JUDGMENT
M.B. Shah, J.
1. It is the say of the petitioner that he is a dealer of silver for the last ten years and is also an income-tax assessee from the assessment year 1986-87. He has challenged the order dated August 1, 1994, under Section 132(5) read with section 132(7) of the Income-tax Act, 1961, passed the Assistant Commissioner of Income-tax, Circle 3(3), Ahmedabad, whereby it is ordered that due to unsatisfactory explanation given by the petitioner the seized silver was being treated as of unexplained ownership.
2. It is vehemently contended by the learned advocate for the petitioner that the impugned order is on the face of it arbitrary, unjust and illegal. He has pointed out that the petitioner had purchased the silver from the Customs Department by paying the amounts by account payee drafts on various dates. He, therefore, submitted that the impugned order be quashed and set aside.
3. From the record of the case, it is apparent that the petitioner had purchased the silver from the Customs Department during the period from December 2, 1993, to March 1994. For this purpose, the petitioner had produced on record the extracts of his account with the Manekchowk Co-operative Bank Limited at annexure “J” collectively which throw light as to how the petitioner got money by account payee cheques from different parties. This was explained (in his reply dated March 22, 1994, annexure “J”) to the Assistant Director of Investigation. In that reply dated March 22, 1994, in paragraph 3, it is specifically stated as regards the source of income of Rs. 12,30,000 as under :
Rs.
(a) 4,67,865 Cheque No. 774210 received from Pari Girishkumar
Laherchandbhai drawn on Manekchowk Co-operative
Bank, dated March 5, 1995, against discounting of
cheques.
(b) 8,24,000 Cheque No. 150700 received from Ghanshyam Silver
drawn on Manekchowk Co-operative Bank Ltd., in
payment of invoices Nos. 413 and 414.
(c) 1,00,000 Cheque No. 150698 received from Ghanshyam Silver
drawn on Manekchowk Co-operative Bank Ltd., in
payment of invoice No. 417.
(d) 15,000 Cheque No. 792788 received from M. J. Silver Traders
for payment of invoice No. 411.
(e) 91,361 Cheque No. 657633 received from Chetan Jewellers
drawn on Manekchowk Co-operative Bank Ltd., in
payment of invoice.
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14,98,226
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4. Thus, as per bank account of the petitioner, he has issued account payee cheques for getting draft of Rs. 12,30,000 and he has also paid Rs. 3,075 towards commission to the shroff by account payee cheque.
5. Considering the aforesaid facts, it would not be possible to arrive at the conclusion by any standard that the petitioner has failed to explain the source of purchase of silver. It cannot be held that the petitioner was in possession of silver from an undisclosed source. Mr. Thakore, learned counsel appearing on behalf of the respondents, was not in a position to point out that the petitioner has not purchased silver by account payee draft. Nor it was contended that the extracts of the bank account produced by the petitioner were not reliable. Further, in the affidavit in reply, it has been stated that shroff issued account payee from another bank after depositing cash in the bank account, the source of the cash deposit of Rs. 12,30,000 in the account of the shroff also causes serious doubts. This statement in the affidavit-in-reply indicates that at the most accounts of shroff are doubtful and not purchase or silver by the petitioner.
6. Hence, this petition is allowed. The impugned order dated August 1, 1994, under section 132(5) read with section 132(7) of the Income-tax Act, 1961, passed by the Assistant Commissioner of Income-tax, Circle 3(3), Ahmedabad, at annexure “R” to the petition, is quashed and set aside. The respondent is directed to return the silver on or before October 3, 1994. Rule made absolute to the aforesaid extent with no order as to costs.