TaxTMI 
TaxTMI 
2020 (2) TMI 953
X X X X Extracts X X X X
X X X X Extracts X X X X
....interest in accordance with Section 132B of the Income Tax Act, 1961. 2.Since the 5th respondent proceeded to pass an assessment order dated 31.12.2018 against the 4th petitioner during the pendency of the present Writ Petition, the petitioners amended the prayer in the above writ petition for the following relief after impleading the 5th respondent:- To call for the records pertaining to the purported search and seizer proceedings Warrant No.8609, dated 1st July 2016 and all purported proceedings initiated thereunder and/or relating thereto and/or in pursuance thereof and quash the same including the proceedings of the Office of the Assistant Commissioner of Income Tax, dated 31.12.2018 ACIT/DCIT/Circle-44, Kolkatta passed in Order No.ITBA/AST/S/143(3)/2018- 19/1014678722(1) for the Assessment Year 2017-18 in the name 4th petitioner and quash the same in so far as it relates to the Bullion and Jewellery seized vide Panchanama 01.07.2016 by the 2nd respondent and consequently direct the 2nd respondent to release the gold bullion and jewellery seized vide Panchanama dated 01.07.2016 by the 2nd respondent to the custody of the 1st petitioner and also to pay interest in ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ined the position reiterating what was explained earlier by their reply dated 22.08.2016. 8.Meanwhile, the 1st and the 2nd petitioners filed a separate declaration regarding the seized gold bars and jewellery on 01.02.2017 before the 2nd respondent. The 4th petitioner also filed a declaration regarding the seized gold with the 2nd respondent on 28.02.2017 and stated that the 4th respondent had purchased about 10 Kgs of gold bars (995) on 01.06.2016 and 10 Kgs of gold bars (995) on 30.06.2016 from the Bank of Nova Scotia. 9.It was further stated that out of the aforesaid quantity, the 4th respondent had sold 9 Kgs of gold bars to the 1st petitioner on 30.06.2016 and that 10 Kgs of gold were handed over to the 1st petitioner for manufacturing purpose on 30.06.2016. 10.It was further stated that the 1st petitioner in turn contracted the 2nd petitioner to manufacture jewellery wherein in turn had handed over 18043.960 g of gold bar for manufacturing purpose and 1765.450 g of gold jewellery for repair and polishing purpose. The 3rd petitioner represented by the 4th petitioner and therefore it cannot be treated as undisclosed income of the 4th petitioner. 11.In the course of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ounts. 17.It is the contention of the petitioners that the seized gold belong to the 1st petitioner in view of subsequent adjustment between 1st petitioner and 4th respondent on account of seizure of gold. An affidavit of the parties have been filed. It is further submitted that the seized gold belong to the 1st petitioner and therefore the officers of the 2nd respondent ought to have returned the seized gold to the 1st petitioner particularly in the light of the fact that it has claimed ownership over the seized good. 18.It is further submitted that the 2nd respondent had no authority under the provisions of Section 132 of the Income Tax Act, 1961 to seize bullion and jewellery as they were stock in trade of the business of the petitioners. The 2nd respondent was merely bound to make a note or inventory of such stock in trade of the business and return the jewellery items. 19.It is submitted that before the actual seizure was effected despite information recorded from both the 1st and 2nd petitioners and furnishing of details which clearly established that the seized goods were handed over by the 1st petitioner to the 2nd petitioner who in turn sub-contracted the work to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....neral of Income Tax, 2012 SCC OnLine Guj 6350. iii. Vindhya Metal Corporation and Others Vs. Commissioner of Income Tax and Others, 1983 OnLine All 998. iv. Shri L.R. Gupta and Others Vs. Union of India and Others, 1991 SCC OnLine Del 584. v. Commissioner of Income Tax, Allahabad and Others Vs. M/s. Vindhya Metal Corporation and Others, (1997) 5 SCC 321. vi. Mrs. Anita Sahai Vs. Director of Income-Tax, 2004 SCC OnLine All 1769. vii.Mitaben R Shah Vs. Deputy Commissioner of Income Tax and Another, 2010 SCC OnLine Guj 1740. viii.Tejram Omprakash (Huf), Indore Vs. Director of Income Tax (Investigation), 2013 SCC OnLine MP 10794. ix. Mul Chand Malu (HUF) and 3 Others Vs. Assistant/Deputy Commissioner of Income Tax and 5 Others, 2016 SCC OnLine Gau 138. x. Ameeta Mehra Vs. Additional Director of Income Tax (INV)-Unit and Another, 2017 SCC OnLine Del 8439. xi. Ajit Jain Vs. Union of India and Others, 2000 SCC OnLine Del 92. xii.Union of India Vs. Ajit Jain and Another, 2003 (260) ITR 80. xiii.Dimondstar Exports and Others Vs. Director General of Income Tax (Investigation) and Others, 2004 S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a was drawn or at the time of seizure or thereafter. Pursuant to the statement recorded from the 4th petitioner at the Netaji Subash Chandra Bose International Airport, Calcutta, a summons was also issued to the 2nd petitioner on the same date on 01.07.2016 by the 1st respondent. 30.The 2nd petitioner has also explained the position that it had received 18043.960 gms for manufacturing and 1765.450 gms of old gold jewellery for repair and polishing purpose from the 1st petitioner on 30.06.2016 and that these gold items were handed over to the 4th petitioner along with voucher Nos. 98 and 100 dated 30.06.2016. 31.They have also produced stock register of fine gold and gold repairs. Thereafter, summonses were issued on 08.07.2016 to the 1st and the 2nd petitioners for recording statements. 32.There is no variance between the statements of the petitioners in the proceedings. They have clearly stated that the seized gold bullion and jewellery were meant for manufacturing and repair/polishing purpose and were handed over to the 4th petitioner only for the aforesaid purpose. Thus, the official respondents can no longer rely on presumption under Section 292C of the Income Tax Act,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ven though as per 1st proviso to Section 132(1)(c), makes it clear that bullion, jewellery or other valuable article or thing being stock in trade of the business, found as a result of search shall not be seized and the is authorised officer shall merely make a note of inventory of such stock in trade of the business. 39.Since the investigation and eventual seizure by the officers of the 2nd respondent was pursuant to the tip off from the officers of the 1st respondent at the Chennai Kamaraj International Airport when the 4th petitioner was boarding the flight in evening to Kolkata on 30.06.2016 carrying gold, the 2nd respondent ought to have seized the gold and sent it to his counterpart for further investigation. 40.Detention & seizure effected by the officers at Kolkata shows arbitrary exercise of power in as much as person claiming to be the owners of the seized gold bullion and jewellery is admittedly located within the State of Tamil Nadu at Chennai and carry on business in retail sale and manufacture of gold jewellery. 41.If the 1st respondent had any doubts regarding the ownership, he should have detained the 4th petitioner and effected a seizure at the Chennai Air....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is sense such presumption is also rebuttable. "Conclusive proof" gives an artificial probative effect by the law to certain facts. No evidence is allowed to be produced with a view to combating that effect. In this sense, this is irrebuttable presumption. 44.The Court further observed as follows:- 24. The words in sub-section (4-A) are "may be presumed". The presumption under sub-section (4-A), therefore, is a rebuttable presumption. The finding recorded by the High Court in the impugned judgment that the presumption under sub-section (4-A) is an irrebuttable presumption insofar as it relates to the passing of an order under sub-section (5) of Section 132 and rebuttable presumption for the purpose of framing a regular assessment is not correct. There is nothing either in Section 132 or any other provisions of the Act which could warrant such an inference or finding. 25. Presumption under sub-section (4-A) would not be available for the purpose of framing a regular assessment. There is nothing either in Section 132 or any other provision of the Act to indicate that the presumption provided under Section 132 which is a self-contained code for se....