9911796707
TMI Blog1989 (1) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... n ground No. 1 wherein the assessee challenges the reassessment proceedings on the ground that the addition made did not pertain to the asst. yr. under appeal as the gold and gold ornaments weighing 235.7 grams were seized by the Central Excise Collectorate on 23rd Jan., 1976. Since, the issue is rooted in the very reassessment proceedings, the parties were allowed to address us first on this ground only. We have heard the parties carefully and considered their rival submissions. We first bring into focus the factual background of the case, which is not in dispute. 2. The assessee is a registered firm carrying on the business in the name and style of M/s Nemchand Jain & Bros., Sadar Bazar,Delhi. Its previous year is the calendar year. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been paid. The assessee filed letter dt.25th Feb., 1982before the ITO. The ITO valued the seized gold at Rs. 20,662 and in the originally assessed income of Rs. 86,760, he added the value of this gold taken as Rs. 20,662 and also added the amount of redemption fine and penalty at Rs. 4,000 and Rs. 1,000 respectively. Thus, before the firm's tax in the reassessment proceedings, total income was determined at Rs. 1,12,422. This was challenged in appeal. The learned CIT(A) heard the parties and perused the record. He observed that the fact of the recovery of raw gold from the appellant was not denied. Since, the assessee was found in possession of the said gold, onus was upon the assessee to prove that it did not belong to it. According to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of these three sections, it is cleat that the ITO has not accepted the explanation offered by the assessee about it. Therefore, without concession and for the sake of argument if the amount embedded in the purchase of this bullion is taxable, it is taxable only in the assessment year relevant to the financial year 1975-76, the previous year of the assessee being calendar year for the business of purchase of sale of gold notwithstanding. The authorities below, therefore, it was submitted, erred in adding the amount of Rs. 20,662 being the value of the gold in the asst. yr. 1977-78 on the basis of the previous year followed by the assessee for the business carried on for which the books of account are maintained. The learned counsel emph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article or the explanation offered by him is not, in the opinion of the ITO, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year. Amount of investments, etc., not fully disclosed in books of account. 69B. Where in any financial year the assessee had ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed to be the income of the assessee for such financial year. 8. We are of the opinion that the case of the assessee is covered by s. 69A of the Act. This is so because s. 69B, which follows s. 69A, deals with the case of this type where the amount expended on making investment in bullion and jewellery etc., exceeds the amount recorded in this behalf in the books of account maintained by the assessee. The facts of the case show that the assessee was maintaining the books of account for the business from which there was income liable to tax from purchase and sale of gold or silver. It is also clear that the assessee was found in possession of the bullion. The assessee's explanation has not been accepted by the ITO. The assessee was found ..... X X X X Extracts X X X X X X X X Extracts X X X X
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