Gujarat High Court
Priyank vs Commissioner on 11 May, 2011
Author: Akil Kureshi
Bench: Akil Kureshi
Gujarat High Court Case Information System
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SCA/4176/2011 3/ 3 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 4176 of 2011
=========================================================
PRIYANK
GEMS - Petitioner(s)
Versus
COMMISSIONER
OF INCOME TAX-II - Respondent(s)
=========================================================
Appearance
:
MRS
SWATI SOPARKAR for
Petitioner(s) : 1,
NOTICE SERVED BY DS for Respondent(s) : 1,
MRS
MAUNA M BHATT for Respondent(s) :
1,
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CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 11/05/2011
ORAL
ORDER
(Per : HONOURABLE MR.JUSTICE AKIL KURESHI) Petitioner assessee has prayed for quashing order Annexure A and has further prayed for a direction to release the seized diamonds of the petitioner forthwith.
During search operation carried out with respect to a mini-bus, diamonds weighing 485.26 carats valued at Rs.67,93,640/- were seized. Department had previously taxed the said amount in the hand of the Angadia operating the said mini bus substantially and on protective basis in the hands of the petitioner. Subsequently, however, additions in case of the Angadia was deleted. Addition made in the case of the present petitioner was, therefore, treated as substantive.
The petitioner had earlier approached this Court by filing Special Civil Application No.29241 of 2006 and sought release of diamonds. The said petition was, however, disposed of by order dated 2.7.2007 providing that before releasing the diamonds, question has to be decided as to who is the owner. It was, therefore, provided that the Revenue shall not dispose of the diamonds till the decision at the level of the Tribunal to assess the income of investment in the diamonds in the hands of Patel Ambalal Hargovandas & Company (Angadia)is arrived at.
Since the question of ownership was no longer controversial, the petitioner approached the Income Tax Authorities and requested for release of the diamonds, which request was turned down by the impugned order dated 29.12.2010 in which Commissioner of Income Tax, Surat, refused to release the diamonds primarily on the ground that though the ITAT had decided that the seized diamonds belonged to the assessee firm and it was part of its stock in trade, such decision of the Tribunal was not accepted by the Department and further appeal was filed before the High Court. Department's Tax Appeal No.2343 of 2010 came up for admission hearing on 9th May 2011 and the same was dismissed. In that view of the matter, the major objection of the Department in releasing the diamonds no longer survives.
Counsel for the Department drew our attention to the provisions contained in section 132D of the Act and submitted that the seized article can be adjusted towards other income tax dues of the assessee. Ordinarily, we would have permitted the Department to examine this question at length and pass appropriate order thereafter. However, considering that at the High Court level, question of taxing the value of the diamonds has already been decided and that the diamonds were seized many years back, we have requested the counsel for the Revenue to ascertain any tax dues of the petitioner are still outstanding. In response to the request, learned counsel for the Revenue has placed on record, a communication dated 9.5.2011 from the Commissioner of Income Tax stating that no tax demand is outstanding in case of the petitioner for any of the assessment years. This being the position, in the facts of the case, we are inclined to issue directions for release of the diamonds.
In the result, impugned order Annexure A is quashed. The diamonds seized on 24th July 2004 during search operation of mini bus shall be released latest by 31st May 2011.
With the above direction, petition is disposed of.
(Akil Kureshi, J.) (Ms.Sonia Gokani, J.) (vjn) Top