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TMI Blog1992 (2) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... g a taxable income of Rs. 10,38,835, which he subsequently revised on 7-9-1988 enhancing his income to Rs. 10,49,257. On 19-6-1987, the DDI authorities at Coimbatore seized from one of the assessee's employees a sum of Rs. 9,89,550 in cash belonging to the assessee. The assessee, on receipt of summons under section 131, 19-6-1987 and 26-6-1987 made a statement in the presence of ADI (Inv.), Unit III(3), Bombay, declaring that he was the owner of the money. On 16-10-1987, the Income-tax Officer passed an order under sections 132(5) and 132(7), after considering the submissions of the assessee and his representative both orally and through letters dated 12-10-1987 that the seized amount may be considered as the taxable income and tax be deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed source towards drawings for personal use on the basis of the order of the ITO, Calicut Rs. 40,000 On the basis of the above, the Assessing Officer levied interest under section 217 of the Act for not filing the estimate of tax as required under section 209A. The learned Commissioner(Appeals) upheld the levy of interest. 3. So far as the liability to interest under section 217 is concerned, it was urged by the learned counsel for the assessee that the assessee vide his letters dated 12-10-1987 and 13-11-1987 had requested the Income-tax authorities to adjust and treat as paid his tax liability out of the sum of Rs. 9,89,550 seized from the servant. The Income-tax Officer also vide his order dated 16-10-1987 under sections 132(5) and 132( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability of an assessee to file an estimate under sub-section (4) of section 209A is there, yet it would not be possible to quantify the amount of interest where advance-tax has been paid in full and the same does not fall short of the assessed tax as defined in sub-section (5) of section 215. In the case in hand, since the advance-tax paid (by way of adjustment) did not fall short of the assessed tax, there was no liability to pay interest under section 217. The assessee thus succeeds on this ground. 5. The next ground raised in the appeal for the assessment year 1988-89 pertains to the addition of Rs. 40,000 on account of low drawings. This issue stands dealt with by the learned Commissioner(Appeals) in paragraph 3 of his impugned order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound of the appeal thus fails. 7. In the appeal for the assessment year 1989-90, the first ground raised is with regard to the addition of Rs. 80,000 on account of low drawings. For this addition the basis is the same as the one for the addition of Rs. 40,000 in the immediately preceding year. Here again, no case has been made out for our interference in this part of the impugned order of the learned Commissioner(Appeals). This ground of the appeal thus fails. 8. The next ground raised in the appeal for the assessment year 1989-90 relates to the addition of Rs. 2,83,11,475 representing the value of (i) 750 gold bars ; (ii) 2 air-conditioners ; (iii) dutiable and restricted goods of foreign origin ; and (iv) Sanyo Colour T.V. The Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be the owner of the goods, yet he was entitled to the set off of the conmmercial loss on account of the confiscation of those goods by the Customs Authorities. On the question of independent application of mind, the learned counsel relied upon the decision of the Tribunal in the case of IAC v. Indian Aluminium Cables Ltd. [1991] 38 ITD 53 (Delhi), On the question of ownership of the seized goods, the learned counsel relied upon the decision in the case of CIT v. Thirumalaiswamy Naidu & Sons [1984] 147 ITR 657 (Mad.). On the third aspect of the matter relating to the adjustment of commercial loss, reliance was placed upon the following decisions, viz. : (a) CIT v. Piara Singh [1980] 124 ITR 40 (SC) ; (b) Kanhaiya Lal v. CIT [1983] 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not appear to have considered and discussed this issue in the required length and manner so as to show that there has been proper application of mind by him for arriving at legally credible and tenable findings. The second argument of the learned counsel for the assessee pertains to the question of ownership of the confiscated goods. Here again, we find sufficient force in the argument of the learned counsel. What was important in customs proceedings was mere possession of the contraband goods, whereas an addition under section 69A of the Income-tax Act can be made only where an assessee is found to be the owner of any money, bullion, jewellery or other valuable articles. In the case in hand, neither a copy of the order of the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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