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TMI Blog1985 (6) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ued at Rs. 2,70,000. The investigations in that case by the customs authorities revealed Mr. Cunnanan made a trip to Bangkok and contacted Suresh Zaveri, the brother of the present two assessees. The said Suresh Zaveri was introduced to him as Sydny Zaveri in Victory Hotel in Bangkok. Accordingly, Mr. Cunnanan made a trip to Bangkok on 14-8-1974 on his way to Manila. He contacted Mr. Sydny (Suresh) Zaveri on telephone and Suresh Zaveri proposed to Mr. Cunnanan to make a trip to India on his behalf and on behalf of his brothers one of whom was Mr. Henry Zaveri (Himat Zaveri) one of the present two assessees. When Mr. Cunnanan agreed to the said proposition, Mr. Suresh Zaveri informed him that his brother Henry Zaveri was coming to meet him and at the same time he would accompany Mr. Cunnanan back to Bombay on the same flight which Mr. Cunnanan would take. Mr. Cunnanan made several trips from Bangkok to Bombay on behalf of Zaveri Brothers and brought smuggled goods. In the course of one of the trips dated 14-12-1974 he carried two suitcases delivered by Mr. Suresh Zaveri at Bangkok to Delhi, which contained wrist watches. He also carried packets which contained precious stones. At As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri. The customs authorities during the search had found packets which were exclusively meant for packing precious stones. The assessees denied that they were kept for packing precious stones. According to them they were lying at home without any use. 5. Both the assessees filed copies of affidavit dated 6-9-1975 alleged to have been sworn by Mr. Cunnanan on 6-9-1975 at Manila. In this affidavit Mr. Cunnanan had retracted from his earliest statement against the assessees. He stated in his alleged second affidavit that the assessee Himatlal Zaveri had been requested by him to work for him in his smuggling operation but the assessee Himatlal Zaveri refused to co-operate and work for him. He suspected that Himatlal Zaveri had informed the authorities against him and for that reason he had been caught in while smuggling goods. Out of sheer vengeance and in hot temper he falsely implicated Himatlal Zaveri and his family in his statement to the authorities in India. The ITO observed that this document had no evidentiary value because Mr. Cunnanan was not available for cross-examination and he was out of reach of Indian authorities. 6. The assessee Himatlal Zaveri had disclosed income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee Himatlal Zaveri was concerned, there was some material on record but that material was not sufficient to come to the conclusion that the said assessee had engaged himself in the business of smuggling in the relevant accounting year. As far as the other assessee, namely, Shantilal Zaveri was concerned, according to the learned representative, there was no material to draw any inference against him. 12. We shall first deal with the case of the assessee Himatlal Zaveri. One of the materials against him is the statement of Mr. Cunnanan recorded on 28-5-1975. In his statement he has clearly stated that the assessee's brother Suresh Zaveri alias Sydny Zaveri had contacted him at Bangkok and had made proposal to make trips to India on his behalf and on behalf of his brothers in India, namely, Himatlal Zaveri and Shantilal Zaveri. The name of Himatlal Zaveri was given as Henry Zaveri so that Mr. Cunnanan who was a foreigner and who had difficulty in remembering Indian names may easily remember the English name. He has clearly stated that the assessee Himatlal Zaveri alias Henry Zaveri came from Bombay and stayed at Shereton Hotel in Bangkok. Mr. Cunnanan gave description of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that on another occasion he carried these packets from the hotel room of Mr. Cunnanan at Bombay. However, according to him, he was paid Rs. 3,200 for that job. He admitted that he knew that those packets contained watches. He admitted that the air tickets seized from the room were for his journey to Bangkok. The above admissions corroborate the statement of Mr. Cunnanan against the assessee. The explanation of the assessee that he carried packets from the hotel room of Mr. Cunnanan to some third party for commission of Rs. 3,000 on each of the two occasions is not acceptable. It is obvious that the packets containing contraband watches and stones had been delivered to him in the course of the smuggling business carried on by him with the assistance of his brother Suresh Zaveri and with the co-operation of Mr. Cunnanan. 13. The copy of the alleged subsequent affidavit of Mr. Cunnanan cannot be relied on. Mr. Cunnanan had left India and was out of reach of Indian authorities. He had nothing to lose by retracting the earlier statements. Besides his version in the alleged subsequent affidavit is too unnatural to inspire confidence. The story mentioned therein is wholly unbelievabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s finding was that evidence on record was not sufficient to connect him with the offence. Thus, the mere fact that the assessee Shantilal Zaveri was discharged in the criminal case would not be a conclusive proof in assessment proceeding in respect of the fact that he did not carry on activity of smuggling. 15. Our attention was also drawn to the fact that the Tribunal for forfeited property had passed an order on 10-1-1980 setting aside the order of competent authority forfeiting shares worth Rs. 3,550. We have perused that order and we find nothing contained therein is of any assistance to the assessee Shantilal Zaveri as far as the question involved in the present assessment proceeding is concerned. 16. As far as the inference of the ITO and the AAC to the effect that the assessee Shantilal Zaveri had indulged in smuggling activity in the relevant accounting year is concerned, we have first, the statement of Mr. Cunnanan recorded on 28-5-1975. He has specifically mentioned that he had entered into contract with Suresh Zaveri for carrying contraband goods to India on behalf of Suresh Zaveri and his brothers. The brothers of Suresh Zaveri mentioned by him were obviously Himatl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffidavit of Mr. Cunnanan sworn in Manila. We have already referred to this affidavit while dealing with the case of the assessee Himatlal Zaveri. As stated earlier, the statement of Mr. Cunnanan in this subsequent affidavit that he implicated Zaveri brothers because of sheer vengeance is wholly unbelievable. As already stated one of the brothers, namely, Himatlal Zaveri has admitted connections with Mr. Cunnanan and to have carried packets from Mr. Cunnanan's room on two occasions. There was no question of implicating on account of anger and vengeance. Mr. Cunnanan is out of reach of Indian authorities and as such it was not unnatural on his part to resile from his earlier statement. His earlier statement which stands corroborated from other materials on record is acceptable while his subsequent affidavit is not acceptable. The very fact that the assessee Shantilal Zaveri could obtain original affidavit from Mr. Cunnanan indicated close intimacy of the assessee Shantilal Zaveri with Mr. Cunnanan. In the absence of close intimacy he could not have been able to obtain the same. The material on record clearly proves that the assessee Shantilal Zaveri had also indulged in smuggling act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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