BHIM RAJ ANAND KUMAR Vs. INCOME-TAX OFFICER

JUDGEMENT

(1.) This appeal is against the order of penalty of Rs. 45,000 imposed by the ITO for concealment of income which has since been confirmed by the CIT (A).

(2.) The relevant facts may be noted. The assessee is a firm doing money-lending business; it also purchases and sells silver bullion and silver ornaments. The residential and business premises of the partners were searched by the Gold Control Authorities on 7-10-1977. In the course of the said search, primary gold and gold ornaments were seized, numbering in all 389 pieces weighting 1487.400 grams. In the course of the search proceedings, the statement of the main partner of the assessee firm, namely, Sri Gopi Krishna was recorded wherein it was stated by him that the firm in question was doing business in gold ornaments without licence. The aforesaid gold ornaments were thereupon seized by the custom authorities and proceedings under sections 71 and 78 of the Gold Control Act were commenced by the assessing authorities before the Deputy Collector of Customs before whom, a plea was taken by the assessee, inter alia that some of the seized ornaments were pawned by customers and that the firm was not being in gold ornaments as alleged and that earlier statement that firm was dealing in gold ornaments was recorded under duress. The above statement, which was given on 26th May, 1978, was rejected by the Deputy Collector, Central Excise as being an afterthought, as there was no evidence to suggest that at the time, when originally the statement of Sri Gopal Krishna was recorded, he was under duress. The learned Deputy Collector further found that the number and varieties of seized new gold ornaments definitely indicated their commercial nature and as such it could not be believed that the firm from whose custody the said gold ornaments had been seized, did not deal in gold ornaments.

(3.) After recording the finding as above, the Deputy Collector, Central Excise imposed a fine of Rs. 10,000 on the firm and the further penalty of Rs. 5,000 and directed that on payment of the aforesaid amount the gold ornaments may be released to the firm.