PCIT Vs Hassan Ali Khan (Supreme Court of India)
Summary: The case arose from a search at the residence of a third party, Kashinath Tapuriah, during which bank drafts of Union Bank of Switzerland were seized. One US$ 2 million draft was in favour of Pan Asian Distribution Ltd., while another was in favour of Hassan Ali Khan. For Assessment Year 2000-01, the Assessing Officer treated the Indian-rupee equivalent of the amounts as unexplained income of the assessee. The Tribunal confirmed the addition relating to the draft in the assessee’s name but deleted the addition relating to the draft in favour of Pan Asian Distribution Ltd. The Revenue challenged the Tribunal’s decision before the Bombay High Court, relying on the presumptions under Sections 132(4A) and 292C of the Income-tax Act, 1961.
Read HC judgment in this case: Bank Draft Seized From Third Party Cannot Establish Assessee Ownership: Bombay HC
The High Court noted that the search had taken place at a third party’s residence and that the disputed draft was payable to Pan Asian Distribution Ltd., not to the assessee. There was no material showing that the company did not exist or establishing a link between the company and the assessee. The Court held that a bank letter concerning revalidation of the draft could not by itself establish the assessee’s entitlement to the amount. The issues were factual and no question of law arose. The Tribunal’s decision concerning unexplained lifestyle expenditure was also held to involve a factual determination. The Revenue’s appeal was dismissed. The Revenue thereafter approached the Supreme Court, which condoned the delay but dismissed the Special Leave Petition and disposed of the pending application. Consequently, the Bombay High Court judgment remained undisturbed.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Delay condoned.
The Special Leave Petition is dismissed.
Pending application stands disposed of.
