ROCHEME SEPARATION SYSTEMS (I) P.LTD, MUMBAI V. ACIT 10, MUMBAI

ITA 1183/MUM/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0265 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 26-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 11-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: GOURAV BANSAL
• Keywords: Bogus purchase; Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Source of fund; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 153A; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 1183 / MUM/20 13 ASSESSMENT YEAR: 2007 - 08 M/S. ROCHEME SEPARATION SYSTEMS VS. A CIT 10 INDIA PVT. LTD. AAYAKAR BHAVAN, 503, DALAMAL CHAMBERS, 29 NEW M LINES M.K. MARG, MUMBAI 400020 MUMBAI - 400020 PAN NO. AABCR1955P (APPELLANT) (RESPONDENT) ITA NO. 1203/MUM/2013 ASSESSMENT YEAR: 2007 - 08 ACIT CEN CIR 10 VS. M/S. ROCHEM SEPERATION INDIA P. LTD. 8 TH FLOOR, R. NO. 802 101, HDIL TOWER, ANANT KANEKAR OLD CGO BLDG. M.K. ROAD MARG, BANDRA (EAST) MUMBAI 400020 MUMBAI - 400051 PAN NO. AABCR1955P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GOURAV BANSAL, AR REVENUE BY: SHRI O.P. MEENA, DR DATE OF HEARING : 12/05 /2017 DATE OF PRONOUNCEMENT: 09/08/2017 ITA NO. 1183 & 1203 /MUM/201 3 2 ORDER PER N.K. PRADHAN, AM THE CAPTIONED APPEALS FOR THE ASSESSMENT YEARS 2007 - 08 THE ONE BY THE ASSESSEE AND THE OTHER BY THE REVENUE - ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 37, MUMBAI AND ARISE OUT OF ORDER U/S 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961 (THE ACT). 2. THE GROUND S OF APPEAL FILED BY THE ASSESSEE READ AS UNDER: - 1. THE LD. CIT(A) ERRED IN LAW AND FACTS IN CONFIRMING THE REOPENING OF AS SESSMENT U/S 147 OF THE INCOME T AX ACT FOR THE IMPUGNED ASSESSMENT YEAR ON THE BASIS OF REASONS RECORDED BY ASSESSING OFFICER WHICH HAVE ALREADY BEEN CONSIDERED DURING THE ORIGINAL ASSESSMENT PROCEE DINGS U/S 143(3) OF THE INCOME T AX ACT BY WAY OF ACCEPTING THE AVAILABILITY AND UTILIZATION OF THE LIQUID CASH AGAINST BOGUS PURCHASES SURRENDERED DURING THE SEARCH PROCEEDINGS. THUS THE REA SSESSMENT PROCEEDINGS INITIATED MERE LY ON CHANGE OF OPINION IS VOID - AB - INITIO AND SHOULD BE ANNULLED. 2. THE LD. CIT(A) ERRED IN LAW AND FACTS IN CONFIRMING THE ADDITION MADE BY ASSESSING OFF ICER ON PROTECTIVE BASIS OF RS. 1,24,50,500/ - FOR THE INVESTMENT IN GOLD BAR IN THE IMPUGNED FINANCIAL YEAR WITHOUT APPRECIATING THAT THE SOURCE OF THE SAME WAS EXPLAINED AND ASSESSED IN THE ASSESSMENT PROCEEDINGS U/S 153A UPTO THE A.Y. 2005 - 06 AS THE AMOUNT RECEIVED BACK FROM THE SUPPLIERS FOR BOGUS PURCHASES SURRENDERED AS NON - GENUINE DURING THE SEARCH PROCEEDINGS. THUS, THE PROTECTIVE ADDITION SO MADE ON SURMISES AND CONJECTURES SHOULD BE DELETED. 3. THE LD. CIT(A) ERRED IN LAW AND ON FAC TS IN NOT REDUCING A SUM OF RS. 36,58,500/ - FROM THE PROTE CTIVE ADDITION CONFIRMED OF RS . 1,24,50,500/ - IN THE IMPUGNED ASSESSMENT YEAR FOR THE ADDITION MADE IN THE ASSESSMENT YEA R 2008 - 09 U/S 68 OF THE INCOME T AX ACT TREATING IT AS UNEXPLAINED CREDIT WHICH RESULTED INTO DOUBLE ADDITION ITA NO. 1183 & 1203 /MUM/201 3 3 ONE IN THE IMPUGNED ASSESSMENT YEAR AND SECOND IN THE ASS ESSMENT YEAR 2008 - 09. THUS, RS. 36,58,500/ - INCL UDED IN RS. 1,24,50,500/ - IN PROTECTIVE ADDITION CONFIRMED SHOULD BE DELETED. 3. WE BEGIN WITH THE 1 ST GROUND OF APPEAL. THE ASSESSEE - COMPANY M/S ROCHEME SEPARATION SYSTEMS (I) PVT. LTD. (RSSIPL) FILED ITS RETURN OF INCOME FOR THE AY 2007 - 08 ON 31.10.2007 DISCLOSING INCOME OF RS.6,57,52,359/ - . THE ABOVE RETURN OF INCOME WAS ACCEPTED U/S 143(1). THE ASSESSI NG OFFICER (AO) DURING THE COURSE OF SCRUTINY ASSESSMENT FOR THE AY 2008 - 09 NOTICE D THAT TAXABLE INCOME RELATING TO THE IMPUGNED ASSESSMENT YEAR HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF S ECTION 147 OF THE ACT. THEN HE PASSED AN ORDER U/S 143(3) R.W.S. 147 ON 30.12.2011. 3.1 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) UPHELD THE REASSESSMENT PROCEEDINGS INITIATED BY THE AO ON THE REASON THAT THE ASSESSEE IN THE INSTANT CASE FAILED TO D ISCLOSE FULL AND TRUE MATERIALS BEFORE THE AO . 3.2 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THE RE - ASSESSMENT PROCEEDINGS INITIATED BY THE AO IS BASED ON CHANGE OF OPINION. IT IS STATED BY HIM THAT THE AO HAS ALREADY CONSIDERED THE ISSUE BY ACCEPTING THE AVAILABILITY AND UTILIZATION OF LIQUID CASH AGAINST BOGUS PURCHASES SURRENDERED DURING THE SEARCH PROCEEDINGS . 3.3 ON THE OTHER HAND, THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 3.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE RELEVANT MATERIALS ON RECORD. THE AO HAS GIVEN DETAILED REASONS RUNNING INTO 7 PAGES FOR RE - OPENING OF ASSESSMENT OF RSSIPL FOR THE IMPUGNED ITA NO. 1183 & 1203 /MUM/201 3 4 ASSESSMENT YEAR . THE AO HAS RECORDED A REASON INTER ALIA WHICH RUNS AS UNDER: THEREFORE, I AM SATISFIED TH AT THERE ARE REASONS TO BELIEVED THAT THE TRANSACTION OF THE PURCHASE OF GOLD BARS BY THE ASSESSEE IN AY 2007 - 08 FOR RS.1,24,50,500/ - BY MAKING CASH PAYMENT IS A SHAM TRANSACTION AND IN VIEW OF THE ABOVE TAXABLE INCOME OF THE ASSESSEE RELATING TO AY 2007 - 08 HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1961. THE RETURN RELATING TO THE AY 2007 - 08 HAS BEEN ACCEPTED U/S 143(1) OF INCOME TAX ACT, 1961. NO ASSESSMENT HAS BEEN DONE. IN VIEW OF THE ABOVE, I AM SATISFIED THAT THE PROCEEDINGS RELATING TO AY 2007 - 08 NEEDS TO BE RE - OPENED TO ASSESS THE UNEXPLAINED INVESTMENT OF RS.1,24,50,500/ - . IT HAS BEEN HELD BY THE HONBLE SUPREME COURT IN ACIT VS. RAJESH JHAVERI STOCK BROKERS P. LTD. 291 ITR 500 (SC) THAT INTIMATION U/S 143(1) (A) IS NOT AN ASSESSMENT AND THEREFORE, THE NOTICE ISSUED U/S 148 IS VALID. ALSO IN THE CASE OF KONE ELEVATOR INDIA P. LTD. VS. ITO (MAD) 340 ITR 454 , CIT VS. IDEAL GARDEN COMPLEX P. LTD . (MAD) 340 ITR 609 AND ACIT VS. MAERSK GL OBAL SERVICE CENTRE (INDIA) (P) LTD. (ITAT, MUM) 66 DTR 90 , IT HAS BEEN HELD THAT IF THE RETURN IS PROCESSED U/S 143(1), THE ONLY CONDITION TO BE SATISFIED FOR REOPENING IS TAXABLE INCOME HAS ESCAPED ASSESSMENT AND THE ASSESSEES PLEA THAT NO FRESH MATERIA L BEFORE THE AO WARRANTING REOPENING IS NOT RELEVANT. IN THE INSTANT CASE, THE ASSESSEE FAILED TO FILE DETAILS REGARDING PURCHASE OF GOLD BARS AMOUNTING TO RS.1,24,50,500/ - BY MAKING CASH PAYMENT. THIS IS ONE OF THE GROUND OF REASONS RECORDED BY THE AO FO R RE - OPENING ASSESSMENT U/S 148 OF THE ACT. AS THERE WAS NO TRUE AND FULL DISCLOSURE BY THE ASSESSEE, THE AO HAS RIGHTLY ISSUED THE NOTICE U/S 148 FOR RE - OPENING THE ASSESSMENT. THEREFORE, WE UPHOLD THE ITA NO. 1183 & 1203 /MUM/201 3 5 ORDER OF THE LD. CIT(A) ON THE ABOVE ISSUE AND DISMIS S THE 1 ST GROUND OF APPEAL FILED BY THE ASSESSEE. 4. NOW WE TURN TO THE 2 ND AND 3 RD GROUND OF APPEAL. THE ISSUE RELATES TO THE ADDITION OF RS. 1,24,50,500/ - MADE BY THE AO ON PROTECTIVE BASIS IN RESPECT OF THE ASSESSEES CLAIM OF PURCHASE OF GOLD BARS WEIG HING 12.8 KG. TREATING THE SAME AS SHAM TRANSACTION. HOWEVER, FOR THE AY 2008 - 09, THE AO FOUND THAT THE ASSESSEE CREDITED ITS BOOKS OF ACCOUNTS BY THE AMOUNT OF RS.36,58,900/ - BEING THE SALE OF GOLD BARS AND ADMITTED A NET SHORT TERM CAPITAL GAINS (STCG) OF RS.4,09,971/ - ON WHICH TAX INCIDENCE IS ONLY RS. 1.23 LAKHS . THUS THE AO ARRIVED AT A FINDING FOR THE AY 2008 - 09 THAT THE ASSESSEE HAS TRIED TO BRING UNACCOUNTED INCOME OF RS.36,58,900/ - INTO HIS BOOKS OF ACCOUNTS BY PAYING A TAX OF ONLY RS. 1.23 LAKHS ONLY. THE AO THUS HAS MADE AN ADDITION OF RS.1,24,50,500/ - IN RESPECT OF PURCHASE OF 12.8 KG. OF GOLD BARS ON PROTECTIVE BASIS . 4.1 IN APPEAL THE LD. CIT(A) HELD THE FOLLOWING: GRO U ND NO. 5 IS IN RESPECT OF ADDITION OF RS.1,24,50,500/ - FOR THE INVESTMENT IN GOLD BARS DURING THE IMPUGNED ASSESSMENT YEAR. ALTHOUGH ADDITION ON ACCOUNT OF OTHER UTILIZATION OF SURRENDERED INCOME IN THE RETURNS FILED U/S 153A HAVE BEEN DELETED, AS PER DISCUSSION SUPRA AS WELL AS IN RESPECT OF EARLIER ORDER FOR AY 2006 - 07, IN RESPECT OF THIS ADDITION FOR PURCHASE OF GOLD BARS, A REFERENCE TO WHICH HAS BEEN MADE AT PARA 5.3.4 (SUPRA) IN THE APPELLATE ORDER FOR AY 2006 - 07, I FIND THAT THE ENTIRE SALE PROCEEDS OF THE ALLEGED GOLD BARS HAVE BEEN BROUGHT TO TAX DURING THE AY 2008 - 09 AND THEREAFTER. THE ADDITION FOR AY 2008 - 09 HAS BEEN UPHELD BY THE LD. CIT(A) AND EVEN THE PENALTY IMPOSED U/S 271(1)(C) HAS BEEN UPHELD ON ACCO U NT OF THE FACT THAT THE INVESTIGATION MADE BY THE LD. AO IN AY 2008 - 09 REVEAL THAT THE ALLEGED PURCHAS ERS OF GOLD BARS SOLD BY THE APPELLANT COMPANY WERE FICTITIOUS. THE APPELLANT WAS ALSO NOT ABLE TO ITA NO. 1183 & 1203 /MUM/201 3 6 DISCHARGE THE ONUS CAST UPON IT IN RESPECT OF THE CASH CREDIT IN AY 2008 - 09 AND THEREAFTER. AS ALREADY OBSERVED IN THE APPELLATE ORDER FOR AY 2006 - 07 (SUPRA) , THERE CANNOT BE ANY DOUBLE ADDITION ON ACCOUNT OF THE SAME INCOME UNLESS THERE ARE FACTS CONTRARY TO THE CLAIM MADE BY THE APPELLANT. AS THE CLAIM OF CAPITAL GAINS MADE BY THE APPELLANT IN AY 2008 - 09 ON ACCOUNT OF SALE OF GOLD BARS HAS BEEN DISBELIEVED A ND BROUGHT TO TAX IN TOTO, CONFIRMING THE INVESTMENT PORTION OF THE SAME GOLD BARS DURING THE AY 2007 - 08 ON SUBSTANTIVE BASIS WOULD LEAD TO DOUBLE ADDITION OF THE SAME INCOME. HOWEVER, AS THE MATTER HAS NOT ATTAINED FINALITY IN RESPECT OF ISSUE OF CAPITAL GAINS DURING AY 2008 - 09 AND THEREAFTER RELATING TO SALE OF GOLD BARS ALLEGEDLY ACQUIRED BY THE APPELLANT DURING AY 2007 - 08, I CONFIRM THE ADDITION MADE BY THE LD. AO FOR AY 2007 - 08 ON PROTECTIVE BASIS ALONE. ACCORDINGLY , THIS GROUND OF APPEAL IS DISMISSED FOR STATISTICAL PURPOSES. 4.2 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THE ABOVE AMOUNT OF RS.1,24,50,000/ - WAS RECEIVED BY THE ASSESSEE AFTER THE DATE OF SEARCH AGAINST THE NON - GENUINE PURCHASES AND AFTER RECEIVING THE SAME, IT WAS BROUGHT INTO THE BOO KS OF ACCOUNTS AS CASH RECEIVED. AFTER RECEIPT OF THE AMOUNT FROM THE PARTIES FROM WHOM NON - GENUINE PURCHASES WERE MADE AND WERE SURRENDERED AT THE TIME OF SEARCH PROCEEDINGS, THE ASSESSEE MADE INVESTMENT IN THE GOLD AMOUNTING TO RS.1,24,50,500/ - ON VARIOUS DATES AS UNDER IN CASH: SR. NO. DATE OF PURCHASE AMOUNT (RS.) 1. 10/05/2006 RS.24,96,000/ - 2. 23/05/2006 RS.24,25,000/ - 3. 15/06/2006 RS.24,79,500/ - 4. 17/07/2006 RS.25,50,000/ - 5. 02/08/2006 RS.25,00,000/ - TOTAL RS.1,24,50,500/ - THEREFORE, IT IS SUBMITTED THAT THE ORDER OF THE LD. CIT(A) UPHO LDING THE ADDITION MADE BY THE AO OF RS.1,24,50,500/ - MADE ON PROTECTIVE BASIS BE DELETED. ITA NO. 1183 & 1203 /MUM/201 3 7 4.3 ON THE OTHER HAND, THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 4.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. BROADLY STATED, THE PRINCIPLES OF INCOME - TAX ACT IS TO CHARGE ALL INCOME WITH TAX, BUT IN THE HANDS OF THE SAME PERSON ONLY ONCE. IT HAS BEEN HELD SO IN S TATE OF UP VS. RAZA BULAND 118 ITR 50 (SC); ACHAMMA VS. IAC 180 ITR 57; KAMLAKER VS. CIT 67 ITR 351, 357 58; CIT VS. DALMIA 135 ITR 346, 350 - 51; GHISALAL VS. CIT 248 ITR 506. WE FIND THAT THE AO HAS MADE AN ADDITION OF RS.36,58,900/ - OF THE SALE PROCEEDS OF GOLD BARS AS UNEXPLAINED CREDIT U/S 68 OF THE ACT IN THE ASSESSMENT ORDER FOR THE AY 2008 - 09. THE LD. CIT(A) HAS UPHELD THE ABOVE ACTION OF THE AO BY SUSTAINING THE ADDITION MADE U/S 68 OF THE ACT. WE FIND THAT THE LD. CIT(A) HAS STATED AT PARA 8.1.6 OF HIS APPELLATE ORDER DATED 08.11.2012 THAT THE ENTIRE SALE PROCEEDS OF THE ALLEGED GOLD BARS HA VE BEEN BROUGHT TO TAX IN A.Y. 2008 - 09 AND THEREAFTER. IN VIEW OF THE ABOVE, WE DIRECT THE AO TO DELETE THE ADDITION OF RS.1,24,50,500/ - MADE ON PROTECTIVE BASIS. THUS THE 2 ND GROUND OF APPEAL FILED BY THE ASSESSEE IS ALLOWED. AS THE 2 ND GROUND OF APPEAL HAS BEEN ALLOWED, THE 3 RD GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ITA NO. 1183 & 1203 /MUM/201 3 8 6 . WE NOW TURN TO THE GROUNDS OF APPEAL FILED BY THE REVENUE WHICH READ AS UNDER: I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF CASH PAYMENTS TOWARDS CIVIL & OTHER INTERIOR WO RK CARRIED OUT AT OFFICE AT RS. 1,66,40,000/ - ; CASH PAYMENT CLAIMED TO HAVE PAID TOWARDS 40 % SHARE IN RESIDENTIAL FLAT RS. 46,00,000/ - ; CASH DEPOSITS OF RS. 55,99,717/ - WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE NEVER CLAIMED THAT ANY AMOUNT WAS RECEIVABLE FROM ANY OF THE BOGUS BILLERS, AND THE ONUS WAS ON THE ASSESSEE TO ESTABLISH THE CLAIM. II. ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT HAVING ADMITTED THE FACTS DURING THE SEARCH ACTION ITSELF THAT IT HAD ISSUED CHEQUES AGAINST ITS BOGUS PURCHASES AND AFTER ACTING UPON THE STATEMENT GIVEN IN THIS REGARD BY THE DIRECTOR OF THE COMPANY, THERE WAS NO NEED TO RECEIVE THE AMOUNT IN CASH EVEN IF ANY PART OF THE SAME WAS RECEIVABLE FROM SUCH BOGUS BILLERS, AND ACCORDINGLY MERELY ON THE BASIS OF THIS EVIDENT FACT, THE PLEA OF THE ASSESSEE COMPANY WAS LIABLE TO GET REJECTED. III. ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE LD. CIT(A) CLEARLY FAILED TO APPRECIATE THAT THE ONUS WAS ON THE ASSESSEE COMPANY TO ESTABLISH ITS CLAIM BEYOND ANY REASONABLE DOUBT BY PROVIDING CREDIBL E DOCUMENTARY EVIDENCES, WHICH THE ASSESSEE COMPANY MISERABLY FAILED IN THE INSTANT CASE. IV. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT IT IS A USUAL TRADE PRACTICE THAT IF AN ASSESSEE TAKES ACC OMMODATION ENTRIES OF PURCHASE TO INFLATE ITS EXPENSES, IT IN TURN RECEIVES BLACK MONEY IN CASH BUT WHEN THE REALITY OF SUCH BOGUS PURCHASE TRANSACTION BECAME EVIDENT AND THE FACTS IN THIS REGARD WERE ADMITTED BY BOTH THE ASSESSEE AS WELL AS THE BOGUS BILL ERS; THE BALANCE AMOUNT, IF ANY, WAS RECEIVABLE AS ON DATE OF SEARCH, THE ASSESSEE SHOULD HAVE TAKEN THE SAME THROUGH BANKING CHANNEL STRICTLY. ITA NO. 1183 & 1203 /MUM/201 3 9 V. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) CLEARLY FAILED IN HOLDING THAT THE UNACCOUNTED INCOME BROUGHT TO THE BOOK OF THE ASSESSEE DURING PREVIOUS YEAR RELEVANT TO A.Y. 2006 - 07 ON ACCOUNT OF CASH PURCHASES, CASH DEPOSITS WITH BANK AND RECEIVABLE FROM VENDORS WAS APPLICATION OF THE SAME INCOME EARNED BY IT THROUGH ITS BOGUS PU RCHASES. VI. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT IT WAS THE DUTY OF THE ASSESSEE TO PROVE ITS CLAIM WITH COGENT EVIDENCE PRODUCED IN ITS SUPPORT AND ALSO IT WAS REQUIRED TO JUSTIFY SUCH CLA IM WHEN PUT TO TEST ON HUMAN PROBABILITY WHICH IN THE INSTANT CASE THE ASSESSEE HAS MISERABLY FAILED. VII. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE GOLD BARS WEIGHIN G 12.8 KGS FOR AN AMOUNT OF RS. 1,24,50,500/ - WAS CLAIMED BY THE ASSESSEE TO HAVE PURCHASED IN CASH FOR WHICH IT FAILED TO FURNISH CORROBORATIVE DOCUMENTARY EVIDENCES AND THAT THE ONUS WAS ON THE ASSESSEE COMPANY TO PROVE WITH COGENT EVIDENCE THAT THE GOLD BARS WERE PURCHASED OUT O F ITS ACCOUNTED SOURCES OF INCOME. VIII. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT ONLY 3.34 KG OF GOLD BARS WAS SOLD AND SALE PROCEEDS WITH RESPECT TO THE SAME WAS BROUGHT TO TAX FOR A.Y. 2008 - 0 9 U/S 68 OF THE ACT AND ACCORDINGLY, THE ADMITTED INVESTMENT AT LEAST IN BALANCE 9.46 KG OF GOLD BARS WAS DULY LIABLE TO GET TAXED DURING A.Y. 2007 - 08 AS UNEXPLAINED INVESTMENT IN GOLD BARS OUT OF UNACCOUNTED SOURCES OF ASSESSEE COMPANY AND AS S UCH PROPORT IONATE AMOUNT OF RS. 92,01,571/ - SHOULD HAVE BEEN CONFIRMED ON SUBSTANTIVE BASIS AND AT BEST WITH RESPECT TO THE 3.34 KG OF GOLD FOR PURCHASE VALUE OF RS. 32,48,929/ - THE SALE PROCEEDS OF WHICH WERE ENTIRELY TAXED FOR A.Y. 2008 - 09; THE LD. CIT(A) WOULD HAVE CONFIRMED ADDITION ON PROTECTIVE BASIS TILL THE FINALIZATION OF ISSUE. 7 . WE BEGIN WITH THE 1 ST GROUND OF APPEAL. IT IS IN RESPECT OF ADDITION OF RS.1,66,40,000/ - FOR THE AMOUNT SPEN T IN CASH TOWARDS ITA NO. 1183 & 1203 /MUM/201 3 10 CIVIL AND OTHER INTERIOR WORK CARRIED OUT IN THE OFFICE R PREMISES OF RSSIPL DURING THE FY 2004 - 05 BASED ON SEIZED MATERIAL. AS PER THE AO, THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THE SOURCE OF THE ACCOUNTING TREATMENT DURING THE AY 2007 - 08, WHEREAS IT IS THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE THAT I T WAS ONLY AN ACCOUNTING TREATMENT IN THE BOOKS OF ACCOUNTS FOR THE AY 2007 - 08. IT IS ALSO STATED BY THE LD. COUNSEL THAT INCOME HAS ALREADY BEEN OFFERED IN THE RETURN OF INCOME FILED FOR AY 2005 - 06 U/S 153A OF THE ACT. WE FIND THAT THE LD. CIT(A) AFTER EX AMINING THE FACTS EMANATING FROM THE ASSESSMENT ORDER AND SUBMISSION MADE DURING 153A PROCEEDINGS , FOUND THAT THE ASSESSEE HAD ALREADY MADE A DISCLOSURE U/S 132(4) IN RESPECT OF PAYMENT OF CASH FOR CIVIL AND INTERIOR WORK CARRIED OUT AT THE OFFICE PREMISES DURING AY 2005 - 06. THE LD. CIT(A) HAS EXTRACTED IN PARA 8.1.3 THE RELEVANT PORTION OF THE STATEMENT OF SHRI KAMLESH KUMAR GOEL, MD OF RSSIPL DATED 11.08.2005. THEREAFTER THE LD. CIT(A ) DELETED THE ADDITION OF RS. 1,66,40,000/ - MADE BY THE AO . 7 .1 THE OTHER ISSUE RELATES TO ADDITION OF RS.46,00,000/ - MADE BY THE AO TOWARDS EXPENDITURE INCURRED IN CASH OF 40% SHARE IN RESIDENTIAL FLAT ACQUIRED IN THE FY 2002 - 03 IN RESPECT OF WHICH A DISCLOSURE WAS MADE IN THE RETURN OF INCOME FILED U/S 153A FOR AY 2003 - 04. THE LD. CIT(A) HAS NOTED THAT DURING THE STATEMENT OF SHRI GOEL RECORDED U/S 132(4) ON 11.08.2005, HE HAS CONFIRMED THE PAYMENT OF RS.46,00,000/ - AS PER QUESTION NO. 1 7. THEREFORE, THE LD. CIT(A) DELETED THE ADDITION OF RS.46,00,000/ - MADE BY THE AO. 7 .2 THE OTHER ADDITION MADE BY THE AO IS RS.55,99,717/ - ON ACCOUNT OF CASH INTRODUCED IN THE BOOKS OF ACCOUNTS. AS PER THE ASSESSEE, THIS AMOUNT WAS RECEIVED BACK FROM THE SUPPLIERS AS BOGUS PURCHASES SURRENDERED AS NON - GENUINE DURING THE SEARCH ITA NO. 1183 & 1203 /MUM/201 3 11 P ROCEEDINGS AS REFLECTED IN THE RETURN OF INCOME FILED U/S 153A UP TO AY 2005 - 06. THE LD. CIT(A) HAVING EXAMINED THE ISSUE AT LENGTH ALLOWED THE APPEAL FILED BY THE ASSESSEE. 7 .3 WE AGREE WITH THE REASONS GIVEN BY THE LD. CIT(A) AS MENTIONED AT PARA 7 , 7 .1 AND 7 .2 HERE - IN - ABOVE. 7.4 NOW WE COME TO THE ADDITION OF RS.1,24,50,500/ - MADE BY THE AO. WE HAVE EXTRACTED AT PARA 4.1 HERE - IN - ABOVE THE FINDING OF THE LD. CIT(A) IN RESPECT OF THE ADDITION OF RS.1,24,50,500/ - MADE BY THE AO IN RESPECT OF INVESTMENT IN GOLD BARS DURIN G THE IMPUGNED ASSESSMENT YEAR. AS PER OUR FINDING DELINEATED AT PARA 4.4 HERE - IN - ABOVE THE GROUND OF APPEAL RELATING TO THE ADDITION OF RS.1,24,50,500/ - MADE BY THE AO IN THE IMPUGNED ASSESSMENT YEAR DOES NOT SURVIVE. 7 .5 IN THE RESULT, THE APPEAL IS DISMISSED. 8 . TO SUM UP , THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED WHEREAS THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN C OURT ON 09/08/2017. SD/ - SD/ - ( SAKTIJIT DEY ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 09/08/2017 RAHUL SHARMA , SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI ITA NO. 1183 & 1203 /MUM/201 3 12 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI