TaxTMI 
TaxTMI 
1979 (6) TMI 90
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....ng to the proceedings before the CE authorities and also of the judgment of the CMM, Egmore, Madras, and after issuing a draft order under s. 144B, added a sum of Rs.1,48,878 as income of assessee from undisclosed sources represented by the unexplained value of the gold ornaments and semi-precious stones seized by the CE Department. On appeal, the AAC confirmed the addition made. The assessee has come on further appeal before us. 2. We heard the learned counsel for the assessee and the learned departmental representative. We have also perused the records brought to our notice. In the assessment order, ITO has set out the facts of the case. They are briefly as under. On 22nd Feb., 1971 the CEO noticed in front of the Tamil Nadu Housing Bo....
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....by the said Magistrate on 30th March, 1976, the assessee and Shri Rethinaswamy were acquitted on the ground that the gold ornaments and semi-precious stones seized from them were not established as smuggled goods liable to confiscation under s. 111 of the Customs Act. 3. After referring to the above facts of the case, the ITO observed that, since the gold ornaments and the semi precious stones were found in the car, in which the assessee was travelling, it was upto the assessee to adduce evidence to show the source of investment for the same. The ITO called upon the assessee to explain the acquisition of the car and the seized goods. The assessee appears to have reiterated the plea that there was actually no seizure of the goods from the....
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....chani, took us through the judgment of the Chief Metropolitan Magistrate, Egmore, Madras, in CC No. 3337/74 and pointed out that the assessee had nothing to do with the articles seized and that, therefore, the addition made is wholly unsustainable. 4. We have considered the rival submissions. The goods, in question viz., the gold jewellery and the semi-precious stones, whose value is not in dispute before us, are said to have been seized by the Central Intelligence Unit of the CE Department on 22nd Feb., 1971, which were concealed in a car MDO 6861. Along with the assessee, other persons, i.e., Shri M. Rethinaswamy and the driver Shri T. Shanmugam were said to have been present at the time of the seizure. The above articles were said to ....
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.... that there was no evidence worth the name on the side of the prosecution to show that the gold ornaments and the precious stones were of foreign origin and that there was no evidence, direct or circumstantial, to establish that the goods were smuggled. In the course of the judgment, the Magistrate referred to the arguments of the learned counsel for the prosecution to the effect that the very fact that the assessee and Shri Rethinaswamy concealed the goods in the cavity in the chassis of the car would go to show that the goods must have been smuggled from Ceylon and that they should have known about it. The Magistrate observed that this circumstance would not necessarily lead to the only inference that the gold was smuggled and the accused....
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....lready been confiscated by the Department and no order regarding the disposal of the same is necessary." The lower authorities have failed to consider this operative part of the judgment of the Magistrate. The statement of the assessee that he had nothing to do with the packets found in the car coupled with the absence of the claim by him for the return of the goods as observed in the above paragraph of the judgment clearly indicate that the assessee is not the owner of the said goods. The learned departmental representative vehemently argued that it can be reasonably inferred that the assessee can be deemed to be owner of the goods in question as he was found in possession thereof and that the provisions of s. 69A would apply. It is sig....
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....Customs and Central Excise has held that the assessee has not discharged the burden of proving that the goods concerned were not smuggled goods and that the articles seized represented contraband illicitly imported into India in contravention of s. 11 of the Customs Act, 1962 r/w s. 3(2) of Imports & Exports (Control) Act, 1947, and s. 8(1) and 23 A of the foreign Exchange Regulation Act, 1947 and that, therefore, they were liable to confiscation. In pursuance of the above adjudication order the Assistant Collector of Central Excise Preventive Department, Madras, has filed the prosecution against the assessee and Shri Rethinaswamy before the Chief Metropolitan Magistrate, Egmore, Madras, as referred to above under s. 135(b)(ii) of the Custo....