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TMI Blog2015 (1) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... others. The appellant in his statement stated that the said Indian currency recovered was the sale proceeds of contraband gold biscuits of foreign origin. The appellant in his statement stated the details of the procurement of the smuggled gold in respect of sale proceeds. The appellant was arrested the remanded to judicial custody on 23.4.1985. The said officers also recorded statements from various persons who have helped the appellant for smuggling of the gold. The appellant sent a representation dated 27.4.1985 to the Collector of Central Excise in which it is stated that one Shri S.S. Arumugam @ Rajarathinam of Srilanka who was a resident of Mellur, Madurai was known to him. The same S.S. Arumugam on his request gave a loan of Rs. 5,50,000/- on 22.4.1985 as a loan and thus the amount was seized by the customs officers. He also attached a photocopy of the document dated 24.4.1985 and medical certificate dated 25.4.1985. During the enquiry, the customs officers found that the concerned medical officer denied the authenticity of the medical certificate. A show-cause notice dated 16.10.1985 was issued to various persons including the appellant proposing to confiscate the Indian c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d piece of evidence. It is submitted that the other persons have not retracted their statements and therefore the adjudicating authority rightly confiscated the goods. 5. After hearing both sides and on perusal of the records, we find that the appellant at the time of seizure of the Indian currency stated that the amount in question was the sale proceeds of the contraband gold. It is seen that subsequently the appellant by his representation dated 27.4.1985 to the Collector of Central Excise, Madurai stated that the amount in question was taken as loan from Shri S.S. Arumugam @ Raja Rathinam of Sri Lanka. We find that this issue went up to the ITAT. The Income Tax Officer by order dated 19.9.1989 for the Assessment Year 1986 - 87 added the amount of Rs. 5,50,000/- as borrowed from S.S. Arumugam of Melur during the previous year. The appellant filed appeal before the ITAT. By order dated 31.12.1996, the Tribunal held that the amount in question was lent by S.S. Arumugam alias Rajarathinam to the appellant and therefore the addition of the income is deleted and the appeal of the appellant was allowed. The relevant portion of the said order is reproduced below:- &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.4.1985 the assessee stated before the authorities that the seized money represents the deposits received from Rajarathinam, a Srilankan. Sri Rajarathinam on 8.4.85 has field before the assessing officer an intimate that he had migrated from Sri Lanka to India and he has also stated that he brought a sum of Rs. 7,95,000/- out of his earnings in Sri Lanka. The ITO has acknowledged this declaration on 9.4.85. In pursuance of summons issued by the department, Sri Rajarathinam appeared before the ITO, has acknowledged this declaration on 9.4.85. In pursuance of summons issued by the department, Sri Rajarathinam appeared before the ITO and confirmed that he has given a sum of Rs. 5,50,000/- to the assessee for said custody. He has also stated to have brought this sum from Sri Lanka. There were representations to the Board that in view of the difficulties being faced by the persons migrating from Sri Lanka to India due to disturbances in that country, it may not be possible for a migrant from that country to lead the evidence necessary to prove his/her claim that a particular sum of money or personal jewellery etc. has been brought over by him/her from that country, were made. The Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant portion of the order is reproduced below:- 5. On 23.4.1985, the customs authorities searched the premises of the assessee and implicated the assessee and per force recorded the statement that the said money represented sale proceeds of contraband which the assessee retracted later. The assessees contention is that he was having the said sum of Rs. 5,50,000/- on 22.4.1985 since it was entrusted to him by one S.S. Rajarathinam, whose income tax papers contain declaration on 9.4.1985 that he had brought Rs. 7,95,000/- from Sri Lanka out of which amount Rs. 1,85,000/- was given by him to Sujatha Jewellers and Rs. 5,50,000/- was entrusted to the assessee for safe custody. The income tax department also summoned the said Rajarathnam who has confirmed having deposited the sum of Rs. 5,50,000/- with the assessee but he could not explain properly how he had brought funds from Sri Lanka. Therefore, the assessing officer has disbelieved the stand of the assessee and added the said amount of Rs. 5,50,000/- as undisclosed cash credit and the sale proceeds represented the value of contraband gold b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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