Manish Mittal, V. ACIT CC-2,

ITA 1116/DEL/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1089 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-10-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 07-03-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Assessee Lawyers: AMIT AGGARWAL
• Keywords: Search and seizure; Loose papers; Document seized; Documents seized
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO.1116/DEL./2007 (ASSESSMENT YEAR : 2002-03) SHRI MANISH MITTAL, VS. ACIT, CEN. CIRCLE 2, A-184, MAJLIS PARK, NEW DELHI. ADARSH NAGAR, DELHI. (PAN/GIR NO.AGYPM1566H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT AGGARWAL, REVENUE BY : SHRI B.K. GUPTA, SR.DR ORDER PER K.D. RANJAN: AM THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 20 02-03 ARISES OUT OF THE ORDER OF CIT(A)-III, NEW DELHI. 2. THE FIRST ISSUE FOR CONSIDERATION RELATES TO SUS TAINING THE ADDITION OF RS.1,00,000/- ON ACCOUNT OF FOREIGN TRAVEL EXPENSES. THE FACTS O F THE CASE STATED IN BRIEF ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN THE CASE OF THE ASSESSEE ON 23.12.2003. DURING THE COURSE OF SEARCH, CERTAI N LOOSE PAPERS WERE FOUND. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE ALONG WITH HIS W IFE HAD GONE ON FOREIGN TOUR FOR TWO WEEKS TO UK AND EUROPE. IT WAS SUBMITTED THAT ASSE SSEE AND HIS WIFE HAD WITHDRAWN RS.1,67,197 FOR MEETING OUT THE EXPENSES FOR THE YE AR. ASSESSEE AND HIS WIFE HAD WITHDRAWN RS.89,318/- DURING LAST YEAR. IT WAS SUB MITTED BY THE ASSESSEE THEY HAD STAYED WITH THE RELATIVE OF HIS MOTHER IN LONDON. THE ASS ESSING OFFICER NOTED THAT NO SUCH CLAIM OF STAYING WITH THE RELATIVE IN DIFFERENT COU NTRIES OF EUROPE HAD BEEN MADE. AS PER THE SEIZED DOCUMENTS AT ANNEXURE 59 OF PANCHNAMA DA TED 23.12.2003, THE ASSESSEE HAD PAID 1400 STERLING PONDS FOR THEIR 13 NIGHTS EUROPE AN TOUR. THE EXPENSES WERE WORKED OUT TO RS.1,12,000/-. THE ASSESSING OFFICER KEEPIN G IN VIEW THE ABOVE FACTS WAS OF THE VIEW THAT WITHDRAWALS WERE NOT SUFFICIENT FOR MEETI NG OUT FOREIGN TRAVELING AND BOARDING I.T.A. NO.1116/DEL./2007 (A.Y. : 2002-03) 2 AND LODGING EXPENSES IN EUROPE. HE ACCORDINGLY ADD ED RS.2 LAKH TO COVER UP THE UNEXPLAINED EXPENSES OF THE ASSESSEE AND HIS WIFE D URING THE FOREIGN TOURS. 3. ON APPEAL, IT WAS SUBMITTED THAT THE ASSESSEE HA D WITHDRAWN RS.1,12,000/- FOR FOREIGN TOUR. THE ASSESSEE HAD STAYED WITH HIS REL ATIVE WHICH HAVE BEEN CONFIRMED. THE ASSESSING OFFICER HAD NOT CONSIDERED THE FACTS AND HAD WRONGLY COME TO THE CONCLUSION THAT WITHDRAWALS MADE BY THE ASSESSEE WERE NOT SUFF ICIENT FOR MEETING OUT FOREIGN TRAVEL EXPENSES. THE CIT(A) CONSIDERED THE ARGUMENTS ADVA NCED BY THE ASSESSEE. HE WAS OF THE OPINION THAT ASSESSING OFFICER HAD NOT DISPUTED THE CONTENTION REGARDING THE STAY IN LONDON AT THE RESIDENCE OF HIS MOTHERS RELATIVE. HOWEVER, IT COULD NOT BE DISPUTED THAT AN EXPENDITURE OF RS.1,12,000/- WAS MADE TO PURCHAS E FOREIGN CURRENCY FOR THE PURPOSE OF FOREIGN TOUR. CONSIDERING SUCH EVIDENCE AND OTHER EXPENDITURE TOWARDS FARE FOR TO AND FRO JOURNEY FOR EUROPE & UK, HE WAS OF THE OPINION THAT ADDITION OF RS.1,00,000/- WAS SUFFICIENT. HE ACCORDINGLY UPHELD THE ADDITION OF RS.1,00,000/-. 4. BEFORE US, LD.AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAD REJECTED THE CONTENTION OF THE ASSESSEE WITHOUT CON SIDERING THE EVIDENCES FILED BY THE ASSESSEE. THE ASSESSEE FILED CONFIRMATION FROM MS. VINAY JUNG, STATING THEREIN THAT MANISH MITTAL AND HIS WIFE WERE STAYED WITH HER IN LONDON AND ALL THEIR EXPENSES OF EUROPE TOUR HAVE BEEN BORNE BY HER. THE ASSESSING OFFICER HAD IGNORED THESE EVIDENCES. THEREFORE, NO ADDITION WAS TO BE MADE. HE PLACED R ELIANCE ON SEVERAL DECISIONS OF ITAT IN SUPPORT OF THE CONTENTION. ON THE OTHER HAND, L D.SR.DR SUPPORTED THE ORDER OF THE LD.COMMISSIONER OF INCOME-TAX (APPEALS). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE HAVE GONE THROUGH THE CERTIFICATE FILED BY MS. V INAY JUNG. IN CERTIFICATE WHICH IS NOT DATED, IT HAS BEEN STATED THAT DURING AUGUST, 2001, SHRI MANISH MITTAL AND HIS WIFE HAD STAYED WITH HER AND ALL EXPENSES INCLUDING PETTY EX PENSES INCURRED BY RUCHI & MANISH TO LONDON HAD BEEN BORNE BY HER AND ALSO THEIR EUROPE TOUR EXPENSES WERE FUNDED BY HER. HOWEVER, NO DETAILS ABOUT THE EXPENDITURE INCURRED BY HER HAD BEEN GIVEN. THERE ARE OVER WRITING IN HER NAME AND THE NAME OF HER HUSBAN D. THE CERTIFICATE IS UNDATED. IN THE ABSENCE OF THE RELEVANT DETAILS OF THE EXPENDITURE INCURRED, THE CERTIFICATE IS VAGUE AND I.T.A. NO.1116/DEL./2007 (A.Y. : 2002-03) 3 CANNOT BE TAKEN AS ADMISSIBLE EVIDENCE. MOREOVER, THE ASSESSEE COULD NOT CO-RELATE THE WITHDRAWALS MADE BY HIM DURING THE YEAR WITH THE EX PENDITURE INCURRED ON FOREIGN TRAVEL. IN THE ABSENCE OF ANY NEXUS HAVING BEEN ESTABLISHED , IN OUR CONSIDERED OPINION, THE LD.COMMISSIONER OF INCOME-TAX (APPEALS) WAS JUSTIFI ED IN RESTRICTING THE ADDITION OF RS.1,00,000/-. ACCORDINGLY, WE DO NOT FIND ANY I NFIRMITY IN THE ORDER PASSED BY THE LD.COMMISSIONER OF INCOME-TAX (APPEALS) CONFIRMING THE ADDITION OF RS.1,00,000/- OUT OF TOTAL ADDITION OF RS.20,000/-. 6. THE NEXT ISSUE FOR CONSIDERATION RELATES TO ADDI TION OF RAS.10,000/-. THE FACTS OF THE CASE RELATING TO THIS GROUND OF APPEAL ARE THAT DURING THE COURSE OF SEARCH, A DOCUMENT AT SL.NO.18 OF ANNEXURE 1 OF PANCHNAMA IN FORM OF A VOUCHER WAS FOUND. AS PER THE DOCUMENT, THE JEWELLERY WAS SOLD ON 24.4.2001 FOR R S.30,500/- OUT OF WHICH RS.10,000/- WERE RECEIVED AS ADVANCE AND BALANCE AMOUNT WAS SHO WN AT RS.20,500/-. THE ASSESSING OFFICER ON THE BASIS OF ENTRY FOUND RECORDED IN THE SEIZED PAPER WAS OF THE OPINION THAT JEWELLERY WORTH RS.30,500/- WAS PURCAHSED OUTSIDE T HE BOOKS OF ACCOUNT. THE ASSESSING OFFICER MADE AN ADDITION OF RS.30,500/-. 7. ON APPEAL, IT WAS SUBMITTED THAT PAPER BELONGED TO M/S ABHUSHAN PALACE, SHALIMAR BAGH, NEW DELHI. IT WAS SUBMITTED THAT AC CORDING TO THE ASSESSING OFFICER, JEWELLERY AS PER THE SEIZED PAPER WAS PURCHASED BY THE ASSESSEE AND SOLD OUTSIDE THE BOOKS BY ABHUSHAN PALACE. THE ASSESSING OFFICER NE VER ENQUIRED FROM THE ASSESSEE AND NEVER GIVEN A QUESTIONNAIRE REGARDING THE DOCUMENT AND, THEREFORE, THE ASSESSING OFFICER WAS INCORRECT AND UNJUSTIFIED IN IGNORING THE WORD ESTIMATE WRITTEN ON THE PAPER. THE ASSESSEE, THEREFORE, DENIED THE PURCHASE OF ANY JEW ELLERY. THE ASSESSEE FILED CONFIRMATION FROM ABHUSHAN PALACE THAT THEY HAD NOT SOLD SUCH JEWELLERY TO THE ASSESSEE. THEY HAVE ALSO CONFIRMED THAT THEIR BOOKS OF ACCOUN T DO NOT INDICATE OR DO NOT SHOW ANY SUCH SALE OF JEWELLERY AS PER THE PAPER. THE COMMI SSIONER OF INCOME-TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS WAS OF THE OPINION THAT CONFIRMATION FILED FROM GUPTA ABHUSHAN PVT. LTD. WAS NOT IN RECONCILIATION WITH T HE SEIZED DOCUMENTS WHICH WERE FROM ABHUSHAN PALACE AND, THEREFORE, THE SAID CONFIRMATI ON GIVEN BY GUPTA ABHUSHAN PVT. LTD. BECAME IRRELEVANT. HOWEVER, THE SAID DOCUMENT DOES NOT SPECIFY THAT WHETHER JEWELLERY WAS PURCHASED OR FULL PAYMENT OF RS.30,50 0/- WAS MADE AS A CONSIDERATION OF I.T.A. NO.1116/DEL./2007 (A.Y. : 2002-03) 4 THE JEWELLERY PURCHASED. IN ANY CASE, AS PER THE S EIZED DOCUMENTS, THERE WAS AN ADVANCE PAYMENT IN CASH OF RS.10,000/- FOR WHICH NEITHER IN THE ASSESSMENT PROCEEDINGS NOR IN THE APPELLATE PROCEEDINGS ANY EVIDENCE COULD BE GIVEN R EGARDING THE SOURCE OF THE SAME. THE COMMISSIONER OF INCOME-TAX (APPEALS) ACCORDINGLY RE STRICTED THE ADDITION TO THE EXTENT OF RS.10,000/-. 8. BEFORE US, LD.AR OF THE ASSESSEE SUBMITTED THAT IT WAS A ROUGH ESTIMATE AND, THEREFORE, NO ADDITION COULD BE MADE. ON THE OTHER HAND, LD.SR.DR SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). 9. WE HAVE GONE THROUGH THE MATERIAL PLACED ON RECO RD CAREFULLY AND CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE. FROM THE SEIZED PAPER, WE FIND THAT GUPTA ABHUSHAN PVT. LTD. ISSUED A RECEIPT ON 24.4.2001 FOR SALE OF JEWELLERY I.E. DIAMOND, BRACELET, GOLD FOR RS.30,500/- AND AN AMOUNT OF RS.10,000/- HAS BE EN SHOWN AS ADVANCE RECEIVED BY GUPTA ABHUSHAN PVT. LTD. THEREFORE, ASSESSEE HAD M ADE PAYMENT OF RS.10,000/- ON 22.4.2001. AS REGARDS, THE CONFIRMING OF ADDITION OF RS.10,000/-, THE ASSESSEE DID NOT ADVANCE ANY ARGUMENT NEITHER BEFORE THE COMMISSIONE R OF INCOME-TAX (APPEALS) NOR BEFORE US. THEREFORE, IN OUR CONSIDERED OPINION, T HE COMMISSIONER OF INCOME-TAX (APPEALS) WAS JUSTIFIED IN CONFIRMING THE ADDITION OF RS.10,000/-. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. 11. ORDER PRONOUNCED IN OPEN COURT 30/10/2009. (C.L. SETHI) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: OCT. 30, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-III, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT I.T.A. NO.1116/DEL./2007 (A.Y. : 2002-03) 5