TaxTMI 
TaxTMI 
2002 (1) TMI 9
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.... reappraisal of the evidence and there are no substantial questions of law arising in this appeal. The assessment order relevant for the purpose herein is the block period from April 1, 1986, to October 18, 1996. The assessee is a firm of diamond exporters. On April 3, 1996, the office premises of the assessee were searched by the FERA authorities, wherein cut and polished diamonds, weighing 20,076.07 carats, found in the cupboard and on the table top of the assessee's office premises were seized. Thereafter, the matter was referred to the investigation branch of the Income-tax Department. On detailed enquiry and investigation, cut and polished diamonds weighing 1,156.53 carats valued at Rs. 68,36,099 were only seized by the income....
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.... unexplained income of the assessee. It was submitted that since the inception, it was the case of the assessee that the seized diamonds belonged to the brokers who were present in the office of the assessee at the time of search by the FERA authorities. It was submitted that in support of his claim, the assessee had filed the affidavit of Ashok D. Patel, the broker, who had brought the diamonds belonging to ten different parties to the office of the assessee for approval. It was submitted that the said broker had jangad receipts (letter/bills issued by diamond owners to whom the diamonds are given for the purpose of business prior to sale/export, etc.) from the ten owners. It was submitted that not only had the said ten parties filed their....
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.... 1996, the FERA authorities had recorded the statement of the partner of the assessee on April 4, 1996. It is true that in the said statement, it was stated that the seized diamonds in boxes DD, EE, FF and GG belonged to the brokers. On proper verification, the diamonds seized by the FERA authorities contained in boxes DD, EE, FF and part of GG were released by the income-tax authorities and only part of GG weighing 1,156.53 carats valued at Rs. 63,87,522 were seized by the income-tax authorities on October 18, 1996. The authorities below have noted that although the partner of the assessee had claimed that diamonds seized on April 4, 1996, and kept in boxes marked DD to GG belonged to the brokers in question, the assessee produced janga....
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....Mr. Ashokbhai V. Patel. It was held that most of the parties, who claimed ownership of the diamonds were either men of no means or negligible means. It was seen that most of them had not even maintained books of account or had maintained them at the instance of the said Shri Ashokbhai Patel. It was found that the affidavits of the ten parties were stereotyped and were verbatim the same. It is also recorded that some of the parties confessed the involvement of the broker, Mr. Ashokbhai, in preparation of the papers at Bombay which were sent to the party at Bhavnagar. It was found that one of the parties had admitted that he had not purchased any diamonds from any person as entered in the books. Thus, after evaluating the overall evidence ....
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....Pardiwala drew our attention to the decision of the apex court in the case of CIT v. Smt. P. K. Noorjahan [1999] 237 ITR 570, wherein it was held that the word used in section 69A "may" and not "shall" and, therefore even if the explanation regarding source was not satisfactory, the source of investment was not necessarily be treated as income of the assessee, In our opinion, the said decision is not of relevance as in that case, the apex court held that the question whether the source of the investment should be treated as income or not under section 69 of the Income-tax Act has to be considered in the light of the facts of each case. In that case, on the facts, the Tribunal had come to the conclusion that the Assessing Officer had not ....