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Tax Publishers Bitumen short delivered in carriage - Whether valuable goods - Subject to addition under section 69A as unexplained money *Facts:* Assessee contractor was in charge of carrying bitumen from various oil companies to government sites. In the carriage performed during assessment year 1996-97, it was alleged that they short delivered substantial bitumen as against the bailed quantity which was possibly sold by the assessee as per the AO and the short delivered quantity x market price was added as unexplained money under section 69A by the AO. On appeal CIT(A) deleted the addition. On further appeal ITAT concurred with CIT(A). On further appeal the High court reversed the order of the ITAT. On higher appeal by the assessee - Held in favour of the assessee that the addition is not sustainable under section 69A. 1. In a bailment there is no ownership except on certain circumstances. Exceptions cannot be examples. 2. Carrier does not have ownership of goods for carriage as it is a contract of bailment. 3. To fasten liability under section 69A ownership is a must - bailee is not owner, so is the assessee. 4. Goods ought to be valuable - bitumen is not a valuable good. 5. Ejusdem generis/Noscitur a sociis to be applied in reading section 69A to valuable articles listed thereto. Noscitus a sociis is more proximate reading than ejusdem generis - of the same genus/genre. 6. Meaning of ownership explained - possession alone without rights to exploit is not ownership. Right to exploit without ownership triggers taxing rights to state, *Ed. Note:* The decision by Justice KM Joseph who retired few days later to the judgment is a landmark one as it discusses meaning of ownership in various dimensions besides the exposition on section 69A. *Case:* D.N. Singh v. CIT 2023 TaxPub(DT) 2966 (SC)

Tax Publishers

Bitumen short delivered in carriage - Whether valuable goods - Subject to addition under section 69A as unexplained money

Facts:

Assessee contractor was in charge of carrying bitumen from various oil companies to government sites. In the carriage performed during assessment year 1996-97, it was alleged that they short delivered substantial bitumen as against the bailed quantity which was possibly sold by the assessee as per the AO and the short delivered quantity x market price was added as unexplained money under section 69A by the AO. On appeal CIT(A) deleted the addition. On further appeal ITAT concurred with CIT(A). On further appeal the High court reversed the order of the ITAT. On higher appeal by the assessee -

Held in favour of the assessee that the addition is not sustainable under section 69A.

1. In a bailment there is no ownership except on certain circumstances. Exceptions cannot be examples.

2. Carrier does not have ownership of goods for carriage as it is a contract of bailment.

3. To fasten liability under section 69A ownership is a must - bailee is not owner, so is the assessee.

4. Goods ought to be valuable - bitumen is not a valuable good.

5. Ejusdem generis/Noscitur a sociis to be applied in reading section 69A to valuable articles listed thereto. Noscitus a sociis is more proximate reading than ejusdem generis - of the same genus/genre.

6. Meaning of ownership explained - possession alone without rights to exploit is not ownership. Right to exploit without ownership triggers taxing rights to state,

Ed. Note: The decision by Justice KM Joseph who retired few days later to the judgment is a landmark one as it discusses meaning of ownership in various dimensions besides the exposition on section 69A.

Case: D.N. Singh v. CIT 2023 TaxPub(DT) 2966 (SC)