9911796707
TMI Blog1998 (3) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... d Rs. 2,18,750 by way of consignment of thin-walled bearings. As regards the first item of Rs. 1,50,000, the assessee showed receipts of Rs. 20,000, dated July 21, 1965, by drafts on Bank of India and Rs. 80,000 dated July 14, 1965, by cash through Balwant Singh Bawa. The accounts showed that the amounts were originally credited to Madhusudan Gordhandas and Co. and later transferred to the accounts of French India Traders in the assessee's books of account. As regards the balance of Rs. 50,000 the amount was alleged to have been paid by Madhusudan Gordhandas and Co., Bombay, to the assessee directly. As regards cheques, the assessee's books showed the following entries : April 26, 1966 cheque of Babubhai and Sons, Rs. 4,00,000 June 8, 1966 cash of Babubhai and Sons, Rs. 1,00,000 June 29, 1966 cheque of Babubhai and Sons, Rs. 1,50,000. According to the Income-tax Officer, the balance of Rs. 1,00,000 was received by the assessee directly from Madhusudan Gordhandas and Co., in cash and there was no mention in the books of the assessee that thin-walled bearings had been handed over to the customs clearance permit holders. The Income-tax Officer, therefore, came to the conclusion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in coming to the conclusion that the assessee was the beneficiary of the transactions. The Appellate Assistant Commissioner considered the matter in detail. He referred to the statement of G. L. Pathy, the power of attorney of Kailashchand Bhaiya, an employee of the assessee-firm, the power of attorney deed executed by Pathy in favour of Kailashchand Bhaiya, certain correspondence and also statement given by the said Pathy at the time of examination by the Income-tax Officer. After exhaustively considering the matter, he came to the conclusion that the customs clearance permits of French India Traders were exploited by the assessee and the entire amount received as a result of such exploitation was utilised by the assessee for its benefit. He, therefore, held that the Income-tax Officer was justified in making the additions admitting all customs clearance permits in the hands of the assessee for both the assessment years. The assessee carried the matter on appeal before the Income-tax Appellate Tribunal. In the appeal before the Tribunal, the assessee challenged also the addition of Rs. 60,000 being the credit in the name of one Damodardas Ramandas. It was an undisclosed income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained in the name of Zip Industries. The Tribunal, therefore, came to the conclusion that the receipts credited in the name and account of G. L. Pathy in respect of customs clearance permits were all disbursed in the manner in which they were said to have been disbursed. The Tribunal, therefore, held that G. L. Pathy did not play any role though the permits stood in his name. According to the Tribunal, L. G. G. Agencies which is a part of the assessee had taken a greater and real interest. The mere fact that employees of the Bombay office and Delhi office were associated with G. L. Pathy and receipts were recorded in the books of L. G. G. Agencies is a significant one which can be attributable to L. G. G. Agencies. The Tribunal, on the basis of the materials and evidence came to the conclusion that the benefits relating to the exploitation of customs clearance permits reached the assessee and where surrounding circumstances and probabilities of the case indicate that it was difficult to evaluate the benefits, then greater share should have gone in favour of the assessee. The Tribunal, therefore, estimated that out of total receipts, i.e., Rs. 12 lakhs, 50 per cent. should be ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, the Tribunal is right in law in holding that though the customs clearance permits stood in the name of Shri Naidu, the applicant should be deemed to have derived 50 per cent. benefit? 5. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that even assuming any profit has been received by the applicant in regard to the customs clearance permit transaction whether the same is assessable as income liable to tax? 6. Whether, on the facts and in the circumstances of the case, the Tribunal is right in ignoring the fact that the applicant was not carrying on business of dealing in or exploiting customs clearance permits and as such even assuming without conceding any profit had been derived the same is not income but a casual receipt? 7. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in its finding that Shri Naidu did not play any role worthwhile especially in view of the clear finding that the customs clearance permits really belonged to him? 8. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in its finding that Lala Gopikrishna Gokuldas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the customs clearance permit transaction, whether the same is assessable as income liable to tax? 7. Whether, on the facts and in the circumstances of the case, the Tribunal is right in ignoring the fact that the applicant was not carrying on business of dealing in or exploiting customs clearance permits and as such even assuming without conceding any profit had been derived the same is not income but a casual receipt? 8. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in its finding that Shri Naidu did not play any role worthwhile especially in view of the clear finding that the customs clearance permits really belonged to him? 9. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in its finding that Lala Gopikrishna Gokuldas Agencies appears to have taken greater and real interest and concern than Shri Naidu? 10. Whether, on the facts and in the circumstances of the case, there is any justification for the Tribunal to adopt 50 per cent. of the value of the customs clearance permits as benefit derived by the applicant? 11. Whether, the Tribunal has exceeded its jurisdiction and/or acted without any evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the addition made towards the unexplained credit entries amounting to Rs. 60,000. We have carefully considered the case of the Department as well as the assessee. We are of the opinion that the Tribunal has arrived at a finding that there was an exploitation of customs clearance permits. The Tribunal took into account the statement of Ramnarayan, one of the partners of the assessee-firm, and the statements of G. L. Pathy, Balwant Singh and Bhaiya. It also took into account the correspondence between Madhusudan Gordhandas and Ramnarayan and clearly recorded its finding that G.L. Pathy did not play any role though the permits were standing in his name. The Tribunal also from the evidence came to the conclusion that L.G.G. Agencies which is a partner of the assessee had taken a greater role and real interest. Though the assessee had pleaded lack of interest and anxiety relating to the exploitation of the customs clearance permits, the Tribunal also found that the employees of the assessee in Bombay and Delhi had been associated with G. L. Pathy and all the receipts had been recorded in the books of L. G. G. Agencies and there was positive evidence in the form of letters in the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot entered into any such contract earlier and it was in no way connected with thin-walled bearings. Though there was assessment in the hands of Zip Industries for the sum of Rs. 3 lakhs, the total income assessed was Rs. 18,954. Even there was a controversy about the receipt of articles between Pathy and Balwant Singh and the contract in respect of articles entered into with Zip Industries which had never dealt in those articles would appear to be a make-believe contract. Therefore, the Tribunal, after taking into account the fact that the amounts were credited in the accounts of G. L. Pathy and the Income-tax Officer assessed Zip Industries in respect of receipts when Zip Industries offered the same for assessment, came to the conclusion that a part of the profit was attributable to the assessee. Therefore, it cannot be stated that the Tribunal has omitted to take into account any relevant consideration or taken into account some irrelevant consideration in holding that a part of the profit arising on the exploitation of customs clearance permits found its way to the assessee. We are, therefore, of the opinion that the finding arrived at by the Tribunal is a finding of fact and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1966-67 and the balance of Rs. 4.5 lakhs should be assessed during the next assessment year. The Tribunal estimated the profit attributable to the transaction and arrived at the figure of Rs. 6 lakhs. Therefore, the estimate made by the Appellate Tribunal on the basis of materials cannot be disturbed by this court while sitting in reference jurisdiction. Once it is found that the assessee was not entitled to the entire benefits, the further question that remains is only the question of estimation and the Tribunal estimated the profit at Rs. 6 lakhs and directed the apportionment of the same into two years under consideration. Therefore, we are of the view that the estimate made by the Appellate Tribunal on the basis of the materials cannot be disturbed by this court. In so far as the sum of Rs. 60,000 is concerned, the Tribunal found that there was an admission by the creditors that the transaction was bogus. The creditors not only denied the transaction, but also filed an affidavit to the effect that the transaction was not a genuine one. Thus, on the face of the denial by the creditors, the burden was cast on the assessee to prove that the transaction was a genuine one and in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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