D. D. VYAS, J.M.: appeal and cross objection relate to asst. yr. 1967-68. points in issues in all appeals are inter connected. So all appeals were heard together and are being disposed of by common order. facts of case in brief are that on 24th Oct., 1966 officers of customs Department received information to effect that Beldev Raj B has in, assessee had gone to Bombay to bring smuggled gold and he was likely to come back within two or three days. They also had information that assessee and his accomplice were to get down at Nizamuddin Railway Station. On 26th Oct., 1966 Baldev Raj Bhasin was seen in company of another person while going from railway platform while going from railway platform Nizamuddin to Nizamuddin Colony through irregular route after having alighted from Janta Express at railway station. customs staff challenged to stop. However, Baldev Raj (assessee) who knew custom officer previously ran frantically. His accomplice who was found carrying rexine bag in has hands also started running but was over-powered immediately thereafter. Letter on said gentleman disclosed his name as Ashok Kumar Jain S/o Shri Mohan Lal Jain resident of 4624, Darya Ganj New Delhi. assessee was chased. He ran and entered bungalow No. 24, East Nizamuddin with view of elude customs staff. On complaint, flying squad of police reached spot and Baldev Raj was brought out of said premises and apprehended by customs staff. He was brought back to railway station. rexing bag, carried by Ashok Kumar Jain was found to contain 80 gold bars of ten toles each, inscribed with foreign marking thereon contained in eight packets. Importation of gold into India from foreign territory without permit of Reserve Bank of India is prohibited vide notification No. 12(II) F. 1/45 dt. 25th Aug., 1948 issued by Government of India under s. 8(1) of Foreign Exchange Regulation Act, 1947. assessee and A. K. Jain could not produce requisite permit for import of said gold. said gold was, therefore, seized under s. 110 of Customs Act, 1962, in reasonable belief that same was of smuggled nature. statement of assessee and A. K. Jain were recorded by custom staff. According to statement of assessee its comes out that he had gone to Bombay and brought gold. He also stated that he brought smuggled gold from Bombay to Delhi. He also stated that he and Jain ran away on seeing customs staff. In another statement it was said that gold was to be disposed of through Murari Lal Dalal. Statements of other persons were also recorded. Customs Authority issued show cause notice to explain as to why seized gold should not be confiscated under s. II(d) of Customs Act, 1962 and further why penal action any not be taken against assessee and Ashok Kumar Jain under s. 112 of Custom Act. Collector of Custom after considering entire evidence confiscated 80 bars of gold weighing 80 tolas valued at Rs. 1,40,000 under s. 111(d) of customs Act, 1962. Rexing bag used as container of smuggled gold was also confiscated. said authority imposed penalty of Rs. 30,000 and Rs. 20,000 under s. 112 of Customs Act on assessee and Ashok Kumar Jain respectively. During assessment proceedings ITO confiscated assessee with t h e statements recorded before Customs Authorities. assessee had stated that he was falsely implicated by customs Department and that he had n o connection with seized gold. ITO after considering evidence recorded by Customs Authorities and also evidence recorded by him during course of assessment proceedings held that explanation given by assessee was not satisfactory. According to him, 80 gold bars of 10 tolas each valuing Rs. 1,40,000 was owned by assessee and assessee failed to explain source of acquisition of said gold. Thus he held that sum of Rs. 1,40,000 was income of assessee from undisclosed sources. As matter of fact, ITO made addition under s. 69-A of IT Act, 1961. Before CIT(A), inter alia, it was contended that assessee had not gone to Bombay. He was at his residence at Qutub Road, Delhi at time of recovery o f alleged gold from rexing bag in possession of Ashok Kumar Jain. officers of customs Department were on inimical terms with assessee. assessee was taken from his residence and was falsely implicated in case. It was also pointed out that even on admitted facts seized gold was not recovered from possession of assessee. There was no evidence showing that really assessee was owner of gold. Thus it was contended that provision of s. 69A were not attracted. In alternative it was contended that gold in question was confiscated and as such in view of decision in case of CIT vs. Piara Singh (1980) 17 CTR (SC) 111: (1980) 124 ITR 40 (SC) said amount may be allowed as business loss. ld. CIT(A) mainly considered order passed by Customs Authorities and he also pointed out that penalty of Rs. 30,000 was imposed on assessee by Collector (Customs) on 24th Nov., 1970. ld. CIT(A) on reasoning and conclusion given by Collector (Customs) in penalty proceedings held that assessee was owner of 3/5th of seized gold and balance 2/5th belonged to his accomplice Ashok Kumar Jain. Thus Asstt. CIT(A) reduced addition to Rs. 84,000 in hands of assessee and gave relief of Rs. 56,000. Against order of CIT(A) assessee appeal and cross objection separately. Inter alia contention in appeal and cross objection was that ld. CIT(A) was not justified at all in holding that initiation of proceedings under s. 147(a) was justified in sustaining addition of Rs. 84,000 in hands of assessee. In appeal filed by Department it was submitted that ld. CIT(A) was not justified in deleting addition of Rs. 56,000. first contention of ld. counsel for assessee was that initiation of proceedings under s. 147(a) were bad in law According to ld. counsel there was no material for starting proceedings under s. 147(a) of Act. On other hand, on behalf of Revenue it was submitted that IT Department on basis of material gathered by Customs Authorities was of view that ITO has reason to believe that income chargeable to tax escaped on part of assessee to disclose fully and truly all material facts necessary for assessment for that year. since assessee was doing smuggling activities, he was under obligation to disclose income from this source. Thus it was contended that ITO was perfectly justified in starting proceedings under s. 147(a) of Act. After haring parties and considering evidence on record we are of view that initiation of proceedings under s. 147(a) in present case could not be said to be illegal. assessee did not disclose income from this source. From material collected by Customs Authorities, as discussed above, ITO has reason to believe that on account of commission or failure on part of assessee, there was escapement of income for year under consideration. It is settled by now that Courts and Tribunal will not go into sufficiency of reasons recorded by ITO for initiating proceedings under s. 147(a) of Act. Looking to aforesaid facts and entirety of circumstances, in our opinion, initiation of proceedings under s. 147(a) was perfectly justified. other contention of ld. counsel for assessee was that gold in question was never recovered from possession of assessee. There is n o evidence to prove that really gold in question was owned by assessee. As matter of fact it was pointed out that assessee had no connection whatsoever with smuggled gold. Really speaking assessee was falsely implicated in case. ITO and CIT(A) did not consider application dt. 26th Oct., 1966, moved by assessee in Court stating that his confession was recorded under duress and coercion. Even Ashok Kumar, other co-accused made similar application stating his confession was recorded under duress. In said application it was also sated that medical examination dt. 28th Oct., 1966, also would go to show that assessee was beaten by Customs Authorities at time of recording his statement. evidence recorded by Customs Authorities was not confronted to assessee by ITO in assessment proceedings. ITO only recorded statement of assessee and in his statement he clearly stated that he had no connection with seized gold and it was never owned by him. In statement he also sated that alleged confession recorded by Customs Authorities was under duress and coercion. In assessment proceedings there was no independent evident to prove that assessee was really owner of gold in question. smuggled gold was never recovered from possession of assessee. assessee is ordinary man and from him it is not expected that he was doing smuggling activities. In past assessee was never found doing such activities. In present case heavy burden lay on Department to prove that gold in question was really owned by assessee. Department miserably failed to prove this fact. As matter of fact of ITO and CIT(A) mainly relied on decision of Customs Authorities imposing penalty against assessee. order of ITO and CIT(A) are vitiated because ultimately Customs, Excise and Gold (Control) Tribunal vide their order dt. 12th Sept., 1984 cancelled penalty orders passed by Customs Authorities against assessee and others. copy of order of Tribunal is in paper book. So very basis on which, finding on ITO and CIT(A) is based, disappears. According to ld. counsel in present case no evidence worth name was brought on record by Revenue to prove that really smuggled gold in question was really owned by assessee. Thus no addition whatsoever can be made in hands of assessee. On behalf of Revenue it was contented that evidence collected by Customs Authorities at time of seizure of gold was sufficient to prove that gold in question was owned by assessee who has been doing smuggling activities subsequently no doubt assessee stated before ITO that he was not closing such activity and gold in question was not owned by him. Really this statement was after thought and as such may be safely overlooked. ld. Departmental Representative contended that in present case preponderance of probabilities are in favour of holding that assessee had been doing smuggling activities and gold in question was really owned by him. Thus it was contended that ld. CIT(A) was not justified in deleting addition of Rs. 56,000. entire addition made by ITO may be sustained. We have considered rival submissions and perused entire material on record. Before discussing evidence on record we would like to point out that s. 69A is attracted where assessee is found to be owner of any money, bullion, jewellery or other valuable article which is not reflected in his books of account. In case falling under s. 69A phraseology used would go to show that before said section can be invoked condition precedent was existence of investment, expenditure which must be conclusively established by evidence or material on record. If we go through provision of s. 69A it would be clear that section was enacted to make certain properties as assessee s income by deeming provision. But then facts must be found to clearly bring case within deeming provision. It is no doubt true that in case of deeming provision Court or Tribunal has to assume unreal stated of things to be real. Reference may be made to ratio of Supreme Court decision things to be real. Reference may be made to ratio of Supreme Court decision in case of CIT vs. S. Teja Singh (1959) 35 ITR 408 (SC). But then basis for assessment must exist. In present case it is undisputed fact that bag containing gold was not recovered from possession of assessee. evidence on record would go to show that said bag was recovered from possession of one Ashok Kumar Jain. Since incriminating goods were not recovered from possession of assessee, there will be heavier burden on Department to establish that gold in question was really owned by assessee. There are decisions to effect that mere possession of thing will not raise presumption that possessor is owner. For example thief may be in possession of stolen property. Reference may be made to ratio of decision in case of Addl. CIT vs. Karnail Singh V. Kaleran (1974) 94 ITR 505 at 517 (P&H). It appears before Customs Authorities statements of assessee, Ashok Kumar Jain and other were recorded Customs Authorities also started penalty proceedings against assessee and Ashok Kumar Jain. But highest fact finding authority i.e., Customs, Excise and Gold (Control) Tribunal vide their order dt. 12th Sept., 1984 (copy of which is in paper book) after appreciating all evidence came to conclusion that guilt of accused was not proved. Consequently assessee was exonerated from penalty proceedings. It is also undisputed that gold in question was confiscated by Customs Authorities. assessing authority in present case mainly relied on order of Collector customs passed against accused in penalty proceedings. Even ld. CIT(A) relied on that order. said order was reversed by Customs Tribunal as discussed above. So very basis on which IT Authorities based their decisions disappeared. material which was mainly considered by taxing authorities in support of allegations cannot go beyond what had already been considered in adjudication proceedings culminating in complete exoneration of assessee by virtue to highest fact finding authority i.e., Customs, Excise and Gold (Control) Tribunal order. IT Authorities no doubt can consider such evidence in assessment proceedings but ITO made on efforts to allow assessee to cross examine on statements recorded by Customs Authorities. On 4th Jan., 1982, assessee gave application to ITO requesting for furnishing copies of statement recorded before Customs Authorities for cross examining him. Similar request was made by assessee on earlier occasion i.e., 7th Jan., 1980 (copies of which are in paperbook). In spite of such request copies of statements were never supplied to assessee by ITO under circumstances whatever evidence was recorded by Customs Authorities may not be helpful to Revenue because before relying on such evidence assessee was not given opportunity to cross examine statements of deponents. statement of assessee was recorded by ITO. In his statement he clearly stated that gold in question was not owned by him and it was not recovered from his possession. In his statement assessee also stated that whatever statement was recorded by Customs Authorities was under duress and coercion. This fact was also stated by assessee in bail application dt. 26th Oct., 1966, moved before Magistrate when was produced before Magistrate. copy of such application is in paperbook. Similar application was given by Ashok Kumar Jain to Magistrate that statement recorded by customs authorities were made under duress and coercion. Copy of this application is also in paperbook. assessee also filed criminal complaint against officers of custom Department under ss. 220, 221 and 223 of Indian Penal Code. On basis of such complaint Magistrate 1st Class vide his order dt. 14th April, 1978 framed change against accused C. L. Talwar, Modh. Akram who had allegedly beaten assessee at time of his arrest on 25th Oct., 1966. change framed by magistrate was that on 26th Oct., 1966 both accused namely, C. L. Talwar and Mohammed Akram in furtherance of their intention at Custom house within jurisdiction of Police Station, Darya Ganj, caused simple hurt by means of blunt weapon to Baldev Raj. (the assessee), and thereby committed offence punishable under ss. 323/34 IPC. Both accused pleaded not guilty. copy of such charge is in paperbook. At time of arguments ld. counsel for assessee contended that till that date there were no further proceedings against accused and till today matter is pending. ld. counsel pointed out that when assessee was produced before Magistrate in pursuance of his arrest on 25th Oct., 1966, he stated before Magistrate that he was beaten by Customs Authorities and as result of it has suffered injuries. So on his request Magistrate directed Jail authorities to examine assessee. Accordingly assessee was medically examined and copy of medical report is in paper book. assessing authority did not collect further material before making assessment order except recording statement of assessee. copy of statement is in paperbook. In statement assessee clearly stated that he never admitted that he dad any connection with smuggled gold. He was not doing any smuggling business. He never went to Bombay and he also never came back to Delhi alongwith Shri Ashok Kumar Jain. From his statement it was clear that smuggled goods were never recovered from his possession. He further stated that whatever statements were recorded by Customs Authorities were made under duress and coercion. statement recorded by assessing authorities remained un- controverted. As matter of fact ITO did not record statements of witnesses what statements were recorded by customs authorities. Inspite of such statements were also not furnished to assessee inspite of repeated requests. Under circumstances, ITO could not rely on statements recorded by custom authorities. We have considered entire evidence or record. assessee has filed voluminous paper book showing that he has no connection with smuggled goods and he was not owner of gold in question. evidence produced by assessee remained unrebutted. Thus from material on record it is not established that assessee was owner of gold in question. It was also not recovered from his possession. Even preponderance of probabilities would go to show that assessee was not owner of gold in question. Thus Department fallen to prove ingredients of s. 69A of Act. Thus ld. CIT(A) was not correct in holding that assessee was owner of 3/5th of seized gold in question. It is also not established that assessee had been doing smuggled activities. So, no income from such activity can be added in hands of assessee. Accordingly all additions made are deleted. In result Appeal No. 2447 & C.O. No. 207 (Del) 82 by assessee are allowed and Appeal No. 2459 by Department is dismissed. *** BALDEV RAJ v. INCOME TAX OFFICER