Shri Paresh Naranbhai Gajera, Ahmedabad V. The DCIT, Central Circle-2(1), Ahmedabad

ITA 2480/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0603 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-09-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 21-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 2480/AHD/2013 (ASSESSMENT YEAR: 2011-12) SHRI PARESH NARANBHAI GAJERA A-27, HARIOM SOCIETY, NR. SURJIT SOCIETY, NR. SURJIT SOCIETY INDIA COLONY ROAD, BAPUNAGAR, AHMEDABAD-380024 V/S DCIT, CENTRAL CIRCLE-2(1), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ABNPG1713A APPELLANT BY : SHRI PARIN SHAH, AR RESPONDENT BY : SHRI RAJ DEEP SINGH, SR. D.R . ( )/ ORDER DATE OF HEARING : 19 -09-201 6 DATE OF PRONOUNCEMENT : 21 -09-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE LD. CIT(A)-III, AHMEDABAD DATED 02.09. 2013 PERTAINING TO A.Y. 2011-12. ITA NO. 2480 /AHD/2013 . A.Y. 2011-1 2 2 2. THE GRIEVANCE OF THE ASSESSEE IS TWOFOLD. GROUND NO . 1 RELATES TO THE ADDITION OF RS. 2,05,350/- AND THE SECOND GROUND RE LATES TO THE ADDITION OF RS. 4,02,316/-. 3. A SEARCH ACTION WAS CARRIED OUT IN THE GROUP CASES OF SAVALIA GROUP ON 06.01.2011. 4. DURING THE COURSE OF THE SEARCH AND SEIZURE PROCEED INGS, 2338 GRAMS OF GOLD WERE FOUND FROM THE RESIDENCE AND LOCKER. T HE ASSESSEE WAS ASKED TO EXPLAIN THE POSSESSION OF THIS JEWELLERY. ASSESSEE FILED A DETAILED REPLY EXPLAINING THAT THE JEWELLERY BELONG S TO VARIOUS FAMILY MEMBERS; PART OF THE JEWELLERY WAS DECLARED UNDER V DIS, 1997 AND SUBMITTED THE PURCHASE BILLS IN RESPECT OF SOME OF THE JEWELLERY. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE A.O. WAS CONVINCED WITH THE EXPLANATION TO THE EXTENT OF 1977 GRAMS. HOWEVER, H E DID NOT FIND THE EXPLANATION SATISFACTORY IN RESPECT OF 361 GRAMS AN D ACCORDINGLY MADE THE ADDITION OF RS. 6,67,850/-. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND REITERATED THAT 250 GRAMS WERE DECLARED UNDER THE VDIS, 1997 SCHEME AND 90.300 GRAMS WERE PURCHASED IN 1991. THE COPIES OF THE PUR CHASE BILLS WERE FILED ONCE AGAIN BEFORE THE FIRST APPELLATE AUTHORI TY. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) WAS C ONVINCED WITH THE EXPLANATION RELATING TO 250 GRAMS AND ACCEPTED THE SAME AS DECLARED UNDER VDIS, 1997. HOWEVER, THE LD. CIT(A) CONFIRMED THE ADDITION IN RESPECT OF THE BALANCE OF THE JEWELLERY. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE ONCE AG AIN DREW OUR ATTENTION TO THE COPIES OF THE PURCHASE BILLS AND S TATED THAT THESE ITA NO. 2480 /AHD/2013 . A.Y. 2011-1 2 3 PURCHASE BILLS HAVE NOT BEEN ACCEPTED BY THE LOWER AUTHORITIES, THOUGH NO DEFECT WAS POINTED OUT IN RESPECT OF THESE PURCH ASE BILLS. THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE LOWER A UTHORITIES. 7. IN OUR CONSIDERED OPINION AND AFTER CONSIDERING THE FACTS, WE FIND THAT THE ASSESSEE HAS DULY EXPLAINED THE PURCHASE OF 90. 300 GRAMS OF JEWELLERY. IT IS AN UNDISPUTED FACT THAT THE JEWELL ERY PURCHASED KEEP ON CHANGING THE FORM AS THE TIME PROGRESSES AND AS NEW DESIGNS COME IN THE MARKET. THE OLD JEWELLERY CHANGES ITS FORM BUT NONETHELESS THE WEIGHT REMAINS ALMOST THE SAME. THE JEWELLERY PURCH ASED IN 1991 MAY HAVE CHANGED ITS SHAPE ON 06.01.2011 WHEN THE S EARCH TOOK PLACE. BUT THE FACT OF THE MATTER IS THAT THE ASSES SEE HAS SUCCESSFULLY SHOWN THE PURCHASE OF THE JEWELLERY WEIGHING 90.300 GRAMS. THEREFORE NO ADVERSE INFERENCE SHOULD BE DRAWN. THE A.O. IS DIRECTED TO GIVE RELIEF OF 90.300 GRAMS OF JEWELLERY AND RE- COMPUTE THE ADDITION, IF ANY, ON THIS ACCOUNT. GROUND NO. 1 IS PARTLY ALLOWED. 8. ON FURTHER PROBE, THE A.O. FOUND THAT THE ASSESSEE HAS INVESTED IN A FLAT AT AMUL PARK, THAKKARBAPANAGAR. THE ASSESSEE E XPLAINED THAT THE SAME WAS PURCHASED IN THE YEAR 2000, BUT BY OVERSIG HT/INADVERTENCE IT WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS AND O NLY IN THE YEAR 2010, BOOK ENTRY WAS MADE AT THE PURCHASE COST OF R S. 1,05,000/-. THE A.O. DID NOT FIND THIS EXPLANATION TO HIS SATIS FACTION AND BY ADOPTING THE JANTRY RATE OF RS. 7400 MADE AN ADDITI ON OF RS. 4,02,316/- AS UNEXPLAINED INVESTMENT. 9. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. ITA NO. 2480 /AHD/2013 . A.Y. 2011-1 2 4 10. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE DREW OU R ATTENTION TO THE CONFIRMATION OF TIRUPATI VIHAR SOCIETY POINTING OUT THAT THE FLAT WAS PURCHASED IN THE YEAR 2000. THE LD. COUNSEL FURTHER DREW OUR ATTENTION TO THE COPY OF THE LEDGER ACCOUNT IN THE BOOKS OF A MUL CORPORATION SHOWING THE ENTRIES IN THE NAME OF THE ASSESSEE AMO UNTING TO RS. 1,05,000/-. CORRESPONDING ENTRIES WERE SHOWN IN THE BOOKS OF TIRUPATI VIHAR. IT IS THE SAY OF THE LD. COUNSEL THAT MERELY BECAUSE BOOK ENTRY WAS MADE IN THE YEAR 2010 WOULD NOT MAKE THE PROPER TY UNEXPLAINED. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE ASS ESSMENT ORDER. 11. WE HAVE CAREFULLY CONSIDERED THE FACTUAL MATRIX DIS CUSSED HEREINABOVE, WE FIND THAT THE SOURCE OF RS. 1,05,00 0/- HAS BEEN DULY EXPLAINED BY FILING NECESSARY COPIES OF LEDGER ACCO UNT/CONFIRMATION. IN OUR CONSIDERED OPINION, INVESTMENT OF RS. 1,05,000/ - STANDS EXPLAINED. HOWEVER, WE FAIL TO UNDERSTAND WHEN THE PROPERTY WA S PURCHASED IN 2000 AND NECESSARY EVIDENCES WERE PLACED ON RECORD BEFORE THE A.O., WHY THE A.O. HAS ADOPTED JANTRY VALUE OF 2010 FOR M AKING THE IMPUGNED ADDITIONS. BE THAT AS IT MAY, AS MENTIONED ELSEWHERE, THE ASSESSEE HAS EXPLAINED THE PURCHASE OF FLAT. WE, TH EREFORE, DO NOT FIND ANY REASON FOR THE IMPUGNED ADDITIONS. WE, ACCORDIN GLY, SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO D ELETE THE ADDITION OF RS. 4,02,316/-. GROUND NO. 2 IS ALLOWED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 21 - 09- 2016. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY