9911796707
TMI Blog1991 (6) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... a on 2nd April, 1980, he had brought foreign currencies which he got exchanged for rupees and he took two loans from two persons and out of the amount raised by above manner he purchased those diamonds from several persons in the market whom he did not know and from whom he did not obtain any receipt. The customs officers made enquiry from two persons from whom the assessee had claimed to have borrowed amounts and those persons denied to have lent any amount to the assessee. The assessee changed his version about having exchanged foreign currencies for rupees and stated that those currencies were lying with his brother-in-law. They were then seized. The CIT, Baroda, on receipt of information issued authorisation under s. 132A(1) of the IT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d since that foreign income was not assessable the assessment made was unsustainable. His second submission was that since diamonds were confiscated, the value thereof was allowable as deduction in view of decision of Supreme Court in CIT vs. Piara Singh (1980) 17 CTR (SC) 111 : (1980) 124 ITR 40 (SC). The submission on behalf of Department, on the other hand, was that in view of the statements of assessee at the relevant time the presumption would be that he acquired diamonds in India and since there was no acceptable explanation for source from which investment was made, addition was justified. The further submission was that on the facts of the case no deduction was allowable and principle laid down by Supreme Court in the case of Piara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the said version was false. It is thus established that source of the amount which was invested in acquiring diamonds is not proved by the assessee and as such addition was rightly made by the ITO. 7. The alternate submission of the assessee to the effect that income earned by him in foreign country prior to 2nd April, 1980 when he was non-resident should regarded to have been invested in acquiring those diamonds cannot be accepted because there was no evidence that such income was invested by him in acquiring the diamonds and it is not his version that he had brought the diamonds in question from foreign country or that he had brought his income from foreign country. There was a time gap of 24 days between 2nd April, 1980 when h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duji Kushalji Co. vs. CIT (1973) 89 ITR 112 (AP) wherein the rejection by the Tribunal of the claim of the assessee firm (which was carrying on business gold and jewellery) for deduction as business loss of amount representing value of the contraband gold seized from him by Customs Officers was confirmed and the High Court observed that to be entitled to deduction, the loss must be one that springs directly from the business or trade which the assessee carries no or is incidental to the business that he carries on and that confiscation of contraband gold is an action in Rem and not a proceeding in personam, as the action taken is directed against the property and as such confiscation of contraband gold could not be said to be a trading or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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