Manoj A. Gor, Ahmedabad V. The DCIT, Circle-2(3), Ahmedabad

ITA 1233/AHD/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6933 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Income from undisclosed sources; Set aside
• Section: 147; 132; 69A

Judgement Text

आयकर अपीलीय अिधकरण, अहमदाबाद ᭠यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’ SMC’’ BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT AT AHMEDABAD) BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT And SHRI WASEEM AHMED, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 1233/AHD/2018 िनधाᭅरण वषᭅ/Asstt. Year: 2014-15 Manoj A. Gor, C/o The Bhuj Mercantile Co-op. Bank Ltd., Vyapar Bhavan, Mithakhali Six Roads, Ahmedabad. PAN: AFPPG1371Q Vs. D.C.I.T., Circle-2(3), Ahmedabad. (Applicant) (Respondent) Assessee by : Shri Sakar Sharma, A.R Revenue by : Shri Kamlesh Makwana, Sr.D.R सुनवाई कᳱ तारीख/Date of Hearing : 10/11/2021 घोषणा कᳱ तारीख /Date of Pronouncement: 07/12/2021 आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals), Ahmedabad, dated 08/09/2016 arising in the matter of assessment order passed under s. 147 r.w.s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2014-15. ITA no.1233/AHD/2018 A.Y. 2014-15 2 2. The assessee has raised the following grounds of appeal: 1. The Ld. CIT (A)-12 erred on facts and in law in making addition being unexplained investment in Jewellery even though the appellant furnished complete details and explanation in the course of search as well as assessment proceedings. 2. The Ld. CIT (A)-12 erred on facts and in law confirming addition of Rs. 4,50,000/- on account of unexplained investment u/s 69A of the Act. The appellant craves permission to add, alter, amend or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 3. The only issue raised by the assessee is that the learned CIT (A) erred in confirming the order of the AO by sustaining the addition of Rs. 4.50 lacs on account of unexplained investments under section 69A of the Act. 4. The facts in brief are that the assessee in the present case is an individual and earning income under the salary and other source. There was a search and seizure operation under section 132 of the Act dated 3 rd July 2013 at Dharti Group including the assessee. In the course of search, it was found that the assessee was maintaining 2 lockers with Bhuj Mercantile Co-operative Bank Ltd wherein among other jewelries, 2 gold bars weighing 50g and 100g were found. It was explained by the assessee that gold bar of 50g belongs to him which was purchased from RK Jewelers Baroda dated 8 th May 2013 out of the withdrawal of cash from the bank. Likewise the gold bar of 100g was purchased by his mother from RK Jewelers dated 7 th April 2013 out of her rental income, family pension and past savings. It was also explained by the assessee that earlier the Mother has purchased 2 gold bars of 50g each which was subsequently exchanged for 1 gold bar of 100g. The assessee in support of his contention has also filed the copies of the bills for the purchase of gold bars. 4.1 However, the AO found that the search team on verification of the mobile of the assessee, observed that there was a message from Shri Chintan Pravin Morabia for arranging the bogus bills of the gold bullions held by him in the specified ITA no.1233/AHD/2018 A.Y. 2014-15 3 denomination. Likewise, Shri Chintan Pravin Morabia in the statement furnished under section 131(1)(a) of the Act dated 16 th September 2016 has also admitted to have obtained the bogus bills. Accordingly, the AO was of the view that the assessee has also arranged the bogus bills from RK jewelers out of his unaccounted income. Thus, the AO treated the investment in such gold bars as unexplained investment of the assessee and added the same under section 69A of the Act to the total income of the assessee. 5. Aggrieved assessee preferred an appeal to the learned CIT (A). 6. The assessee before the learned CIT (A) reiterated the submissions made before the AO during the assessment proceedings. However, the learned CIT (A) disregarded the contention of the assessee by observing that the version of the assessee that he has purchased the gold bar of 50g out of the cash withdrawal from the Bhuj Mercantile Co-operative Bank is not correct. It is for the reason that no prudent person will withdraw the cash in Bhuj and carry the same to the Baroda to buy the jewelry in cash. If the assessee is really willing to buy the gold bar, then he could have made the payment in cheque instead of cash. 7. The learned CIT (A) also not found the contention of the assessee acceptable for the gold bars purchased by the mother of the assessee. First, of all, the story of buying 2 gold bars having 50g each doesn’t appear to be true. It is because the ladies normally prefer to buy the jewelry instead of buying the gold bar otherwise they will have to incur the loss on converting the same into gold in the form of melting of the gold as well as making charges. Furthermore, there is a prohibition to make the payment in cash beyond Rs. 2 lacs. Accordingly, the assessee to justify the payment in cash has taken the 2 purchase bills for 2 different gold bars which were made consolidated on the later date. Likewise, there was no evidence brought on record by the assessee about the availability of source of cash in the hands of ITA no.1233/AHD/2018 A.Y. 2014-15 4 the mother. In view of the above, the learned CIT (A) confirmed the order of the AO. 8. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 9. The learned AR before us filed a paper book running from pages 1 to 42 and submitted that there was no unexplained investment made by the assessee as alleged by the revenue. Therefore, there cannot be any addition to the total income of the assessee under section 69A of the Act. 10. On the contrary the learned DR before us vehemently supported the order of the authorities below. 11. We have heard the rival contentions of both the parties and perused the materials available on record. First of all, we deal with the Gold bar of 50g found during the course of search. The assessee in support of such gold bar was able to produce the invoice from RK Jewelers. Thus, in our considered view, the revenue before reaching to the conclusion that such bill represents the bogus bill, it was incumbent to get the verification to establish the genuineness of the bill from the party. The necessary details from whom the assessee has purchased the gold bar were in the possession of the AO. But we note that, no such verification has been carried out by the assessee. Furthermore, the purchase of the gold bar out of the cash withdrawal from the bank and that too from a far off city appears to be bit unusual. It is for the reason that it is difficult for a prudent person to withdraw the cash from the bank in Bhuj and carry the same to Baroda for the purchase of gold bar. The assessee would have easily opted to make the payment through bank. This act of the assessee certainly creates suspicion about the genuineness of the transaction but no addition is warranted based on suspicion under the provisions of ITA no.1233/AHD/2018 A.Y. 2014-15 5 law until and unless, the same is established based on the documents and other material evidences. 11.1 As regards the gold bar purchased by the mother of the assessee, we note that the bill was issued in the name of the mother. Thus it is implied that the mother is the owner of the gold bar and therefore if any addition is to be made that can be made only in the hands of the mother and not in the hands of the assessee. Likewise, the revenue has not brought anything on record that the assessee has introduced his unaccounted cash in order to buy the gold bar in the name of his mother. To find out the truth, it was very necessary and essential for the revenue to get the confirmation from the RK Jewelers. But we note that no enquiry of whatsoever has been conducted about the purchase of gold bar from RK Jewelers by the authorities below. Thus, in such facts and circumstances, no addition is warranted in the hands of the assessee. 11.2 Moving further, the statement of Shri Chintan Pravin Morabia under section 131(1)(a) of the Act dated 16 th September 2013 wherein it was admitted by him to have taken the bogus bills to account for his unaccounted jewelry, cannot help the revenue. It is because Shri Chintan Pravin Morabia might be engaged in taking the bogus bills but that does not lead to draw an inference against the assessee that the assessee has also taken the bogus bills until and unless some supporting documents are brought on record that the assessee has shown the investments in the jewelry based on bogus bills. 11.3 In view of the above and after considering the facts in totality, we do not find any reason to uphold the finding of the authorities below. Accordingly the order of the learned CIT (A) is set aside with the direction to the AO to delete the addition ITA no.1233/AHD/2018 A.Y. 2014-15 6 made by him. Hence the ground of appeal of the assessee is allowed. 12. In the result, the appeal of the assessee is allowed. Order pronounced in the Court on 07/12/2021 at Ahmedabad. Sd/- Sd/- (RAJPAL YADAV) (WASEEM AHMED) VICE PRESIDENT ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 07/12/2021 Manish