JUDGMENT
1. This is an appeal under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as “the Act”).
2. The facts giving rise to this appeal, briefly stated, are as under :
On January 16, 1997, search and seizure operations were carried out by the officers of the Income-tax Department at the business premises of H. P. Dhanuka Plastic Chem Private Limited, M. I. Road, Jaipur, and the residential premises of Plot No. 361, Mahaveer Nagar, Tonk Road, Jaipur, as also at the residential premises of Shri Prem Kumar Gupta, an associate of the appellant. Various documents and valuables, in the form of cash, foreign exchange, silver and gold jewellery were found and seized during the search operations. As a result of search and seizure, the tax liability of Rs. 3.42 crores was raised vide assessment order dated January 29, 1999. This was an ex parte assessment under Section 144 of the Act computing the total undisclosed income of Rs. 4,25,66,587. The appellant preferred an appeal before the Commissioner of Income-tax (Appeals), Rajasthan-III, Jaipur, which was registered as Appeal No. 639 of 1998-99. It was heard and disposed of vide order dated September 24, 1999. The Commissioner of Income-tax (Appeals), rejected the contention that the appellant was a non-resident Indian, residing and carrying on business in Nepal and, therefore, not amenable to assessment and payment of income-tax in India. However, the assessment of undisclosed income of the appellant was scaled down to Rs. 58,72,939. Against the order of the Commissioner Income-tax (Appeals), the appellant preferred an appeal before the Income-tax Appellate Tribunal (in short “the ITAT”). An appeal was also filed against the order of the Commissioner of Income-tax (Appeals) by the Revenue authorities. The two appeals were heard and disposed of together. Aggrieved by the order of the Income-tax Appellate Tribunal, this appeal has been preferred by Shri Ram Kumar Dhanuka.
3. Having heard learned counsel for the appellant at length, we do not find any substantial question of law involved in the case. The main contention of the appellant is that he was a non-resident Indian, residing and carrying on business in Nepal where he has been assessed to income-tax. According to learned counsel for the appellant, the income-tax authorities had no right or jurisdiction to proceed against the appellant for the aforesaid reason. According to learned counsel, search and seizure operations carried on against the appellant were a]l illegal and without authority of law. The contention is devoid of any force. Section 132(1)(c) of the Act authorises search and seizure if there is reason to believe that any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or
thing represents either wholly or partly income or property, which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act. Thus any person, including a non-resident Indian, assuming the appellant to be one, would be amenable to search and seizure under Section 132 of the Act.
4. The next contention of learned counsel was that there was no question of having reason to believe that the income was liable to be taxed and would not be disclosed because according to learned counsel, a person who was a non-resident Indian, would not be liable to tax in India and was, therefore, not liable to disclose any income for the purpose of the Indian Income-tax Act. This argument is also fallacious because even a non-resident Indian can have income earned in India which may be taxable under the Indian Income-tax Act and which might not have been disclosed or would not be declared.
5. The other questions raised were about the addition of certain income, allegedly of some other persons, as undisclosed income of the appellant. These are purely factual questions and not questions of law. The question as to whether the appellant was a non-resident Indian or not, is also essentially a question of fact. Only because there is an open border between India and Nepal and a passport is not required to travel to and fro between India and Nepal, it cannot be presumed that anyone who claims to be an Indian national residing in Nepal, is a non-resident Indian. Simply because it is difficult to prove in such a case whether a person was residing for a particular period in Nepal or in India, it does not mean that the claim of a person who claims to be residing in Nepal that he is a non-resident Indian, has to be accepted by the authorities.
6. We find no substantial question of law involved in this appeal. The appeal is therefore, dismissed.