Loss due to Confiscation of stock by Customs is allowable

On a reading of the tribunal’s order one is left with an indelible impression that the arguments on assessee’s behalf, so also the discussion, and conclusions reached, have gone on merrily on the dotted lines as on certain prior occasions, – on the beaten track, so to say- as laid by case law, with origin traced back to the historically leading Piara singh’s case.

One of the aspects which, however, attracts special attention is the finding of fact by the Customs, as upheld by the CEGAT (also, not disturbed by the HC). That is to the effect that the assessee’s claim to have purchased silver from 18 NRIs was not proved hence not accepted, leading to seizure of the confiscated commodity. Albeit, that is not readily reconcilable with the observation of / view taken by the ITAT that “the stock of silver under consideration was very much a part of the stock shown in the regular books of account” ; and “therefore, no addition is possible under s. 69/69C of the Act.

Be that as it may, some of the finer points with regard to the entire scheme of related provisions i.e. of sections 69, 69A, 69B and 69C came to be lucidly explained but in a different light by the High court of Gujarat in Fakir Mohmed Haji Hasan,s case (2002) 120 Taxman 11. That case is not seen to have been cited and relied on by the Revenue in the instant case.

For a detailed analysis and elucidation of those points, the published article – (2006) 156 Taxman 121 may be read; also,- (2007) 160 Taxman 145)