TMI Blog1992 (8) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise authorities conducted the raid at the business premises of the assessee on 21-10-1978. The Central Excise authorities seized the gold ornaments weighing 323.800 grams at the time of raid. The Income-tax Officer made an addition of Rs. 22,000 being the value of 323.800 grams of gold ornaments. The said gold ornaments were found in the excess over the quantity recorded in the stock register regularly kept. Having found these gold ornaments in excess viz. seven items, i.e., (1) Tode, (2) Patli, (3) Laxmi Har, (4) Bangles, (5) Pendants, (6) Bajibandha and (7) Rings were seized. Shri Ishwarlal Shankarlal Lalwani, partner of the assessee-firm, stated before the Central Excise authorities that he was unable to account for the varia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of CIT v. S. Pitchaimanickam Chettiar [1983] 15 Taxman 68. The arguments advanced before him on the basis of the documents produced were that the said statements do not stand in the light of the observations made by the adjudicating authority in its order dated 23-11-1984. It was stated that assessee completely established its case that the said ornaments were given by Shri Thadeshwar and they originally belonged to him. The said ornaments were not entered into the register at the time of search of Central Excise authorities and therefore the assessee was penalised a fine of Rs. 3,000 and personal penalty of Rs. 2,000 by the Central Excise authorities. 5. The learned departmental representative, Mr. Gautam Kar has relied and cite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abad for the A. Y. 79-80. These decisions are also distinguishable on facts. 6. As the addition was made under section 69A of the Income-tax Act, therefore, the assessee tried to take the support from the decision of the Madras High Court on the ground that section 69A applies only when the gold is owned by the assessee and failed to explain the source of acquisition of the same. The CIT(A) proceeded on the ground that the ownership of the gold ornaments did not belong to the assessee and therefore the addition of the value of the same cannot be added to the income of the assessee. He held that addition cannot be sustained and therefore deleted the same. The revenue not being satisfied with the order of the CIT(A) brought the dispute be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Doshi explained that Mr. Thadeshwar was an employee as a goldsmith in some jewellery shop. He left that service and started his own business of goldsmith. At which place Mr. Thadeshwar started his business of goldsmith, under what licence, how he purchased the gold to manufacture the ornaments in question and why he handed over them without obtaining any receipt from Mr. Gavali as samples for approval are not brought on record. It was specifically asked to produce licence No. of Mr. Thadeshwar to show that he was manufacturing gold ornaments. Unfortunately neither his licence No. nor his particulars of whereabouts were furnished. Moreover, this explanation was submitted at the time of hearing of this appeal only. 9. Mr. Doshi has relied o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hree items as per page 31 of the paper book. Said page 31 of the paper book does not contain Tode, Laxmihar, Bajubandha and Rings. Mr. Doshi wanted us to accept this explanation. The explanation without any support and basis is unacceptable. 11. The partner Ishwarlal himself, his servant Gavali, his clerk Narayandas and the alleged Mr. Thadeshwar were interested witnesses. Moreover, their statements do not create any evidence and the statements given by them do not appear creditworthy. In this view of the matter and in the light of the facts discussed above, the CIT(A) should not have accepted the explanation as truthful because the statements were not creditworthy. His accepting the explanation is not in consonance with the facts on reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tner. When the Central Excise Authorities ascertained the excess of gold ornaments found the items listed are different from the items allegedly brought as samples. Hence there is discrepancy between the items of samples and the jewellery seized. If the samples version is to be true, such items alone could have been separated and seized. But it was not done so. What was seized is part and parcel of the gold jewellery of the assessee. This make-believe story is completed by saying that ultimately such sample jewellery were returned to Mr. Thadeshwar. This was obviously resorted only to show that the gold jewellery found excess did not belong to the assessee to avoid application of section 69A of the Act. 14. The only conclusion from the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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