Case Law Details
Brief of the Case
Delhi High Court held In the case of CIT vs. Provestment Securities Pvt. Ltd. that we are inclined to agree with the Tribunal that the question whether an investment had been made or not is a matter of fact and the same cannot be presumed. In the present case, it is probable that either the Assesses or any other person related to the assesses would have paid for acquiring the vehicle in question. An investigation into the sources of the funds may perhaps have established a link between the funds used for the purchase of the vehicle and the Assesses. However, no such link has been established. In absence of any material to show that the consideration for the vehicle had not been paid by assesses, it is not possible to conclude that the Assesses had made an investment in purchase of the vehicle in question. In the facts and circumstances, we are unable to hold that the decision of the Tribunal is perverse.
Facts of the Case
The Assesses is a promoter of a public company – JCT Ltd. which belongs to the Thapar Group. Mr Sameer Thapar is the Vice-chairman-cum-Managing Director of JCT Ltd. He is also the Karta of Sameer Thapar & Sons (HUF), which is stated to own 99% of the shareholding of the Assesses. The Department of Revenue Intelligence (Customs Department)(DRI) conducted search and seizure operations on the premises of one Mr Sanjay Bhandari, in connection with the import of motor vehicles under the EPCG Scheme at a concessional rate of duty.Pursuant to the search, notices were issued by the DRI for productionof the vehicle in question, which was in possession of Mr. Sameer Thapar. The vehicle in question was produced before the DRI on 10th September, 2005 and was seized by the DRI on that date for alleged violation of duty payment.
On the basis of information received from the Assistant Director of Income Tax regarding the vehicle in question, a show cause notice was issued by the AO to the Assesses on 19th November, 2008 requiring the Assesses to explain the source of the investment of the vehicle in question. In response to the show cause notice, the Assesses filed a letter dated 22nd November, 2008. The Assesses explained that M/s V.K. Tours & Travels (VKTT) had approached the Assesses for taking the vehicle on lease and had handed over the possession of the vehicle for trial. While the vehicle was still on trial, the same was seized by the DRI. Subsequently, the vehicle was released to the Assesses on the payment of differential duty, execution of bond and submission of bank guarantee for fine and penalty. Since no consideration was shown to have been paid for the original cost of the vehicle, the AO was not convinced of the explanation offered as to the rights being exercised by the Assesses in respect of the vehicle in question. Accordingly, the AO held that the Assessee’s investment in purchasing the vehicle was liable to be taxed in its hands, as unexplained investment u/s 68.
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