D.N. Singh Vs CIT (Supreme Court of India)
Summary: The Supreme Court allowed the assessee’s appeals and held that bitumen could not be treated as an “other valuable article” for purposes of Section 69A of the Income-tax Act, 1961. The assessee was engaged as a carriage contractor to transport bitumen lifted from oil companies for delivery to divisions of the Bihar Government’s Road Construction Department. An addition of ₹1,04,71,720.30 had been made for AY 1996-97 on the footing that 2,094.52 metric tonnes of bitumen had not been delivered and that the assessee was its owner. The Court held that ownership is an indispensable condition for applying Section 69A. A common carrier or bailee entrusted with possession does not become owner merely because goods allegedly remain undelivered or are possessed contrary to the contract. The assessee therefore could not be regarded as owner of the bitumen. On the expression “other valuable article”, the Court held that everything possessing some value does not automatically become a “valuable article”. The expression contemplates a movable and marketable article worth a good price or a great deal of money; an ordinary low-value commodity does not become a valuable article merely because a very large quantity produces a high aggregate value.
