1982 (3) TMI 35

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....and they were being smuggled by a German National. It was claimed in the proceedings before the Customs officials that the smuggling was done or attempted at the instance of the assessee ; the assessee, however, denied this fact and the ownership of the watches was also not claimed by him. In these proceedings, the watches were confiscated and a penalty of Rs. 25,000 was imposed against the assessee which is still under challenge in proceedings under the Customs Act. The ITO had added Rs. 1,10,000 to the assessee's income on account of smuggling business. This was reduced on appeal by the AAC to Rs. 70,000 as being the value of the unexplained investment in the watches. The Tribunal on a further appeal, held that even this addition of Rs. ....

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....hes belonged to the assessee and were lying in a shop, there is no doubt that the amount could be added to his income as an unexplained credit. We see little difference why a similar inference cannot be raised if the watches were smuggled by the assessee through the agency of another. The real point is that this question is still undecided. On the above question, the Tribunal's view was that the matter could not be decided till the Customs authorities finally decided the question of ownership of the watches. However, the appeal was argued on a different question, namely, that even if Rs. 75,000 was the unexplained credit, the watches had been seized and even a fine had been imposed, so the net amount was a debit and not a credit. Out of th....