Shri Jai Prakash Periwal, Surat V. The ACIT., Cent.Circle-2, Surat

ITA 2694/AHD/2006

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9785 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-09-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 07-12-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Assessee Lawyers: RASESH SHAH
• Keywords: Search and seizure; Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH C CC C BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI MUKUL SHRAWAT MUKUL SHRAWAT MUKUL SHRAWAT MUKUL SHRAWAT, , , , JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER AND AND AND AND SHRI SHRI SHRI SHRI N.S.SAINI N.S.SAINI N.S.SAINI N.S.SAINI, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER DATE OF HEARING : DRAFTED ON: ITA NO. 2694 /AHD/ 2006 ASSESSMENT YEAR :2004-05. SHRI JAI PRAKASH PERIWAL, 31/451, TEXTILE MARKET, RING ROAD, SURAT. VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENT. CIR-2, AAYAKAR BHAVAN, MAJURA GATE, SURAT. PAN/GIR NO. : AEVPP 6734 P (A PPELLANT ) .. ( RESPONDENT ) HEARING : DRAFTED ON: ITA NO. 2946 /AHD/ 2006 ASSESSMENT YEAR :2004-05. ASSISTANT COMMISSIONER OF INCOME TAX, CENT.CIRCLE- 2, AAYAKAR BHAVAN, MAJURA GATE, SURAT. VS. SHRI JAI PRAKASH PERIWAL, 31/451, TEXTILE MARKET, RING ROAD, SURAT. PAN/GIR NO. : - (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI RASESH SHAH. RESPONDENT BY: SHRI K.M. MAHESH, D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THESE ARE THE CROSS APPEALS FILED BY THE ASSESSE E AND REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS)-II, SURAT DATED 8-11-2006. 2. GROUND NO.1 IN ASSESSEES APPEAL IS DIRECTED AGA INST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) - 2 - CONFIRMING THE ADDITION OF `.4,30,000/- FOR UNDISCL OSED INVESTMENT IN PURCHASE OF DIAMOND JEWELLERY. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 10-12-2003. DURI NG THE COURSE OF THE SEARCH AMONGST OTHERS 15.59 CARATS OF DIAMON D JEWELLERIES OF THE VALUE OF `.4,30,000/- WAS FOUND. ACCORDING T O THE LEARNED ASSESSING OFFICER THE ASSESSEE COULD NOT EXPLAIN TH E SOURCE OF THE AFORESAID DIAMOND JEWELLERIES WITH EVIDENCES. THE ASSESSEE CLAIMED THAT THE DIAMOND JEWELLERIES WERE OWNED BY HIS WIFE SMT. SEEMA PERIWAL WHO RECEIVED THE SAME AT THE TIME OF HER MARRIAGE IN 1993 AND OTHER SOCIAL AND RELIGIOUS OCCASIONS. T HE LEARNED ASSESSING OFFICER DISBELIEVED THE EXPLANATION OF TH E ASSESSEE AND ADDED `.4,30,000/- AS UNDISCLOSED INCOME OF THE ASS ESSEE. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CONFIRMED THE ACTION OF THE LEARNED ASSES SING OFFICER. 5. WE FIND THAT THE ASSESSEE PLACED AT PAGE 24 OF T HE PAPER BOOK A COPY OF THE STATEMENT OF SMT. SEEMA PERIWAL WHICH WAS RECORDED ON 10-12-2003 I.E. THE DATE OF SEARCH BY A CIT, CIRCLE-3, AHMEDABAD. IN REPLY TO QUESTION NO.6 THE SAID SMT. SEEMA PERIWAL STATED THAT THE GOLD JEWELLERRIES OF 60 TOLAS WERE RECEIVED BY HER AT THE TIME OF HER MARRIAGE, BIRTH OF CHILDREN AND OTH ER SOCIAL AND RELIGIOUS OCCASIONS. IN ADDITION TO THIS, SHE ALSO RECEIVED DIAMOND SET. 6. AT THE TIME OF THE HEARING THE ASSESSEE EXPLAINE D THAT DIAMOND JEWELLERIES AND GOLD JEWELLERIES FOUND DURI NG THE COURSE OF THE SEARCH BELONGED TO HIS WIFE. THE LEARNED ASSES SING OFFICER OBSERVED THAT SMT. SEEMA PERIWAL ACCEPTED OWNERSHIP OF ONLY GOLD JEWELLERIES AND NOT DIAMOND JEWELLERIES IN THE STAT EMENT GIVEN DURING THE COURSE OF THE SEARCH. - 3 - 7. HOWEVER, WE FIND FROM THE ABOVE STATED STATEMENT OF SMT. SEEMA PERIWAL THAT SHE CATEGORICALLY ADMITTED TO HA VE RECEIVED ALSO THE DIAMOND JEWELLERIES IN ADDITION TO THE GOL D JEWELLERIES. THE CLAIM OF THE ASSESSEE IS THAT BOTH GOLD JEWELLE RIES AND DIAMOND JEWELLERIES FOUND DURING THE COURSE OF THE SEARCH B ELONGED TO HIS WIFE SMT. SEEMA PERIWAL. WE FIND THAT NO MATERIAL W HICH WAS FOUND DURING THE COURSE OF THE SEARCH COULD BE BROUGHT ON RECORD BY THE REVENUE TO CONTROVERT THE EXPLANATION OF THE ASSESS EE AND TO SHOW THAT THE DIAMOND JEWELLERIES WERE IN FACT NOT OWNED BY SMT. SEEMA PERIWAL BUT WERE OWNED BY THE ASSESSEE I.E. SHRI JA I PRAKASH PERIWAL. IN ABSENCE OF ANY SUCH MATERIAL AND IN VIE W OF THE ADMISSION OF SMT. SEEMA PERIWAL RECORDED DURING THE COURSE OF THE SEARCH PROCEEDINGS WE FIND THAT THERE WAS NO MATERI AL TO REJECT THE CONTENTION OF THE ASSESSEE THAT DIAMOND JEWELLERIES WERE ALSO OWNED BY SMT. SEEMA PERIWAL AND NOT THE ASSESSEE. F URTHER IT IS OBSERVED THAT THE LEARNED ASSESSING OFFICER HAS ACC EPTED THE STATEMENT OF THE WIFE OF THE ASSESSEE SMT. SEEMA PE RIWAL IN PART THAT 60 TOLAS OF GOLD JEWELLERIES WAS RECEIVED BY H ER ON THE OCCASION OF HER MARRIAGE AND OTHER SOCIAL FUNCTIONS AND DID NOT ACCEPT THE OTHER PART OF THE STATEMENT ABOUT RECEIV ING OF THE DIAMOND JEWELLERIES AT THE TIME OF HER MARRIAGE AND OTHER SOCIAL OCCASIONS WITHOUT ANY PLAUSIBLE REASON. THUS, IN OU R CONSIDERED VIEW IF ANY ADDITION WAS REQUIRED TO BE MADE IN RES PECT OF THE ABOVE DIAMOND JEWELLERIES THE SAME COULD HAVE BEEN MADE IN THE CASE OF SMT. SEEMA PERIWAL AND NOT IN THE HANDS OF THE ASSESSEE. WE THEREFORE, DELETE THE ADDITION OF `.4,30,000/- A ND ALLOWED THIS GROUND OF APPEAL OF THE ASSESSEE. 8. GROUND NO.2 OF ASSESSEES APPEAL AND SOLE GROUND OF APPEAL OF THE REVENUE ARE DIRECTED AGAINST THE LEARNED COM MISSIONER OF INCOME TAX (APPEALS)S ORDER IN RELATION TO THE BAD DEBTS OF `.7,19,871/-. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE HAS - 4 - CLAIMED BAD DEBTS OF `.7,19,871/- WHICH WAS DISALLO WED BY THE LEARNED ASSESSING OFFICER AS IN HIS OPINION THE SAM E WAS A LOAN TO GROUP COMPANIES OF PERSONAL NATURE AND DOES NOT REL ATE TO THE CHEQUE DISCOUNTING BUSINESS OF THE ASSESSEE AS THE ADVANCES WERE GIVEN EARLIER AND CHEQUE DISCOUNTING BUSINESS WAS S TARTED LATER BY THE ASSESSEE. 10. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) DELETED THE ABOVE ADDITION BY OBSERVING T HAT CHEQUE DISCOUNTING BUSINESS OF THE ASSESSEE WAS STARTED ON 9 TH MAY 2001 AND AMOUNTS IN QUESTION WERE GIVEN DURING THE PERIO D 16-8-2002 TO 20-12-2003. 11. WE FIND THAT THE FIRST ISSUE WHICH REQUIRES OU R ADJUDICATION IS THE DATE ON WHICH THE ASSESSEE STARTED HIS CHEQUE D ISCOUNTING BUSINESS. WE FIND THAT NO MATERIAL WAS BROUGHT ON R ECORD BY THE LEARNED ASSESSING OFFICER TO SHOW THAT THE CHEQUE D ISCOUNTING BUSINESS WAS STARTED BY THE ASSESSEE ON A DATE SUBS EQUENT TO THE DATE ON WHICH AMOUNTS IN QUESTION WERE GIVEN BY THE ASSESSEE. FURTHER, WE ALSO FIND THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO NOT BROUGHT ANY MATERIAL ON RECO RD ON VERIFICATION OF WHICH HE FOUND THAT THE ASSESSEE ST ARTED HIS CHEQUE DISCOUNTING BUSINESS ON 9 TH MAY, 2001. 12. BEFORE US ALSO BOTH THE PARTIES HAVE BROUGHT NO MATERIAL TO SHOW THE DATE ON WHICH THE ASSESSEE STARTED HIS CHE QUE DISCOUNTING BUSINESS. COPY OF ASSESSEES RETURN OF INCOME FOR THE ASSESSMENT YEAR 2002-03 WAS NOT FILED BY BOTH THE P ARTIES BEFORE US TO SHOW THAT WHETHER ANY INCOME OR LOSS FROM CHE QUE DISCOUNTING BUSINESS WAS THERE OR NOT. IN ABSENCE OF THE SAID MATERIAL THE ISSUE UNDER CONSIDERATION CANNOT BE AD JUDICATED UPON BY US. IN THE CIRCUMSTANCES WE CONSIDER IT TO BE RE ASONABLE AND FAIR TO RESTORE THIS ISSUE BACK TO THE FILE OF THE LEARN ED ASSESSING OFFICER FOR ADJUDICATION AFRESH AFTER PROPER VERIFI CATION OF ALL THE MATERIALS AND AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO - 5 - THE ASSESSEE AS PER LAW. THUS, THE RELEVANT GROUND S ARE ALLOWED FOR STATISTICAL PURPOSES. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN THE MANNER INDICATED AND THE APPEAL OF THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 24 TH DAY OF SEPTEMBER, 2010. SD/- SD/- (MUKUL SHRAWAT ) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: ON THIS 24 TH DAY OF SEPTEMBER, 2010 COMPILED AND COMPARED BY: PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 9-9-2010 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 9-9-2010 ------ ------------- 3. DRAFT PROPOSED & PLACED 9-9-2010 -------- ---------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 20-9-2010 ----------- -------- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 24-9-2010 ----- --------------- 6. KEPT FOR PRONOUNCEMENT ON 24-9-2010 ---------- ---------- 7. FILE SENT TO THE BENCH CLERK 24-9-2010 ------- ------------- 8. DATE ON WHICH FILE GOES TO THE --------------- -------------------- 9. DATE OF DISPATCH OF ORDER --------------- ---- -----------------