ACIT, Central Circle - XX, Kolkata, Kolkata V. M/s. A.S. Jewellers(P)Ltd, Kolkata

ITA 1023/KOL/2012

• Counselvise Citation: 102323514 RSA 2012
• Duration Of Justice: 2 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAAD
• Assessee Lawyers: RAVI TULSIYAN
• Keywords: Unexplained investment; Search and seizure; Corroborative evidences
• Section: 69; 132

Judgement Text

I.T.A. NO . 1023 & 1024 /KOL./201 2 ASSESSMENT YEAR S : 200 8 - 20 0 9 & 2009 - 2010 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI N.K. SAINI (ACCOUNTANT MEMBER) , AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 1023 & 1024 /KOL . / 20 1 2 ASSESSMENT YEAR S : 200 8 - 20 0 9 & 2009 - 2010 ASSISTANT COMMISSIONER OF INCOME TAX , ... ............ .. .APP ELL ANT CENTRAL CIRCLE - XX, KOLKATA 18, RABINDRA SARANI, PODDAR COURT, 5 TH FLOOR, KOLKATA - 700 0 01 - VS. - M/S. A . S. JEWELLERS PVT. LTD., ....................... ....... . RESPONDENT 23A, N.S. ROAD, 8 TH FLOOR, KOLKATA - 700 0 01 [PAN : AA F C A 3468 E ] APPEARANCES BY: SHRI RAJENDRA PRASAAD , J CIT, FOR THE DEPARTMENT SHRI RAVI TULSIYAN , FCA , FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JANUARY 2 8 , 2 01 5 DATE OF PRONOUNCING THE ORDER : JANUARY 29 , 201 5 O R D E R PER GEORGE MATHAN : ITA 1023/KOL/2012 AND ITA 1024/KOL/2012 ARE THE APPEALS FILED BY THE REVENU E AGAINST THE ORDER S PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , CENTRAL - III , KOLKATA IN APPEAL NO S . 179 & 180/CC - XX/CIT(A)C - III/10 - 11/KOL DATED 2 7 .0 4 .2012 FOR THE ASSESSMENT YEAR S 200 8 - 0 9 AND 2009 - 10 . 2 . SHRI RAJENDRA PRASAD , J CIT, SR. D.R., REPRESENTED ON BEHALF OF THE REVENUE AND SHRI RAVI TULSIYAN , F.C.A. , REPRESENTED ON BEHALF OF THE ASSESSEE . 3. AS THE ISSUES IN BOTH THE REVENUE S APPEALS ARE IDENTICAL, THE SAME ARE BEING DISPOSED OF BY THIS COMMON ORDER. I.T.A. NO . 1023 & 1024 /KOL./201 2 ASSESSMENT YEAR S : 200 8 - 20 0 9 & 2009 - 2010 PAGE 2 OF 5 4 . IN BOTH THE REVENUE S APPEAL S , THE REVENUE HAS RAISED THE FOLLOWING GROUND S : - (1) THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) ERRED BOTH IN FACTS AS WELL AS IN LAW IN ALLOWING THE ASSESSEE S APPEAL AND DIRECTING THE AO TO DELETE THE DISALLOWANCES ON ACCOUNT OF PROFIT ON UNDISCLOSED SALES OF RS.1,12,500/ - AND RS.2,42,330/ - WITHOUT PROPER APPRECIATION OF AO S FINDINGS AS WELL AS MATERIALS BROUGHT ON RECO RD BY THE AO DURING THE COURSE OF ASSESSMENT FOR THE AYS 2008 - 09 AND 2009 - 10 RESPECTIVELY. (2) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW IN ALLOWING THE ASSESSEE S APPEAL AND DIRECTING THE AO TO DELE TE THE DISALLOWANCES ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY U/S 69 OF RS.21,08,113/ - , RS.25,04,960/ - WITHOUT PROPER APPRECIATION OF AO S FINDINGS AS WELL AS MATERIALS BROUGHT ON RECORD BY THE AO DURING THE COURSE OF ASSESSMENT FOR THE AYS 2008 - 09 AND 2009 - 10 RESPECTIVELY. 5 . AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. J CIT, SR. D.R. THAT THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED BY THE REVENUE AT THE RESIDENCE OF SHRI SUSHIL KUMAR SARAF, ONE OF THE DIRECTORS OF THE ASSESSEE - COM PANY, ON 12.06.2008. IT WAS THE SUBMISSION THAT IN THE COURSE OF SEARCH, BOOKS OF ACCOUNTS MARKED SKS - 1 TO SKS - 5 WAS FOUND AND SEIZED. IT WAS THE SUBMISSION THAT THE ASSESSEE IS TRADING IN JEWELLERY. IT WAS THE SUBMISSION THAT CONSEQUENTLY AS THE SEIZED MA TERIAL RELATED TO TRADING IN JEWELLERY, THE SAME WAS TREATED AS THE INCOME OF THE ASSESSEE AND THE TRANSACTIONS IN THE BOOKS OF ACCOUNTS SEIZED WERE TAKEN INTO CONSIDERATION AND NET PROFIT AND UNDISCLOSED FUNDS USED FOR ACQUIRING SUCH JEWELLERY WAS TREATED AS INCOME OF THE ASSESSEE. IT WAS THE SUBMISSION THAT SHRI SUSHIL KUMAR SARAF, THE DIRECTOR OF THE ASSESSEE - COMPANY HAD DECLARED THE NET PROFIT OF RS.1,12,500/ - AS HIS INCOME FROM TRADING IN JEWELLERY FOR THE ASSESSMENT YEAR 2008 - 09 AND RS.2,42,330/ - AS H IS INCOME FROM TRADING IN JEWELLERY FOR THE ASSESSMENT YEAR 2009 - 10. IT WAS THE SUBMISSION THAT THE SAME WAS ADDED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE - COMPANY. I.T.A. NO . 1023 & 1024 /KOL./201 2 ASSESSMENT YEAR S : 200 8 - 20 0 9 & 2009 - 2010 PAGE 3 OF 5 6. IT WAS THE SUBMISSION BY THE LD. D.R. THAT THE SECOND GROUND WAS AGAINST THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER REPRESENTING THE COST OF JEWELLERY WHICH HAD BEEN TRADED FOR GENERATING THE SAID INCOME. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(APPEALS) WAS LIABLE TO BE RE VERS ED. 7. ON A SPECIFIC QUERY FROM THE BENCH AS TO WHETHER THE ASSESESE - COMPANY WAS SEARCHED, THE REPLY GIVEN BY THE LD. D.R. WAS NO. TO THE FURTHER QUERY AS TO WHERE THE BOOKS OF ACCOUNTS SEIZED WERE FOUND, WHETHER IN THE RESIDENCE OF THE DIRECTORS OR AT THE PREMISES OF THE COMPANY. THE LD. D.R. SUBMITTED THAT THEY WERE FOUND IN THE RESIDENCE OF THE DIRECTORS. 8. IN REPLY, LD. A.R. SUBMITTED THAT THE SEARCH HAD BEEN CONDUCTED AT THE RESIDENTIAL PREMISES OF THE DIRECTORS OF THE ASSESSEE - COMPANY. IT WAS TH E SUBMISSION THAT THE ASSESESE - COMPANY HAD TWO DIRECTORS BEING SHRI SUSHIL KUMAR SARAF AND HIS WIFE. IT WAS THE SUBMISSION THAT THE SEIZED BOOKS OF ACCOUNTS WERE FOUND AT THE RESIDENCE OF SHRI SUSHIL KUMAR SARAF AND SHRI SUSHIL KUMAR SARAF HAD ADMITTED THE INCOME FROM THE TRANSACTIONS IN THE SEIZED BOOKS TO THE EXTENT OF RS.1,12,500/ - FOR THE ASSESSMENT YEAR 2008 - 09 AND RS.2,42,330/ - FOR THE ASSESSMENT YEAR 2009 - 10. IT WAS THE SUBMISSION THAT SHRI SUSHIL KUMAR SARAF HAD SPECIFICALLY ADMITTED THAT THIS WAS H IS INCOME FROM THE BUSINESS OF JEWELLERY MAKING FOR THE PERIOD 15.01.2008 TO 30.05.2008. IT WAS THE SUBMISSION THAT NO UNDISCLOSED JEWELLERY WAS FOUND FROM THE RESIDENCE OF SHRI SUSHIL KUMAR SARAF. THUS IT WAS THE SUBMISSION THAT THE JEWEWLLERIES WERE BEIN G MANUFACTURED AT THE INSTANCE OF THE PURCHASERS AND THERE WAS NO STOC KING OF THE JEWELLERY. IT WAS ALSO THE SUBMISSION THAT SHRI SUSHIL KUMAR SARAF HAD FILED HIS RETURNS FOR THE RELEVANT ASSESSMENT YEARS DISCLOSING HIS INCOME FROM THE TRANSACTIONS. IT WAS THE SUBMISSION THAT THERE WAS NO UNDISCLOSED INCOME RELATING TO THE ASSESSEE - COMPANY FOUND IN THE COURSE OF SEARCH. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER I.T.A. NO . 1023 & 1024 /KOL./201 2 ASSESSMENT YEAR S : 200 8 - 20 0 9 & 2009 - 2010 PAGE 4 OF 5 HAD TREATED THE INCOME OFFERED BY SHRI SUSHIL KUMAR SARAF AS THE UNDISCLOSED INCOME OF THE ASSESSEE - COMPANY WITHOUT ANY SUPPORTING EVIDENCE , W HEN, IN FACT, THE BOOKS OF ACCOUNTS SEIZED HAD BEEN FOUND AT THE RESIDENCE OF SHRI SUSHIL KUMAR SARAF, WHO HAD ALSO DISCLOSED THE INCOME THERE FROM. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(APP EALS) WAS LIABLE TO BE UPHELD. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ORDER OF THE LD. CIT(APPEALS) SHOWS THAT THE LD. CIT(APPEALS) HAS TAKEN INTO CONSIDERATION THE PROVISIONS OF SECTION 292C, WHICH SPECIFIES THE PRESUMPTION REFERRI NG THE OWNERSHIP OF THE ASSETS, BOOKS OF ACCOUNTS, ETC. FOUND IN POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF SEARCH UNDER SECTION 132 OR SURVEY UNDER SECTION 133A. ADMITTEDLY THE SAID SEIZED BOOKS OF ACCOUNT ON THE BASIS OF WHICH THE INCOME FOR TH E ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 HAS BEEN DETERMINED WAS FOUND IN THE COURSE OF SEARCH ON SHRI SUSHIL KUMAR SARAF. ADMITTEDLY THE BOOKS OF ACCOUNTS WERE UNDER THE CONTROL AND CUSTODY OF SHRI SUSHIL KUMAR SARAF. NO DOCUMENT LINKING THE SAID BOOKS IN AN Y MANNER WHATSOEVER TO THE ASSESSEE - COMPANY HAD BEEN FOUND IN THE COURSE OF SEARCH. ADMITTEDLY SHRI SARAF HAS ALSO ADMITTED THE INCOME IN RESPECT OF THE SAID BOOKS OF ACCOUNTS IN HIS RETURNS OF INCOME. THIS BEING SO, WE FIND NO ERROR IN THE FINDINGS AS ARR IVED AT BY THE LD. CIT(APPEALS) AND CONSEQUENTLY THE SAID FINDING STANDS UPHELD. 10. COMING TO THE ISSUE OF THE COST OF THE JEWELLERY, WHICH HAS BEEN DETERMINED BY THE ASSESSING OFFICER, A PERUSAL OF THE ORDER OF LD. CIT(APPEALS) CLEARLY SHOWS THAT HE HAS TAKEN INTO CONSIDERATION THE FACT THAT NO STOCK OF THE INDIVIDUAL BUSINESS MAINTAINED BY SHRI SUSHIL KUMAR SARAF WAS FOUND IN THE COURSE OF SEARCH. IN FACT, THE CLAIM OF THE ASSERTION OF SHRI SUSHIL KUMAR SARAF THAT HE WAS MANUFACTURING THE JEWELLERIES AS PER THE REQUEST OF THE CUSTOMERS HAS NOT BEEN FOUND TO BE FALSE AND NO EVIDENCE TO THE CONTRARY HAS BEEN FOUND IN THE COURSE OF SEARCH. IN THESE I.T.A. NO . 1023 & 1024 /KOL./201 2 ASSESSMENT YEAR S : 200 8 - 20 0 9 & 2009 - 2010 PAGE 5 OF 5 CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE DELETION AS MADE BY THE LD. CIT(APPEALS) OF THE SAID ADDITION REPRE SENTING THE COST OF THE UNDISCLOSED JEWELLERY IS ON THE RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. 11 . IN THE RESULT, BOTH THE APPEAL S FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY , 201 5 . SD/ - SD/ - N.K. SAINI GEORGE MATHAN ( ACCOUNTANT MEMBER) ( JUDICIAL MEMBER) KOLKATA, THE 29 TH D AY OF JANUARY , 201 5 COPIES TO : (1) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - XX, KOLKATA 18, RABINDRA SARA NI, PODDAR COURT, 5 TH FLOOR, KOLKATA - 700 001 (2) M/S. A. S. JEWELLERS PVT. LTD., 23A, N.S. ROAD, 8 TH FLOOR, KOLKATA - 700 001 (3) COMMISSIONER OF INCOME TAX (APPEALS) ( 4 ) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S.