TaxTMI 
TaxTMI 
2008 (3) TMI 284
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....rnaments totalling 3770.800 grams Out of this, 1257.300 grams were seized from his residence and this included various items like new bangles (757.300 grams), melted gold rods (170.500 grams), gold coins (84 grams) and gold wire (245.500 grams). From the business premises, they seized ornaments to the tune of 2323.500 grams which includes gold bangles (1718.800 grams), gold coin locket (410.200 grams), primary gold in the form of rod (186.500 grams) and melted gold rod (8 grams). Apart from that, 877.900 grams of gold ornaments were found in the residence and accepting the explanation of the appellant's wife that these ornaments belong to her and her daughter, they were not seized by the Central excise authorities. As per order No. 8/89, dated March 10, 1989, the Collector of Central Excise, Cochin, confiscated the gold and gold ornaments and also imposed penalty. The assessee was given an option to redeem the gold and gold ornaments on payment of fine. Appeals were filed by the assessee and four other goldsmiths working with him, before the Tribunal which confirmed the order of the Collector. The Tribunal reduced the redemption fine for the release of gold ornaments and primary go....
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....tended by learned senior counsel for the Revenue relying upon the decision of a Division Bench of this court in CIT v. Smt. Jayalakshmi Devarajan [2006] 286 ITR 412 that the burden to prove that the articles belonged to him is on the assessee and really the Tribunal misdirected itself in casting the burden on the Revenue. It was strongly contended that the approach made by the Tribunal is totally perverse and the findings of fact have been reversed without considering the evidence available on record. It is submitted that the proceedings of the Collector of Central Excise and that of the Customs, Excise and Gold (Control) Appellate Tribunal have clearly found the claim of the assessee and others working with him unsustainable and as those proceedings have become final, they should not have been brushed aside by the Tribunal herein to find in favour of the assessee. It is pointed out that no reliable documents have been produced by the assessee in support of the said claim and therefore the findings rendered were clearly based on surmises and conjectures rather than on the evidence available in the record. It is therefore submitted by the learned senior counsel relying upon the dict....
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....at in the absence of any acceptable evidence in regard to the acquisition of gold bangles by the above persons, the lower authority has rightly rejected their claim and the reasoning of the lower authority is well founded. 7. The Assessing Officer and the Commissioner of Income-tax (Appeals) have considered the effect of the above orders while considering the various aspects. In fact, the Assessing Officer had considered the statements given before the Central excise authorities, confirmation letters furnished and also the statements recorded from them in detail. 8. In fact, the goldsmiths working under him uniformly have set up a case that the gold bangles belonged to them and were kept for safe custody with the assessee. But the Assessing Officer noticed that there are improbabilities in their stand, as there was no proper explanation as to why the ornaments which should have been kept in their residence, were entrusted with the assessee, especially in a case where they had set up a case that these ornaments were received from the parents, family, etc. The Assessing Officer found that it is difficult to believe that they had left these gold ornaments which were meant for use by....
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....ered after considering the findings rendered by the Customs and Central excise authorities also. 10. The Commissioner of Income-tax (Appeals) considered the contentions of the assessee in paragraph 4 of the order. The Commissioner agreed with the findings of the Assessing Officer while dealing with the case of the assessee that the goldsmiths working along with him are not the owners of the bangles of which ownership was claimed by them. Referring to the contentions by the claimants that they had received gold from their parents, the Commissioner rightly concluded that there is no proof or evidence regarding that. He found it difficult also to agree with the contentions raised by many of them that they were keeping the ornaments with the assessee even though some of them have been staying with their own family including their wives separately. Thus, the Assessing Officer and the Commissioner of Income-tax (Appeals) entered their findings after analysing the evidence in a deep and thorough manner. 11. In fact, none of the claimants could prove how they came into possession of those gold bangles and they merely described these are their life savings. In fact, the Commissioner agree....
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.... in a position and hence the gold ornaments did not belong to them. Presumption cannot take the place of facts. The principal evidence adduced in this respect being sound has to be accepted." 13. Ultimately, in paragraph 28 the issue found by the Tribunal is in the following terms: "The facts and evidence lead us to draw an inference favourable to the appellant to accept his explanation and the explanation of other claimants claiming certain quantity of gold ornaments as belonging to them." 14. This conclusion was arrived at by relying upon the dictum laid down in CIT v. L. G. Ramamurthi [1977] 110 ITR 453 (Mad) to the effect that if there is a possibility of drawing two probable inferences from a same set of facts, in that event, the inference beneficial to the assessee should be accepted. What persuaded the Tribunal to accept the explanation is further evident from paragraph 30, It was held thus: "Other goldsmiths raised loans to pay fine to the Central excise authorities for redeeming the gold and gold ornaments claimed by them as owners of the same. They have claimed certain gold and gold ornaments as their own right from the beginning and they were also appellants before t....
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....has ignored the evidence which was available before the Assessing Officer and other authorities. Therefore, as held by the Division Bench in the above quoted case, the wrong application of law amounted to an error of law giving rise to a substantial question of law. 16. Going by the provisions of section 69A of the Act, the additions made herein with reference to the claims raised by the other goldsmiths ought not to have been deleted. We find that the reasoning adopted by the Tribunal referring to redemption of gold and gold ornaments by the claimants after availing of loans and by paying fine to the Central excise authorities, has no significance in the light of the findings rendered above. Actually, the Tribunal was persuaded to accept their version because of the subsequent conduct on the part of the said goldsmiths in redeeming the gold which, according to us, pales to insignificance when the claim itself could not be proved by any cogent evidence before the Central excise authorities and before the Assessing Officer. Hence, the Tribunal acted perversely in arriving at the conclusion that they are the owners of the gold and gold ornaments as claimed by them and that the asses....