CHANDABEN SHYAM PODDAR, MUMBAI V. ACIT CC 17 & 28, MUMBAI

ITA 1518/MUM/2009

• Counselvise Citation: 151819914 RSA 2009
• Duration Of Justice: 2 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 05-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SATBIR SINGH
• Keywords: Business income; Income from undisclosed sources; Search and seizure; Revised return
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI R.V. EASWAR, PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1518/MUM/2009 (ASSESSMENT YEAR: 2006-07) SMT. CHANDBEN SHYAM PODDAR ACIT, CENTRAL CIRCLE 17 & 28 M/S. POOJA AGRO INDUSTRIES AAYAKAR BHAVAN, M.K. ROA D 252, WALKESHWAR ROAD, KIRSHAN VS. MUMBAI 400020 BHAVAN, MUMBAI 400006 PAN - AAAEP 0579 K APPELLANT RESPONDENT APPELLANT BY: SHRI DHARMESH SHAH RESPONDENT BY: SHRI SATBIR SINGH O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A) CENTRAL IV, MUMBAI DATED 08.12.2008. 2. ASSESSEE RAISED THE FOLLOWING GROUND: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.6,0 4,550/- AS UNDISCLOSED INCOME. THE LD. AO HAD ADDED THE SAID A MOUNT ON THE GROUNDS THAT THE SAME WAS NOT ACCOUNTED AND DECLARE D BY THE APPELLANT IN HER INCOME TAX RETURN, WHEREAS, THE AP PELLANT HAS ACTUALLY ACCOUNTED FOR THE SAME AND DECLARED IT AS A PART OF HER WEALTH TAX RETURN. 3. BRIEFLY STATED, ASSESSEE WAS SEARCHED UNDER SECTION 132 OF THE I.T. ACT ON 07.02.2006. THE LOCKER MAINTAINED IN THE BAN K WAS ALSO OPENED SUBSEQUENTLY ON 04.03.2006. INVENTORY OF JEWELLERY ITEMS ON THE DATE OF SEARCH AS WELL AS INVENTORY OF THE ITEMS AVAILABLE IN THE LOCKER WAS MADE. ASSESSEE EXPLAINED THAT IN THE COURSE OF STATEMENT UNDER SECTION 132(4) THAT TOTAL WEIGHT OF GOLD DECLARED IN THE WEALTH TAX RET URN MATCHES WITH THE GOLD JEWELLERY FOUND AT THE TIME OF SEARCH WITH MINOR VA RIATION. HOWEVER, IN 2 RESPONSE TO QUESTION NO. 5 IT WAS STATED THAT THE D IAMOND JEWELLERY VALUED AT ` 6,04,550/- WAS UNACCOUNTED AND ADMITTED AS INCOME I N THE STATEMENT. ASSESSEE IS PROPRIETOR OF M/S. POOJA AGR O INDUSTRIES AND APART FROM BUSINESS INCOME SHE ALSO HAD INCOME FROM OTHER SOURCES. HOWEVER, AT THE TIME OF FILING RETURN SHE DID NOT ADMIT THE INC OME DECLARED AND RETURN WAS FILED FOR INCOME OF ` 2,15,260/-. THE A.O. PURSUED THE ISSUE AND ASKED FOR RECONCILIATION OF JEWELLERY FOUND DURING THE CO URSE OF SEARCH WITH THAT OF WEALTH TAX RETURN FILED EARLIER. INSTEAD OF RECONCI LING THE JEWELLERY, ASSESSEE FILED A REVISED RETURN ON 27.12.2007 VIDE ACKNOWLED GEMENT NO. 268 OFFERING THE AMOUNT OF ` 6,04,550/- AS ADDITIONAL INCOME. THE A.O. VIDE THE ASSESSMENT PASSED ON THE SAME DAY DISCUSSED THE SEQ UENCE OF EVENTS AND ASSESSED THE TOTAL INCOME AT ` 8,19,816/- IN A WAY ACCEPTING THE REVISED RETURN. HOWEVER, ASSESSEE PURSUED THE MATTER IN APP EAL BEFORE THE CIT(A) CONTESTING THAT THE INCOME WAS DECLARED IN THE WEA LTH TAX RETURN AND THE ADDITION OF ` 6,04,550/- WAS NOT CORRECT. IT WAS ALSO CONTESTED THAT ASSESSEE HAS NOT FILED REVISED RETURN BUT ONLY REVISED LETTE R. 4. THE CIT(A), AFTER CONSIDERING THE SUBMISSIONS AND E XAMINING THE RECORD HAS GIVEN THE FOLLOWING FINDINGS VIDE PARA 6 OF THE ORDER: - 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AND I FIND THAT AN ATTEMPT HAS BEEN MADE BY THE APPELLANT TO MISLEA D THE DEPARTMENT BY OFFERING AN AMOUNT OF RS.6.04 LACS ON ACCOUNT OF UNDISCLOSED INVESTMENT IN DIAMOND JEWELLERY IN HER STATEMENT U/S. 132(4) A STATEMENT GIVEN ON OATH WITHOUT ANY PRES SURE. SHE DID NOT OFFER THE SAME AMOUNT IN HER RETURN OF INCOME FILED SUBSEQUENT TO SEARCH BUT DURING THE ASSESSMENT PROCEEDINGS, IN FA CT ON THE SAME DAY AS THE ASSESSMENT ORDER IS PASSED, SHE FILES A REVISED RETURN WHERE THE SAID AMOUNT IS OFFERED AS AN INCOME, DECL ARED BY HER U/S. 132(4) RECORDED ON 04.03.2006. WHEN THE ASSESSMENT WAS MADE BY THE AO TAKING COGNIZANCE OF THE REVISED RETURN FILE D BY ADDING THE SAME AS HER UNACCOUNTED INCOME, THE APPELLANT IS AG GRIEVED FOR NO PLAUSIBLE REASON AND IS IN APPEAL. THE SUBMISSION M ADE BY THE LD. AR THAT NO REVISED RETURN WAS FILED BUT THE SAID IN VESTMENT IN DIAMOND JEWELLERY WAS OFFERED FOR TAXATION, DURING THE ASSESSMENT PROCEEDINGS BY MEANS OF A LETTER ONLY, IS COMPLETEL Y UNTRUE AND CONTRARY TO FACTS. I HAVE PERSONALLY SEEN THE ASSES SMENT RECORD AND I FIND THAT A REVISED RETURN WAS FILED ON 27.12.2007 VIDE ACKNOWLEDGEMENT NO. 268 OFFERING RS.604550/- AS ADDITIONAL 3 INCOME DECLARED AS PER 132(4) OF THE I.T. ACT. HENC E, THE LD.AR IS NO BEING TRUTHFUL IN HIS WRITTEN SUBMISSION. ON THE CA REFUL CONSIDERATION OF THE FACTS, I HAVE NO HESITATION IN UPHOLDING THE ADDITION OF RS.604550/- OFFERED BY THE APPELLANT HERSELF IN THE REVISED RETURN OF INCOME FILED ON THE BASIS OF STATEMENT RECORDED U/S . 132(4) AT THE TIME OF SEARCH FOR INVESTMENT IN JEWELLERY. IN THE CIRCUMSTANCES, THE GROUND OF APPEAL STANDS DISMISSED. 5. THE CIT(A) WAS OF THE OPINION THAT SINCE THE SAME WAS OFFERED BY THE ASSESSEE IN THE REVISED RETURN THERE IS NO GRIE VANCE TO THE ASSESSEE AND ACCORDINGLY,THE APPEAL WAS DISMISSED. ASSESSEE IS I N APPEAL. 6. DURING THE COURSE OF ARGUMENT THE LEARNED A.R. REFE RRED TO THE AMOUNT VALUED AT THE TIME OF SEARCH AT THE RESIDENC E AND BANK LOCKER AND SUBMITTED THAT MOST OF THE JEWELLERY ITEMS BELONGS TO MS.ALKA PODDAR, DAUGHTER-IN-LAW OF ASSESSEE AND THESE ITEMS WERE RE CONCILABLE WITH THE WEALTH TAX RETURN DECLARED. IT WAS FURTHER SUBMITTE D THAT THERE WAS PRESSURE BY THE DEPARTMENT FOR DISCLOSURE AND ASSES SEE WAS HARASSED BY THE RAIDING AUTHORITIES TO DECLARE JEWELLERY AMOUNT . IT WAS FURTHER SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS ALSO ASSESSE E WAS COMPELLED TO FILE REVISED RETURN AND THEREFORE ASSESSEE SHOULD BE GIV EN RELIEF OF THE AMOUNT DISCLOSED WRONGLY. 7. THE LEARNED D.R., HOWEVER, SUBMITTED THAT THERE WAS NO PRESSURE EXERTED BY THE DEPARTMENT AS CAN BE SEEN FROM THE R ECORD ASSESSEE VOLUNTARILY STATED UNDER SECTION 132(4) AND FURTHER FILED REVISED RETURN, THEREFORE, THERE IS NO GRIEVANCE. 8. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE ANNE XURE PREPARED AT THE TIME OF SEARCH OPERATION THE JEWELL ERY VALUED BY SHRI NANDLAL H. JAVERI, VALUER AT ` 12,01,940/- WAS INVENTORISED ON 07.02.2006 AND THE SAME JEWELLERY WAS ALSO RETURNED TO THE ASS ESSEE AND NOT SEIZED. VIDE ANOTHER ANNEXURE PREPARED ON 04.03.2006 WHEN T HE LOCKER WAS OPENED THERE WAS GOLD JEWELLERY WEIGHTING 1436 GMS. VALUED AT 11.02 LAKHS AND DIAMOND WORTH ` 1,47,200/- AVAILABLE IN THE BANK LOCKER. CONSEQUENT TO BOTH THESE INVENTORIES THE STATEMENT UNDER SECT ION 132(4) WAS RECORDED 4 AND VIDE QUESTION NO. 5 ASSESSEE ADMITTED THAT DIAM OND JEWELLERY VALUING ` 2,71,300/- WEIGHING AT 13.04 CARAT AND 8.40 CARAT VALUED AT ` 1,86,000/- FOUND AT THE RESIDENCE AND DIAMOND JEWEL LERY OF 8.20 CARAT VALUING AT ` 1,47,250/- IN THE LOCKER, TOTALLING TO ` 6,04,550/- WAS DECLARED AS INCOME OF THE CURRENT YEAR. BEFORE THE STATEMENT S ASSESSEE VIDE QUESTION NO. 4 EXTRACTED IN PAGE NOS. 1 & 2 OF THE ASSESSMENT ORDER AGREED THAT MOST OF THE GOLD ORNAMENTS MENTIONED AT SR. NO . 1 TO 9 ARE NOT MATCHING WITH THE WEALTH TAX RETURN/ VALUATION REPO RT. THEREFORE SHE REQUESTED FOR REBATE OF GOLD ITEMS AS PER WEIGHT AN D NOT AS PER ITEMS. SINCE SHE DECLARED GOLD OF 1354.700 GMS THE JEWELLERY FO UND WITH FAMILY MEMBERS OF 1100 GMS. AND AT RESIDENCE TOTALLING TO 1436 GMS. WAS CONSIDERED WITHIN THE LIMITS DECLARED BY HER. THERE FORE, SHE DECLARED THE DIAMOND JEWELLERY AS UNDISCLOSED AMOUNT UNDER SECTI ON 132(4). FOR THE REASONS BEST KNOWN TO THE ASSESSEE, THE AMOUNT SO D ECLARED WAS NOT DISCLOSED IN THE RETURN FILED AND WHEN THE A.O. ASK ED TO RECONCILE THE WEALTH TAX BY ISSUING VARIOUS NOTICES SHE HAS NOT R ECONCILED THE JEWELLERY BUT FILED REVISED RETURN ON THE LAST DAY ADMITTING THAT AMOUNT. THAT IS WHY THE A.O. RECORDED THESE FACTS AND ACCEPTED THE REVI SED RETURN. CONSIDERING THE SEQUENCE OF EVENTS WE ARE OF THE OPINION THAT A SSESSEE HAS VOLUNTARILY ADMITTED THE INCOME UNDER SECTION 132(4) AND FAILED TO DECLARE THE SAME IN THE RETURN ORIGINALLY FILED. THERE WAS TIME GAP OF ALMOST A MONTH BETWEEN THE INVENTORY OF JEWELLERY PREPARED AT HOME AND INV ENTORY OF BANK LOCKER. A.O. TRIED TO RECONCILE THE ABOVE TWO INVENTORIES W ITH THAT OF THE WEALTH TAX RETURN FILED. ASSESSEE ALSO ADMITTED THAT SOME OF THE JEWELLERIES WERE WORN BY THE FAMILY MEMBERS AND ASKED FOR CREDIT OF ONLY GOLD ORNAMENTS WHICH MORE OR LESS TALLIED BY WEIGHT WITH THAT OF T HAT ITEMS DECLARED IN THE WEALTH TAX RETURN. THERE WAS NO ADDITION OF GOLD JE WELLERY. THEREFORE THE ALLEGATION THAT ASSESSEE WAS PRESSURISED FOR DECLAR ATION OF THE AMOUNT AND FURTHER ASSESSEE WAS COMPELLED TO FILE REVISED RETU RN HAS NO BASIS AS THE A.O. SEEMS TO HAVE ASKED FOR RECONCILIATION OF THE DECLARED AND FOUND ITEMS. THEREFORE, AS RIGHTLY OBSERVED BY THE CIT(A) , THERE IS NO PLAUSIBLE REASON FOR GRIEVANCE TO CONTEST IN APPEAL. SINCE AS SESSEE HAS NOT RECONCILED 5 THE ITEMS FOUND WITH THAT OF THE WEALTH TAX RETURN AT ANY POINT OF TIME AND SINCE ASSESSEE FILED REVISED RETURN BEFORE COMPLETION OF ASSESSMENT, WHICH WAS ACCEPTED BY THE A.O., WE FIND NO REASON TO INTERFERE WITH THE ORDERS OF THE CIT(A). THE GROUND IS REJECT ED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE 2011. SD/- SD/- (R.V. EASWAR) (B. RAMAKOTAIAH) PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH JUNE 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CENTRAL IV, MUMBAI 4. THE CIT CENTRAL RANGE-II, MUMBAI CITY 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.