Uttam Chand Jain, Hyderabad V. ACIT,Central Circle -5, Hyderabad

ITA 1530/HYD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2522 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 26-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 19-11-2013
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Search and seizure
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1530/HYD/2013 ASSESSMENT YEAR: 2009-10 UTTAM CHAND JAIN HYDERABAD [PAN: ABCPN2423K] VS ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-5 HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI K.J. RAO, DR DATE OF HEARING : 04-05-2017 DATE OF PRONOUNCEMENT : 09-05-2017 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-I, HYDERABAD, DATED 13-09-2013 ON THE ISSUE OF ADDITION OF RS. 7,17,787/- TOWARDS GOLD AND RS. 1,58,600/- TOWARDS SILVER AS UN-EXPLAINED I NVESTMENT. 2. BRIEFLY STATED, ASSESSEE IS PROPRIETOR OF M/S. UTTAM SILVER PALACE AND WAS DOING SILVER AND GOLD BUSINESS. DUR ING THE COURSE OF SEARCH AND SEIZURE OPERATIONS U/S. 132 OF THE INC OME TAX ACT [ACT] CONDUCTED AT THE BUSINESS AND RESIDENTIAL PREMISES OF ASSESSEE ON 05-06-2008, CERTAIN CASH AND EXCESS JEWE LLERY WAS IDENTIFIED. ASSESSEE HAS ADMITTED AN AMOUNT OF RS. 49, 18,454/- I.T.A. NO. 1530/HYD/2013 UTTAM CHAND JAIN :- 2 - : TOWARDS UN-ACCOUNTED INVESTMENT IN GOLD BULLION RS. 8,1 7,715/- IN SILVER AND BALANCE CASH. CONSEQUENT TO THE SEARCH P ROCEEDINGS AND DECLARATION U/S. 132(4), ASSESSEE FILED RETURN OF INCOME ON 31-01-2009 DECLARING TOTAL INCOME OF RS. 91,29,350/- WHICH INCLUDES AN AMOUNT OF RS. 76,77,235/- ADMITTED AS HIS UN- DISCLOSED INCOME. IN THE SCRUTINY PROCEEDINGS, AO MA DE AN ADDITION OF RS. 81,715/- AS CASH NOT DISCLOSED WHICH THE LD.CIT(A) DELETED. APART FROM THAT, ASSESSEE HAS REDUCED THE DIS CLOSURE BY AN AMOUNT OF RS. 7,17,787/- FROM THE AMOUNT OF DISCL OSURE MADE TOWARDS GOLD BULLION ON THE REASON THAT ASSESSEE HAD G OLD JEWELLERY WEIGHING 717.500 GMS., WHICH WAS MELTED AND VALUE O F GOLD BY WEIGHING 588.350 GMS., HAS NOT BEEN EXCLUDED, AS STAT ED IN THE DECLARATION U/S. 132(4). LIKE-WISE, OUT OF THE SILVER DECLARED OF RS. 8,17,715/-, ASSESSEE ADMITTED RS. 6,59,115/- AND FOR THE DIFFERENCE OF RS. 1,58,660/-, ASSESSEE HAD CLAIMED OPENING STOCK OF SILVER AND ON RECONCILIATION REDUCED THE DECLARATION. AO, HOWEVER, IN THE SCRUTINY PROCEEDINGS DID NOT AGREE AND BROUGHT THESE TWO AMOUNTS ALSO TO TAX. 3. BEFORE THE LD.CIT(A), ASSESSEE REFERRED TO THE STAT EMENT GIVEN DURING THE COURSE OF SEARCH AND A SLIP GIVEN BY THE P ERSON WHO MELTED THE GOLD ORNAMENTS, IN SUPPORT OF THE CONTENTIONS. LD.CIT(A) HOWEVER, DID NOT AGREE WITH THE CONTENTIONS, ON THE REASON THAT THERE IS NO EVIDENCE, CONFIRMED THE ADDITION S TOWARDS GOLD AND SILVER. 4. LD. COUNSEL REFERRING TO THE STATEMENT GIVEN ON 07 -07-2008 (PLACED IN THE PAPER BOOK AT PG. 13 TO 15) PARTICULARLY , TO QUESTION NO. 7 & 8 TO SUBMIT THAT IN THE COURSE OF SEARCH ITSEL F ASSESSEE HAS I.T.A. NO. 1530/HYD/2013 UTTAM CHAND JAIN :- 3 - : STATED THAT THE OPENING STOCK OF RS. 717.500 GMS. WAS C ONVERTED TO PURE GOLD WEIGHING 588.350 GMS. IT WAS SUBMITTED THA T LD.DDIT WHILE RECORDING THE STATEMENT ASKED FOR THE EVIDENCE W HICH WAS SUBSEQUENTLY PROVIDED, BUT WAS NOT ACCEPTED BY THE AUTH ORITIES. HE REFERRED TO THE CLOSING STOCK STATEMENTS OF EARLIER Y EARS, WHEREIN BOTH GOLD AND SILVER ARTICLES WERE SHOWN IN THE STOCK STATEMENTS. IT WAS THE SUBMISSION THAT ASSESSEE WAS HAVING THE OPE NING STOCK OF GOLD WEIGHING 717.500 GMS., AND SILVER OF 10.350 KGS., VALUE OF WHICH WAS REDUCED FROM THE DECLARED AMOUNT. IT WAS SU BMITTED THAT THE BALANCE OF THE AMOUNT U/S. 132(4) HAS BEEN DISC LOSED BY ASSESSEE ON WHICH THERE IS NO DISPUTE. 5. LD.DR, HOWEVER, RELIED ON THE ORDERS OF THE AUTHORI TIES AND ALSO SUBMITTED THAT ORNAMENTAL GOLD CANNOT BE CONVERTED TO GOLD BULLION AND THE STATEMENT OF ASSESSEE CANNOT BE ACCEPTE D AS SUCH. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE DOCUMENTS PLACED ON RECORD IN THE PAPER BOOK. ADMITTE DLY, ASSESSEE HIMSELF HAS STATED IN THE COURSE OF SEARCH IN THE STATEMENT U/S. 132(4) THAT STOCK OF 717.500 GMS., OF GO LD ORNAMENTS WERE MELTED DURING THE YEAR, WHICH YIELDED THE BULLION VALUED AT RS. 7,17,787/-. DDIT WANTED THE EVIDENCE OF SUCH CONVERSION BUT THE SAME WAS RECORDED IN THE 132(4) STA TEMENT. AS SEEN FROM THE STOCK STATEMENTS FILED IN EARLIER YEARS AL SO, ASSESSEE WAS SHOWING THE STOCK IN THE STATEMENTS OF ACCOUNTS. CONSEQUENTLY, WE ARE OF THE OPINION THAT WHAT ASSESSEE W AS TELLING FROM THE DATE OF SEARCH IS THE TRUTH. CONSEQUENTLY, ASS ESSEE IS CORRECT IN TAKING CREDIT FOR THE STOCK AVAILABLE AT THE BE GINNING OF THE YEAR WHILE ARRIVING AT THE UNEXPLAINED INVESTMENT. CONSIDERING I.T.A. NO. 1530/HYD/2013 UTTAM CHAND JAIN :- 4 - : THE FACT THAT ASSESSEE HAS HONOURED DECLARATION OF BALAN CE AMOUNT OF RS. 76,77,235/- ADMITTED IN THE COURSE OF SEARCH, WE ARE OF THE OPINION THAT ASSESSEE DESERVES CREDIT FOR THE OPENING STOCK AVAILABLE IN THE BUSINESS PREMISES. THE VALUE ADOPT ED BY ASSESSEE IS THE CONVERSION VALUE OF THE GOLD BULLION AND SILV ER. WHETHER THE GOLD ORNAMENTS CAN BE CONVERTED INTO BULLION OR NOT IS TO BE EXAMINED IN ANOTHER CASE, AS AO HAS NOT MADE OUT ANY CASE ON THAT ISSUE, NOR THE DDIT IN THE EARLIER PROCEEDINGS AN D DRS ARGUMENT ON A NEW ISSUE CANNOT BE ENTERTAINED NOW. WE ARE OF THE OPINION THAT ASSESSEE DESERVES CREDIT FOR THE OPENING STOCK SHOWN IN THE STATEMENTS IN EARLIER YEARS. IN THAT WAY, ASSE SSEES CONTENTIONS ARE TO BE UPHELD. IN VIEW OF THAT, WE DIREC T THE AO TO DELETE THE ADDITIONS TOWARDS THE BULLION OF RS. 7,17,7 87/- AND SILVER OF RS. 1,58,660/- AND ACCEPT THE AMOUNTS AS DI SCLOSED BY ASSESSEE IN THE RETURN OF INCOME. GROUNDS ARE ALLOWE D. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH MAY, 2017 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEM BER HYDERABAD, DATED 9 TH MAY, 2017 TNMM I.T.A. NO. 1530/HYD/2013 UTTAM CHAND JAIN :- 5 - : COPY TO : 1. UMA CHAND JAIN, HYDERABAD. C/O. SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, D.NO. 3- 6-643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 2. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -5, HYDERABAD. 3. CIT (APPEALS)-I, HYDERABAD. 4. CIT(CENTRAL), HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.