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Shri Ram Avtar Sharma S/o Shri Radhey Shyam Sharma Versus The Income Tax Officer, Ward-2, Sawai Madhopur

2016 (10) TMI 201 - ITAT JAIPUR

Addition u/s 69A and 69C - deposit of penalty amount on behalf of the jewellers - Held that:- The assessee’s explanation regarding his commission income from carrier business has been accepted by the Revenue for the year under consideration. Further, nothing has been brought on record to suggest that the assessee is the owner of the gold and silver jewellery other than the documents received from the Commercial Sales tax department which we have already examined or the assessee has any other sou .....

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e : Shri Siddarth Ranka (C.A.) For The Revenue : Shri G.R. Pareek (JCIT) ORDER PER SHRI VIKRAM SINGH YADAV, A.M. This appeal has been filed by the assessee against the order of CIT(A) Kota dated 26.03.2012 wherein the assessee has taken following grounds of appeal: (1) That on the facts and in the circumstances of the case, the ld. Lower authorities grossly erred in coming to the conclusion that the assessee is the owner of the goods (gold ornaments and jewellery) seized by the Sales Tax Authori .....

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on of ₹ 29,32,344/- u/s 69A of the Income Tax Act, 1961. 1.2 That the assessee being a man of low means, having no taxable income in the past, nor during the year under appeal, earning small income on account of being carrier of goods, the ld. Lower authorities grossly erred in holding that the assessee is real owner and in not deleting the said addition. 1.3 That the ld. lower authorities grossly erred in assuming and presuming that the said goods were purchased by him and that he is liab .....

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nces for all the parties remain the same. 2. That on the facts and in the circumstances or the case, the ld. lower authorities grossly erred in holding that the assessee is explainable for the amount deposited as penalty before the Sales Tax Authorities amounting to ₹ 10,37,257/-and in holding the same as income from undisclosed sources u/s 69C of the Income Tax Act. 2.1 That the traders whose goods the assessee was carrying from Delhi and whose names were conveyed to the sales Tax Authori .....

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w and deserves to be deleted. 2.3 That when two persons having admitted of payment of penalty for the release of the said goods, the ld. CIT(A) having deleted amounts having been received from them at ₹ 65,820/-, the sustenance of balance admission is unjustified, bad in law and deserved to be deleted when facts and circumstances for all the parties remain the same. 3. That on the facts and in the circumstances of the case, the ld. lower authorities grossly erred in making separate additio .....

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er in appeal before the ld. CIT(A), Kota who had given partial relief to the assessee and for the remaining additions, the appellant is in appeal before us. 2.1 The ld AR submitted that the appellant was carrying on business as a Carrier of goods. This fact has not been disputed by the ld. AO while completing assessment for the year under appeal as he has assessed his income at ₹ 70,000/- from carrier work. The appellant did not have any other source of income during the year under appeal. .....

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s by presuming that goods so transported have been sold in the state of Rajasthan by him and he is deemed to be a dealer for those goods under the said Act. Therefore, imposing of penalty as well as charging of Sales Tax in the value of goods founds in the possession of the appellant as a Carrier of goods does establish his ownership but as done as provided under the Sales tax law. The ld AR further submitted that the ld. AO was not proper and justified in making addition of ₹ 34,15,100/- .....

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y the Authorities of Commercial Taxes Department has explained that he was carrying the goods found in his possession during the course of their inspection as a Carrier which belong to 10 persons whose names addresses as well as description & quantity was also explained before him. (b) The ld. AO after getting information about the action by the Commercial Taxes Department has during the enquiry proceedings/assessment proceedings recorded statement of the appellant on 15.11.2003, 13.1.2004 a .....

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unts. Copies of relevant pages of Cash Book & Ledger were also obtained by the ld. AO which were also made as part of his assessment order as Annex. G & H. Shri Ram Vilas Soni has also recorded the amount of penalty & Sales Tax & Carrier charges on the Gold Jewellery & Silver reimbursed to the appellant in his cash book dated 9.5.2003 as under: Gold Jewellery Cost of goods 1,29,400 Penalty CTO 38,800 Sales Tax 2,592 Courier charges 250 Total ₹ 1,71,322 Silver Cost of go .....

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the purpose of making addition. The ld AR further submitted that the authorities of Commercial taxes Dept. has seized the material found in the possession of the appellant & created demand of ₹ 11,03,077/-. The appellant has collected the amount from the concerned owners of goods in proportion to the value of their goods & deposited the same with the Commercial Taxes Dept. After payment of demand said goods were released by the Commercial Taxes Deptt. which the appellant has hande .....

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.), possession is considered proof of ownership (unless otherwise is proved). The assessee in all the proceedings before sales tax authorities admitted that the jewellery belonged to them. The assessee in all the proceedings before I.T. authorities states that jewellery belonged to others. The assessee paid penalty of ₹ 11,03,077/- levied by sales tax, to get the jewellery of ₹ 34 lacs released by Sales tax authorities, however, before Income Tax Authorities he stated that the same w .....

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chased goods from assessee and have shown advance of money in their books of a/çs. Shri Satish Chand has shown advance of ₹ 2,67,356/-, Shri Ramvilas soni has shown advance of ₹ 1,76,400/-. Similarly Shri Mithilesh Kumar Soni also admitted transaction of 5 kg. Of silver and has shown advance of total ₹ 39,000/-. The assessee was found to blow hot and cold according to his own convenience.The assessee at one time stated that he admitted ownership as he was offered 50% of .....

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2.3 The ld. DR relied on the order of the lower authorities. 2.4 We have heard the rival contentions and perused the material available on record. The reasons recorded u/s 148 of the Act by the AO states that the assessee is a carrier of goods for the traders in the gangapur city who used to bring their gold, silver and jewellery. Further, the Assessing officer states that the penalty on the goods which have been seized by the Commercial tax department has been paid by the said traders in propor .....

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fact that the assessee is maintaining consistent position stating that the gold, jewellery and other articles doesn t belong to him and belong to other 10 specified persons whose particulars have been disclosed in his earlier statement. At the same time, the AO did not agree with the said position of the assessee and has stated that contrary to the statements made by the assessee, the documentary evidence received from the Commercial Tax Department proves that the assessee was the owner of the .....

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(11) of the Rajasthan Sales tax Act, 1944. Here, it would be relevant to refer to section 78(2), 78(5) and section 78(11) of Rajasthan Sales tax Act, 1944 which reads as under:. Section 78(2):The driver or the person in charge of a vehicle or carrier of goods in movement shall - (a) carry with him a goods vehicle including Challan and Bilities bills of sale or dispatch memos and prescribed declaration forms; (b) stop the vehicle or carrier at every check-post and while entering and leaving the l .....

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under sub-section (3), after having given the owner of the goods or a person authorised in writing by such owner or the person incharge of the goods a reasonable opportunity of being heard and after having held such enquiry as he may deem fit, shall impose on him for possession or movement of goods, whether seized or not, in violations of the provisions of clause (a) of sub section (2) or for submission of false or forged documents or declaration, a penalty equal to thirty percent of the value o .....

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above provisions of Rajasthan Sales Tax Act, it is clear that the penalty can be levied either on the owner of the goods or the person authorised by the owner or the in-charge of the goods. In the instant case, taking into consideration the statement of the appellant dated 09.05.2003 made before the Commercial Taxes dept, penalty levied u/s 78(5) in terms of the order issued by the Commercial Taxes Dept. dated 09.05.2003 can only be said to be levied on the appellant as the in-charge/ carrier of .....

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er of the gold and other items found in his possession by the Commercial Taxes Dept. is contrary to the legal and factual position which cannot be accepted. Further, the AO has recorded the statement of the three persons who have admitted that gold belongs to them and inspite of that, he has gone ahead and made an addition in the hands of the asessee. The ld. CIT(A) has taken a note of the said admission and has given partial relief to the assessee. This also support the case of the assessee tha .....

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atutorily in favour of the revenue and against the assessee, nor is there any warrant to invoke section 69A merely on the basis of assessee s possession. On his disclaimer that such articles found in his possession do not belong to him, the burden lies on the revenue to establish the ownership of the assessee before raising any presumption against him. 2.8 Similarly, in the case of CIT vs. S. Pitchaimanickam Chettiar 15 Taxman 68, Hon ble Madras High Court has held that Section 69A can apply onl .....

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