Delhi H.C : Whether, on the facts and in the circumstances of the case, the Tribunal had enough material to come to the conclusion that Mohd. Masoom was not the owner of the gold which was confiscated from the car which admittedly belonged to him ?

Counsel Appeared

Sanjiv Khanna & Ajay Jha, for the Applicant

JUDGMENT

ARIJIT PASAYAT, C.J. :

Pursuant to the direction given by this Court under s. 256(2) of the IT Act, 1961 (“the Act”) in IT Case No. 279 of 1979, the Tribunal, Delhi Bench D, has referred the following question for opinion of this Court : “Whether, on the facts and in the circumstances of the case, the Tribunal had enough material to come to the conclusion that Mohd. Masoom was not the owner of the gold which was confiscated from the car which admittedly belonged to him ?” Dispute relates to the asst. yr. 1974-75.

2. Factual position as indicated in the statement of case is as follows : Assessee at the relevant point of time dealt in plastic beads and was carrying on business in the name and style of Bombay General Stores. The beads used to be purchased from Bombay and received by train. The revenue intelligence authorities received information that gold was being smuggled along with beads in the boxes. They kept a watch on the movement of the assessee. He was found taking delivery of two boxes from Frontier Mail at New Delhi Railway Station on 10th April, 1973. The goods were taken in an Ambassador car belonging to the assessee. Intelligence authorities arrested him and searched the boxes and found 1,550 tolas of primary gold which were seized. The authorities also kept a watch on the parcels received by the same train on 11th April, 1973. On that date also two parcels had arrived from Bombay from which they recovered 500 tolas of primary gold. The assessee was examined by the Intelligence Officers. He admitted before them to have carried on the activities of smuggling but stated that he was only a carrier and gold actually belonged to one Daya Shankar Kapoor of Shakti Nagar, Delhi. The IT authorities initiated proceedings against the assessee for the asst. yrs. 1973-74 and 1974-75. They questioned him about his activities and the gold recovered by the revenue intelligence authorities. Before the ITO, the assessee flatly denied to have any connection with the smuggling activities. He stated that he was falsely implicated by the authorities and he did not know any Daya Shankar Kapoor. He also denied to have done any job as carrier of gold for Daya Shankar Kappor. The ITO held that the assessee was owner of the gold. He estimated its value at Rs. 7,17,500 and added the same as the assessee’s undisclosed income. The assessee preferred appeal before the AAC. Said authority affirmed the conclusions of the AO. Matter was carried in further appeal before the Tribunal. Stand of the assessee was accepted and addition was deleted by the Tribunal.

3. Relevant observations of the Tribunal are contained in para. 4 of its order which read as follows : “The assessee is now in appeal before us. We have heard the parties. We have also gone through the order of the Collector of Customs dt. 30th March, 1977, referred to above. The finding of the Collector as contained in para 35 of his order is that Shri Daya Shankar was the financier in this organisation and that he was also the receiver of the gold. In view of this finding, we do not find any material to hold that the assessee was the owner of the gold or that he had financed its purchase. The assessee will, therefore, get relief of Rs. 7,17,500 in the asst. yr. 1974-75. The Department will, of course, be at liberty to proceed against Shri Daya Shankar, if otherwise permissible under the Act.”

The Revenue’s prayer for reference under s. 256(1) was turned down. However, on being moved under s. 256(2) direction was given by this Court to refer the question as set out above.

We have heard the learned counsel for the Revenue. There is no appearance on behalf of the assessee in spite of notice. The learned counsel for the Revenue submitted that the conclusions of the Tribunal are erroneous and contrary to the facts.

We find that the Tribunal referred to the order passed by the Customs authorities wherein it was held that Daya Shankar Kapoor was the financier in the organisation and the assessee was not the owner of the gold and had not financed its purchase. Conclusions of the Tribunal are essentially factual giving rise to no question of law. Therefore, we decline to answer the question.

The reference is returned unanswered.

Decision in favour of Reference returned unanswered

[Citation : 252 ITR 596]