BHARATI JEWELLERS, MUMBAI V. ACIT CIR 19(2), MUMBAI

ITA 1380/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83701 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 28-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 15-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Assessee Lawyers: S D CHHEDA
• Keywords: Business income
• Section: 133A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G B ENCH, MUMBAI ! , ' #$ % % % % , &' . % . () . % . #$ * BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ./I .T.A. NO.1380/MUM/2011 ( + + + + / ASSESSMENT YEAR : 2007-08 BHARATI JEWELLERS, SHOP NO. 5-6, RIDDHI SIDDHI BUILDING, 1 ST GOATHAN LANE, SANTACRUZ (W), MUMBAI / VS. THE ACIT CIR 19(2), MUMBAI $, ' ./ - ./ PAN/GIR NO. : AAAFB 5860D ( ,. / APPELLANT ) .. ( /0,. / RESPONDENT ) ,. 1 / APPELLANT BY: SHRI S.D. CHHEDA /0,. 2 1 / RESPONDENT BY: SMT. PARMINDER 2 3)' / DATE OF HEARING :28.08.2014 45+ 2 3)' / DATE OF PRONOUNCEMENT :03.09.2014 #6 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-30, MUMBAI DT.24.12.2010 PERTAINING TO A.Y.2 007-08. 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE AS SESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 29,53,089/-. ITA NO. 1380/M/2011 2 3. THE ASSESSEE IS A DEALER IN GOLD ORNAMENTS AND A LSO DOES JOB WORK ON ACCOUNT OF GOLD ORNAMENTS. THE RETURN FOR THE YE AR WAS FILED ON 22.10.2007 DECLARING TOTAL INCOME AT RS. 42,65,591/ -. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT. 3.1. THERE WAS A SURVEY OPERATION U/S. 133A OF THE ACT ON 17.10.2006. DURING THE SURVEY OPERATION, PHYSICAL STOCK TAKING WAS DONE, CERTAIN ITEMS WERE FOUND IN EXCESS AND AT THE SAME TIME CER TAIN ITEMS WERE FOUND LESS. THE ASSESSEE WAS CONFRONTED WITH THE PHYSICA L STOCK AND THE BOOK STOCK AT THE TIME OF SURVEY. THE ASSESSEE SHOWED H IS INABILITY TO RECONCILE THE SAME AT THE TIME OF SURVEY. HOWEVER, HE DECLARED RS. 35 LAKHS AS INCOME OVER AND ABOVE HIS NORMAL BUSINESS INCOME. 3.2. DURING THE COURSE OF THE SCRUTINY ASSESSMENT P ROCEEDINGS, THE ASSESSEE FILED A DETAILED WORKING RECONCILING THE P HYSICAL STOCK AND THE BOOK STOCK AS ON THE DATE OF SURVEY AND REWORKED TH E ADDITIONAL INCOME AT RS. 3,59,000/- INSTEAD OF RS. 35 LAKHS. THE REC ONCILIATION STATEMENT DID NOT FIND FAVOUR WITH THE AO WHO PROCEEDED BY THE FA CT THAT THE ASSESSEE HAS HIMSELF DECLARED ADDITIONAL INCOME OF RS. 35 LA KHS AND SINCE HE HAS NOT OFFERED THE ENTIRE INCOME IN HIS RETURN INSTEAD THE ASSESSEE HAS OFFERED ONLY RS. 5,46,911/-. THE AO ADDED THE DIFFERENCE A T RS. 29,53,089/-. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 5. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. T HE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY STATED THAT DUE TO CERTAIN CLERICAL ERRORS OCCURRED IN PHYSICAL QUANTITY PREPARED BY SURVEY STAFF ON TH E DATE OF SURVEY, A MISTAKE HAS ARISEN. IT IS THE SAY OF THE LD. COUNSE L THAT ITEMS OF 22 CARAT HAS BEEN SHOWN AS ITEMS OF 24 CARATS. THE LD. COUN SEL FURTHER SUBMITTED ITA NO. 1380/M/2011 3 THAT ON REALIZING THE MISTAKE, THE ASSESSEE FILED A DETAILED RECONCILIATION OF STOCK STATEMENT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS ITSELF. IT IS THE SAY OF THE LD. COUNSEL THAT THE ENTIRE ADDI TION HAS BEEN MADE ONLY ON THE BASIS OF THE STATEMENT RECORDED AT THE TIME OF SURVEY WHICH HAS NO EVIDENTIARY VALUE THEREFORE THE ADDITION MADE ON TH E BASIS OF THE SAID STATEMENT DESERVES TO BE DELETED. 6. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE FINDINGS OF THE LOWER AUTHORITIES. IT IS THE SAY OF THE LD. DR THAT THE ASSESSEE SHOULD HAVE FILED THE RECONCILIATION STATE MENT AT THE TIME OF SURVEY ITSELF FAILING WHICH THE AO IS VERY MUCH JUS TIFIED IN MAKING THE ADDITION. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND THE RELEVANT MATERIAL EVIDENCES BROUGHT ON RECORD B EFORE US. IT IS AN UNDISPUTED FACT THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF THE STATEMENT OF THE ASSESSEE GIVEN AT THE TIME OF THE SURVEY. AT THE TIME OF THE SURVEY ITSELF, THERE WERE CERTAIN ITEMS WHICH W ERE FOUND IN EXCESS WHEREAS AT THE SAME TIME THERE WERE ITEMS WHICH WER E FOUND LESS. THE MAJOR DIFFERENCE IS BETWEEN GOLD OF 24 CARAT, 22 CA RAT AND 18 CARAT. ONCE THE ASSESSEE HAD FILED A DETAILED RECONCILIATION ST ATEMENT AT THE TIME OF THE ASSESSMENT PROCEEDINGS, THE AO SHOULD HAVE EXAMINED THE RECONCILIATION STATEMENT WITH THE BOOKS OF ACCOUNTS OF THE ASSESSE E. THE AO SIMPLY PROCEEDED BY THE STATEMENT MADE AT THE TIME OF SURV EY. 7.1. HONBLE SUPREME COURT IN THE CASE OF CIT VS S. KHADER KHAN SON IN APPEAL (CIVIL) NOS. 13224 OF 2008 & 6747 OF 2012 HAS HELD THAT SECTION 133A DOES NOT EMPOWER ANY INCOME TAX OFFICE R TO EXAMINE ANY PERSON ON OATH. THEREFORE, THE STATEMENT RECORDED U/S. 133A OF THE ACT IS NOT GIVEN ANY EVIDENTIARY VALUE. THE HONBLE SUPRE ME COURT FURTHER ITA NO. 1380/M/2011 4 STATED THAT THE MATERIALS COLLECTED AND THE STATEME NT RECORDED DURING THE SURVEY U/S. 133A ARE NOT CONCLUSIVE PIECE OF EVIDEN CE BY ITSELF. DRAWING SUPPORT FROM THIS DECISION OF THE HONBLE SUPREME C OURT, IN OUR CONSIDERED OPINION, THE STATEMENT OF THE ASSESSEE W OULD NOT AUTOMATICALLY BIND UPON THE ASSESSEE. WE FURTHER FIND THAT THE A SSESSEE HAS GIVEN A DETAILED RECONCILIATION STATEMENT AND THE AO HAS NO T POINTED OUT ANY MATERIAL DEFECT IN THE SAID RECONCILIATION STATEMEN T. ADDITIONS MADE MERELY ON THE BASIS OF THE STATEMENT GIVEN AT THE T IME OF SURVEY CANNOT BE UPHELD. WE, ACCORDINGLY SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION OF RS. 29,53,0 89/-. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD SEPTEMBER, 2014 SD/- SD/- (S.T.M. PAVALAN ) (N.K. BILLAIYA) #$ / JUDICIAL MEMBER ' #$ / ACCOUNTANT MEMBER MUMBAI; 7# DATED : 3 RD SEPTEMBER, 2014 . . ./ RJ , SR. PS ITA NO. 1380/M/2011 5 #6 #6 #6 #6 2 22 2 /3 /3 /3 /3 8+3 8+3 8+3 8+3 / COPY OF THE ORDER FORWARDED TO : 1. ,. / THE APPELLANT 2. /0,. / THE RESPONDENT. 3. 9 ( ) / THE CIT(A)- 4. 9 / CIT 5. :; /3 , , / DR, ITAT, MUMBAI 6. ;& < / GUARD FILE. #6 #6 #6 #6 / BY ORDER, 03 /3 //TRUE COPY// = == = / > > > > (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI