Harish Dargan vs Commissioner Of Income Tax
2008 Latest Caselaw 332 Del

JUDGMENT

Madan B. Lokur, J.

1. The Revenue is aggrieved by an order dated 31st October, 2006 passed by the Income Tax Appellate Tribunal, Delhi Bench E , in IT (SS) A No. 359/Del/2003 relevant for the block Assessment Years 1991-92 to 2001-2002.

2. The assessed is the proprietor of M/s Sona Jewellers and is also a Director in M/s Hira Jewellers.

3. On the morning of 2nd February, 2001, the assessed was intercepted at Delhi Airport by the Intelligence Wing of the Income Tax Department and was found to be carrying Rs. 18 lakhs in cash. His statement was recorded under Section 131 of the Income Tax Act, 1961 (the Act) and he stated that approximately Rs. 4 lakhs was available with his proprietary concern M/s Sona Jewellers. He stated that he was carrying Rs. 18 lakhs in cash since he was going to Bombay for purchasing diamonds for M/s Sona Jewellers.

4. As a result of the above, the Income Tax Department conducted a search of his business and residential premises at about 1.00 pm on 2nd February, 2001. At that time, the statement of the assessed was recorded under Section 132(4) of the Act and he stated that he was carrying Rs. 17 lakhs in cash relating to M/s Hira Jewsellers and the rest relates to himself and his proprietary concern M/s Sona Jewellers. He also stated that he was going to Bombay to purchase loose diamonds since he was informed that people of Gujarat are selling loose diamonds at a cheaper rate due to the financial crisis in Gujarat due to the earthquake.

5. The Income Tax Department also recorded the statement of one Smt. Dhanlata Marwah, the Accountant of M/s Hira Jewellers who stated that she was in-charge of preparing bills and she stated that some bills were prepared by her on the morning of 2nd February, 2001 showing substantial cash sales without actual sales having been made. She also stated that as per the procedure, after a jewellery item is approved by a customer, the salesgirl brings the details of the item to her and thereafter she prepares the bill.

6. The Income Tax Department also recorded the statements of Smt. Meenakshi Sharma and Smt. Shalini Bala who were apparently salesgirls with M/s Hira Jewellers and they denied having participated in the preparation of any bills.

7. Much later, on 28th February, 2001 and 1st March, 2001, Smt. Dhanlata Marwah, Smt. Meenakshi Sharma and Smt. Shalini Bala retracted their statements and stated on affidavit that they had been coerced by the officers of the Income Tax Department on 2nd February, 2001 to deny having made the bills.

8. On his part, the assessed gave a statement on 11th February, 2001 that when he was intercepted at the Delhi Airport in the morning of 2nd February, 2001, he was carrying a letter from M/s Hira Jewellers to the effect that he was carrying cash belonging to M/s Hira Jewellers. The letter was also produced by the assessed.

9. Upon a consideration of the material on record, the Assessing Officer came to the conclusion that the statements made by Smt. Dhanlata Marwah, Smt. Meenakshi Sharma and Smt. Shalini Bala on 2nd February, 2001 were true and correct and that their retraction was an afterthought. In fact, there was no cash amount available in such a large quantity with M/s Hira Jewellers on the evening of 1st February, 2001 which could be taken by the assessed while going to the Airport. It was held that the explanation given by the assessed was inadequate and the amount that he was carrying at the Delhi Airport was his income from undisclosed sources.

10. The assessed preferred an appeal before the Commissioner of Income Tax (Appeals) [CIT (A)] who also did not accept the version proffered by the assessed and upheld the view taken by the Assessing Officer.

11. Before the Income Tax Appellate Tribunal (the Tribunal), the assessed raised the same contentions raised earlier but to no effect.

12. The Tribunal took into consideration several facts to come to a conclusion against the assessed. First of all, it was found that the letter said to have been issued by M/s Hira Jewellers was prepared subsequent to the interception of the assessed at the Delhi Airport. Were it not so, the assessed would have, at the time when he was intercepted, shown the letter that the cash belonged to M/s Hira Jewellers.

13. The Tribunal also took into consideration the fact that the employees of M/s Hira Jewellers had stated that bills evidencing cash sales had been prepared on the morning of 2nd February, 2001 but there were no actual cash sales. The retractions by these employees were disbelieved.

14. The Tribunal also found that there was absolutely no independent evidence produced that there was any availability of cash either with the assessed or with M/s Hira Jewellers such that the amount could be explained in the hands of the assessed when he was intercepted on the morning of 2nd February, 2001 at the Delhi Airport.

15. In view of all these factors, the Tribunal upheld the view taken by the Assessing Officer as well as by CIT (A).

16. We are of the opinion that in view of these concurrent findings on questions of fact, no substantial question of law arises for our consideration. The conclusions of fact cannot be said to be perverse in any manner but are based on material evidence that was available with the Revenue.

17. Learned Counsel for the assessed raised the contention that the cash amount recovered from the assessed at the Delhi Airport was not as a result of any search having been conducted in accordance with law. This argument was considered by the Tribunal as well. It transpires that when the assessed was intercepted at the Airport, he admitted that he was carrying cash. At that point of time, the assessed was not searched. On the basis of a warrant, the search commenced later in the day at about 1.00 pm when cash was found with the assessed and seized as a result of the search. Under these circumstances, it cannot be said that there was no recovery as a result of any search. The validity of the search obviously could not be challenged by the assessed before the departmental authorities and that being the position, and the search having started at 1.00 pm on 2nd February, 2001 and recovery of the amount having been made as a result of the search, the contention of learned Counsel really has no legs to stand on.

18. It was also contended by learned Counsel that the assessed had not signed any statement at the Airport. This is partially correct inasmuch as the statement at the airport was in two pages. The first page was signed by the assessed. The second page of the statement was not signed by the assessed although the second page bears his signature at the bottom. However, neither the Tribunal has relied upon the contents of the second page nor have we thought it fit to rely on the contents of the second page of the statement. Even disregarding the contents of the second page of the statement, there is enough material to show that the assessed was not able to explain the availability of cash with him in the morning of 2nd February, 2001.

19. Learned Counsel for the assessed finally contended that in so far as the availability of cash with M/s Hira Jewellers on the evening of 1st February, 2001 is concerned, that was accepted by the Assessing Officer of M/s Hira Jewellers. Such an argument was not raised by the assessed at any time before any of the statutory authorities and in any case the assessed was not able to show to the satisfaction of any of the authorities below that cash belonging to M/s Hira Jewellers was given to him and that he was carrying that cash when he was intercepted at Delhi Airport on the morning of 2nd February, 2001.

20. No substantial question of law has been made out. The appeal is, accordingly, dismissed.