9911796707
TMI Blog1997 (6) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment proceeding could have been initiated or completed. 3.1 The learned Commissioner of Income-tax (Appeals) erred in holding that the appellant is owner of the gold bars seized from her person and baggage. 3.2 It is submitted that in the facts and circumstances of the case and in law the appellant could not have been held to be the owner of the gold bars. 4.1 Without prejudice to the above, the learned Commissioner of Income- tax (Appeals) erred in holding that the appellant is not eligible for set off of the goods seized by the custom authorities against the addition made. 4.2 The learned Commissioner of Income-tax (Appeals) failed to appreciate that there is no condition for allowability of business loss that the business must be a continuing one. 4.3 The learned Commissioner of Income-tax (Appeals) failed to appreciate that even one single venture can be deemed to be business. 4.4 It is submitted that in the facts and circumstances of the case and in law the appellant should have been allowed deduction of gold bars seized as business loss." The assessee has also raised an addition ground, which reads as follows :- "The learned Assessing Officer is not just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase the same, she could not furnish the bills in support of the purchase of the same. She, however, did not name the owner of the seized goods. 5. As the assessee did not name the owner of the seized goods and as the goods were brought by her and were seized from her, the Assessing Officer held that she was the owner. As the source of the funds in the investment of gold and foreign currency was not explained, the Assessing Officer added the value of the gold of ₹ 8,55,494 (L.M.V.) and of the foreign currency of ₹ 26,234 as income under the head 'Other sources'. 6. The CIT(Appeals) confirmed the additions with a slight modifications. He relied upon section 110 of the Evidence Act and held that in the light of its provisions, the burden of proving that the assessee is not the owner of the gold and foreign currency in question is on the assessee. He observed that even though the Evidence Act does not apply to taxation proceedings, the taxing authorities are not precluded from invoking the provisions of this Act. Accordingly, as the assessee was not able to rebut the burden that lay on her regarding the ownership of the gold and the foreign currency, he held that the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt, reliance is placed upon the decision of the jurisdictional High Court in the case of CIT v. Lalchand Bhabutmal Jain [1985] 151 ITR 360 (Bom.) and also of the Hon'ble Madras High Court in the case of Pichaimanickam Chettiar (supra). In support of the contention that the assessee was only a carrier, it is pleaded that she was functioning, during the relevant time, as an air-hostess and it was impossible from her meagre income to make a substantial investment of about ₹ 5½ lakhs in gold and foreign currency. 10. To a query from the Bench, the learned counsel gave the details of the incomes declared by the assessee in her returns for the assessment years 1984-85 to 1988-89 and they are as follows :- 1984-85 ₹ 25,018 1985-86 ₹ 22,780 1986-87 ₹ 31,029 1987-88 ₹ 28,700 1988-89 ₹ 57,634 It is also pleaded that for the assessment year 1988-89, the assessee disclosed gross commission receipts of the order of ₹ 96,000 and these receipts could indicate that she was only a carrier. We may mention at this stage that the assessee did not clarify at any stage the nature of commission receipts of ₹ 96,000. The commission was all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her decisions cited before the CIT(Appeals). 12. Regarding the additional ground about levy of interest under section 217, the learned counsel for the assessee relied upon the decision of the Apex Court in the case of Modi Industries Ltd. v. CIT [1995] 216 ITR 759 wherein "Regular Assessment" has held to mean only the original assessment made under section 143/144 of the Income-tax Act. The learned counsel did not advance any arguments on grounds 2 to 2.3 regarding re-opening of the assessment taken by the assessee in the appeal. 13. The learned D.R., on the other hand, relies on the order of the CIT(Appeals) and in particular has invited our attention to the decision of the Hon'ble Bombay High Court in the case of J.S. Parkar v. V.B. Palekar [1974] 94 ITR 616, cited supra , wherein it was held that the loss consequent to confiscation of gold because of the pursuit of an illegal activity is not allowable as a deduction. He has also invited our attention to para 4.2.1 of the order of the CIT(Appeals) which has been extracted hereinabove and pleaded that there is no evidence at all that the assessee was carrying on the business of smuggling and so the benefit of the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... title and anyone who intends to oust the possessor must establish the right to do so. This section, to our mind, appears to operate in a different situation, that is, where contenting claims are made about the title. It comes into picture when another person questions the ownership title of a person who is in possession of the property in question. To bring out the import of section 110 of the Indian Evidence Act, it may be contrasted with section 132(4A), which also contains a similar presumption. The relevant portion of this section reads as follows:- "132(4A). Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed - (i)that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belongs to such person; (ii)that the contents of such books of account and other documents are true; and (iii)that the signature of every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Even the other decisions relied on by the learned counsel for the assessee before the CIT(Appeals) support this view. The CIT(Appeals) sought to distinguish these decisions on the ground that there is no evidence that the assessee was in the business of smuggling. During the hearing, the learned counsel for the assessee pleaded that the seized valuables are found on the body of the assessee and the mode of carrying thereon itself would indicate that she is an accomplished artist in this illegal activity and so, this cannot be a case of solitary instance. We are in agreement with this contention. Even otherwise, a continuous activity spread over a period of time, is not a desideratum for postulating a business. Even a single adventure in the nature of a trade can amount to a business. In this view of the matter, we are of the view that the benefit of the decision of the Apex Court in the case of Piara Singh ( supra) has to be extended to the assessee. 18. As already mentioned, we accept the contention of the learned counsel for the assessee that she was only a carrier atleast of gold. So far as the foreign currency is concerned, it can be her own acquisition to meet her personal e ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
