COMMISSIONER OF INCOME TAX Vs. AMRATLAL CHUNILAL SHAH

JUDGEMENT

(1.) In this reference the following two questions are referred to us by the Tribunal for determination :

(2.) The assessment year involved is 1964-65. The assessee was a partner in the firm of M/s. Amrit Metal Marts and was doing brokerage business in gold. No books of account were maintained by him. He was found in physical possession of 500 total of gold on 10-7-1965. He was arrested by the customs authorities for contravening the provisions of the Customs Act. The assessee pleaded guilty to the charge of possessing the contraband gold and was sentenced to 6 weeks' vigorous imprisonment. The ITO examined the assessee u/s. 131 of the IT Act to elicit the identity of the real owner of the gold. The ITO discarded the evidence of the assessee that he was merely a carrier and not the owner of the gold and resorting to s. 69A of the It Act. 1961 added Rs. 65,000 being the then market value of the contraband goods to the income of the assessee. The appeal to the AAC filed by the assessee was dismissed. Thereafter the matter was taken up before the ITAT. The Tribunal has come to a conclusion that then assessee was not the owner of the gold but only a carrier. The Tribunal has found that the financial condition of the assessee was poor and that his income for the previous assessment year was determined only at Rs. 4,000. The Tribunal has also relied upon the following facts as disclosed in the complaint before the Chief Presidency Magistrate, Bombay, namely that there were other persons who had accompanied the assessee at the time when he was carrying the gold in question. The assessee did not at the sight of the bogus customer approach the taxi in which the customer was sitting. Some other person negotiated with the customer first, and then led the assessee to the taxi. No other person, however, was prosecuted. The Tribunal accepted the explanation given by the assessee that he was induced on a payment of Rs. 50 to carry a bag containing gold upto a taxi which was standing on Kalbadevi Road. The Tribunal has, therefore, on the basis of these facts came to the conclusion that the assessee was a small person with insufficient means and that he was not the owner of the gold in question. The Tribunal has, therefore, come to the conclusion that the addition of Rs. 65,000 made by the ITO under sec. 69A of the IT Act, 1961 was not justified.

(3.) In these circumstances, it cannot be said that the finding of the Tribunal was not based on any evidence. This is a matter where the Tribunal has come to a finding of fact on an appreciation of evidence which was before the Tribunal.