That the approach of the Tribunal that the firm could not have obtained an overdraft against the security of B's fixed deposit was erroneous. It is a common feature of commercial and other transactions that securities are offered by other persons to guarantee the payment of the amount which may be found due from the principal debtor. The concepts of security and ownership are different and it would be a wholly erroneous approach to hold that a thing, offered in security by a third person to guarantee the payment of debt due from the principal debtor belongs not to the surety but to the principal debtor.

(iv) That the fact that B received no consideration for offering the fixed deposit receipt as security for the overdraft facility would not result in any inference against the respondent.

(v) That the onus of proving that the apparent was not the real was on the party who claimed it to be so. As it was the Department which claimed that the amount of fixed deposit receipt belonged to the respondent firm even though the receipt had been issued in the name of B, the burden lay on the Department to prove that the respondent was the owner of the amount despite the fact that the receipt was in the name of B.

(vi) That the fact that the branch of the bank in Calcutta was in the same building in which there were the business premises of the firm was a wholly extraneous and irrelevant circumstance for determining the ownership of the sum of Rs. 5 lakhs.

(vii) That both as regards the source as well as the destination of the amount, the material on record gave no support to the claim of the Department, There should be some direct nexus between the conclusion of fact arrived at by the authority concerned and the primary facts upon which that conclusion is based. The use of extraneous and irrelevant material in arriving at that conclusion would vitiate the conclusion of fact because it is difficult to predicate as to what extent the extraneous and irrelevant material has influenced the authority in arriving at the conclusion of fact.

51. In the case of Prahlad Maliram v. CIT , the issue before the court was, can the income of the firm be assessed as income of the Hindu undivided family. There is no evidence that funds invested by the coparceners in the firm came from the Hindu undivided family. This court held that the finding that the assessee Hindu undivided family constituted the source of investments in the firm was patently based on conjectures as there was no evidence to support it. Therefore, the income of the firm could not be assessed in the hands of the assessee-Hindu undivided family.

52. In case of Heirs of Vrajlal J. Ganatra v. Heirs of Parshottam S. Shah : [1996]222ITR391(SC) , the question before their Lordships was whether a particular sale is benami. In para. 5 their Lordships have observed as under (page 394) :

'The question whether a particular sale is benami or not is largely one of fact. Though there is no formula or acid test uniformly applicable it is well nigh settled that the question depends predominantly upon the intention of the person who paid the purchase money. For this, the burden of proof is on the person who asserts that it is a benami transaction. However, if it is proved that the purchase money came from a person other than the recorded owner (ostensible owner) there can be a factual presumption at least in certain cases, depending on the facts, that the purchase was for the benefit of the person who supplied the purchase money.'

53. The above referred decisions of their Lordships clearly show that the burden lay on the authority/person who claims that the particular transaction is benami.

54. In the notice under Section 263, the Commissioner simply said that the proper enquiry has not been conducted. He has pointed out only that the Assistant Commissioner has not enquired whether an application has been given by Shri Jayanti Lal Patel for obtaining FDRs. The material on record brought before the Assistant Commissioner in the proceedings under Section 132(5) should that at the time of the search, it was pointed out on the spot by Dr. Tomar that these FDRs are of Shri Jayanti Lal Patel. Shri Jayanti Lal Patel has come to India and claimed that he has purchased these FDRs out of the amount in his account in the State Bank of Indore, Station Road, Jaipur, and in this account, the money has been transferred from his account, in the State Bank of Baroda branch at Belgium. The account has been operated by him since 1984. It is also enquired from the Bank of Indore, Station Road, Jaipur, whether application has been given by Shri Jayanti Lal Patel for taking these FDRs. In reply, the bank authorities of the State Bank of Indore have clarified vide letter dated January 6, 1993, that they have verified from their own record and found that all these three FDRs have been prepared on oral instruction and this is the common practice in case of NRI account to prepare FDR on oral instruction. Shri Jayanti Lal Patel has his NRI account in their bank. No written application is required in the case of NRI for obtaining FDR but while making the payment they obtained written instructions from the depositor. In view of the clarification given by the bank authorities, there is no substance in the objection of the Commissioner in the notice that the Assistant Commissioner has not enquired about the application. Not only that, the order under Section 132(5) is just a provisional order, the final order is yet to be passed under Section 143(3) of the Act, but in spite of that, he issued the notice for direction under Section 263 of the Act and ordered that the FDRs should not be released.

55. The Assessing Officer has passed a regular assessment order under Section 143(3) also, after the order under Section 132(5) of the Act. There also the same amount has been added in the income of Dr. Tomar treating the investment in these FDRs of Dr. Tomar.

56. In the assessment year 1991-92, investment in the FDRs has been assessed in the name of Dr. Tomar. The reason given by the Assessing Officer is that when any property is found in the possession of any person, the burden lay on the person in whose possession the property is found. Whether mere possession is enough to hold the ownership of the assets In the case of benami transaction, the consistent view of their Lordships is that the burden lay on a person to prove, who asserts that it is a benami transaction.

57. In the case in hand, the undisputed facts are, the FDRs are in the name of Shri Jayanti Lal Patel. He claimed the ownership of those FDRs. Dr. Tomar has clarified on the spot when the search had taken place that these FDRs are of Shri Jayanti Lal Patel. It is only the Department who is claiming that Shri Jayanti Lal Patel is not the owner of these FDRs, they belonged to Dr. Tomar, only on the basis that they were found at the residence of Dr. Tomar. It is also admitted fact that after the search, the detailed enquiry has been made by the Assistant Commissioner before the order under Section 132(5) of the Income-tax Act and on the basis of that enquiry, he found that the owner of the FDRs is Shri Jayanti Lal Patel. He enquired from various banks how the money flowed and who invested in the FDRs. Money flowed from the account of Shri Jayanti Lal Patel. The Assessing Officer has treated these FDRs of Dr. Tomar only on the basis that once the FDRs are found at the residence of Dr. Tomar, he is the owner of these FDRs and the burden lay on him prove that he is not the owner. It is just the contrary view from the view taken by the apex court in a catena of their decisions.

58. The FDRs are purchased in 1990. Prior to that, the Benami Transactions (Prohibition) Act, 1988, has come into force. That not only prohibits benami transactions, but also provides punishment. Sub-section (3) of Section 3 of the Benami Transactions (Prohibition) Act, 1988, provides that whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.

59. In view of these facts and the decisions taken by their Lordships in various cases, I am of the considered view that there is no justification in adding the amount of investment in FDRs in the income of Dr. Tomar, That should be deleted. The FDRs be released forthwith and handed over to Dr. Tomar, who was the custodian of the FDRs at the time of the search. Dr. Tomar shall give an undertaking that if the investment is found to be of Dr. Tomar, he shall pay the tax in accordance with the provisions of the Income-tax Act.

60. Now, it brings me to the issue whether alternate efficacious remedy is available to the petitioner in the circumstances.

61. In the case of Ram and Shyam Company v. State of Haryana : AIR1985SC1147 , their Lordships have observed as under (page 1151) :

'We remain unimpressed. Ordinarily it is true that the court has imposed a restraint in its own wisdom on its exercise of jurisdiction under article 226 where the party invoking the jurisdiction has an effective, adequate alternative remedy. More often, it has been expressly stated that the rule which requires the exhaustion of alternative remedies is a rule of convenience and discretion rather than rule of law. At any rate it does not oust the jurisdiction of the court.'

62. In the case of Dhari Gram Panchayat v. Saurashtra Mazdoor Mahajan Sangh : (1988)ILLJ468SC , their Lordships have observed as under (page 169) ;

'We do not propose to express any opinion on this question since we are of the view that, on the finding that the action of the panchayat was mala fide, the High Court could have directly interfered with the retrenchment of the workmen under article 226 of the Constitution if the workmen had straightaway approached the court without raising an industrial dispute.'

63. In the case of Dr. Bal Krishna Agarwal v. State of Uttar Pradesh [1995] Lab iC 1396, in para. 9, their Lordships have observed as under (page 1398) :

'The writ petition had been filed in 1988 and it had been admitted and was pending in the High Court for the past more than five years. The learned counsel has also urged that the High Court was not right in saying that there was dispute on questions of fact. According to the learned counsel there is no dispute that the appellant had been selected by the Selection Committee.'

64. Their Lordships have further observed in para. 10 as under (page 1398):

'We are of the view that the High Court was not right in dismissing the writ petition of the appellant on the ground of availability of an alternative remedy under Section 68 of the Act especially when the writ petition that was filed in 1988 had already been admitted and was pending in the High Court for the past more than five years. Since the question that is raised involves a pure question of law and even if the matter is referred to the Chancellor under Section 68 of the Act it is bound to be agitated in the court by the party aggrieved by the order of the chancellor.'

65. Therefore, when there is no dispute on questions of fact and the petition is pending for a long time, the High Court should normally dispose of it on the merits instead of dismissing it on the ground of alternate remedy.

66. In Syed Viquar Mohd. v. Jawaharlal Nehru Technological University [1984] 2 SLR 294, the view has been taken that even where an alternate remedy has been availed of, if it is not efficacious, jurisdiction under article 226 of the Constitution can be exercised.

67. Now, I come to the question whether the assessment orders passed are mala fide. As discussed above, at the time of the search by the Department, the search party has found only jewellery of 12 tola gold and cash of Rs. 7,164 and the FDRs of Shri Jayanti Lal Patel. When nothing was found at the time of search by the Income-tax Department, Shri Dilip Shivpuri, the then DDI who happened to be the cousin of Dr. Deepak Shivpuri, who is a rival in the profession of Dr. Tomar, approached his collegemate Shri Rohit Mahajan, the then Additional S. P. (RSIB), Jaipur City-I, and Shri Rohit Mahajan has obtained the valuation report of the house, the house B-4, Govind Marg, Jaipur, has been valued at more than Rs. 40 lakhs as against Rs. 25 lakhs investment shown by Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar Hindu undivided family. The FIR has been lodged within five days from the date of search mainly on the basis of the valuation report obtained from the PWD. Ultimately, that FIR has been quashed and strictures have been passed against Shri Dilip Shivpuri and Shri Rohit Mahajan. Complaints are also filed by Dr. Tomar against Shri Dilip Shivpuri and the then Commissioner, Shri Kanwar Jeet Singh, that they have demanded money and are harassing him. After investigation, the order under Section 132(5) has been passed and the investment in the plot was found explained. The Assistant Commissioner of Income-tax also found that Shri Jayanti Lal Patel is the owner of the FDRs. The normal course after an order under Section 132(5) is an order under Section 143(3), but without waiting for that regular order, a notice under Section 263 of the Act has been issued by the Commissioner to the effect that why the order under Section 132(5) should not be modified/ cancelled, though no proper justification has been given by the Commissioner for issuing such notice.

68. In the regular assessment under Section 143(3) additions of huge amounts have been made in the income of Dr. Tomar.

69. Mr. Jain, learned counsel for the Department, failed to show any justification for such additions, such as on account of valuation of the house, on the basis of the valuation report of the PWD ignoring the valuation report of the departmental value, as well as, the approved value of the Department. Mr. Jain has also failed to show any justification how the FDRs in question can be treated as the FDRs of Dr. Tomar. The additions of huge amounts have been made on account of some figures on a piece of paper which is admittedly neither in the handwriting of Dr. Tomar nor in the handwriting of any member of his family nor has it been found in any hidden place. A small piece of plain paper wherein some figures are given, which are not tallied even with the account of the seller of the plot nor these figures are tallied with the figures in the account of the agent through whom the plot B-4, Govind Marg, Jaipur, has been purchased. In their statements, the seller of the plot B-4, Govind Marg, Jaipur, as well as the agent through whom the plot has been purchased admitted that the plot has been sold for about Rs. 15 lakhs and payment has been received in instalments. The possibility cannot be ruled out that the piece of paper might have been planted to create evidence and harass Dr. Tomar, who is a rival of the cousin of Shri Dilip Shivpuri, the then DDL When these huge amounts are baseless and without any justification, the conduct of the departmental officials and their attitude left no doubt that the assessment orders which are passed are mala fide. Once the orders are mala fide, this High Court has jurisdiction to interfere in the orders in exercise of its powers under article 226 of the Constitution of India.

70. The notice under Section 263 of the Act has been issued by the Commissioner in 1993 whereby Dr. Tomar was required to explain why the FDRs should not be treated as the property of Dr. Tomar. That has been challenged by Shri Jayanti Lal Patel and has also made Dr. Tomar as respondent No. 5. In reply, Dr. Tomar has raised all these grievances. Thereafter, he filed the appeals also against the assessment orders. One of the grounds in each appeal is that the decision in the appeal shall be subject to the decision on the writ petition pending in the High Court.

71. Mr. Kasliwal also brought to my notice the following strictures passed by this court against Shri Dilip Shivpuri and Shri Rohit Mahajan :

'From the material placed on record, it stands proved that Shri Dilip Shivpuri being cousin of Dr. Deepak Shivpuri (who, in the circumstances spelt out from the petition, after his machination to get himself posted as Assistant Professor in Paediatrics for which, Dr. B.S. Tomar was to be posted after his return from London, having failed, had been nursing a rancour against Dr. Tomar), and being Dy. Director (Investigation), Income-tax, had made firstly raid at the house of the petitioners, and when he failed in his machination in the raid which ended in a whimper after anatomizing income-tax returns and assessment orders of the petitioners and family members, he approached his collegemate, Shri Rohit Mahajan, who admittedly has been Addl. S.P. (RSIB), Jaipur City I, on or after September 17, 1992, and informed Shri V.K. Thanvi, the then Director-General of Police, RSIB, Jaipur, complaining of the property and assets of the petitioners, and in this manner, Shri Dilip Shivpuri was the complainant bearing rancour with the petitioners as a result of rivalry in between his cousin, Dr. Deepak Shivpuri, and Dr. Tomar. Thus, it cannot be denied that Shri Dilip Shivpuri, Dy. Director (Investigation), Income-tax, is the first informant and complainant; that, he failed in his machination to get a case registered for an offence punishable under the provisions of the Income-tax Act in the income-tax raid supervised, stage-managed by him, against the petitioners, which ended in a whimper obviously after having found no case made out, and that since he failed in his intrigue, so, in order to save their faces and conceal lapses, he informed the other administrative authority, i.e., the present investigating authority which has been pursued for their own purpose and wreak rancour which arose also out of their failure in intrigue. The dominant purpose, as I wrung out from the aforesaid facts and circumstances pointed out in regard to the mala fide exercise of power, supra, to register FIR and investigation thereon after being pursued by Shri Dilip Shivpuri is unlawful and to make the character assassination of the petitioners and family members. Thus viewed, registration of the impugned FIR and intended follow-up action is manifestly attended with mala fide, with an ulterior motive for wreaking vengeance on the petitioners and with a view to spite them due to private and personal grudge.'

72. That shows Dr. Tomar has no faith in departmental officials. Just for formality, he has filed appeals and later on withdrawn the same. Here is a case where it has been clearly proved that the entire frame of assessments smacks of mala fides and the assessment orders have originated from malice harboured by the officers of the Income-tax Department personally against the petitioner Dr. Tomar. In doing so they have ignored the clear provisions of law and certain aspects : assessment history of the petitioner, several pieces of evidence, adduced by the petitioner.

73. It is proved beyond doubt that the taxation authority has framed assessment orders purely out of malice both in fact and in law. The petitioner's case is a proved case of malice in fact and malice in law. The alternate remedy prescribed in the statute is by way of an appeal to the Commissioner of Income-tax (Appeals), who is an officer subordinate to the Commissioner of Income-tax, Chief Commissioner of Income-tax and the Central Board of Direct Taxes (respondents Nos. 2 to 4). The appeal before the Commissioner of Income-tax (Appeals) in the peculiar facts and circumstances of the present case is neither efficacious nor effective remedy. In these circumstances, it can be said that this court has jurisdiction to interfere in the mala fide orders passed by the Assessing Officer.

74. When the issue regarding ownership of FDRs has been decided in the writ petition of Dr. Tomar, now that need not required to be decided once again in the petition of Shri Jayanti Lal Patel. Thus, the petition of Shri Jayanti Lal Patel shall stand disposed of in the light of the views taken in the petition of Dr. Tomar in respect of ownership of the FDRs.

75. Further, notice under Section 263 of the Act has been issued to show cause why the order under Section 132(5) of the Act should not be modified. Now after the summary order under Section 132(5), regular final order under Section 143(3) has been passed, in respect of an item considered in the order under Section 132(5) of the Act. Therefore, the order under Section 132(5) no more remains in existence.

76. To sum up :

(i) The income/assets declared under the Amnesty Scheme for the assessment year 1984-85 cannot be reopened unless there is positive finding of the Assessing Officer that the income shown by the assessee is not correct or the asset has not properly been valued.

(ii) The three FDRs, referred to above, are the property of Shri Jayanti Lal Patel. They should be released forthwith and be handed over to Dr. Tomar, who is the custodian of these FDRs at the time of the search, on an undertaking from him that if the investment in FDRs is found to be of Dr. Tomar, he will pay the tax in accordance with the provisions of the Income-tax Act.

(iii) The value of the house B-4, Govind Marg, Jaipur, cannot be taken at more than what has been shown by the three assessees, i.e., Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar Hindu undivided family.

(iv) No addition on account of entries on a piece of paper which is claimed to have been found at the time of the search, can be made, treating the figures as investment for purchase of plot No. B-4, Govind Marg, Jaipur, in the hands of Dr. Tomar, Dr. Mrs. Tomar and B.S. Tomar Hindu undivided family.

(v) Dr. Tomar and Dr. Mrs. Tomar sold two plots for Rs. 1,71,000. That should be accepted and no double additions should be made presuming that one plot is sold for Rs. 1,71,000. The benefit as required under Section 54F should also be given.

(vi) The loan which has been taken from Ashok Kumar Bansal, and on his suit, the suit has been decreed, that should be accepted as such. The sale proceeds of the jewellery should be accepted as genuine and benefit of Section 54F, if conditions arc satisfied, should be given to the assessee. Any addition on account of any loan should not be made, if the loan has been taken from the income-tax assessees and they have given affidavits, the Assessing Officer should verify the genuineness of the loan from the concerned official in the Department. If he certifies the loan by the creditor who is the assessee of the Department, no addition is warranted. Similarly, the amount of various gifts be verified, before any addition is made.

77. In the result, the writ petition of Dr. Tomar is allowed. All the six assessment orders annexures-IX-A to IX-F dated March 22, 1996, and March 27, 1996, are set aside and also drop the penalty proceedings, if any initiated on the basis of these assessment orders, with a direction to pass fresh assessment orders within three months, in the light of the aforesaid discussions. The issue regarding ownership of FDRs of Shri Jay-anti Lal Patel has been considered in the writ petition filed by Dr. Tomar, and there is no need to go into the merits once again in the case of the petition filed by Shri Jayanti Lal Patel as the ownership of Shri Jayanti Lal Patel has been considered in the writ petition filed by Dr. Tomar. That writ petition shall stand disposed of accordingly.