9911796707
TMI Blog1988 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year with which we are concerned in this application is 1974-75. It appears that the petitioner had submitted his return of income for the assessment year 1974-75 showing a total income of Rs. 3,113 in response to a notice issued under section 143(2) of the Income-tax Act, 1961 (hereinafter called " the Act "). According to the petitioner, he had derived his income from 2 stores, i.e., M/s. Mohanani Fancy General Stores and M/s. Roopkala General Stores, Durg. It, however, appears that on January 19, 1974, on the basis of the order passed by the Superintendent, Central Excise, Jagpur, dated December 25, 1975, there was confiscation of foreign watches from the house of the petitioner and levy of penalty of Rs. 2 lakhs under the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter. Hence, by an order dated November 10, 1973, before the expiry of six months, time was extended by the Collector of Customs for a further period of 6 months for giving a notice as required under section 124(a) of the Customs Act, 1962. Under the proviso to sub-section (2) of section 110 of the Customs Act, 1962, a show-cause notice, specifying the requisite particulars, was given to the petitioner on May 4, 1974. In the reply, the petitioner made a general denial. The enquiry was fixed on October 30, 1975, for giving a personal hearing to the petitioner, when the petitioner's counsel appeared and sought for an adjournment to November 20, 1975, which was granted. However, on November 20, 1975, counsel for the petitioner stated that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Madhya Pradesh initiated criminal proceedings under section 125 read with section 111 of the Customs Act, 1962, and the learned Chief judicial Magistrate, Durg, by his order convicted the petitioner and awarded one years rigorous imprisonment. Thereafter on November 2, 1982, the petitioner filed an appeal in the Court of the Additional judge in the Court of Sessions, who, by his judgment, allowed the appeal and acquitted the petitioner of the said criminal charge. Thereafter, there was a reference to the High Court on two questions against the order of the Income-tax Appellate Tribunal under section 256(1) of the Act. The questions are as follows: " (i) Whether, on the facts and in the circumstances of the case, the Tribunal was just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion rightly, that the value of the wrist-watches is the income of the assessee. In this connection, reference may be made to the views expressed by Justice Tulzapurkar, as his Lordship then was, of the Bombay High Court in the case of J. S. Parkar v. V. B. Palekar [1974] 94 ITR 616, where, on a difference of opinion between Justice Deshpande and justice Mukhi, justice Tulzapurkar agreed with justice Deshpande and held on the question whether the evidence established that the petitioner was the owner of the gold seized, though there was no direct evidence placed before the taxing authorities to prove that the petitioner had actually invested moneys for purchasing the gold in question, the inference of the ownership of the gold in the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act has wide meaning which meant anything which came in or resulted in gain. Hence, in the facts of this case, a legitimate inference could be drawn that the assessee had income which he had invested in purchasing the wrist-watches and, as such, that income was subject to tax. In this view, the High Court was justified in justifying the Tribunal's holding that the assessee was the owner of the wrist-watches and thus including the value in the assessment of the assessee as his income and so deemed to be the income of the assessee by virtue of section 69A of the Act coupled with the surrounding circumstances. Therefore, inclusion of the money in purchasing the wrist-watches, that is to say, Rs. 87,455, was correct and proper for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this sub-section." From the facts found by the Revenue, the assessee had shown only a total income of Rs. 3,113 and subsequently the raiding party seized wrist watches worth Rs. 87,455. Thus the value of that income (watches) was included in the assessable income of the assessee. Therefore, the total assessable income of the assessee came to Rs. 90,568 whereas the returned income was only Rs. 3,113 which was certainly less than 80% of the assessed income and, as such, the Explanation applied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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