M/s. Ram Gopal Bansal(HUF), Kolkata V. DCIT, Central Circle - XXI, Kolkata, Kolkata

ITA 1268/KOL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6517 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 04-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: S K TULSIYAN
• Keywords: Unexplained investment; Unexplained expenditure; Document seized; Valuation report; Documents seized

Judgement Text

I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA CORAM : SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI ABRAHAM P. GEORGE (ACCOUNTANT MEMBER) I.T.A. NO.: 1268/KOL./2012 ASSESSMENT YEAR : 2005-2006 M/S. RAM GOPAL BANSAL (HUF)........................ .................APPELLANT 12/2, PARK MANSION, 3 RD FLOOR, 57A, PARK STREET, KOLKATA-700 016 [PAN : AACHR 7477 Q] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ..RESPONDENT CENTRAL CIRCLE-XXI, 18, RABINDRA SARANI, PODDAR COURT, KOLKATA-700 001 & I.T.A. NO.: 1279/KOL./2012 ASSESSMENT YEAR : 2009-2010 ASSISTANT COMMISSIONER OF INCOME TAX,.............. .....APPELLANT CENTRAL CIRCLE-XXI, KOLKATA, 18, RABINDRA SARANI, PODDAR COURT, KOLKATA-700 001 -VS._ M/S. RAM GOPAL BANSAL (HUF)........................ ............. RESPONDENT 12/2, PARK MANSION, 3 RD FLOOR, 57A, PARK STREET, KOLKATA-700 016 [PAN : AACHR 7477 Q] APPEARANCES BY: SHRI S.K. TULSIYAN, A.R., FOR THE ASSESSEE SHRI VARINDER MEHTA, CIT, D.R, FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : APRIL 21, 2014 DATE OF PRONOUNCING THE ORDER : APRIL 23, 2014 O R D E R PER ABRAHAM P. GEROGE : 1. THESE ARE APPEALS FILED BY THE ASSESSEE AND REVE NUE RESPECTIVELY. ASSESSEES APPEAL IS FOR ASSESSMENT YEAR 2005-06 AN D REVENUES APPEAL IS FOR ASSESSMENT YEAR 2009-10. BOTH ARE DIRECTED AGAI NST AN ORDER DATED I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 2 27.06.2012 OF LD. COMMISSIONER OF INCOME TAX (APPEA LS), CENTRAL-II, KOLKATA. 2. FIRST WE TAKE UP THE APPEAL OF ASSESSEE. GRIEVAN CE RAISED BY THE ASSESSEE IS THAT LD. CIT(APPEALS) CONFIRMED AN ADDI TION OF RS.44,00,000/- FOR ALLEGED UNEXPLAINED JEWELLERY, AN ADDITION OF R S.35,00,000/- FOR ALLEGED CASH LOANS AND AN ADDITION OF RS.16,43,861/ - FOR INVESTMENTS WITHOUT CONSIDERING THE AGRICULTURAL INCOME. 3. FACTS APROPOS ARE THAT THERE WAS A SEARCH AND SE IZURE OPERATION CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 30.04. 2008 AND CERTAIN OTHER SUBSEQUENT DATES. PURSUANT TO THE SEARCH, NOT ICES UNDER SECTION 153C WERE ISSUED TO THE ASSESSEE FOR VARIOUS YEARS. RETURN FILED BY THE ASSESSEE PURSUANT TO SUCH NOTICE, FOR THE IMPUGNED ASSESSMENT YEAR DECLARED AN INCOME OF RS.20,32,479/-. DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER MADE AN ANALYSIS OF THE SEIZED DOCUMENTS AND ISSUED A LETTER TO THE ASSESSEE ON 28.10.2010 I NDICATING THE VARIOUS AMOUNTS QUANTIFIED BY HIM FOR ADDITIONS. IN REPLY A SSESSEE FILED A CASH FLOW STATEMENT ALONG WITH A LETTER DATED 18.11.2010 . AFTER CONSIDERING THE SAME, ASSESSING OFFICER CAME TO A CONCLUSION TH AT THERE WAS NET TAXABLE INCOME OF RS.6,25,89,100/- ON ACCOUNT OF UN ACCOUNTED INVESTMENTS. SUMMARY OF THIS AS COMPILED FROM PAGE NO. 23 OF THE ASSESSMENT ORDER, IS REPRODUCED HEREUNDER FOR BREVI TY:- TOTAL UNACCOUNTED AMOUNT ESTIMATED 119187741 LESS : INCOME NOT CONSIDERED WHILE WORKING OUT INVESTMENT 28439335 INVESTMENT AFTER CONSIDERING INCOME 90748406 LESS : EXCESS CONSIDERED IN JEWELLERY 17986000 NET INVESTMENT 72762406 LESS : PAID FROM OTHER 1175207 I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 3 INDIVIDUAL FILES 71587199 LESS : EXCESS CONSIDERED IN DOMESTIC EXPENSES 78500 NET INVESTMENT AS PER INCOME & EXPENDITURE 71508699 ADD. : CASH SEIZED ON 01.05.2008 4579200 ADD. : CASH BALANCE ON 01.05.2008 AFTER SEIZURE OF RS.45,79,200 1423012 77510911 LESS: REFUND OF LOAN GIVEN EARLIER 9000000 68510911 LESS: FUND AVAILABLE AS ON 01.04.2002 5921810 NET TAXABLE UNACCOUNTED INVESTMENTS 62589101 4. APART FROM THE UNACCOUNTED INVESTMENTS MENTIONED ABOVE, ASSESSING OFFICER BASED ON AN ANALYSIS OF THE CASH FLOW STATEMENT FILED BY THE ASSESSEE, CAME TO A CONCLUSION THAT THERE WERE UNACCOUNTED EXPENDITURE OF RS.44,00,000/- AND UNACCOUNTED CASH LOAN ADVANCE OF RS.35,00,000/-. BREAK-UP OF THE UNACCOUNTED INVESTM ENTS AND PAYMENTS CONSIDERED BY THE ASSESSING OFFICER, IS AVAILABLE A T PAGE NO. 27 OF THE ASSESSMENT ORDER AND THIS IS REPRODUCED HEREUNDER: UNACCOUNTED INVESTMENT IN JEWELLERY 57947257 UNACCOUNTED INVESTMENT IN LAND 24901149 CASH LOAN GIVEN 3500000 OTHER UNACCOUNTED EXPENSES 4400000 TOTAL 90748406 TOTAL OF RECEIPTS & PAYMENTS 119187741 I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 4 5. WHILE ASSIMILATING THE CASH FLOW STATEMENT, ASSE SSING OFFICER ALSO REFUSED TO ACCEPT THE CLAIM OF ASSESSEE THAT HE HAD AN AGRICULTURAL INCOME OF RS.16,43,861/-. SINCE SUCH AGRICULTURAL INCOME W AS ALSO A PART OF THE INFLOW SHOWN BY THE ASSESSEE FOR EXPLAINING ITS INV ESTMENTS, AN ADDITION OF THE SAID AMOUNT WAS ALSO MADE. 6. ASSESSEE MOVED IN APPEAL BEFORE LD. CIT(APPEALS) WITH REGARD TO THE ADDITION OF RS.35,00,000/- FOR THE CASH LOAN, R S.44,00,000/- FOR ALLEGED UNACCOUNTED EXPENDITURE AND RS.16,43,861/- FOR NON-ACCEPTANCE OF AGRICULTURAL INCOME CLAIMED. ARGUMENT OF THE ASS ESSEE BEFORE LD. CIT(APPEALS) WAS THAT THE CASH LOAN AS WELL AS UNAC COUNTED EXPENDITURE CONSIDERED FOR ADDITION WHERE ALL PROPERLY EXPLAINE D IN THE CASH FLOW STATEMENT FILED. AS PER THE ASSESSEE WITHOUT POINTI NG OUT ANY DEFECT IN THE CASH FLOW STATEMENT, ASSESSING OFFICER HAD MADE THE ADDITION. LD. CIT(APPEALS) WAS OF THE OPINION THAT THE ARGUMENTS OF THE ASSESSEE HAD SOME MERITS. HOWEVER, ACCORDING TO THE LD. CIT(APPE ALS), INCOME DECLARED BY THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR WA S ONLY RS.20,32,479/-, WHEREAS ASSESSEE WAS TRYING TO JUST IFY UNEXPLAINED OUTFLOW OF RS.79,00,000/-. AS PER LD. CIT(APPEALS) ASSESSEE COULD NOT RECONCILE THESE FIGURES. IN THIS VIEW OF THE MATTER , HE CONFIRMED THE ADDITION OF RS.79,00,000/- MADE BY THE ASSESSING OF FICER. IN RESPECT OF THE CLAIM OF AGRICULTURAL INCOME, LD. CIT(APPEALS) WAS OF THE OPINION THAT SIMILAR GROUNDS IN ITS APPEALS FOR ASSESSMENT YEARS 2003-04, 2004-05, 2006-07 AND 2008-09 WERE WITHDRAWN BY THE ASSESSEE. LD. CIT(APPEALS) THUS CONFIRMED THE ADDITION OF RS.16,43,869/- ALSO. 7. NOW BEFORE US, LD. A.R. STRONGLY ASSAILING THE O RDERS OF AUTHORITIES BELOW, SUBMITTED THAT CASH FLOW STATEMENT FILED FOR VARIOUS FINANCIAL YEARS STARTING FROM 01.04.2002 TO 30.04.2008 PLACED AT PAGES 43 TO 49 OF THE PAPER BOOK, CLEARLY GAVE ALL THE DETAILS OF INV ESTMENTS MADE BY THE ASSESSEE. ACCORDING TO HIM, ASSESSING OFFICER HIMSE LF HAD ACCEPTED THE AVAILABILITY OF FUNDS OF RS.59,21,810/- ON 01.04.20 02, IN THE ASSESSMENT I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 5 ORDER. FURTHER ACCORDING TO HIM, AGRICULTURAL INCOM E RETURNED FOR FINANCIAL YEARS 2002-03 AND 2003-04 WERE NOT DISTUR BED BY THE ASSESSING OFFICER IN THE RESPECTIVE ASSESSMENTS. HENCE, THERE WAS NO REASON WHY THE OPENING SURPLUS OF RS.81,12,623/- AVAILABLE TO THE ASSESSEE ON 01.04.2004 SHOULD BE IGNORED. ACCORDING TO HIM, IF THE OPENING SURPLUS WAS ACCEPTED, JEWELLERY WORTH RS.44,00,000/- ACQUIR ED AND LOANS OF RS.35,00,000/- GIVEN, STOOD FULLY EXPLAINED. ACCORD ING TO HIM THE ADDITIONS WERE MADE IGNORING CASH FLOW STATEMENT FI LED. LD. CIT(APPEALS) FELL IN ERROR WHEN HE TRIED TO EQUATE THE RETURNED INCOME WITH THE OUTFLOW SHOWN IN A CASH FLOW STATEMENT. VIS-A-VIS T HE ADDITION FOR AGRICULTURAL INCOME, LD. A.R. SUBMITTED THAT THE CL AIM WAS DISBELIEVED DESPITE SUCH INCOME BEING ACCEPTED IN THE EARLIER Y EARS. 8. PER CONTRA, LD. D.R. SUBMITTED THAT OPENING SURP LUS OF RS.81,12,623/- WHICH THE ASSESSEE CLAIMED WAS NEVER PROVED. THEREFORE, ACCORDING TO HIM, THE INVESTMENT MADE DURING THE RE LEVANT PREVIOUS YEAR STOOD UNEXPLAINED. FURTHER AS PER THE LD. D.R., ASS ESSEE HAD NOT PRODUCED ANY EVIDENCE IN SUPPORT OF THE AGRICULTURAL INCOME. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS PER THE ASSESSING OFFICER, A SUM OF RS.44,00,000/- WAS UNACCOUNTED EXPENDITURE SHOWN BY THE ASSESSEE A ND RS.35,00,000/- WAS UNACCOUNTED CASH LOAN. IT IS AN ADMITTED POSITI ON THAT ASSESSEE HAD DURING THE COURSE OF ASSESSMENT PROCEEDINGS FILED A CASH FLOW STATEMENT BEFORE THE ASSESSING OFFICER. PERTINENT PART OF THE CASH FLOW STATEMENT UPTO 31.03.2005 IS REPRODUCED HEREUNDER: 2002- 03 INCOME EXPENDITURE /INVESTMENT DATE PARTICULARS AMOUNT DATE PARTIC ULARS AMOUNT 1.4.02 OPENING SURPLUS 5921810 AGRICULTURA L INCOME 1063334 22.11.2002 JEWELL ERY 754097 I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 6 OTHER INCOME AS PER RE 1089520 30.01.2003 JEWELL ERY 335723 TOTAL 8074664 TOTAL 1089820 31.03. 2003 CLOSING SURPLUS 6984844 2003- 2004 01.04. 2003 OPENING SURPLUS 6984844 30.09. 2003 JEWELL ERY 2,16,453 AGRICULTURA L INCOME 1127779 30.09.2003 JEWELL ERY 2,30,000 OTHER INCOME AS PER RE 1152139 30.09.2003 JEWELL ERY 7,05,686 TOTAL 9264762 1152,139 31.03. 2004 CLOSING SURPLUS 8112623 2004- 2005 01.04. 2004 OPENING SURPLUS 8112623 25.10.2004 JEWELL ERY 1200000 22.01.2005 JEWELL ERY 650000 04.02.2005 JEWELL ERY 50000 09.03.2005 LOAN GIVEN 2500000 AGRICULTURA L INCOME 1643861 21.03.2005 LOAN GIVEN 1000000 OTHER INCOME AS PER RE 2032479 31.03.2005 JEWELL ERY 2500000 TOTAL 11788963 7900000 31.03. 2006 CLOSING SURPLUS 3888963 I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 7 OPENING SURPLUS SHOWN BY THE ASSESSEE AS ON 01.04.2 002 WAS RS.59,21,810/-. ASSESSING OFFICER WHILE WORKING OUT THE NET TAXABLE UNACCOUNTED INVESTMENT OF RS.6,25,89,101/-, REPRODU CED AT PARA 3 ABOVE, HAS ACCEPTED THAT, THIS SUM WAS AVAILABLE WITH THE ASSESSEE ON 01.04.2002. ASSESSEE HAD SHOWN AGRICULTURAL INCOME FOR ASSESSMENT YEARS 2002-03 AND 2003-04 IN THE RETURNS FOR RESPECTIVE A SSESSMENT YEARS AND THIS WAS NOT DISTURBED. EVEN FOR IMPUGNED ASSESSMEN T YEAR, AGRICULTURAL INCOME OF RS.16,43,861/- RETURNED BY THE ASSESSEE H AS BEEN CONSIDERED FOR RATE PURPOSES IN THE COMPUTATION OF TOTAL INCOM E MADE BY THE ASSESSING OFFICER AT PAGE 29 OF THE ASSESSMENT ORDE R, WHICH IS REPRODUCED HEREUNDER:- COMPUTATION OF TOTAL INCOME RS. RS. INCOME FROM OTHER SOURCE INTEREST RECEIVED FROM BANK 2,931.00 INTEREST RECEIVED FROM PPF 10,295.00 13,226.00 LESS : EXEMPTED (PPF) 10,295.00 2,931.00 OTHER INCOME 79,00,000.00 GROSS TOTAL INCOME 79,02,931.00 LESS : DEDUCTION UNDER CHAPTER VIA(U/S. 80L) 2,931.00 79,00,000.00 ADD. : AGRICULTURAL INCOME (FOR RATE PURPOSE) 16,43,861.00 TOTAL INCOME 95,43,861.00 ROUNDED OFF 95,43,860.00 10. ONCE AGRICULTURAL INCOME IS ACCEPTED BY THE DEP ARTMENT, THEN THE ASSESSEE CANNOT BE RESTRAINED FROM TREATING IT AS A N INFLOW IN ITS CASH FLOW. ONLY OTHER AMOUNT SHOWN BY THE ASSESSEE AS A PART OF ITS INFLOW FOR I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 8 FINANCIAL YEARS 2002-03 AND 2003-04 WERE THE INCOME DECLARED BY IT IN THE RETURNS OF INCOME. THIS BEING SO, IN OUR OPINIO N THE OPENING SURPLUS FUNDS OF RS.81,12,623/- AVAILABLE WITH THE ASSESSEE AS ON 01.04.2004 CANNOT BE IGNORED. ONCE THIS IS TAKEN INTO CONSIDER ATION, IT IS CLEAR THAT THE SUM OF RS.44,00,000/- CONSIDERED AS UNACCOUNTED EXPENDITURE AND RS.35,00,000/- CONSIDERED AS UNACCOUNTED CASH LOAN STAND EXPLAINED. LD. CIT(APPEALS), IN OUR OPINION, FELL IN ERROR WHEN HE GAVE A FINDING THAT ASSESSEE COULD NOT RECONCILE THE RETURNED INCOME OF RS.20,32,479/- WITH THE SUM OF RS.79,00,000/- CONSIDERED FOR ADDITION B Y THE ASSESSING OFFICER. THE OUTFLOW WAS EXPLAINED BASED ON A CASH FLOW STATEMENT OF WHICH INCOME AS PER THE RETURN FORMED A PART. WE AR E THEREFORE, OF THE OPINION THAT THERE IS NO ROOM FOR THE ADDITION MADE BY THE ASSESSING OFFICER. 11. VIS-A-VIS THE ADDITION OF RS.16,43,861/- DISBEL IEVING THE AGRICULTURAL INCOME, WE ARE OF THE OPINION THAT THE AGRICULTURAL INCOME HAVING BEEN ACCEPTED BY THE DEPARTMENT FOR RATE PUR POSES WHILE COMPUTING THE TOTAL INCOME, IT COULD NOT BE IGNORED AS A SOURCE OF INFLOW. HENCE, AVAILABILITY OF RS.16,43,861/- WITH THE ASSE SSEE FOR EXPLAINING ITS INVESTMENTS OUGHT NOT HAVE BEEN DISBELIEVED. WE ARE , THEREFORE, OF THE OPINION THAT THE ADDITIONS MADE BY THE ASSESSING OF FICER ON THESE THREE ITEMS HAVE NO LEGS TO STAND. SUCH ADDITIONS STAND D ELETED. 12. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS AL LOWED. 13. NOW WE TAKE UP THE REVENUES APPEAL FOR ASSESSM ENT YEAR 2009-10. ONLY GRIEVANCE RAISED BY THE REVENUE IS THAT LD. CI T(APPEALS) REDUCED THE ADDITION OF RS.1,79,86,000/- MADE BY THE ASSESSING OFFICER FOR UNEXPLAINED INVESTMENT IN JEWELLERY TO RS.4,70,646/ -. 14. FACTS APROPOS ARE THAT ASSESSEE HAD OFFERED UNE XPLAINED INVESTMENTS OF RS.3,99,61,257/- IN JEWELLERY AS A P ART OF ITS INCOME FOR I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 9 TAXATION AND PAID TAX. HOWEVER, ASSESSING OFFICER E STIMATED VALUE OF SUCH INVESTMENT AT RS.5,79,47,257/- AND MADE AN ADDITION OF RS.1,79,86,000/-. ASSESSEE, WHEN IT WAS PUT ON NOTICE WITH REGARD TO PROPOSED ADDITION, SUBMITTED THAT SEIZED DOCUMENT RG/17, WHICH WAS THE BASIS FOR THE ADDITION ACTUALLY REFLECTED SALES MADE BY THE ASSES SEE AND NOT PURCHASES. AS PER THE ASSESSEE, PAGE 19 OF RG/17 AND PAGE 5 OF RG/11 REFLECTED BOTH PURCHASES IN CASH AND CHEQUES, AS WELL AS SALES MAD E IN CASH. ARGUMENT OF THE ASSESSEE WAS THAT ONCE THE PURCHASES WERE ACCEP TED, SALES OUGHT NOT HAVE BEEN IGNORED. SUCH EXPLANATIONS WERE NOT HOWEV ER ACCEPTED BY THE ASSESSING OFFICER. ACCORDING TO HIM, ASSESSEE COULD NOT PRODUCE SUFFICIENT PROOF IN SUPPORT OF THE CLAIM ON SALE OF JEWELLERY. ASSESSEE HAVING OFFERED INCOME OF RS.3,99,69,257/- AGAINST UNDISCLOSED INVE STMENT IN JEWELLERY, BALANCE OF RS.1,79,86,000/- WAS ADDED BY THE ASSESS ING OFFICER. 15. IN ITS APPEAL BEFORE THE LD. CIT(APPEALS), ARGU MENT OF THE ASSESSEE WAS THAT, IF THERE WERE PURCHASES OF THE NATURE ALL EGED MADE BY THE ASSESSING OFFICER, IT WOULD HAVE BEEN FOUND AT THE TIME OF SEARCH. ACCORDING TO THE ASSESSEE EACH OF THE SALE SHOWN IN RG/17 WERE EXPLAINED, AND LINKED WITH PURCHASES OF THE SAME IT EMS EARLIER MADE. SUCH PURCHASES WERE MENTIONED IN SEIZED DOCUMENTS. AS PER THE ASSESSEE, ASSESSING OFFICER HAD ADOPTED A PICK AND CHOOSE APP ROACH WHILE CONSTRUING THE SEIZED DOCUMENTS. LD. CIT(APPEALS) W AS APPRECIATIVE OF THESE CONTENTIONS. ACCORDING TO HIM, ASSESSEE WAS A BLE TO SHOW CORRESPONDING PURCHASES AGAINST THE CLAIM OF SALES. PAGE 26 OF THE SEIZED DOCUMENTS RG/17, RELIED ON BY THE ASSESSING OFFICER FOR MAKING THE ADDITION WAS WRITTEN BY THE ASSESSEE IN HIS OWN HAN DWRITING. AS PER LD. CIT(APPEALS) HAD IT BEEN PURCHASE, IT WAS NOT NECES SARY FOR THE ASSESSEE TO RECORD SUCH PURCHASES IN OWN HANDWRITING. FURTHE R, AS PER THE LD. CIT(APPEALS), IF THERE WERE SUCH PURCHASES THEN SUC H ITEMS OF JEWELLERY WOULD HAVE BEEN FOUND AT THE TIME OF SEARCH. THE IT EMS WHICH WERE MENTIONED AT PAGE NO. 26 IN RG/17 DID NOT FORM A PA RT OF THE JEWELLERY FOUND AT THE TIME OF SEARCH. THUS ACCORDING TO HIM, CLAIM OF THE ASSESSEE I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 10 THAT THE RELEVANT DOCUMENT MENTIONED SALE OF JEWELL ERY AND NOT PURCHASES WAS TO BE ACCEPTED. HOWEVER, HE HELD THAT ASSESSEE HAD RECEIVED A SURPLUS OF RS.4,70,646/- ON SALE OF JEWE LLERY WHEN COMPARED TO THE COST OF PURCHASE AND DIRECTED THE ASSESSING OFF ICER TO ASSESS SUCH AMOUNT TO SHORT-TERM CAPITAL GAINS TAX. 16. NOW BEFORE US, LD. D.R. STRONGLY ASSAILING THE ORDER OF LD. CIT(APPEALS) SUBMITTED THAT THE SEIZED DOCUMENTS RG /17 DID NOT AT ANY PLACE MENTION THAT IT PERTAINED TO ANY SALES AFFECT ED BY THE ASSESSEE. ON THE OTHER HAND, ACCORDING TO HIM, ASSESSING OFFICER HAD CORRECTLY MADE A WORK-OUT OF THE UNACCOUNTED SALES AS AVAILABLE AT P AGE 26 OF THE SEIZED DOCUMENT RG/17. ASSESSEE COULD NOT CORROBORATE ITS CLAIM THAT THE AMOUNTS MENTIONED IN PAGE 26 OF RG/17 WERE OF ANY S ALES AFFECTED BY IT. SINCE THE ASSESSEE HAD OFTEN INDULGED IN THE PRACTI CE OF MAKING PURCHASES AND SALES OF JEWELLERY, OUTSIDE ITS BOOKS, REASONIN G GIVEN BY THE ASSESSEE CANNOT BE BELIEVED. THEREFORE, ACCORDING TO HIM, TH E ADDITION WAS RIGHTLY DONE BY THE ASSESSING OFFICER. 17. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND ALSO GONE THROUGH THE RELEVANT PAGES IN THE PAPER BOOK FILED BY THE ASSESSEE. UNACCOUNTED JEWELLERY WORTH RS.5,79,47,257/- WAS ESTIMATED BY THE ASSESSING OFFICER, WHEREAS WHAT WA S ADMITTED BY THE ASSESSEE WAS RS.3,99,61,257/- ONLY. THE DIFFERENCE BETWEEN THE ASSESSEE AND THE ASSESSING OFFICER THUS CAME TO RS.1,79,86,0 00/- WHICH WAS SUBJECTED TO AN ADDITION. ARGUMENT OF THE ASSESSEE IN THIS REGARD WAS THAT PAGE 26 OF THE SEIZED DOCUMENTS MARKED AS RG/17 WER E SALES EFFECTED AND NOT PURCHASES MADE BY IT. ASSESSING OFFICER DEC LINED TO ACCEPT THIS CONTENTION FOR THE REASON THAT ASSESSEE COULD NOT P RODUCE EVIDENCE IN SUPPORT OF SUCH SALES. NARRATIONS IN PAGE 26 OF RG/ 17 IS REPRODUCED BY US HEREUNDER:- 17,80,000 SOLITARY TOPS 10,51,000 CHURI I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 11 4,65,000 HEART NECK 4,24,000 PANNA SET 9,000 TURMULI 2,61,000 CHURI 36,96,000 SET 3,10,000 SET TOTAL : 86,96,000/- 83,00,000/ - BALANCE : 3,96,000/ - 98,000/ - MOT I BRACELET RS.4,94,000/- RS.1,99,000/- SET RS.6,93,000/- ASSESSEE HAD ALSO FURNISHED A STATEMENT WHICH GAVE PURCHASE MADE WITH REFERENCE TO THE ITEMS OF SALES. THESE ARE REPRODUC ED HEREUNDER:- SALES OF JEWELLERY REF. RG/17 PG. 26 ITEMS VALUE PURCHASE REFERENCE BILL DATE AMOUNT SOLITAIR TOPS 1780000 RG/8 PG 3 04.02.2007 1685712 CHURI 1051000 RG/8 PG 6 21.05.2007 964780 HEART NECKLESS 1165000 RG/17 PG 56 19.07.2007 1047159 PANNA SET 424000 RG/11 PG 7 & RG 8 PG 30 425095 TURMULI 9000 CHURI 261000 RG/11 PG 7 385645 SET 4006000 RG/8 PG 6 21.05.2007 3858963 MOTI BRACELET 98000 RG/4 PG 36 55000 SET 199000 RG/4 PG 36 100000 TOTAL 8993000 8522354 I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 12 THUS FOR EVERY ITEM MENTIONED IN PAGE 26 OF RG/17, ASSESSEE WAS ABLE TO GIVE A PURCHASE REFERENCE, WHICH AGAIN FORMED PART OF THE SEIZED RECORDS. HAD THE FIGURES BEEN AGAINST PURCHASES, WITHOUT DOU BT, SUCH ITEMS WOULD HAVE BEEN AVAILABLE AS A PART OF THE JEWELLERY FOUN D AT THE TIME OF SEARCH. LD. CIT(APPEALS) HAD VERIFIED THE VALUATION REPORT OF THE DEPARTMENTAL VALUER FOR THE JEWELLERY FOUND AT THE TIME OF SEARC H. NONE OF THE ITEMS WHICH WERE MENTIONED AT PAGE 26 OF RG/17 FORMED A P ART OF SUCH ITEM. WHEN THE ITEMS WERE NOT FOUND AT THE TIME OF SEARCH , IN OUR OPINION, THE ONLY PRESUMPTION THAT CAN BE TAKEN IS THAT WHAT WAS DEPICTED IN THE RELEVANT SEIZED DOCUMENT WERE ONLY SALES. IT IS NOT DISPUTED THAT THE RELEVANT PAGE 26 OF SEIZED RECORD RG/17 WAS WRITTEN IN ASSESSEES OWN HANDWRITING. PREPONDERANCE OF PROBABILITY IS THAT W HAT WAS MENTIONED IN THE RELEVANT PAGE NO. 26 OF RG/17 WERE ONLY ITEMS W HICH WERE SOLD AND NOT PURCHASED. THOUGH THE ASSESSING OFFICER HAD TRI ED TO GET CONFIRMATION FROM ONE JEWELLER NAMED M/S. R.G. BANSAL & GROUP, F OR THE TRANSACTIONS, IT IS ADMITTED BY THE ASSESSING OFFICER HIMSELF THAT T HE ITEMS MENTIONED IN PAGE 26 OF RG/17 WERE NOT A PART OF THE TRANSACTION S ACCEPTED BY THE SAID JEWELLER. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPIN ION THAT LD. CIT(APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION AND DIRECTING THE ASSESSING OFFICER TO CONSIDER ONLY THE GAINS ARISIN G OUT OF THE SALE OF JEWELLERY FOR TAXATION. WE DO NOT FIND ANY REASON T O INTERFERE WITH THE ORDER OF LD. CIT(APPEALS). 18. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 19. TO SUMMARIZE THE RESULT, THE APPEAL OF THE ASSE SSEE IS ALLOWED, WHEREAS THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DAY OF APRIL, 2014. SD/- SD/- MAHAVIR SINGH ABRAHAM P. GEORGE (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 23 RD DAY OF APRIL, 2014 I.T.A. NO.: 1268/KOL./20 12 ASSESSMENT YEAR : 2005-2006 & ITA NO. 1279/KOL/2012 ASSESSMENT YEAR : 2009-201 0 PAGE 1 TO 13 13 COPIES TO : (1) M/S. RAM GOPAL BANSAL (HUF), 12/2, PARK MANSION, 3 RD FLOOR, 57A, PARK STREET, KOLKATA-700 016 (2) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-XXI, 18, RABINDRA SARANI, PODDAR COURT, KOLKATA-700 001 , (3) CIT(APPEALS) (4) CIT (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.