ACIT, Noida V. M/s. Auram Jewellery Export (P) Ltd., Ghaziabad

ITA 1557/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1167 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-10-2009
• Assessment Year: 1995-1996
• Appeal Filed On: 17-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIKHIL CHOUDHARY
• Assessee Lawyers: SHRI T R TALWAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI I.P. BANSAL, JUDICIAL MEMBER ITA NO. 1557/DEL/2009 ASSESSMENT YEAR : 1995-96 ASSTT. COMMISSIONER OF INCOME- TAX, CIRCLE, NOIDA. VS. M/S AURAM JEWELLERY EXPORT (P) LTD., THROUGH SHRI DEEPAK GUPTA, R/O 6/110, SECTOR 2, RAJENDRA NAGAR, SAHIBABAD, GHAZIABAD (UP). (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHRI T.R. TALWAR, ADVOCATE REVENUE BY : SHRI NIKHIL CHOUDHARY, SR. DR O R D E R PER I.P. BANSAL, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT (A) DATED 22 ND JANUARY, 2009 FOR ASSESSMENT YEAR 1995-96. GROUND S OF APPEAL READ AS UNDER:- 1. THAT THE LD. CIT (A) HAS WRONGLY DELETED THE AD DITION OF RS.9,45,000/- WHICH WAS MADE BY THE A.O. ON ACCOUNT OF SALE OF 15 KGS. OF GOLD BY THE ASSESSEE IN DOMESTIC TARI FF AREA. THE LD. CIT (A) HAS NOT APPRECIATED THE FACTS THAT THE A.O. ON THE BASIS OF INFORMATION THAT THE ASSESSEE HAD NOT EXPORTED JEWELLERY TO BE MADE FROM 15 KG. GOLD BUT DELIBERAT ELY TRADED 15 KG. GOLD @ RS.4,20,000/- PER KG HAD RIGHTLY MADE AN ADDITION OF RS.9,45,000/-. 2. HENCE, ORDER OF THE LD. CIT (A) MAY BE SET ASID E AND THE ORDER OF THE A.O. BE RESTORED. ITA NO.1557/DEL/2009 2 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXPOR T OF JEWELLERY. IT IS APPROVED FOR MANUFACTURING AND EXPORT OF PLAIN GOLD JEWELLERY AS PER LOA NO.7- 17/91/NEPZ DATED 29.1.92 ISSUED BY MINISTRY OF COMM ERCE. IT USED TO GET GOLD FROM M/S MMTC, NEPZ, NOIDA ON LOAN BASIS FOR MANUFA CTURING AND EXPORT OF JEWELLERY. IT WAS FOUND THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE DID NOT EXPORT THE JEWELLERY WORTH 15 KGS OF GOLD WHICH WAS REMOVED FROM THE UNIT. THEREFORE, IT WAS HELD THAT TRADING WORTH 15 KGS OF GOLD WAS NOT COVERED UNDER EXPORT TRADING. SHOW CAUSE NOTICE WAS ISSUED TO TH E ASSESSEE TO EXPLAIN WHY NET INCOME OF RS.9,45,000/- ON THE TOTAL SALE OF PU RCHASE MADE FROM 15 KGS OF GOLD AMOUNTING TO RS.63 LAC @ RS.4,20,000/- PER KG OF GOLD SHOULD NOT BE ASSESSED AS TAXABLE INCOME OF THE ASSESSEE TAKING T HE NET INCOME @ 15% OF THE TOTAL VALUE OF GOLD JEWELLERY SOLD IN THE LOCAL MAR KET. IN THE ABSENCE OF REPLY, THE INCOME OF THE ASSESSEE WAS COMPUTED AT A SUM F RS.9 ,45,000/-. THE ADDITION WAS CHALLENGED IN AN APPEAL FILED BEFORE THE CIT ( A). BEFORE THE CIT (A) IT WAS SUBMITTED VIDE WRITTEN SUBMISSIONS DATED 25 TH MARCH, 2004 THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE WAS HAVING GOLD JE WELLERY OF 15 KGS IN THE STRONG ROOM AND THE KEY OF WHICH REMAINED WITH THE ASSESSEE. ON 25 TH MARCH, 1996 THE ASSESSEE INFORMED THE ASSTT. COMMISSIONER CUSTOMS TO VERIFY THE STOCK OF 15 KGS OF GOLD JEWELLERY VIDE LETTER DATED 24 TH FEBRUARY, 1996. LATER ON, TO VERIFY THE STOCK, THE CUSTOMS OFFICIALS BROKEN THE STRONG ROOM ON 26 TH APRIL, 1996 IN THE ABSENCE OF THE ASSESSEE WHEN THE ASSESSEE WA S OUT OF STATION. A FIR WAS FILED AGAINST THE OFFICERS OF MMTC AND CUSTOMS. COUNTER FIR WAS FILED BY MMTC CONTENDING THAT MR. DEEPAK GUPTA, DIRECTOR OF THE ASSESSEE COMPANY HAD TAKEN AWAY 15 KG OF GOLD. THE MATTER WENT TO C B-CID AND CB-CIB FILED CHARGE SHEET AGAINST SHRI DEEPAK GUPTA AND MMTC OFF ICIALS. HOWEVER, SHRI DEEPAK GUPTA WAS DISCHARGED BY THE HONBLE COURT AN D PRIMA FACIE MMTC WAS FOUND GUILTY AND THE COURT ORDERED THAT MINISTRY OF COMMERCE SHOULD TAKE NECESSARY ACTION AGAINST MMTC AND CUSTOMS OFFICIALS . NO APPEAL HAS BEEN FILED AGAINST THAT COURT ORDER BY MMTC AND CUSTOMS DEPART MENT. CERTIFIED COPY OF THE ORDER WAS ENCLOSED. IT WAS SUBMITTED THAT IT I S A CASE OF THEFT OF 15 KGS OF GOLD JEWELLERY BY MMTC AND CUSTOMS OFFICIALS AGAINS T WHOM INVESTIGATION IS ITA NO.1557/DEL/2009 3 GOING ON. THE ASSESSING OFFICER HAS ERRED IN MAKIN G THE ADDITION AND RAISING THE DEMAND AND, THUS, IT WAS SUBMITTED THAT THE ADDITIO N SHOULD BE DELETED. THE RELEVANT ORDER OF THE COURT WAS PLACED ON RECORD BE FORE THE CIT (A). FROM THE SAID ORDER THE LD. CIT (A) HAS FOUND THAT THE ASSES SEE HAD PRIMA FACIE ABSOLVED FROM THE CHARGE OF THEFT/MISUSE OF 15 KGS OF GOLD A ND IT WAS SUPPORTED BY THAT ORDER. LD. CIT (A) ALSO FOUND THAT SALES-TAX DEPAR TMENT HAS ACCEPTED THE CLAIM OF THE ASSESSEE VIDE ORDER DATED 7 TH MARCH, 2001. IT IS IN THESE CIRCUMSTANCES THE CIT (A) HAS DELETED THE ADDITION. THE DEPARTME NT IS AGGRIEVED, HENCE, IN APPEAL. 3. LD. DR RELYING ON THE ORDER OF THE ASSESSING OFF ICER PLEADED THAT THE ADDITION HAS RIGHTLY BEEN MADE. 4. ON THE OTHER HAND, LD. AR OF THE ASSESSEE HAS P RODUCED BEFORE US A COPY OF THE COURT ORDER RENDERED BY 3 RD ADDL. CHIEF JUDICIAL MAGISTRATE, GHAZIABAD DATED 20 TH AUGUST, 1999. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE ADDITION HAS BEEN M ADE BY THE ASSESSING OFFICER ON THE GROUND THAT 15 KGS OF GOLD ISSUED BY MMTC WA S UTILIZED BY THE ASSESSEE FOR MAKING GOLD ORNAMENTS WHICH WAS SOLD OUTSIDE T HE BOOKS OF ACCOUNT. HOWEVER, AS IT IS SEEN FROM THE AFOREMENTIONED ORDE R OF THE COURT DATED 20 TH AUGUST, 1999, DIRECTOR OF THE ASSESSEE COMPANY SHRI DEEPAK GUPTA HAS BEEN DISCHARGED U/S 239 OF CRIMINAL PROCEDURE CODE AS IT HAS BEEN FOUND BY THE COURT THAT NO SUFFICIENT GROUND IS THERE TO FRAME THE CH ARGE U/S 406, 409 OF IPC. IT IS OBSERVED BY THE COURT THAT NO PRIMA FACIE CASE OF M ISAPPROPRIATION OF THE SAID GOLD WITH DISHONESTY AND WITH CRIMINAL INTENTION, C ONVERSION INTO HIS OWN USE AND ITS DISPOSAL CONTRARY TO THE CONTRACT AND THE PROVI SIONS OF LAW IS MADE OUT AGAINST THE DIRECTOR OF THE ASSESSEE COMPANY. IT IS FURTHE R OBSERVED THAT ON THE OTHER HAND, IT IS PATENT INSTANCE OF ARBITRARINESS OF THE OFFICERS OF MMTC AND ABUSE OF AUTHORITY WHICH SHOULD BE TAKEN NOTICE BY THE GOVER NMENT OF INDIA, SO, THE PURPOSE FOR WHICH THE CORPORATION WAS ESTABLISHED I S NOT FRUSTRATED. THE COURT ITA NO.1557/DEL/2009 4 OBSERVED THAT THERE APPEARS TO BE NO PROPER GROUND TO FRAME THE CHARGES U/S 406 AND 409 OF I.P.C. AGAINST SHRI DEEPAK GUPTA AND THE CHARGE IS BASELESS. IN THIS VIEW OF THE FACTUAL SITUATION, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT (A) VIDE WHICH THE IMPUGNED ADDITION HAS BEEN DELETED. WE D ECLINE TO INTERFERE. 6. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. . 7. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.10. 2009. [P.K. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 30.10.2009. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES