9911796707
TMI Blog1980 (12) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... rship of the property and the cost of construction of the property. In our opinion, the first and foremost question here is that of the ownership of the property and with that we will deal first. 4. On the question of ownership, we have heard the rival submissions, looked into the evidence placed in the assessee's paper book and perused the orders of the authorities below. The assessee claimed that the house property belonged to his wife, Smt Harbans Devin in whose name the plot of land was standing and who had also contributed her own capital to the extent of Rs. 19,500. On the other hand, the case of the Revenue rested on what it considered to be assessee's admission on the point in paras 1 and 2 of his letter dt. 11th July, 1977. The Deptl. Rep in the course of arguments also wanted to rely on a letter dt. 15th Feb., 1979 filed in the assessment proceedings of the year 1976-77 but such a letter could not be looked into at this stage axes the assessment order had been passed on 20th March, 1978. In any event, the position about the admission was the same as is referred to in assessee's letter dt. 11th July, 1977. The assessee's counsel, Shri Sundarshan Kapoor, submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because of this sale that the ITO had accepted that the amount of Rs. 16,000 was satisfactorily explained but it appears that the ITO has failed to consider the question of ownership of the house in Gali Kakian Wali property which according to the assessee belonged to his wife. In this connection, it will be relevant to refer to the extract of the order of Tribunal for feited Property under Safema to which the ITO has also referred in his assessment order for a different purpose. In that order in para 7, it has been clearly held that the property of Smt. Harbans Devi in Gali Kakian Wali was sold in 1971 for Rs. 16,000 and out of those sale proceeds a plot No. 168, Shivala Road, Amritsar had been later on acquired for Rs. 15,000. It was also stated on behalf of the assessee that the lady's account in the assessee's books figured in the earlier years also and she had been allowed interest and such interest payments had not been disallowed in the assessments of the assessee. Considering all these important facts, we are left with the clear impression that the issue about the ownership of the property has not been properly looked into by the ITO and he has made certain errors in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him an opportunity to state his case in respect of the stand taken before the Tribunal for forfeited property under Safema. It was also stated that the assessee was not even in the knowledge of any inspection of the property done by the Valuation Officer. Another fact which was pointed out was that the hearing of the case was closed by the ITO on 25th Feb., 1978 and the assessment order was passed on 20th March, 1978 and it was in the interval between the two dates that the ITO made enquiries from Safema authorities and thereafter he proceeded to utilise them against the assessee. It was also pointed out by referring to extracts from the orders of the Tribunal which were placed at pages 22 to 24 of assessee's paper book that all these objections were duly taken before that authority and it was only a concession given about the cost of construction for the limited purpose of not prolonging the proceedings before them while the real issue involved had been accepted by the Tribunal in the assessee's favour. These are all weighty arguments, which clearly show that the assessee has not been properly heard on the question of extra cost of construction and the findings of lower authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the telephone was installed at the shop and not at the residence of the proprietor and in such cases no disallowance was normally made by the ITOs. The submission of the assessee's counsel is correct and we delete the disallowance of Rs. 230. 8. The next two grounds relate to an addition of Rs. 7.500 in respect of alleged smuggling business carried on by the assessee and another addition of Rs. 23,937 under the head. "Income from undisclosed sources" on account of unexplained investment in the contraband goods. It was explained by the assessee's counsel that the authorities below without any evidence have held that the assessee was dealing in contraband goods and that the correct position was that the foreign made goods were not always smuggled goods and the assessee was purchasing these goods from foreign tourists and others and selling them. It was also pointed out very vehemently that all the transactions of foreign goods were duly recorded in the assessee's books and no transactions have been found by the Revenue which were made outside the books of account. It was also contended that the mere fact of seizure of goods by the Customs authorities did not establish that so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment order that the assessee could not show the value of seized goods as part of his closing stock. 9. On both these issues, we find great substance in the arguments put forward on behalf of the assessee. On the basis of mere surmises and conjectures, it cannot be established that the assessee had indulged in smuggling activities. On the other hand, this is a very interesting case where the assessee himself has shown the seized goods as part of his closing stock. When the seized goods are part of the closing stock, it is difficult to hold that the assessee was dealing in smuggled goods outside the books of accounts. It was also claimed that foreign goods could be purchased from tourists and these could be sold and it does not necessarily amount to smuggling, which activity was altogether a different one. The is no material brought on record to justify the addition of Rs. 7,500 sustained by the AAC. Even the previous history cannot support the addition attempted by the Revenue. Similarly, we do not find any basis for the addition of Rs. 23,937. The short question to understand was whether the value of seized goods was accounted for in the books or not Here the undisputed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Kumar of Rs. 2,000, his affidavit was filed and the ITO by order-sheet entry dt. 30th Jan.,1978 required his production before him for examination. On 16th Feb., 1978, there is another order sheet entry which showed that the assessee could not produce the witness due to distance as he was at Allahabad. In these circumstances, we fail to understand as to how it can be said that the assessee had failed to produce the witness. The correct approach was not to draw an inference against the assessee but to give him another opportunity either to produce him or to get the witness examined on commission if the assessee so desired. We think that proper opportunity has not been afforded by the ITO to produce the witness. Consequently we set-aside the finding of the lower authorities on this issue and restore it to the file of the ITO, who will dispose of the matter afresh after giving proper opportunity to the assessee. 13. The last credit of Rs. 2,500 relates to Smt. Ram Piari. She is an old lady of about 70 yours of age. Her affidavit has been filed and also her statement has been recorded. We have perused both of them and find that in the case of a lady of her age who was also illi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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