Shri Sunilbhai Nagjibhai Devani, JAMNAGAR V. The Dy. Commr. of Income Tax, Cen. Cir.-2, RAJKOT-GUJARAT

ITA 266/RJT/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8900 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 09-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MJ RANPURA
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER I.T.A. NO.266/RJT/2015 ( / ASSESSMENT YEAR : 2011-12) SHRI SUNILBHAI NAGJIBHAI DEVANI, FLAT NO.301, SHANT RESIDENCY PHASE II, VALKESHWARINAGARI, JAMNAGAR. VS. THE DCIT, CENTRAL CIRCLE 2, RAJKOT. ! PAN/GIR NO. : AAXPD 4492 J ( ' / APPELLANT ) .. ( #' RESPONDENT ) '$ APPELLANT BY : SHRI M. J. RANPURA, A.R. #'%$ / RESPONDENT BY : SHRI JITENDRA KUMAR, CIT-D.R. & ' (%) * / DATE OF HEARING 29/01/2018 +,-. %) * / DATE OF PRONOUNCEMENT 02/02/2018 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-11, AHMEDABAD, VIDE APPEAL NO.CIT(A)-11/554-R/CC.1/2014-15 DATED 24/03/2015 FO R THE ASSESSMENT YEAR (AY) 2011-12, ON THE FOLLOWING GROUNDS: THE LD.CIT(A)-11, AHMEDABAD ERRED ON FACTS AS ALSO IN LAW IN RELATING ADDITION OF RS.10,00,000/- MADE BY AO ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN FURNITURE. THE RETENTION OF ADDITION IS TOTALLY UNJUSTIFIED ON FACTS AS ALSO IN LAW AND MAY KINDLY BE DELETED. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- ITA NO.266/RJT/ 2015 SHRI SUNILBHAI NAGJIBHAI DEVANI VS. DCIT ASST.YEAR 2011-12 - 2 - THE APPELLANT, AN INDIVIDUAL, IS ASSESSED TO TAX B Y THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2, RAJ KOT. HE IS ONE OF THE PARTNERS IN A FIRM NAMELY (I) SHANTI CONSTRUCTION C O (II) DEVANI ENTERPRISE (II) DEVANI BUILDERS AND DERIVES INCOME FROM REMUNERATION, SHARE OF PROFIT AND INTEREST ON CAPITAL FROM THE FI RMS. SEARCH & SEIZURE ACTION TOOK PLACE ON 25.08.2011 AT THE RESIDENTIAL PREMISES OF THE APPELLANT & GROUP PERSONS/CONCERNS. IN STATEMENT RE CORDED, OF THE APPELLANT WITHOUT VERIFICATION OF RECORDS ADMITTED THAT AN EXPENSE OF RS.10,00,000/- TOWARDS FURNITURE OF HOUSE. HOWEVER, LATER ON AFTER VERIFICATION IT WAS RECOLLECTED THAT THE EXPENSE ST ATED BE OF RS.10,00,000/- WAS MADE UP BY THREE DIFFERENT ITEMS I.E. (A) EXPENSE ON INAUGURATION OF HOUSE RS.3,00,000/-, (B) COST OF NE W FURNITURE RS.5,61,165/- & (C) OLD FURNITURE SHIFTED TO NEW HO USE AROUND RS.1,40,000/-. THE INVESTMENT WAS MADE BY APPELLANT 'S WIFE. THEREFORE NO INCOME WAS NEEDED TO BE OFFERED ON THIS ACCOUNT. IN RESPONSE TO THE NOTICE U/S.153A OF THE INCOME TAX ACT, 1961, RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED ON 03.07.2013 DE CLARING THE TOTAL INCOME AT RS.5,32,500/-. DURING THE COURSE OF ASSES SMENT PROCEEDINGS BOOK RESULTS FOR THE APPELLANT WAS ACCEPTED. HOWEVE R THE AO VIDE ORDER U/S.143(3) OF THE ACT ASSESSED THE TOTAL INCOME AT RS.15,32,500/-, WHEREIN HE MADE AN ADDITION OF RS.10,00,000/- ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN FURNITURE. 3. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO DISMISSED THE APPEAL OF T HE ASSESSEE. ITA NO.266/RJT/ 2015 SHRI SUNILBHAI NAGJIBHAI DEVANI VS. DCIT ASST.YEAR 2011-12 - 3 - 4. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. THE APPELLANT, AN INDIVIDUAL, IS ASSESSED TO TAX. H E IS ONE OF THE PARTNERS IN A FIRM NAMELY (I) SHANTI CONSTRUCTION CO (II) DE VANI ENTERPRISE (II) DEVANI BUILDERS AND DERIVES INCOME FROM REMUNERATIO N, SHARE OF PROFIT AND INTEREST ON CAPITAL FROM THE FIRMS. SEARCH & SE IZURE ACTION TOOK PLACE ON 25.08.2011 AT THE RESIDENTIAL PREMISES OF THE AP PELLANT & GROUP PERSONS/CONCERNS. ON VERIFICATION IT WAS RECOLLECTE D THAT THE EXPENSE STATED BE OF RS.10,00,000/- WAS MADE UP BY THREE DI FFERENT ITEMS I.E. (A) EXPENSE ON INAUGURATION OF HOUSE RS.3,00,000/-, (B) COST OF NEW FURNITURE RS.5,61,165/- & (C) OLD FURNITURE SHIFTED TO NEW HOUSE AROUND RS.1,40,000/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS BOOK RESULTS FOR THE APPELLANT WAS ACCEPTED. IN THIS CASE A STAT EMENT OF THE APPELLANT WAS RECORDED U/S.142(4). LD. AR DRAWN OUR ATTENTION TO PAGE NO.9 OF PAPER BOOK IN WHICH ASSESSEE RECORDED HIS STATEMENT AND MENTIONED THAT HE BROUGHT FURNITURE WORTH OF RS.10,00,000/- BEFORE ONE YEAR AGO FROM DEVANI ENTERPRISE. 5. LD. AR CITED AN ORDER OF JHARKHAND HIGH COURT IN THE MATTER OF SHREE GANESH TRADING CO. VS. CIT (2013) 257 CTR 159 , WHEREIN IT IS HELD AS UNDER: THE STATEMENT RECORDED U/S.132(4) IS EVIDENCE BUT ITS RELIABILITY DEPENDS UPON THE FACTS OF THE CASE AND PARTICULARLY SURROUNDING CIRCUMSTANCES. ALL THE AUTHORITIES BELOW HAVE MEREL Y REACHED TO THE CONCLUSION MERELY ON THE BASIS OF EXEMPTION RESULTI NG IN THE FASTENING OF THE LIABLE UPON THE ASSESSEE. THE STATEMENT ON OATH OF THE ASSESSEE IS A PIECE OF EVIDENCE AS PER SECTION 132(4) AND WHEN TH ERE IS INCRIMINATION ADMISSION AGAINST HIMSELF, THEN IT IS REQUIRED TO B E EXAMINED WITH DUE CARE AND CAUTION. ITA NO.266/RJT/ 2015 SHRI SUNILBHAI NAGJIBHAI DEVANI VS. DCIT ASST.YEAR 2011-12 - 4 - 6. TOTAL INVESTMENT IN FURNITURE/HOUSE HOLD ARE RS. 5,61,165/- ARE VERIFIABLE FROM BOOKS OF ACCOUNT OF APPELLANT AND H IS WIFE. THE APPELLANTS WIFE DERIVES INCOME FROM STITCHING AND EMBROIDERY WORK ETC. AFTER GOING THROUGH THE MATERIAL AVAILABLE ON RECOR D, WE GIVE BENEFIT OF RS.5,61,165/- WHERE WERE RECORDED FROM BOOKS OF ACC OUNTS OF APPELLANT OF HIS WIFE AND REST OF THE ADDITION IS CONFIRMED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 02/02/2018 SD/- SD/- IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRAMOD KUMAR) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 02/02/2018 PRITI YADAV, SR. PS COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012) & 3) / CONCERNED CIT 4. & 3) 45 / THE CIT(A)-2, RAJKOT. 5. 67 8)'12 *12. 0 / DR, ITAT, AHMEDABAD 6. 8 9: ( GUARD FILE. / BY ORDER, # 6)) //TRUE COPY// / !'# ( DY./ASSTT.REGISTRAR) #$ %, / ITAT, AHMEDABAD