Commissioner of Income-tax Vs. S.M.S. Investment Corporation P. Ltd. - Court Judgment

Excerpt:
- section 2(k), 2(1), 7 & 40 & juvenile justice (care and protection of children) rules, 2007, rule 12 & 98 & juvenile justice act, 1986, section 2(h): [altamas kabir & cyriac joseph, jj] determination as to juvenile - appellant was found to have completed the age of 16 years and 13 days on the date of alleged occurrence - appellant was arrested on 30.11.1998 when the 1986 act was in force and under clause (h) of section 2 a juvenile was described to mean a child who had not attained the age of sixteen years or a girl who had not attained the age of eighteen years - it is with the enactment of the juvenile justice act, 2000, that in section 2(k) a juvenile or child was defined to mean a child who had not completed eighteen years of a ge which was given prospective prospect - appellant was about sixteen years of age on the date of commission of the alleged offence and had not completed eighteen years of age when the juvenile justice act, 2000, came into force - juvenile act, of 2000 has been given retrospective effect by rule 12 of juvenile justice rule, 2007 - as such, accused has to be treated as juvenile under the said act. - the assessee had failed to disclose this information and consequently because of the failure on the part of the assessee to declare full and true particulars of its income, the assessments were, accordingly, reopened under section 147(a) of the income-tax act and the balance of the interest which was not added in the original assessment was charged to tax.1. the income-lax appellate tribunal, jaipur bench, jaipur, has referred the following question of law arising out of its order dated july 10, 1981, in respect of the assessment years 1970-71 to 1973-74 :'whether, on the facts and in the circumstances of the case, the tribunal was justified in upholding the finding of the commissioner of income-tax (appeals) that the reopening of assessment under section 147(a) was not justified ?'2. the brief facts of the case are that the assessee has advanced large sums to messrs. citric india ltd. while completing the original assessments, the income-tax officer held that interest at 12 per cent. on the sums advanced to messrs. citric india ltd. accrued to the assessee and included it in the computation of income ignoring the assessee's contention that no such income accrued to it because of disputes with the said company. on february 13, 1975, a branch office of the assessee in rajmahal palace was searched and a slip of paper was seized. on this slip, interest due from messrs. citric india ltd. for various periods from april 1, 1965, to june 30, 1972, was noted under the heading 'interest due from messrs, citric india ltd. at 12 per cent.' the income-tax officer felt that this amount was calculated on compound interest basis. the assessee had failed to disclose this information and consequently because of the failure on the part of the assessee to declare full and true particulars of its income, the assessments were, accordingly, reopened under section 147(a) of the income-tax act and the balance of the interest which was not added in the original assessment was charged to tax. in appeal, the commissioner of income-tax (appeals) accepted the assessee's contention that there was no nexus between the slips seized and the interest earned by the assessee. the reassessment so framed was cancelled.3. the revenue challenged the order before the income-tax appellate tribunal and the tribunal came to the conclusion that an inference on the basis of the seized papers that the assessee charged interest on compound interest basis cannot be inferred. the seized paper cannot be taken as evidence that the assessee was receiving interest under the table over and above what was stipulated in the agreement.4. the submission of learned counsel for the revenue is that, in accordance with the provisions of section 132(4a) of the income-tax act, if any document is found in the possession or control of any person in the course of such search, it may be presumed that such document belongs to such person and that the contents are true. it was further submitted that, in the said paper, sums of rs. 21,369.86 and rs. 1,27,187.21 have been shown in respect of the financial years 1965-66 and 1966-67 and, therefore, the entries in respect of the remaining assessment years should be considered as interest earned by the assessee.5. learned counsel for the assessee has submitted that in d. b. i. t. references nos. 314, 315 and 316 of 1985 decided on april 13, 1988 (cit v. s. m. s. investment corporation ); this court has held that a presumption can be raised but such presumption is a rebuttable presumption and relates to a question of fact. it was held in that case that the tribunal has held that the presumption stands duly rebutted and this being a question of fact, the application was rejected accordingly.6. we have considered the matter. in accordance with section 132(4a), if any document is found in the course of a search, then by legal fiction, a presumption has to be drawn that such document belongs to the person from whose possession or control it was found and the contents of such documents are true. in accordance with the provisions of section 132(4a), we are of the opinion that a presumption has to be drawn that the seized documents belongs to the assessee and is a true document. the said document was found from the branch office of the assessee which was situated on rajmahal palace (hotel). the finding in the judgment dated april 13, 1988 (see ) as has been given is that the question involved is a question of fact. the tribunal has taken into consideration the books of account of citric india ltd. which shows that, for the financial year 1965-66, interest was charged at 12 per cent. in the next year, although the opening balance included the interest charged in the earlier year, the entry regarding interest was reversed on january 31, 1967, and then interest up to march 31, 1967, was calculated. this resulted in the principal amount on which the interest was charged for the financial year 1966-67 did not include the interest charged in the financial year 1965-66. further, no interest has been credited by citric india ltd. to the assessee in the accounting years relevant to the assessment years in appeal. the agreement dated july 27, 1965, was also taken into consideration in which it was provided that simple interest at 12 per cent. was to be charged. a copy of page no. 107 of serial no. 7 of annexure 'a' of the panchnama dated february 13, 1978, which was seized from the branch office of the assessee-company, rajmahal palace, jaipur, was annexed along with the statement of case. in the head line of the said paper it is mentioned 'interest due from messrs. citric india ltd. at the rate of 12 per cent.' the income-tax appellate tribunal has agreed with the conclusion arrived at by the commissioner of income-tax (appeals). in the present matter, it has also taken into consideration that the debtor did not credit any interest in the books of account from the financial year 1968-69 onwards and declined to pay the interest. the finding which has been recorded being a finding of fact on the basis of which the presumption stands rebutted, and the matter being covered by the decision given by this court dated april 13, 1988 (see ), we are of the opinion that the income-tax appellate tribunal was justified in upholding the finding of the commissioner of income-tax (appeals) that the reopening of the assessment under section 147(a) was not justified.7. accordingly, the reference is answered in favour of the assessee and against the revenue. no orders as to costs.