TaxTMI 
TaxTMI 
1982 (1) TMI 14
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....gn gold and that the stock of 25 bars of gold which he was carrying belonged to the assessee. One Govindaraja Chettiar was said to be a person to whom the 25 bars of gold were meant to be delivered. This Govindaraja Chettiar also gave a statement to the Central Excise Dept. at the time of a raid conducted in his house. In his statement, Govindaraja Chettiar admitted that he had had some transactions with the assessee in gold. In the course of his statement, Govindaraja Chettiar referred to his having received from the assessee 25 bars of gold in February, 1971. After obtaining the statements of Janardhanam and Govindaraja Chettiar, the Central Excise authorities examined the assessee. The assessee denied that he had any dealings in any contraband gold of foreign origin. Subsequently, however, the assessee made a different statement admitting his involvement in the transaction relating to 25 bars of gold delivered to Govindaraja Chettiar in February, 1971, and also the transaction involving 25 bars of gold which Janardhanam was carrying in March, 1971, when he was apprehended in Thanjavur railway station by the Central Excise authorities. While admitting that he was implicated in th....
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....cord showed that the assessee was having dealings in gold bars, which he had kept outside his accounts, the Tribunal proceeded to estimate how much by way of unexplained income could be brought to assessment in respect of the assessee's investment in gold bars. According to the Tribunal, the statements obtained by the Central Excise authorities only showed that the assessee had delivered 25 gold bars through Janardhanam to Govindaraja Chettiar in February, 1971. Adopting the value put on the gold bars by the ITO, the Tribunal estimated the value of 25 gold bars dealt with on that occasion at Rs. 59,000. Turning to the subsequent transaction which became abortive in March, 1971, by reason of the seizure of the gold bars by the Central Excise authorities, the Tribunal expressed the view that this stock of 25 gold bars might very well have been acquired by the assessee from out of the proceeds of sale of the earlier stock of 25 gold bars sold by the assessee to Govindaraja Chettiar. The Tribunal based their view on the fact that only one consignment of 25 gold bars was recovered by seizure by the Central Excise authorities and that was during March, 1971. The evidence as respects the ....
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....stimated to have earned the assessee profit of Rs. 6,000. Since no profit had at all been declared and brought to account by the assessee in respect of the transaction of sale during February, 1971, the Tribunal expressed the view that penalty must attach to the non-disclosure of this profit margin estimated to amount to Rs. 6,000. In this view, the Tribunal sustained the penalty to the extent of Rs. 6,000 deleting the balance of Rs. 1,94,000 from the order of penalty made by the IAC. From the decision of the Tribunal both in the assessment and in the penalty proceedings, the Commissioner and the assessee demanded references to be made to this court. Both the applications were rejected by the Tribunal. Further proceedings were taken by both the parties before this court. This court, however, rejected the petition of the assessee, while ordering the application of the Department for reference. On the basis of the directions of this court in the Department's application, the Tribunal has since referred the following question of law " 1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in deleting a sum of Rs. 59,000 out of Rs. 1,18,000 a....
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....ed them to reduce the addition by one-half. We referred to the inference drawn by the Tribunal to the effect that although the assessee might be taken to have dealt with the two consignments of gold bars, 25 bars each, they were nevertheless at different points of time, one after the other, one during February, 1971, and the other during March, 1971. We also referred to the conclusion of the Tribunal that while the assessee was shown to have parted with gold bars in February, 1971, at a profit, there was nothing to show that the proceeds of that sale could not have been available with the assessee, from out of which a subsequent acquisition of 25 gold bars could have been effected which were detected by the Central Excise authorities in the subsequent month of March, 1971. We hold that this inference of the Tribunal based on probabilities of the case must be regarded as a factual inference for which there was ample material on record. Mrs. Nalini Chidambaram submitted that the Tribunal in their order had referred to the fact that the sale by the assessee of 25 bars of gold to Govindaraja Chettiar was not paid for in whole then and there in February, 1971, itself, but only part p....