TMI Blog2009 (3) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... ct existed and it would be liable to pay tax on the value of bitumen. Therefore, the confirmation of addition u/s 69A of the Act amounting to Rs. 1,04,71,720 was legal and valid. - 214 of 2002 - - - Dated:- 5-3-2009 - CHANDRAMAULI KR. PRASAD, RAVI RANJAN DR. JJ JUDGMENT 1. Chandramauli Kr. Prasad, Actg. C. J .-The assessee-appellant aggrieved by the order dated January 11, 2002, passed by the Income-tax Appellate Tribunal, Patna Bench, Patna in I. T. A. No. 240/Pat/2001 has preferred this appeal under section 260A of the Income-tax Act. 2. By order dated October 11, 2006, the appeal has been admitted on the following substantial questions of law: "1. Whether on the facts and in the circumstances of the appel lant's case confirmation of addition under section 69A amounting to Rs. 1,04,71,720 is legal and valid? 2. Whether the addition amounting to Rs. 1,04,71,720 could at all be sustained in the absence of condition precedent for invoking section 69A of the Income-tax Act? 3. Whether the Tribunal is justified in sustaining the addition of Rs.1,04,71,720 under section 69A on account of short supply of bitumen in the hands of the appellant who is merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the various companies located at Haldia. Here in this case too the assessee nowhere disputes the quantity of the goods lifted by it from various companies at Haldia. It has not been disputed that bitumen weighing 10000.77 m.t. was lifted by it from Haldia. Its claim that full supply was made stands demolished when photocopies of delivery challans were found to be false and fabricated. All executive engineers asserted that delivery to the tune of 8206.2 m.t. of bitumen was made to their respective divisions. They had confirmed non-delivery to the tune of 2090.40 m.t. by the assessee. In such a situation the Assessing Officer was justified in adding a sum of Rs. 1,04,72,720 to the income of the assessee under the provisions of section 69A of the Act." 5. Mr. Vikash Jain, appearing on behalf of the appellant-assessee submits that there is no finding that the assessee was the owner of the bitumen who had right to dispose of the same, hence it cannot be held to be owner thereof so as to attract the provision of section 69A of the Act. He also points out that there is no finding that the bitumen was sold by the assessee and on that account also the value of the bitumen cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n behalf of the real owner, it becomes the owner for the purpose of tax. In the present case the assessee is in the business of carriers contract and in that capacity lifted the bitumen to be supplied to the Road Construction Department but having not supplied to the owner, in my opinion shall be liable to pay tax on the value of the bitumen so lifted and not delivered. 9. Referring to the decision of the Supreme Court in the case of R. B. Jodha Mal Kuthiala [1971] 82 ITR 570, the same is clearly distinguishable. In the said case itself, the Supreme Court has observed that for determining the person liable to pay tax, the test laid down by the court was to find out the person entitled to that income. Here on the facts the Tribunal has found that the bitumen was lifted but not supplied to the Road Construction Department and in that view of the matter, I am of the opinion that the assessee shall be liable to pay tax. The relevant portion of the judgment of the Supreme Court reads as follows (page 577): "For determining the person liable to pay tax, the test laid down by the court was to find out the person entitled to that income. An attempt was made by Mr. Mahajan to distinguis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding and hence the judgment relied on in no way supports the assessee's case. 12. Mr. Jain then contends that other valuable articles in section 69A of the Act would not include bitumen. According to him, the expression "other valuable article" must take colour from the preceding words of that section. He points out that for application of section 69A of the Act, bitumen should have nexus with bullion, jewellery or other valuable article and admittedly it is not being so, income derived from it cannot be said to be unexplained income. Section 69A of the Act which is relevant for the purpose reads as follows: "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or other 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 Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or oth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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