ORDER
S.R. Chauhan, Judicial Member
1. This appeal by the Revenue for Assessment Year 1987-88 is directed against the order of the learned CIT(A) Bombay dated 14.8.1992.
2. We have heard the arguments of both the sides and have also perused the records.
3. The Revenue has raised three grounds of appeal before the Tribunal Grounds No. 2 and 3 are general. Ground No. 1 is as under:-
“On the facts and in the circumstances of the case in law, the learned CIT(A) erred in deleting the addition of Rs. 13,51,400/- made Under Section 69A of the I.T. Act ignoring the confessional statement of Mr. Kishore N. Jain and without appreciating the finding in the order dt. 31.5.1988 passed by Collector of Customs (Preventive) wherein Mr. Kishore N. Jain is stated to be merely a student and the assessee is held to be the ‘concerned Person’ on whose instructions Mr. Kishore N. Jain took delivery of gold and therefore the unexplained investment, bullion, if any clearly belonged to the assessee.”
4. The facts, as revealed from record, seem to be that on 15.10.1986 at 19.30 hours the assessee’s brother Kishore N. Jain (for short KNJ) who was going on yellow colour Bajaj scooter No. MFG-2581, was intercepted by officials of Directorate of Revenue Intelligence (DRI) at Jasmine Building, Dockyard Road, Bombay and on search of his person (body) the officials found 50 biscuits/bars of contraband gold weighing 500 Tolas valued at Rs. 13,51,400/- kept in the handmade cotton belt fastened around his waist, and seized the same. The detailed inventory/panchanama (page 17 of the paper book) was prepared in the presence of panchas. Proceedings under the provisions of Custom Act were initiated wherein order of the Customs Collector dated 31.5.1988 (page 59 to 70 of the paper book) was passed, wherein the Customs Collector confiscated the gold as being improperly imported into India from abroad Under Section 111, Customs Act, 1982. He also imposed penalties Under Section 112 of the Custom Act, 1962 and also Under Section 74 of the Gold Act, 1968 on KNJ and assessee (Pukhraj Jain) etc. The Statement of KNJ (page 71 to 74, and English translation on page 75 to 77 of the paper book) was recorded by the official of DRI on 15.10.1988. The statement of Shri Pukhraj Jain/assessee was recorded on 5.12.1986 (page 28 to 35 of the paper book). The Assessing Officer, vide his impugned assessment order framed on 27.3.1992 made addition of Rs. 13,51,400/-. Under Section 69A on account of value of un-explained valuable article being the above mentioned gold, not recorded in the books of account of the assessee. In assessee’s appeal thereagainst, the learned CIT(A), vide his impugned appellate order, deleted the aforesaid addition made by the Assessing Officer Under Section 69A. Hence, the Revenue is in appeal before the Tribunal.
5. The learned departmental representative has contended that 50 gold biscuits were seized by custom official from KNJ on 15.10.1986 and panchnama of the same was prepared (page 17 to 21 of the paper book). He has contended that the statement of KNJ (page 71 to 74 of the paper book) was recorded wherein, KNJ stated that his elder brother Pukhraj Jain (present assessee) had instructed him to go to Ahmed’s premises and to bring from Ahmed whatever thing Ahmed would give to him. He has contended that KNJ was only a college going student and such a huge quantity of gold cannot be owned by KNJ; and that KNJ was acting only as a conduit between Ahmed and Pukhraj Jain. He has contended that Pukhraj Jain had given instructions to KNJ to take delivery from Ahmed and that Ahmed had also instructed to KNJ to deliver the said gold to Pukhraj. Referring to the order of Customs Collector (page 59 to 70) he has contended that under Customs Act that person is punishable who is found in possession of contrabanded gold but under income tax Act it is the owner of that valuable article (gold) who is chargeable to tax and in whose hands the value of the same is includible by way of his un-explained income Under Section 69A. He has contended that the plea of the assessee (Pukhraj), taken before the custom authorities, that he was not in Bombay on 15.10.1988 was not accepted. He has contended that the assessee had furnished some evidence by way of post cards/letters to show that the assessee was not in Bombay at the relevant time and was in his native village Takhatgarh in Rajasthan where he had gone in connection with the sale of his ancestral house property, and that there had also been the statement of assessee’s father Shri Nihalchand regarding assessee being out of Bombay, but all that has not been accepted by Customs Collector, and that has been the finding of the Customs Collector in his order (page 68 of the paper book). He has contended that the assessee having instructed KNJ for taking delivery of contraband gold from Ahmed, so penal action under the Custom Act was initiated against Pukhraj Jain alongwith KNJ and the penalty was imposed and all the aforesaid evidentiary material was available with the Assessing Officer. He has contended that after the above finding being available on record of the Assessing Officer, the burden was on assessee to prove that he was not the owner of that gold or that he has not involved in any act connected therewith. He has contended that in reply to Assessing Officer’s query (page 3 of the Assessing Officer’s order 1st Para), the assessee denied his possession/ownership/involvement in the said gold transaction, and the said reply of the assessee has been reproduced on page 3 of the assessment order. He has contended that in the assessment order the Assessing Officer has relied mainly on the statement of KNJ and drew his finding. He has contended that KNJ being a student, cannot be the owner of gold worth Rs. 13.5 lakhs and these facts indicated that the assessee was the owner of that gold, and since this gold was not recorded in the books of the assessee, the Assessing Officer concluded that there was unexplained investment in this gold by the assessee, and the same was assessable Under Section 69A. He has contended that the learned CIT(A)’s finding is that the Assessing Officer merely relied on the order of the Customs Collector and that no independent material was brought by the Assessing Officer on record. He has contended that in this context it is required to be considered as to whether the order of the Customs Collector is a speaking order or non-speaking? He has contended that the teamed CIT(A) never says as to why it should not be relied upon. He has contended that the order of Customs Collectors is a detailed order giving sequence/details of alt events and therein he has marshaled all the facts; and the Customs Collector has come to independent conclusion that the assessee was involved in the gold transaction. He has contended that the Customs Collector has classified the assessee in the same category as KNJ, and also initiated penal action against the assessee as well alongwith KNJ. He has contended that there is evidence on record that he supports the finding of Customs Collector. Citing 214 ITR 801 (SC) Sumati Dayal v. CIT, he has contended that KNJ being a college going student cannot be the owner of this gold is not a conclusive proof but human probability is there and that should be considered in income Tax matters. He has contended that all the facts on record are pointing out towards assessee (Pukhraj Jain). He has contended as to why the Assessing Officer should make further inquiry when the inquiry has already been made by the Customs Collector? He has contended that the teamed CIT(A) does not point out any lacuna in the order of Customs Collector and can Assessing Officer ignore all those inquiries made by Customs Collector and conduct the inquiry himself ? He has contended that the purpose of all inquiries is to ascertain facts and when facts have already been brought out by the Customs Collector, is it not the Assessing Officer’s duty to accept them unless and until the assessee brings on record the facts wherefor the facts brought on record by the Customs Collector cannot be relied upon. He has contended that the burden has not been discharged by the assessee. He has contended that the learned CIT(A) has observed that in the order of Customs Collector the assessee has merely been treated as a “concerned person”, but can that be not a probability ?. He has contended that the learned CIT(A) could either himself examine this aspect or could have called for a remand report from the Assessing Officer. He has contended that if the learned CIT(A) was to reject the finding of Customs Collector, then he should have given his own reasoning and his own finding and that finding should have been based on inquiries. He has contended as to whether the learned CIT(A) could reject the finding of an independent authority, being Customs Collector, without doing the inquiry himself? He has contended that the probability is very high that KNJ might be working under the instructions of the assessee, and that the learned CIT(A) coming to conclusion and ignoring independent inquiry of Customs Collector is a fatal error on the part of the learned CIT(A). He has contended that various submissions made by the assessee have not been discussed by the learned CST(A) in his impugned order. He has contended that if the learned CIT(A) was not satisfied he should have called Pukhraj and KMJ and should have examined them but the learned CIT(A) having not done so and having drawn his conclusion is patently wrong ; and so the Assessing Officer’s order be restored.
6. As against the above, the learned Authorized Representative of the assessee has referred to his written submissions furnished before the Assessing Officer (page 8 to 13 of the paper book) and contended that the assessee’s plea has been mentioned in details therein. He has contended that on 15.10.1988, the date of seizure of gold from KNJ by custom officials, the assessee was not in Bombay but was in Takhatgarh, Rajasthan. He has contended that the assessee had left Bombay on 6.10.1986 and had returned from Rajasthan to Bombay on 20.11.1986. He has contended that after assessee’s return to Bombay, the statement of assesses was recorded by the custom officials on 05.12.1986 (page 26 to 30 and English translation on page 32 and 33 of the paper book) and there after no further query was made from the assessee in respect of assessee’s plea of alibi. He has contended that the assessee had written several post cards/letters from his native place Takhatgarh, Rajasthan to his father in Bombay (page 47 to 54 of the paper book).
7. He has referred to the statement of the assessee (Pukhraj Jain) (page 71 to 74, English translation page 75 to 77 of the paper book) and contended that the assessee’s explanation/plea has been clearly stated therein; and the assessee has denied therein assessee’s possession and ownership of the gold as also assessee’s presence in Bombay on 15.10.1988. He has contended that the assessee had left Bombay on 6.10.1986 and had gone to his native place village Takhatgarh in connection with sale of their house property in Takhatgarh due to there being dispute among his brothers regarding property. He has contended that the assessee (Pukhraj Jain) had also written some postcards/letters from there to his father in Bombay. In this regard he has referred to the assessee’s various letters/post cards including those on Page 47/48, 49/50 and 51/52 showing the dates of 08.10.1988, 13.10.1988 and 18.10.1986 respectively as the dates on which the said letters were written by the assessee from Takhatgarh. He has also referred to the agreement for sale of the house at Takhatgarh (page 42 to 43 of the paper book) contending that this agreement for sale of house at Takhatgarh was executed by the assessee at Jodhpur on 15.10.1986 and the same was attested by Notary Public on the same day. He has contended that the Department’s case has been that the assessee instructed his brother KNJ on 15.10.1986 for taking delivery of gold from Ahmed, whereas on 15.10.1986 the assesses was not in Bombay but was in Takhatgarh Rajasthan. He has contended that on the basis of page 77 of the paper book he says that the statements of KNJ must have been taken on the night of 15.10.1986 or in the early morning of 16.10.1986 and that on the very next day on 17.10.1986 KNJ retracted from his said statement (page 22 of the paper book). He has contended that during search of the residential premises of Nihalchand Jain, where earlier assessee was also residing with his father and brothers, conducted on 5.11.1986, nothing incriminating was found vide panchnama on page 20 of the paper book. He has contended that the scooter No. MFG 2581 seized from KNJ on 15.10.1986 belong to the assessee and that the assessee’s scooter is MRZ 982 and in this regard he has referred to page 61 of the paper book being Custom Collector’s order mentioning scooter No. MFG 2581 and page 17 of the paper book, being panchnama prepared on 15.10.1988 and page 34 of the paper book being assessee’s further statement recorded on 8.12.1986 mentioning assessee’s scooter being MRZ 982. He has contended that the assessee had written letter dated 13.11.1989 (page 13 and 15 of the paper book) requesting for allowing the assessee opportunity to cross examine KNJ, Panch witnesses, and seizing officer but despite the fact that the Assessing Officer passed the assessment order on 27.3.1992 and thus there having been ample time available, but the Assessing Officer did not allow the assessee opportunity of cross examining the said witnesses. He has referred to the statement of the assessee, as placed on page 32 of the paper book, and contended that the assessee has clearly stated therein that his brother KNJ had always been quarreling with him regarding house property and that because of this bad relationship KNJ might have implicated his name. He has contended that for action under Customs Act, ownership is not necessary whereas for making addition Under Section 69A of the Income Tax Act, 1961 assessee’s ownership of asset is essentially required. He has contended that the onus lay on Revenue to prove that KNJ is not the owner of gold but the assessee is the owner. He has contended that reliance on the statement of KNJ is not justified for the reason that the same was not voluntary, that KNJ has retracted from his statement, that the assessee has not been allowed opportunity to cross-examine him. He has contended that Ahmed, from whom KNJ is stated to have taken the delivery of gold, has not been examined by Customs officials, nor by the Assessing Officer and that there had been assessee’s request for calling Ahmed for cross-examination by the assessee. He has contended that a panch witness Dilipkumar had stated that Pukhraj Jain (assessee) was out of station/Bombay at the relevant time, but the Customs Collector has not accepted and relied upon the same. He has contended that on the one hand there is the statement of KNJ implicating the assessee and on the other hand there is the statement of assessee denying his involvement or connection with the said gold. He has contended that the fact of KNJ being a college going student does not make it assessee’s income.
8. The Seamed Authorized Representative of the assessee has contended that the Assessing Officer is relying on the order of Customs Collector which is detailed no doubt yet several important aspects like assessee’s presence at Takhatgarh, assessee’s letters written from Takhatgarh to his father in Bombay and execution of agreement for sale of house property at Takhatgarh by the assessee have not been considered by him. He has contended that the learned departmental representative’s citation 214 ITR 801 is distinguishable on facts and human probability is in favour of the assessee.
9. The learned Authorized Representative of the assessee has contended that it was the duty of the Assessing Officer to ascertain the facts and it was not necessary for the learned CIT(A) to ascertain that it was not assessable in assessee’s hands. He has contended that it was for Assessing Officer to ascertain the facts and draw his finding that it was assessable in hands of the assessee. He has contended that the burden has not been discharged by the Assessing Officer. He has contended that it is enough for the learned CIT(A) to hold that the burden has not been discharged by the Assessing Officer and accordingly to cancel the assessment. He has contended that it was not CIT(A)’s duty to find out as to whose income it was but his duty was only to find out as to whether it was assessee’s income or not for the reason that it was the assessee who was before him. He has contended that the value of gold was not assessable in the hands of the assessee. He has supported the learned CIT(A)’s order. He has cited 66 TTJ 91 (92) (Taxman) (Del.) Ms. Reena Mirchandani v. ACIT, 48 TTJ 389 (Bom) Pushpa Vihar v. ACIT in his support during arguments. He has also filed a brief synopsis wherein a number of decisions including 51 TTJ 421 (Bom), 237 ITR 570 (SC) CIT v. P.K. Noorjahan, 197 ITR 136 (SC) KTS Mohammed v. ITO and 172 ITR 250 (255) Chuharmal v. CIT have also been cited.
10. In rejoinder the learned departmental representative has contended that when the house property at Takhatgarh, Rajasthan, was ancestral one, then how Pukhraj Jain could sell it or enter into agreement for its sale? He has contended that the assessee should have power of attorney for that purpose but no such power of attorney has been produced. He has also contended that it has not been clarified as to what happened thereafter regarding sale deed and registration thereof and that no registered conveyance deed has been produced. He has contended that Ahmed could not be examined as he was absconding at that time.
11. We have considered the rival contentions, the relevant material on record as also the cited decisions.
12. In 214 ITR 801 (SC) it has been held that Under Section 68 the burden of proof regarding proving that the amounts credited in the books of accounts of the assesses did not represent income is on assessee. The Hon’ble Supreme Court held that in such a case there is prima facie evidence against assessee which is the receipt of money and if the assessee fails to rebut the said evidence, it can be used against him by holding that it was a receipt of an income nature.
13. In 68 TTJ 91 (TM) (Del) it has been held that the presumption Under Section 69A is a rebutttable presumption and the same is to be applied where the assessee offers no explanation about the nature of source of money. It has been held that in order to invoke Section 69A it is necessary to prove that the assessee was owner of the asset. It has also been held that finding of DRI or assessee’s conviction Under Section 132 and 135 of the Customs Act cannot be made basis for presumption of ownership against assesses contemplated Under Section 69A for making addition under that section. It has been held therein as under:-
“Section 132 and 135(1)(a) of the Customs Act are provisions in regard to false declaration and offences in relation to any goods in a way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or nay prohibition for the time being imposed under the Act or any other law for the time being in force with respect to such goods. It should be borne in mind that for punishment under the above sections. It is not necessary for the customs authorities to prove the ownership of the goods. It is enough if there Is an attempt by any person, including a carrier, of evasion of any duty chargeable thereon or of any prohibition for the time being imposed under the Customs Act.”
In this citation it has also been held that the burden of proving ownership is entirely on the department as per the provisions of Section 69A of this Act.
14. In 48 TTJ 389 (Bom) during survey the assessee had made an admission regarding unaccounted income of Rs. 9.25 lacs but later the assessee retracted from the admission on the ground that there was some misunderstanding as what he stated was about sale and not income and so he offered Rs. 3 lacs. The learned CIT(A) rejected the assessee’s subsequent offer on the ground that neither of the two statements was supported by any evidence and so there was no apparent choice between the two, but the former declaration having been made during survey and being spontaneous was more probable and in turn he confirmed the addition of Rs. 9.25 lacs made by the Assessing Officer. The Tribunal, however, held the addition to be not justified in the circumstances when nothing incriminating was found during survey, and original declaration was made by junior most partner, who was non-matriculate, and so the possibility of committing a mistake in explaining affairs of the firm cannot be, ruled out. Accordingly the Tribunal deleted the addition.
15. In 51 TTJ 421 (Born), there was no supporting evidence to confirm the addition except statements of two partners recorded at that time of search, which, recording during search continued for more than two days and two nights. In the circumstances the Tribunal held that the statements cannot be considered to be free, fearless and voluntary; and that there was considerable force in assessee’s contention that the statements were recorded under pressure and force. The statements were retracted. The Tribunal held that the additions cannot be sustained on merits.
16. In 237 ITR 570 (SC) it has been held that Under Section 69 the ITO is not obliged to treat the source of investment as income whenever explanation regarding it is not satisfactory. It has been held that the word “may” in Section 69 cannot be interpreted to mean “shall” and that discretion is conferred on ITO Under Section 69 to treat the source of investment as income of the assesses, if assessee’s explanation is found to be not satisfactory; the said discretion has to be exercised keeping in view the facts and circumstances of the particular case.
17. In 197 ITR 196 (SC) the Hon’ble Supreme Court has held as under:-
“The Foreign Exchange Regulation Act and the I.T. Act were two separate and independent special Acts operating in two different fields; the ambit, scope and intendment of the two Acts were entirety different and dissimilar, and, therefore, the significance of a statement recorded under the provisions of the Foreign Exchange Regulation Act during the investigation or proceedings under that Act so as to bring them within the meaning of judicial proceeding must be examined only qua the provisions of that Act and not with reference to the provisions of any other Act or Acts, such as the Income-tax Act.”
18. However, we may note that the Customs Collector has, vide his order dated 31.05.1988, imposed penalties on KNJ and Pukhraj Under Section 112 of Custom Act, and the said Section 112 of Custom Act provided for the liability of penalty on any person who does or omits to do any act which would render such goods liable to confiscation Under Section 111, or who acquires possession of such goods or is in anyway concerned in the carrying, removing, deposing, keeping concealing, selling or purchasing etc of such goods. As such the person, liable for imposition of penalty Under Section 112 of the Customs Act, may be the person being in anyway concerned with the goods which are improperly imported into India from outside. The above provision, in no way, requires the concerned person to be the owner of the goods. It may also be noted that Under Section 138-A there is a provision for presuming in any prosecution for an offence under the Customs Act, 1982 requiring the culpable mental state on the part of the accused, that such accused had the required culpable mental state though the accused could furnish defence to rebut the said presumption.
19. In 172 ITR 250 (SC) it has been laid down that only the rigours of rules of evidence contained in Evidence Act are not applicable to proceedings under IT Act, 1961 but the taxing authorities could invoke the principles of Evidence Act including that contained in Section 110 of the Evidence Act in proceedings before them. It has also been held that Section 110 Evidence Act embodies the principle of common law jurisprudence that where a person was found in possession of anything the onus of proving that he was the owner was on that person.
20. In 281 ITR 635 (Cal) the Customs authorities had seized foreign currency from the assessee and another person. The assessee disputed ownership of money recovered from other person. It has been held that the addition of entire amount in hands of the assessee was not justified; only the amount recovered from the assessee could be added in the hands of the assessee. It was further held that if the Department wanted to assert that the assessee is the owner of the amount recovered from some one else, then the burden lay on the department to prove the ownership of the assessee.
21. Considering the various judicial pronouncements and the settled legal position, the contention of the learned departmental representative that the Customs collector having had conducted the inquiry and having marshalled/ascertained the facts and then having passed his order under the Customs Act, the Assessing Officer, for framing assessment under I.T. Act and, for that purpose, for making an addition Under Section 69A in the hands of the assessee (Pukhraj Jain) in respect of the value of gold seized from KNJ by Customs officials on 15.10.1986, was not required to make any inquiry, in our humble opinion, seems to be misplaced/fallacious, reflective of a non-understanding or misunderstanding of the very basic concept of judicial/quasi judicial adjudication by a judicial or quasi judicial authority. It may be of some benefits to observe here that although an Assessing Officer, while making an assessment, does not strictly act as a court of law, but he acts in a quasi-judicial capacity and the proceedings before the Assessing Officer are, in general, in the nature of quasi-judicial, though for specific purpose, the same are “deemed judicial proceedings” as provided in Section 136 of I.T. Act, 1961. An Assessing Officer, being a quasi-judicial authority, has, while framing assessment, to discharge his duty/function judicially and in that process the Assessing Officer has to apply his own mind independently to the facts of the case, ascertained by him and then to draw his own conclusion/decision by appreciating the evidence/material brought/available on record before him; the Assessing Officer cannot base his conclusion/decision on the finding of any authority under any other Act/law, and thus adopt the finding/conclusion of that authority. The decision to be drawn by the Assessing Officer has to be his own and independent one. Contextually and advantageously as well, we may refer to the provision of Section 143(3) which, inter alia, provides for the framing of assessment as under:-
“after hearing such evidence as the assesses may produce and such other evidence as the Assessing Officer may require on specified points and after taking into account all relevant material which he has gathered.”
Thus, evidently clear as it is from the above quoted statutory provision, the Assessing Officer cannot base his decision on the findings/conclusions of Customs Collector drawn in the order of Customs Collector under the Customs Act.
22. As regards the statement of KNJ (page 71 to 74 of the paper book) the same too was not recorded by the Assessing Officer during assessment proceedings but was recorded by the customs officials. The said statement was recorded at the back of the assesses and the assessee has not been allowed an opportunity to cross-examine KNJ on the said statement. Besides, whatever be contained in the said statement of KNJ dated 15.10.1986, the same has been retracted by KNJ as is evident from his letter dated 17.10.1986 (page 22 of the paper book) and his another letter dated 7.11.7988 (page 23 and 24 of the paper book) alleging that the same was recorded forcibly and under threat and under influence and that the same was not voluntary, in this regard, we may not be unmindful of this fact as well that KNJ, being himself involved in the unlawful transaction of carrying contraband gold, is a tainted witness, whose testimony, even otherwise, may not be worth reposing credence therein or placing reliance thereon. As against the said statement of KNJ there is also the statement of assesses (Pukhraj Jain) denying totally his involvement in or connection with the said gold transaction. There is no statement of Ahmed either on record to corroborate the department’s case.
23. KNJ having been found in possession of gold, prima facie it is KNJ who is to be treated as owner of his possession (gold) unless this presumptive inference is rebutted by proper/convincing evidence. We do not find any such rebuttive evidence on record whether brought by the Assessing Officer or otherwise available, on record. There being no “evidence” worth the name, the ‘other material’ being the said statement of KNJ and the order of Customs Collector, remain too feeble to entangle assessee as the owner of the said contraband gold, seized by the Customs Officials from the possession of KNJ.
24. For making an addition Under Section 69A of I.T. Act, 1961, apart from ownership of the asset/valuable article, which is deemed to be the income of the assessee of that financial year, it is also a pre-requisite that such asset/valuable article “is not recorded in the books of accounts” maintained by the assessee (if any). In the instant case, even if the department’s factual allegations were assumed to be correct, the stage of recording the said seized gold in the books of accounts of the assesses cannot be said to have arrived yet as the gold is stated to have been seized on the way when KNJ was bringing the same, and thus the valuable article had not yet been brought to the assesses.
25. Be that as it may, considering all the facts and circumstances of the case we find no fault with the impugned order of the learned CIT(A) in deleting the addition made by the Assessing Officer. We therefore, decline to interfere with the same.
25. In the result, this appeal of the Revenue is dismissed.