MS.SASEENDRA JEWELLERY,KANNUR V. THE ASST.COMMISSIONER OF INCOME TAX,

WP(C)/15190/2009

AI Insights

The case involves Ms. Saseendra Jewellery, a jeweller, who filed a writ petition against the Assistant Commissioner of Income Tax and the Commissioner of Income Tax, Central Circle, Kochi, concerning the seizure of gold and silver articles during a search operation under Section 132 of the Income Tax Act. The petitioner contested the treatment of the seized items as unexplained stock and the subsequent tax demand. The primary legal issue was whether the assets seized should be adjusted against the tax demand upon completion of the assessment for the block period. The court's decision was influenced by the ongoing nature of the assessment proceedings and the need to retain the gold to secure potential tax liabilities.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 699442 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-11-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: P RAGHUNATH; PREMJIT NAGENDRAN
• Keywords: Block assessment; Gold Ornaments; Silver articles; Tax demand; Unexplained stock; Writ petition
• Section: 132; 158BC; 132B(i)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC THURSDAY, THE 8TH DAY OF NOVEMBER 2012/17TH KARTHIKA 1934 WP(C).No. 15190 of 2009 (P) --------------------------- PETITIONER: ---------- MS. SASEENDRA JEWELLERY, HIGH SCHOOL ROAD, PANOOR, KANNUR DISTRICT REPRESENTED BY MANAGING PARTNER SRI. BALAN. BY ADVS.SRI.P.RAGHUNATH SRI.PREMJIT NAGENDRAN RESPONDENTS: ----------- 1. ASST. COMISSIONER OF INCOME TAX, CENTRAL CIRCLE II, CALICUT. 2. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOCHI. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08-11-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 15190 of 2009 APPENDIX PETITIONER'S EXHIBITS EXT.P1. COPY OF ORDER DATED 29-04-2005. EXT.P2. COPY OF LETTER DATED 10-=03-2006 EXT.P3. COPY OF REQUEST DATED 08-04-2009. /TRUE COPY/ kvr/ P.A. TO JUDGE ANTONY DOMINIC,J -------------------------------- W.P.(C)No.15190 of 2009 ------------------------------------- Dated this the 8th day of November, 2012 JUDGMENT Petitioner is a jeweller. On 24.11.2000, petitioner's premises was searched under Section 132 of the Income Tax Act. During the search, gold ornaments weighing 19014 grams valued at the rate of Rs.79,85,880/- were seized. Block assessment for the block period 1991-92 to 2001-2002 under Section 158BC was completed and gold ornaments weighing 18666.075 grams valued at Rs.78,40,130/- were treated as unexplained stock and brought to tax. Similarly, silver articles weighing 2492.67 grams valued at Rs.17,449/- were also treated as unexplained stock and brought to tax. The assessment resulted in tax demand of Rs.52,80,294/-. 2. In appeal filed by the assessee, the Appellate Commissioner brought down the value of undisclosed income to Rs.62,56,273/-. Insofar as 8640.330 grams of W.P.(C).No.15190/2009 : 2 : gold claimed to have been purchased from a dealer in Ahmedabad is concerned, the Commissioner remitted the matter to the assessing authority to decide the issue. Against the remand order of the Appellate Commissioner alone, Department filed appeal before the Tribunal and the Commissioner's order was set aside and was directed the Commissioner(Appeals) to consider the issue on merits. The matter was pending before the Commissioner(Appeals). It was at that stage, after making a request to respondents, the petitioner filed this writ petition, with the following prayers: A. Under Sec.132B(i) of the IT Act, the assets seized under Sec.132(1)(B)(iii) and retained by the respondents are liable to be adjusted, against any amounts that may be found due on completion of assessment for the Block Period. In the instant case, the assessment was completed as per order dated 25.11.2002 and thereafter revised as per Ext.P1 Revised Order. The first respondent was therefore bound to adjust the amounts due as per Ext.P1 order by sale of sufficient quantity of gold ornaments retained by the Department. The refusal W.P.(C).No.15190/2009 : 3 : on his part to sell the same and carry out such adjustment is totally illegal and arbitrary. B. The first respondent ought to have noticed that the petitioner have expressed their inability to raise funds to clear the amount demanded and consequently requested to sell the adjust the amounts due by selling sufficient part of the assets seized which the respondent was liable to do. 3. From the statement filed by the respondents, it appears that following the remand by Tribunal, the appeal was pending consideration of the Appellate Commissioner. It is also seen that on the petitioner's request for disposal of sufficient quantity of gold ornaments or to return the gold retaining sufficient quantity with the Department to safeguard the interest of the revenue, the Commissioner of Income Tax passed orders and accordingly, one kilogram of gold, out of the gold ornaments seized was released to them on 06.08.2009. Further, it is also stated that since the assessment has not become final, the balance gold is retained with the department to safeguard the interest of the revenue for realising the demands that may ultimately W.P.(C).No.15190/2009 : 4 : be decided. According to respondents, the probable total liability is more than Rs.1.53 crores and the gold remaining with the department was only 5094 grams, which is valued at Rs.76,41,000/-. Thus, assessment proceedings are still not complete and one kilogram of gold has been released to the petitioner after this writ petition was filed and what is held by the Department is, according to the Department, insufficient to realise the probable demand. In such circumstances, the prayer sought in this writ petition, cannot be granted and therefore, the writ petition is dismissed. This shall be without prejudice to the right of the petitioner to seek appropriate orders once the assessment proceedings attained finality. Sd/- ANTONY DOMINIC, JUDGE ln "