9911796707
TMI Blog1996 (3) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... as unexplained investment in the alleged bringing of gold weighing 30 kgs. by 6 passengers and 35 kgs. By 7 passengers at Delhi International Airport. (ii) 2,17,40,000 2,17,40,000 from the alleged unexplained investment of ₹ 5,22,90,000 in respect of 105 kgs. of gold brought by 20 passengers from abroad in November. (iii) from the alleged unexplained investment of ₹ 5,22,90,000 in respect of 105 kgs. of gold brought by 20 passengers from abroad in November. (iii) 3,00,000 3,00,000 Alleged unexplained investment in the renovation of house. Alleged unexplained investment in the renovation of house. The appellant has also raised certain additional grounds vide his letter dated 8-9-1998 and the additional grounds read as follows : 1. Without prejudice to the other grounds of appeal, the appellants submit that impugned order of block assessment passed under section 158BC of the Income Tax Act, 1961 is void and illegal as no opportunity of hearing has been granted to the appellants by the Commissioner before approving the order of assessment made by the Assistant Commissioner. 2. Without prejudice to the above, the learned Commissioner failed to apprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls, and his only job was to fetch the passengers to Mumbai. It was also mentioned that another passenger accompanied the 10 persons from Sharjah to Ahmedabad and he handed over the requisite foreign exchange to pay the customs duty in respect of the gold in question. The bills for the purchase of the gold in Sharjah and the vouchers in respect of the payment of customs duty at Ahmedabad were produced. The assessing officer, however, did not give credence to the version given by the appellant which was largely corroborated by the 10 passengers in question and he added the value of the gold in question of about 49 kgs. which was seized during the search at ₹ 2,44,22,090 as the unexplained investment of the appellant. As the appellant admitted to have been launched on similar trips on earlier occasions to Delhi and Ahmedabad, the assessing officer came to the conclusion that the appellant was engaged in the business of smuggling gold and he made certain further additions as unexplained investment in gold made by the appellant in the earlier consignments. He also made an addition of ₹ 3,00,000 separately as the unexplained investment in the renovation of the house. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained investment of the appellant. As the appellant admitted to have been launched on similar trips on earlier occasions to Delhi and Ahmedabad, the assessing officer came to the conclusion that the appellant was engaged in the business of smuggling gold and he made certain further additions as unexplained investment in gold made by the appellant in the earlier consignments. He also made an addition of ₹ 3,00,000 separately as the unexplained investment in the renovation of the house. This is how he has made the impugned total addition of ₹ 5,25,90,000 as per the following details. (a) Addition on account of value of gold 65 kgs. (The July consignment at Delhi) (a) Addition on account of value of gold 65 kgs. (The July consignment at Delhi) 3,05,50,000 3,05,50,000 (b) Addition on account of November consignment gold 105 kgs x ₹ 4,700 (b) Addition on account of November consignment gold 105 kgs x ₹ 4,700 = = 5,22,90,000 5,22,90,000 2,17,40,000 2,17,40,000 Credit for the July consignment Rs. Credit for the July consignment Rs. = = 3,05,50,000 3,05,50,000 (c) Addition on account of unexplained investment on the renovation of house. (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner cannot propose a fresh addition or enhance an addition proposed by the assessing officer. His role is only for the exercise of restraint and if he declines to grant approval in respect of any addition, it cannot be included. The canons of natural justice have to be observed by the assessing officer while proposing the additions and in the present case no such dispute is raised before us. In other words, it is not the case of the appellant that the assessing officer had not given him a proper opportunity of being heard before he framed the impugned order. The only objection is that the Commissioner had not given a similar opportunity of being heard before granting his approval under section 158BG of the Income Tax Act. In the view we have taken of the role of the Commissioner under section 15813G, we are of the view that there is no mandatory requirement under this section for the grant of an opportunity of being heard to an assessee before the Commissioner grants the approval. In the case of Shri Mandir Sita Ramji v. Governor of Delhi, cited supra, the Apex Court observed as follows : 6. We are, however, of the view that the above decisions of the Apex Court and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the enquiry is held and the constitution of the Tribunal or the body of persons appointed for that purpose. Whenever a complaint is made before a court that some principle of natural justice had been contravened, the court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case. The rule that enquiries must be held in good faith and without bias, and not arbitrarily or unreasonably, is now included among the principles of natural justice. (Emphasis, italicised in print, by us) From the above remarks it appears that while it is mandatory to observe the principles of natural justice whenever an administrative or quasi-judicial decision is taken to the prejudice of the citizen, it does not follow that an opportunity of being heard has to be allowed even when an administrative authority acts only as a check on the arbitrary exercise of powers by the lower echelons in the administrative hierarchy. Of course, the decision of the Madras Bench of the Tribunal cited by the learned counsel for the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ravels and his statement is believed in part and rejected in part so as to suit the purpose of the Revenue. It is pleaded that the revenue cannot reject his role as employee and saddle him only with the liability arising from his admission of receiving some consignments on behalf of M/s New Robinson Tours Travels. Adverting to the remarks of the assessing officer that M/s New Robinson Tours and Travels does not exist at least at the address specified by the appellant, it is mentioned that the, details of results of such enquiries made by the department in respect of this concern were never put to the appellant and no adverse inference should be drawn on the basis of such enquiries which were conducted behind the back of the appellant . It is also pleaded that, in the alternative, the appellant can be treated only as carrier of gold and not as the owner of the gold and for this proposition reliance is placed upon the decision of the Tribunal in the case of Miss Rose Ben v. Asstt. CIT(1998) 5 DTC 189 (Mum-Trib) : (1998) 65 ITD 57 (Mum-Trib). 6. On merit, the thrust of the argument of the learned counsel for the appellant is that the seized gold of 49 kgs. belonged to the non-res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant given at the time of the search and thereafter and pleaded that the appellant had all along been evasive in his replies. He has also invited our attention to Annexure 'A' to the assessment order in which the appellant has given different names and addresses of the persons involved at different points of time to frustrate all enquiries. He has also invited our attention to the relevant Panchnama and pleaded that 49 and odd kgs. of gold was seized from the appellant from Room No 206 of Hotel Agarwal and so it is contended that there is no basis for the contention for the learned counsel that it was not found in his possession. In this context, the learned Departmental Representative invited our attention to the judgment of the Gujarat High Court dated 5-2-1997, in Special Civil Appln. No. 10107 of 1995, which is a writ petition filed by one of the nonresident passengers claiming ownership of the gold and its recovery from the custody of the Income Tax Department who had seized it wherein the Hon'ble High Court observed that the clandestine manner in which the gold was brought was sufficient to raise the suspicion of the Income Tax authorities and accordingly uphel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners that the gold was seized from them. We are afraid, we cannot accept the contention raised by Mr. Shah that once the gold was lawfully brought in and proper customs duty was paid, the same should not have been pursued by the Income Tax Authorities.. Buying gold in foreign country and bringing it in this country after paying customs duty in foreign exchange does not absolve the person, bringing gold from abroad from his liability to satisfy that the gold was purchased from the income lawfully earned by him and the income earned out of sale of such gold would be disclosed for the purpose of the Act. The clandestine manner in which the gold was brought in was sufficient to rouse suspicion of the Income Tax Authorities that the income earned from the sale of the gold would not be disclosed for the purposes of the Act. Thus, in our view, the Income Tax Authority had sufficient material, before it to form the opinion as envisaged under section 132 of the Act... Respondent No, 5 in the above application is the appellant before us. The learned Departmental Representative pleaded that as the gold was seized from the possession of the applicant, the onus of proving that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the appellant. It is also pleaded that the addition has been made under the provisions of section 69, which is not applicable in the case of the appellant as the provisions of this section apply only in a case where the investments are not recorded in the books of an assessee and it is not the case of the appellant that he had maintained any books of account. It is of course concealed that the provisions of section 64A are attracted in the case of the assessee in case it is to be held that he is the owner of the gold. 9. We find we have to sustain the addition made by the assessing officer towards the value of the 49 and odd kgs. of gold seized, which is ₹ 2,44,22,090. It is clearly mentioned in the Panchnama, which may be seen at p. 10 of the appellant's paper book (APB) that they were seized from Room No. 206, Agarwal Hotel, Ahmedabad. and this room was under the occupation of the appellant. The Police Inspector, Shri K.C. Bawa, who gave the intimation to the Income Tax Authorities about the gold and who was the first authority to visit the appellant in Room No. 206, Agarwal Hotel, Ahmedabad, filed a revised affidavit before the Hon'ble Gujarat High Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the non-resident passengers. He also mentioned that the other passengers were occupying an adjoining room, i.e., Room No. 202 of Hotel Agarwal. Two deposition were taken by the Income Tax Authorities on the date of the search, i.e. on 13-11-1995 at 12 noon and at 5.30 pm. and in neither of these two statements the appellant disputed that the gold of 49 and odd kgs. was seized from his possession. Copies of these two statements can be seen at pp. 27 to 36 of the APB We may also mention that the same position emerges from the affidavits of Shri R. P. Meena, Asstt. Director of Income Tax (Invectment) filed before the Hon'ble Gujarat High Court, and copies of these may be seen at pp. 210 to 231 of the APB. Further, we are of the view that this matter is beyond dispute at this stage in view of the clear finding of the Hon'ble Gujarat High Court, which we have extracted here in above, in Special Civil Appln. No. 10107 of 1995 to the effect that the gold in question was seized from the possession of the appellant. So we have to hold that the gold in question of 49 and odd kgs. was seized from the possession of the appellant and he is answerable for the same in view of the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it could be released to the non-resident passengers as it was obviously his responsibility to hand it over to either Shri Noorbhai at Dubai or to Shri Ahmed Bashir at Mumbai as he received the gold on their behalf and it was seized from his possession. Apart from this, there are a number of discrepancies in the depositions of the appellant. At one stage, he mentioned that it belonged to one Shri Ahmed Bashir of Dubai. Subsequently, he mentioned that it belonged to one Shri Mohd. Ali and still later, to one Shri Vali Mohd. Different addresses were also given of the said Shri Ahmed Bashir. In the deposition taken at 8-11-1995 at 11.40 a.m., which may be seen at pp. 13 to 26 of the APB, in reply to question No. 1, he replied regarding himself as follows . 10. We are of the view that the appellant has not discharged the onus of proving that he was not the owner of the gold found in his possession. The gold was bought in Dubai but it does not automatically follow that the appellant has nothing to do with that gold. As the assessing officer observed, money could be sent in foreign exchange through the havala channels. There is also a contradiction, inasmuch as before the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows : Q.2. Tell your office address once again. Ans. My office address is 91, Samuel Street, 1st floor, near Masijid Bandar, Dongri, Mumbai 9. Tel No. 3739406 and 3747000, 0. 3. Tell us your residential address ? Ans. Address of my residential premises is R. No. 4 2nd floor, Katija Manzil opp. Mum. Urdu School, Nagpada, Mumbai 8. In this deposition, he gave his name as Mohd. Rafiq Abdul Hamid . As already mentioned in the first deposition taken at 11.40 a.m., he mentioned that he was sent by Shri Ahmed Bashir, the Manager of M/s New Robinson Tours Travels. In the second deposition, it is mentioned as follows : Q. 5. In your office at Mumbai who are sitting there ? Ans. Myself, Abdul Salim Patel, Mohd. Alim, Javed Shaikh among us Mohmed Ali is the boss. Noor Mohmed who resides at Dubai he works on behalf of our owner, and take work from us. Q. 6. Previous statement given by you in that you have stated that Bhasir Mohd is your manager, now states as Mohmed Ali like that whose name is correct ? Ans. It is Mohmed Ali. I have written wrong name of Bashir Ahmed. Kindly pardon me. Q. 7 One more chance is given to you. If you have stated any false f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion filed by them has been rejected by the Hon'ble Gujarat High Court, as mentioned earlier. In the circumstances, we are obliged to conclude that the appellant had not discharged the onus of proving that he is not the real owner of the gold seized from him and as there are no ostensible sources explaining this acquisition of gold, the assessing officer was, to our mind, justified in bringing the same to tax under the provisions of the Income Tax Act. His failure to mention the correct section, i.e. 69A, does not make the addition of ₹ 2,44,22,090 in the hands of the appellant invalid. The lapse, if any on the part of the assessing officer in this context, has to be condoned in view of the provisions of section 292B of the Income Tax Act. We have also to reject the alternative contention advanced on behalf of the appellant that he is only a carrier. The case of the appellant is not on par with that of Miss Rose Ben v. Income Tax Officer, cited supra, by the learned counsel for the appellant in this context. Firstly, Miss Rose Ben was a solo actor, whereas the appellant is part of an organised activity. She was a regular airhostess who, by virtue of her job can convenient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... session of gold. The appellant has of course admitted that he handed over certain bills of the gold ornaments to different parties at Mumbai but no enquiries have been made with those parties by the assessing officer and no material has been brought on record connecting the appellant with those alleged sales to the parties. In the circumstances, we are of the view that no other addition, except towards the value of the seized gold of 49 and odd kgs. can be made in the hands of the appellant. We accordingly delete all the other additions. 12. The assessing officer has made a separate addition of ₹ 3,00,000 towards unexplained investment in the renovation of house by the appellant. Compared to the addition of ₹ 2,44,22,090 which we have sustained, the unexplained investment is a pittance. We must hold that the investment is explained from the undisclosed income brought to tax. We accordingly delete the addition of ₹ 3,00,000 also. 12. The assessing officer has made a separate addition of ₹ 3,00,000 towards unexplained investment in the renovation of house by the appellant. Compared to the addition of ₹ 2,44,22,090 which we have sustained, the unexp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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