TaxTMI 
TaxTMI 
2009 (11) TMI 31
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.... Customs. 3. It so happened that certain goods namely consignment of Ball Bearings consigned to one M/s V.A. Enterprises were intercepted at cargo on 4th March, 1993 and were placed under seizure under Section 110 of the Customs Act. Said consignment related to the imports made by M/s Om Prakash Khandelwal, 2923, Khurd Sitaram Bazar, Delhi. The total value of the consignment was estimated at Rs.17,48,969/- which was later revised to Rs.10,79,995/-. Show cause notice was issued after that seizure declaring the value at Rs.4,85,892/-. As per the customs authorities the goods were highly undervalued. As mentioned above after the seizure of the goods and issuing show cause notice, Collector of Customs passed adjudication order dated 11th January, 1994 valuing the goods at Rs.10,79,995/-. While doing so, in the adjudication order the Commissioner of Customs observed that M/s V.A. Enterprises, 2921 Khurd Sitaram Bazar, Delhi as proprietary concern of Sh. Om Prakash Khandelwal c/o 2923, Khurd Sitaram Bazar, Delhi had imported ball bearing vide AWB No.098-6505-0635 dated 21.12.1992 for which bill of entry No. 210189 dated 26.2.1993 was filed. This consignment consist of 1,40,000 pieces ....
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....f the Assessing Officer in assuming jurisdiction by initiating proceeding u/s 147 of the Income Tax Act, 1961, despite the fact that in the absence of independent application of mind of the assessing officer could not be held to have reason to believe that the income of the assessee has escaped assessment? 2. Whether on true and correct interpretation of Section 69 of the Income Tax Act, 1961, the Income Tax Appellate Tribunal was justified in law in upholding the action of the Commissioner of Income Tax (Appeals) in sustaining the addition of Rs.10,79,995/- u/s 69 of the Act, on account of unexplained investment for alleged imports of goods? Immediately thereafter the matter was heard finally as both the counsel were ready to argue the matter. We now proceed to determine these questions of law as framed: QUESTION NO.1 9. This question relates to the justification in initiating the proceedings under Section 147 of the Income Tax Act. The submission in this behalf was that proceedings were initiated by the Assessing Officer at the instance of Commissioner of Income Tax and there was no independent application of mind by the Assessing Officer. This submission is predicated on t....
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....Cargo) dated 11.5.1999 reveal that M/s VA Enterprises, 2921, Khurd Sitaram Bazar, Delhi as proprietary concern of Shri Om Prakash Khandelwal, do 2923, Khurd Sitaram Bazar, Delhi imported Ball Bearing vide AWB No.098-6505-0635 dated 21.12.1992 vide B/E No.210189 dated 26.2.1993. This consignment consist of 1,40,000 pieces of Ball Bearing No.608 of Bore DIA8MM and 38,000 pieces of Ball Bearing No.627 of Bore DIA7MM. CIF value of the said consignment was declared as US$ 15130 (0.08 US$ per piece) equivalent to Indian Rs.4,85,891.99. Shri J.S. Anand pursuing the clearance of the said consignment. The consignment was intercepted on 4.3.1993 at Air Cargo, Complex, New Delhi by DRI officers. After investigation the case DRI offices found that the good was grossly undervalued and therefore were placed under seizure U/S section 110 of the Customs Act, 1962. The total value of these consignments estimated at Rs.17,48,969/- by DRI offices which was almost confirm by Commissioner of Custom, Delhi, hence the total consignment was under value by Rs.12,00,000/- (approximate). Order of Commissioner of Custom (Air Cargo) further held reveal that Shri J.S. Anand is main architect of this fraud. The ....
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....4. Finding of fact was recorded by the Commissioner that real importer in this case was the appellant and not M/s V.A. Enterprises. In appeal, the matter was remitted back to the Commissioner regarding valuation and further determination of duty, confiscation, adoption, fine and penalty etc. Fresh orders dated 11th May, 1999 were passed wherein the Commissioner held that it was Sh. J.S. Anand who negotiated the price of consignment and only he placed the order and was to arrange the disposal of the goods. Commissioner of Customs after examining all the facts and circumstances of the case, held that the goods have actually been under invoiced and these are to be assessed to customs duty on the value mentioned in page 3 of the CIT(A)'s order. It was further ordered that the goods were confiscated u/s 111(m) of the Customs Act, 1962 and these were allowed to be redeemed on payment of fine in lieu of confiscation amounting to Rs.5 lac. Penalty of Rs.10 lac was imposed each on Shri O.P.Khandelwal and Shri J.S.Anand u/s 112(a) of the Customs Act, 1962 for various acts of omission and commission committed by them. 15. On this basis the Assessing Officer in the reassessment proceedings ....