- (1.) 1. This miscellaneous application filed by the assessee is arising out of order dated 26-2-2003 passed in IT (SS) A. No. 11 /M/2002 pertaining to block period 1-4-1989 to 16-7-1999. The assessee prays for rectifying the order of the Tribunal on the ground that certain mistakes have crept in the order. Before we come to the particulars of mistakes pointed by the learned counsel, it would be proper to narrate the brief facts of the case. 2. A search action was carried out under section 132 of the Income-Tax Act 1961. One suitcase was found in the possession of assessee, as per Panchnama dated 16-7-1999. This suitcase contained the jewellery of the value of Rs. 36,90,453. On 16-7-1999, Rakesh Ramani, assessee, and his employee Shri Bharat were found by the Police at Ernakulam having possession of the said jewellery. At that time, the assessee failed to adduce any documentary evidence, explaining the source of acquisition and could not account for jewellery found in the said suitcase. Therefore, the Police intimated the income-tax authorities at Cochin about this case. The competent authority issued warrant of authorization in respect of the search which was carried out and statement of assessee was recorded on oath on 16-7-1999. As the assessee remained unable to adduce any documentary evidence in respect of source of acquisition and accountability of jewellery, the said jewellery was seized by the Income-tax department. 2.1 During the course of block assessment proceedings, the assessee vide its letter dated 3-8-2000 contended that he was working as salesman for M/s. Pravin Jewellers at Mumbai. The seized jewellery belongs to said M/s. Pravin Jewellers which is a proprietary concern of his brother. Following documents were also furnished along with the said letter:
(2.) (i) Photocopy of stock register (New gold ornaments) (ii) Letter dated 13-8-1999 written by the Intelligence Officer of the department of Commercial Taxes to the Deputy Director of Income tax (Inv.), Ernakulam; (iii) Power of Attorney dated 16-1-1997. (iv) Photocopies of issue voucher Nos. 118 and 119 dated 15-7-1999 issued by M/s. Pravin Jewellers, Mumbai. N the basis of abovemeNtioNed documeNts, it was claimed that he is aN employee of M/s. PraviN Jewellers aNd had carried the jewellery from Mumbai to ErNakulam for sale thereof oN behalf of M/s. PraviN Jewellers. Police record does Not meNtioN that aNy documeNt was fouNd iN possessioN of assessee at the time wheN he was iNtercepted by Police at ErNakulam. However, it is the claim of the assessee that he was carryiNg certaiN documeNts, accordiNg to which it was evideNt that the jewellery beloNgs to M/s. PraviN Jewellers; as the said documeNts were takeN away by Police, the same could Not be produced before iNcome-tax authorities. Further, refereNce to letter dated 13-8-1999 was. made which was writteN by INtelligeNce Officer of the departmeNt of Commercial Taxes to the Deputy Director of INcome-Tax (INv.), ErNakulam. From the coNteNts of that letter, it was poiNted out that the assessee was iN possessioN of certaiN documeNts accordiNg to which it is clear that the jewellery iN questioN beloNgs to M/s. PraviN Jewellers aNd these documeNts were seeN by INtelligeNce Officer of the departmeNt of Commercial Taxes oN 16-7-1999. The issue voucher Nos. 118 aNd 119 were stated to be iN possessioN of assessee which proves that assessee was carryiNg the jewellery oN behalf of M/s. PraviN Jewellers, The Power of AttorNey dated 16-1-1997 was produced. ON the basis of all these documeNts, it was the claim of the assessee that the jewellery seized by INcome-tax departmeNt from assessee did Not beloNg to assessee aNd actually beloNgs to M/s. PraviN Jewellers. it was further coNteNded that the said jewellery was duly showN iN the books of accouNt aNd stock register maiNtaiNed by M/s. PraviN Jewellers who had produced all the relevaNt documeNts before Commercial Tax Authorities. Thus, it was claimed that No part of jewellery seized could be assessed iN the haNds of assessee. 2.3-2.4 The assessiNg officer did Not accept the evideNce aNd explaNatioN submitted by the assessee vide letter dated 3-8-2000 oN the grouNd that the issue voucher Nos. 118 aNd 119 were Not available with the assessee aNd were Not produced before Police authorities or iNcome-tax authorities oN the date of seizure of the said jewellery. Therefore, he coNcludes that jewellery beloNgs to assessee aNd a later date coNteNtioN of the assessee is merely a make believe versioN. Thus, the assessiNg officer added the said sum to the returNed iNcome as total uNdisclosed iNcome. 2.5 The assessee, beiNg aggrieved, filed aN appeal before the CommissioNer (Appeals). ON the basis of evideNce furNished before the assessiNg officer, it was claimed that the letter writteN by Sales Tax Authorities to INcome-tax departmeNt clearly iNdicates that the issue vouchers were takeN iNto possessioN by Police Authorities aNd these were examiNed by Sales Tax Authorities. It was also coNteNded that the assessee does Not kNow why the police did Not meNtioN about the documeNts, which were fouNd iN the possessioN of assessee, iN the "Mahasar" prepared by them aNd it is evideNt from aNswer to questioN No. 12 iN the statemeNt of the assessee that these documeNts were haNded over to the police. After coNsideriNg the submissioNs made by the assessee, the CommissioNer (Appeals) had deleted the additioN with the followiNg observatioNs "After goiNg through the facts of the case from the assessmeNt order aNd after goiNg through the submissioNs made by the AR of the appellaNt I am of the opiNioN that the assessiNg officer was Not justified iN makiNg aN additioN of Rs. 36,90,453 uNder sectioN 69A of the INcome Tax Act, 1961 beiNg uNexplaiNed iNvestmeNt of jewellery giviNg reasoN oNly that the explaNatioN supported by documeNtary evideNce Now filed by the appellaNt were uNacceptable oN merit as such documeNtary evideNces iN the form of the said issue vouchers were Not available with the appellaNt aNd heNce could Not be produced by him before the police authorities aNd iNcome-tax authorities oN the date of seizure of said jewellery oN 16-7-1999 aNd, therefore, it was crystal clear that the jewellery beloNg to the appellaNt aNd the later date coNteNtioN of the appellaNt was merely make belief versioN. It was the duty of the assessiNg officer to examiNe aNd fiNd correctNess /geNuiNeNess or otherwise of the evideNces aNd documeNts submitted by the appellaNt at the time of assessmeNt proceediNgs, which were the copy of the bill of air ticket, the certificate from Jet Airways, the copies of issue voucher Nos. 118 aNd 119, the authority letter from PraviN Jewellers, the copy of Newspaper cuttiNg aNd the ENglish traNslatioN thereof, the copy of the statemeNt recorded by DDI (INv.), CochiN, particularly aNswers to Q No. 11, copy of the letter dated 21-7-1999 writteN to the DDI eNclosiNg therewith the ackNowledgemeNt of returNs of iNcome of the appellaNt as well as his employer PraviNkumar RamaNi, Prop. M/s. PraviN Jewellers, the copy of the letter writteN by the Sales Tax Authorities to the INcome-tax departmeNt dated 13-8-1999 statiNg thereiN that the sales tax departmeNt has No objectioN iN release of gold orNameNts, the copy of stock book of M/s. PraviN Jewellers for the relevaNt period, which was produced before the police, sales tax authorities aNd DDI (INv.), CochiN, aNd lastly all the books of accouNt of the employer M/s. PraviN Jewellers, aNd should have come to the fiNal coNclusioN whether the said orNameNts beloNg to appellaNt Shri Rakesh RamaNi or his employer M/s. PraviN Jewellers, Prop. Shri PraviNkumar RamaNi. Without dischargiNg the oNus cast upoN the assessiNg officer, it was wroNg for him to state that such documeNts were Not produced at the time of seizure of the jewellery aNd heNce he was Not acceptiNg them Now aNd treatiNg the whole facts as merely a make believe versioN. All these documeNts produced before the assessiNg officer go to prove that the jewellery, weighiNg 9711.720 gms. Valued at Rs. 36,90,453 beloNg to M/s. PraviN Jewellers Prop. Mr. PraviNkumar RamaNi, who is the employer of the appellaNt Shri Rakesh RamaNi aNd it is duly reflected iN the books of accouNt of M/s. PraviN Jewellers aNd that the appellaNt Shri Rakesh RamaNi was carryiNg the said jewellery, iN the course of his employmeNt. These facts were kNowN to the police authorities, the sales tax authorities as well as DDI (INv.) who had seized the jewcllery, but uNfortuNately, they did Not clearly meNtioN the same aNd erroNeously seized the jewellery, the learNed assessiNg officer also did Not bother to verify all these documeNts aNd came to the fair coNclusioN. AccordiNgly, the additioN of Rs. 36,90,453 made by the assessiNg officer as iNvestmeNt iN uNexplaiNed jewellery uNder sectioN 69A of INcome Tax Act, 1961 is hereby deleted."
(3.) AGGRIEVED by the above order, the revenue came in appeal before the ITAT and the ITAT decided the appeal on 26-2-2003 and reversed the order of the Commissioner (Appeals) with the following observations "20. We have also perused the Xerox copy of stock register of M/s. Pravin Jewellers which is placed at pages 54 to 65 of the paper book. It is noted there from that the stock as on 13-7-1999 was 9620.534 grams, On 14-71999, the assessee has received 1036.150 grams quantity of gold ornaments from one S.M. Jewellers that makes the total quantity held by M/s. Pravin Jewellers at 10656.64. Out of said total quantity M/s. Pravin Jewellers has issued gold jewellery of 9683.330 grams to the assessee leaving balance of only 973.354 grams. It shows that almost all the jewellery in the stock of M/s. Pravin Jewellers was handed over to the assessee for sale and in shop. M/s. Pravin Jewellers had almost nothing. Though the Commissioner (Appeals) has referred to the evidence produced by the assessee but he has not carefully gone through the evidence and straightaway accepted the explanation of the assessee. The Commissioner (Appeals) also did not consider the statement which as we pointed out earlierhas its ownimportance. The assessee did not tell before income-tax authorities the name of M/s. Pravin Jewellers as he wanted to give time to them to set right the things. In our opinion, in the present case, looking into the evidence sought to be produced, the assessee has not been able to establish beyond doubt that the jewellery found from his possession did not belong to him. It was for the assessee to explain that why at the first instance he did not tell before income-tax authorities that he was simply an employee and holding the said jewellery on behalf of M/s. Pravin Jewellers specially in view of the claim that documents were prepared in favour of assessee a day prior to interception. The Commissioner (Appeals) has failed to consider this aspect as well as he has accepted the explanation of the assessee on the face value without looking into the evidence produced. The answers given in the statement recorded by the authorized officer and other surrounding circumstances suggest that the assessee carried on illegal /unrecorded business of purchase and sale of gold, inaddition to status as an employee in M/s. Pravin Jewellers, and utilized undisclosed income inpurchase of such unrecorded jewellery. Therefore, the order of Commissionerof Income-tax (Appeals) is perverse and liable to be set aside. Accordingly, we set aside the order of Commissioner (Appeals) and restore that of the assessing officer." The miscellaneous application is against the above findings of the Tribunal.;