9911796707
TMI Blog1984 (1) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... he ornaments. The gold control authorities had found unrecorded gold ornaments and primary gold weighing 9511.5 grams which were seized by them. By the time the matter had come up before the ITO, the gold control authorities disposed of the same finally and levied a penalty upon the assessee. According to the ITO, in those proceedings the assessee failed to establish the ownership of the ornaments by third parties as claimed. Thereafter, the ITO re-examined the question of ownership and noticed that out of the three persons who had claimed the ownership thereof, Shri Gour Chandra Pandava had matrimonial relations with the assessee. His holding was said to be 261 tolas. He was a village Homoeopath and his monthly income was only Rs. 150. The ornaments were said to be joint property of his along with his three brothers. In the declaration it was stated that the ornaments were left long back and periodical check was made by him in the shop premises of the assessee. After examining the entire story, the ITO held that his version was unacceptable. Similarly, he noticed that Shri S. Das was another relation being the brother-in-law of the assessee and claimed 941 tolas of ornaments as ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. Before we consider the appeal on merits, we may refer to a request by the representative of the assessee that the file of the case decided by the Bench earlier on 25-11-1974 in IT Appeal No. 6059 (Cal.) of 1971-72 be called for because certain evidences and documents were produced and recorded on his behalf in this appeal which were relevant and necessary for reference. An order was passed on his application dated 13-7-1982 filed in this behalf to the effect that the earlier file be searched and tagged with this file and the case be refixed on 13-12-1982. Thereafter, there were a few adjournments on the assessee's request and the case was fixed for 17-5-1983, 13-6-1983, 23-8-1983 and 20-9-1983 and ultimately heard on 3-1-1984. On these dates the representative of the assessee does not appear to have insisted upon the summoning of the file and we found that the file was never tagged, as ordered earlier. According to him, he did make a request on 20-9-1983 but the order of that date only shows that the departmental representative was only asked to produce the entire relevant records. We, accordingly, got the file of the departmental representative and asked the assessee as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , wife, wives of 5 brothers, 5 daughters, 3 sisters, 3 maternal aunts and 2 wives of cousin brothers, in all, as many as 17 were ladies. The AAC, therefore, concluded that all these 3 persons were having large families consisting of a large number of ladies, elderly widows and had agricultural land and income supported in at least two cases, by other income from medical practice. All these families were joint in mess and property and, besides other professions, tilling their own land. They had their kutcha houses in village not very far from Midnapore where their relations, the assessee, had a bullion shop and a secured strong room. The fear of these villagers at least of those who held ornaments and precious things, was not uncommon in these days of precarious law and order situation. The AAC thought it unlikely that a Bengalee housewife could not be in possession of 15/20 tolas of gold ornaments. Further, according to him, the proceedings under the Gold Control Act were also compromised and these ornaments were ultimately released on payment of a token penalty of Rs. 2,000 only. In view of the overall evidence on the record, the normal state of human affairs and sentiments, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise but this has not been done by the AAC at all. Similarly, the Tribunal had directed the AAC to examine the assessee's income during the past few years with a view to assess the chances of the assessee's family being the owner of the ornaments in question but this, again, was not done by him. Regarding the actual conclusions, firstly, what we noticed from the AAC's order was that, according to him, the versions of these parties and the assessee were not rejected by the gold control authorities and only a token penalty of Rs. 2,000 was levied for infraction of the gold control provisions. We, however, find that, according to the order of the Gold Control Administrator dated 28-8-1969, the assessee had appealed against the order of the Collector of Central Excise, Calcutta and Orissa in which the prayer of the assessee was that the gold ornaments of prohibited purity should be accepted to have been received by the assessee for repairs and polishing and they belonged to their families and their relations, who had subsequently come forward to claim them and were quite distinct from the gold and ornaments which related to his business in bullion. The claims of these parties along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leaned them occasionally through the employees and goldsmiths of the deceased. According to these parties, they occasionally took back some ornaments for the use by women and children of the family on ceremonies and other occasions and thus exercised their ownership and possession over the same but after use, returned them to the deceased for their safe custody. Now, none of these parties have mentioned the names of the ladies to whom these ornaments actually belonged. No list of the owners of these ornaments was ever furnished by these parties to the ITO. It is difficult to believe that the ladies will part with their ornaments without even having a basis for identification if these ornaments were mixed up with the ornaments of some other ladies. A perusal of the memo of panchnama of gold seized from the assessee's shop would show that most of the ornaments were new. For example, the ornaments at serial Nos. 3, 4, 5, 7, 8 and 12 were now armlets, new chura, new neck ornaments, new gold round churies, new gold mounted bronze churies and new head ornaments. The ornaments at serial Nos. 2, 6, 13 and 14 contained purity memos and attached with tickets showing their weights. Now, if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not sufficient. However, when we looked into the basis thereof, we noticed that the only authority in support of this proposition was J.S. Parkar v. V.B. Palekar [1974] 94 ITR 616 (Bom.). A reading of the entire report would go to support the department rather than the assessee. Firstly, the majority of their Lordships held that section 69A could be invoked for the purpose of adding to the income of the assessee some smuggled gold seized and confiscated. Secondly, the only evidence in this case consisted of a conviction by the Magistrate for smuggling the gold on the basis of which the value of the smuggled gold had been treated as the undisclosed income by the income-tax authorities. Although their Lordships were generally of the opinion that the record of criminal court was not conclusive evidence for the purpose of assessment proceedings, the majority of their Lordships ultimately concluded that the only material available in the case was the proceedings before the criminal court and its judgment and since there was no additional evidence before the taxing authorities, they could rely upon such material to draw the inference that the real owner of the gold was the petitioner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relating to penalty only and may be that the assessee may get some help from it, if the income-tax department chooses to penalise him for the alleged concealment. The case does not help the assessee so far as the quantum matter in concerned. 6. Before we part, we may refer to one more argument of the assessee's representative, namely, that no ornaments were recovered from the assessee's house at the time of search and this indirectly supported the assessee's version that his household ornaments were also kept at his shop. This argument is again is a double-edged weapon. Either it proves that the household ornament of the assessee was also kept at his shop or that the assessee's family had no ornaments of its own. If it had some, at least something would have been recovered from his house. This, therefore, shows that the financial position of the assessee's family was not very good. This is further confirmed by the statement of total income of the assessee assessed right from the assessment years 1948-49 to 1964-65 in which we find that the income normally assessed varied between Rs. 3,874 to Rs. 12,980 and it was only in the year 1957-58 that the assessment was made at a figure ..... 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