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TMI Blog1985 (1) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... o was found carrying a rexine bag in has hands also started running but was over-powered immediately thereafter. Letter on the said gentleman disclosed his name as Ashok Kumar Jain S/o Shri Mohan Lal Jain resident of 4624, Darya Ganj New Delhi. The assessee was chased. He ran and entered bungalow No. 24,East Nizamuddinwith a view of elude the customs staff. On a complaint, the flying squad of police reached the spot and Baldev Raj was brought out of the said premises and apprehended by the customs staff. He was brought back to railway station. The rexing bag, carried by Ashok Kumar Jain was found to contain 80 gold bars of ten toles each, inscribed with foreign marking thereon contained in eight packets. 3. Importation of gold intoIndiafrom a foreign territory without a permit of Reserve Bank ofIndiais prohibited vide notification No. 12(II) F. 1/45 dt.25th Aug., 1948issued by the Government of India under s. 8(1) of the Foreign Exchange Regulation Act, 1947. The assessee and A. K. Jain could not produce the requisite permit for import of the said gold. The said gold was, therefore, seized under s. 110 of the Customs Act, 1962, in the reasonable belief that the same was of smuggl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitted facts the seized gold was not recovered from the possession of the assessee. There was no evidence showing that really the assessee was owner of the gold. Thus it was contended that provision of s. 69A were not attracted. In the alternative it was contended that the gold in question was confiscated and as such in view of the decision in the case of CIT vs. Piara Singh (1980) 17 CTR (SC) 111 : (1980) 124 ITR 40 (SC) the said amount may be allowed as business loss. 6. The ld. CIT(A) mainly considered the order passed by the Customs Authorities and he also pointed out that penalty of Rs. 30,000 was imposed on the assessee by the Collector (Customs) on24th Nov., 1970. The ld. CIT(A) on the reasoning and the conclusion given by the Collector (Customs) in penalty proceedings held that assessee was the owner of 3/5th of the seized gold and balance 2/5th belonged to his accomplice Ashok Kumar Jain. Thus the Asstt. CIT(A) reduced the addition to Rs. 84,000 in the hands of the assessee and gave relief of Rs. 56,000. 7. Against the order of the CIT(A) the assessee appeal and cross objection separately. Inter alia the contention in the appeal and the cross objection was that ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Oct., 1966, moved by the assessee in the Court stating that his confession was recorded under duress and coercion. Even Ashok Kumar, the other co-accused made similar application stating his confession was recorded under duress. In the said application it was also sated that medical examination dt.28th Oct., 1966, also would go to show that assessee was beaten by the Customs Authorities at the time of recording his statement. The evidence recorded by the Customs Authorities was not confronted to the assessee by the ITO in assessment proceedings. The ITO only recorded the statement of the assessee and in his statement he clearly stated that he had no connection with the seized gold and it was never owned by him. In the statement he also sated that the alleged confession recorded by the Customs Authorities was under duress and coercion. In assessment proceedings there was no independent evident to prove that assessee was really owner of the gold in question. The smuggled gold was never recovered from the possession of the assessee. The assessee is an ordinary man and from him it is not expected that he was doing smuggling activities. In the past the assessee was never found doing suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by evidence or material on record. If we go through the provision of s. 69A it would be clear that section was enacted to make certain properties as assessee s income by deeming provision. But then facts must be found to clearly bring the case within a deeming provision. It is no doubt true that in the case of a deeming provision the Court or Tribunal has to assume an unreal stated of things to be real. Reference may be made to the ratio of Supreme Court decision in the case of CIT vs. S. Teja Singh (1959) 35 ITR 408 (SC). But then the basis for the assessment must exist. 13. In the present case it is undisputed fact that the bag containing gold was not recovered from the possession of the assessee. The evidence on record would go to show that the said bag was recovered from the possession of one Ashok Kumar Jain. Since the incriminating goods were not recovered from the possession of the assessee, there will be heavier burden on the Department to establish that the gold in question was really owned by the assessee. There are decisions to the effect that mere possession of a thing will not raise a presumption that the possessor is the owner. For example a thief may be in possessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not recovered from his possession. In his statement the assessee also stated that whatever statement was recorded by the Customs Authorities was under duress and coercion. This fact was also stated by the assessee in the bail application dt.26th Oct., 1966, moved before the Magistrate when the was produced before the Magistrate. A copy of such application is in the paperbook. Similar application was given by Ashok Kumar Jain to the Magistrate that the statement recorded by the customs authorities were made under duress and coercion. Copy of this application is also in the paperbook. The assessee also filed a criminal complaint against the officers of the custom Department under ss. 220, 221 and 223 of the Indian Penal Code. On the basis of such complaint the Magistrate 1st Class vide his order dt.14th April, 1978framed a change against the accused C. L. Talwar, Modh. Akram who had allegedly beaten the assessee at the time of his arrest on25th Oct., 1966. The change framed by the magistrate was that on26th Oct., 1966both the accused namely, C. L. Talwar and Mohammed Akram in furtherance of their intention at Custom house within the jurisdiction of Police Station, Darya Ganj, cau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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