The Division Bench of Gujarat High Court has held that the income tax department could not withhold the gold on the ground of pending addition against the sending party.
The petitioner, Praveenbhai Girdharilal Agarwal filed his income tax return for the A.Y. 2018-2019 on 17.09.2018.
A search and seizure, carried out under Section 132 of the Income Tax Act, 1961 in respect of Sureshkumar from Jay Mata Di Air Service and one Jagdish Prasad from Bright Courier, a parcel containing gold, was intercepted and seized. The value of the seized gold of the petitioner, was added to the total income of the petitioner, treating the same to be as an unaccounted investment.
Mehta, appeared on behalf of the petitioner, submitted that there was no demand outstanding for any of the liabilities, as provided under Section 132B(1)(i) of the Income Tax Act,1961, after the effect was given to the order of the Appellate Authority dated 07.04.2021 and therefore, the authorities should have released the remaining seized gold.
He also submitted that the appellate authority had already attained finality.
Varun Patel, appeared on behalf of the respondent submitted that the order of assessment was challenged before the Appellate Authority, which deleted the addition in case of the two sender parties.
He further submitted that there was no addition made, upon them that was why the gold was to be released. But in case of sending a party petitioner there was an addition made so the remaining seized gold, weighing 100.350 grams, could not be released.
It was also pointed out that Anant Jewellers had also preferred appeal against the order and the Appellate Authority had dismissed it.
The Division Bench of Justice Vipul M. Pancholi and Justice D. M. Desai, allowed the appeal filed by the petitioner directing to release the balance seized gold and observed that “the order passed by the Appellate Authority has attained finality, as the Respondent-authorities have not challenged the same before a higher forum, we are left with no other option, but, to accept the case put forth by the petitioner that the gold in question belongs to him and he had accounted the same in his books of accounts. Therefore, the Respondent authorities ought not to have withheld the gold in question.”
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