Monika Mittal, Ambala City V. ACIT, Patiala

ITA 281/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5399 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 17-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: S K MUKHI; JYOTI
• Keywords: Search and seizure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,B BENCH,CHAN DIGARH BEFORE SHRI D K SRIVASTAVA, AM AND MS. SUSHMA CHOWL A, JM ITA NO. 281/CHD/2011 ASSESSMENT YEAR: 2007-08 MONIKA MITTAL, V. ACIT, # 974, URBAN ESTATE, CENTRAL CIRCLE, SECTOR-7, AMBALA CITY PATIALA PAN: ABFPM-7990K APPELLANT BY: SHRI S.K.MUKHI AND MS. JYOTI RESPONDENT BY: SMT. JAISHREE SHARMA ORDER D K SRIVASTAVA : THE APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 04.01.2011 ON THE FOL LOWING GROUNDS: 1. THAT THE ORDERS OF THE LD. CIT(A) PANCHKUL A IS ILLEGAL, ERRONEOUS, PERVERSE AND THUS UNCALLED FOR. 2. (A) THAT THE LD. CIT(APPEALS) IS NOT JUSTIFIED I N CONCURRING WITH THE FINDINGS OF LD. AO AND THEREBY CONFIRMING THE ADDITION OF RS.10,00,000/- WHICH IS NOT PERTAINING TO THE YEAR UNDER APPEAL AND HENCE THE ADDITION BEING WITHOUT JURISDICTION S HOULD HAVE ADJUSTED THE MATTER ON MERITS AND RATHER THAN DISMI SSING THE APPEAL IN A SUMMARY MANNER WITHOUT ANY APPLICATION OF MIND ON THE ISSUES BEFORE HIM AS PER GROUNDS OF APPEAL. 3. NOTWITHSTANDING THE ABOVESAID GROUND OF APPEAL, THE CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN RESPECT OF ADDITION OF RS.17,99,525/- ON ACCOUNT OF UNEXPLAINED DEPOSITS IN SAVING BANK, CAPITAL ACCOUNTS AND IN TH E PREMIUM AND FOR HOUSEHOLD EXPENDITURE. 4. THAT THE CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF THE A.O. IN RESPECT OF ADDITION OF RS.1343/- ON ACCOUNT OF 1/5 TH OF THE EXPENDITURE ON INTEREST ON CAR LOAN AMOUNTING TORS. 3588/- AND CAR REPAIR AND MAINTENANCE AMOUNTING TO RS.3127/- PER P ERSONAL USE. 5. THAT THE CIT(A) HAS ALSO ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN RESPECT OF ADDITION OF RS. 14,18,810/- ON ACCOUNT OF UNACCOUNTED PURCHASE OF M.S.INGOTS. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A PARTNER IN M/S SHREE ESTATES, AMBALA CITY. SHE FILED HER RETURN OF INCOME ON 17.05.2007 RETURNING HER TOTAL INCOME AT RS.1,24,05 0/- AGAINST WHICH ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME-T AX ACT ASSESSING HER TOTAL INCOME AT RS.11,24,050/-. THE DIFFERENCE BETW EEN THE INCOME RETURNED ITA 281/CHD/2011 MONIKA MITTAL, AMBALA CITY 2 BY THE ASSESSEE AND THE TOTAL INCOME ASSESSED BY TH E AO HAS ARISEN ON ACCOUNT OF ADDITION OF RS.10,00,000/- MADE BY THE A O ON ACCOUNT OF UNEXPLAINED JEWELLERY RECOVERED FROM HER POSSESSION DURING THE COURSE OF SEARCH AND & SEIZURE OPERATIONS WERE CARRIED OUT BY THE DEPARTMENT UNDER 132 OF THE INCOME-TAX ACT AT THE PREMISES OF WELL K NOWN JEWELLERS KNOWN AS N. N. GROUP OF AMBALA CITY AND OTHERS. WHILE THE SE ARCH OF HER RESIDENCE LED TO THE RECOVERY OF 978.40 GRAMS OF GOLD JEWELLE RY VALUED AT RS.15,30,772/-, THE SEARCH OF HER LOCKER LED TO FUR THER RECOVERY OF 850.87 GRAMS JEWELLERY VALUED AT RS.7,14,790/-. THE AO CAL LED UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE INVESTMENT IN JEWELLERY SO FOUND FROM HER RESIDENCE AND LOCKER. 3. THE ASSESSEE FILED HER REPLY ON 27.08.2008 BEFOR E THE AO IN WHICH SHE CONFIRMED THE FACTUM OF RECOVERY OF JEWELLERY V ALUED AT RS.15,13,770/- FROM HER RESIDENCE AND FURTHER JEWELLERY VALUED AT RS.7,14,790/- FROM HER LOCKER. AS REGARDS THE NATURE AND SOURCE OF THE INV ESTMENT IN JEWELLERY, THE ASSESSEE EXPLAINED THAT JEWELLERY TO THE EXTENT OF RS.10,00,000/- WAS PURCHASED BY HER WHILE THE REMAINING JEWELLERY WAS RECEIVED BY HER FROM THE PARENTS OF BOTH SIDES AND ALSO THAT A PART OF T HE JEWELLERY BELONGED TO HER CHILDREN. IT IS THIS CLAIM OF THE ASSESSEE THAT A PART OF JEWELLERY FOUND FROM HER POSSESSION WAS PURCHASED FOR A SUM OF RS.1 0,00,000/- WHICH WAS SUBJECTED TO EXAMINATION FOLLOWED BY ADDITION BY TH E AO. 4. PERUSAL OF THE ASSESSMENT ORDER PASSED BY THE AO SHOWS THAT THE ASSESSEE HAD FILED HER STATEMENT OF AFFAIRS AS ON 3 1.03.2006 IN THE COURSE OF PROCEEDINGS FOR AY 2006-07 IN WHICH GOLD JEWELLE RY VALUED AT RS.10,00,000/- WAS SHOWN ON THE ASSET SIDE. THE AO TOOK NOTE OF THE AFORESAID FACT AND ACCORDINGLY REQUIRED THE ASSESSE E TO FILE THE DETAILS OF JEWELLERY PURCHASED DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, I.E., A Y 2006-07. IN REPLY, THE ASSESSEE F ILED DETAILS OF JEWELLERY PURCHASED BY HER. IN THE DETAILS FILED BY THE ASSES SEE BEFORE THE AO, THE ASSESSEE CLAIMED TO HAVE PURCHASED JEWELLERY VALUED AT RS.5,19,400/- IN THE FINANCIAL YEAR ENDING 31.03.2006 (ASSESSMENT YE AR 2006-07) AND FURTHER JEWELLERY VALUED AT RS.4,96,500/- IN THE FINANCIAL YEAR ENDING 31.03.2007 (ASSESSMENT YEAR 2007-08). IT WAS CLAIMED BY THE AS SESSEE THAT THE ITA 281/CHD/2011 MONIKA MITTAL, AMBALA CITY 3 AFORESAID JEWELLERY WAS PURCHASED FROM KARIGARS. IN SUPPORT OF HER CLAIM SHE FILED PHOTO COPIES OF BILLS REPORTEDLY OBTAINED FROM KARIGARS CONFIRMING PURCHASE OF JEWELLERY AS AFORESAID IN BOTH THE YEAR S. 5. IN ORDER TO EXAMINE THE MATTER FURTHER, THE AO R EQUIRED THE ASSESSEE TO PRODUCE THE KARIGARS/PERSONS FROM WHOM JEWELLERY VALUED AT RS.5,19,400/- AND RS.4,96,500/- WAS PURCHASED DURIN G THE FINANCIAL YEARS RELEVANT TO ASSESSMENT YEAR 2006-07 AND 2007-08. HE ALSO REQUIRED THE ASSESSEE TO EXPLAIN THE CIRCUMSTANCES IN WHICH SHE PURCHASED THE JEWELLERY FROM KARIGARS INSTEAD OF HER OWN HUSBANDS SHOP WHI CH WAS REPUTED IN THE SALE OF JEWELLERY. 6. IN REPLY TO THE LETTER OF ENQUIRY ISSUED BY THE AO, THE ASSESSEE EXPLAINED THAT JEWELLERY WAS PURCHASED FROM KARIGAR S. SHE HOWEVER EXPRESSED HER INABILITY TO PRODUCE THEM ON THE GROU ND THAT THEY WERE WORKING ON DAY-TO-DAY BASIS AS KARIGARS AT THEIR RE SPECTIVE PLACES AND THEREFORE THEY WOULD NOT BE ABLE TO APPEAL BEFORE T HE AO. AS REGARDS THE CIRCUMSTANCES IN WHICH THE JEWELLERY WAS PURCHASED FROM KARIGARS INSTEAD OF HER HUSBANDS OWN SHOP OF JEWELLERY, THE ASSESSE E EXPLAINED THAT IT WAS CHEAPER TO PURCHASE JEWELLERY FROM KARIGARS. 7. THE AO CONSIDERED THE REPLY OF THE ASSESSEE. HE, HOWEVER, REJECTED THE SAME ON THE FOLLOWING GROUNDS: I) ACCORDING TO THE AO, IT WAS THE ASSESSEE WHO CLA IMED TO HAVE PURCHASED THE JEWELLERY FROM KARIGARS AND THEREFORE THE BURDEN WAS ON THE ASSESSEE TO PRODUCE THEM. II) FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE THEM WAS CONSIDERED BY THE AO TO BE A FACTOR AFFECTING THE C REDIBILITY OF HER EXPLANATION. III) ACCORDING TO THE AO, THE KARIGARS WERE NEITHER ASSE SSED TO SALES-TAX NOR INCOME-TAX. IV) ACCORDING TO THE AO, THE KARIGARS WERE ONLY LABOURE RS AND NOT DEALERS IN PURCHASE OR SALE OF GOLD OR JEWELLERY AN D THEREFORE THEY WERE NOT IN A POSITION TO SELL JEWELLERY TO TH E ASSESSEE. V) ACCORDING TO THE AO, THE ASSESSEE HAD SHOWN GOLD JE WELLERY VALUED AT RS.10,00,000/- ON THE ASSET SIDE OF HER S TATEMENT OF AFFAIRS AS ON 31.06.2006 AS AGAINST WHICH THE ASSES SEE HAD SUBMITTED A REPLY BEFORE THE AO CLAIMING THAT SHE H AD ITA 281/CHD/2011 MONIKA MITTAL, AMBALA CITY 4 PURCHASED JEWELLERY TO THE EXTENT OF RS.5,19,400/- ONLY IN THE YEAR ENDING ON 31.03.2006 AND FURTHER JEWELLERY VAL UED AT RS.4,96,500/- IN THE YEAR ENDING 31.03.2007. SINCE THERE WAS APPARENT CONFLICT BETWEEN THE EXPLANATION GIVEN BY THE ASSESSEE IN WHICH SHE CLAIMED TO HAVE PURCHASED THE JEWELLERY IN TWO YEARS AND THE FACT THAT GOLD JEWELLERY VALUE D AT RS.10,00,000/- WAS SHOWN AS HELD HER HANDS IN THE S TATEMENT OF AFFAIRS AS ON 31.03.2006, THE AO FELT THAT THE E XPLANATION GIVEN BY THE ASSESSEE LACKED CREDIBILITY. VI) AS REGARDS THE NATURE AND SOURCE OF INVESTMENT IN J EWELLERY, IT WAS EXPLAINED BEFORE THE AO THAT THE ASSESSEE HAD W ITHDRAWN A SUM OF RS.11,00,000/- ON 21.01.2006 FOR PURCHASE OF JEWELLERY. THE AO ENQUIRED FROM THE STATE BANK OF INDIA AND FO UND THAT A SUM OF RS.11,00,000/- WAS WITHDRAWN ON 12.01.2006 F ROM THE STATE BANK AND THE SAID AMOUNT WAS PAID BY THE BANK TO SHRI SWAROOP CHAND. THE AO NOTICED THE EARLIER EXPLANATI ON GIVEN BY THE ASSESSEE THAT JEWELLERY VALUED AT RS.5,19,40 0/- ALONE WAS PURCHASED TILL 31.03.2006, THE AO PROCEEDED TO ASCERTAIN AS TO WHETHER REMAINING AMOUNT (I.E. THE AMOUNT WIT HDRAWN FROM THE BANK RS.11,00,000/- AS REDUCED BY THE AMOU NT REPORTEDLY INVESTED IN PURCHASE OF JEWELLERY IN FIN ANCIAL YEAR 2005-06 FOR RS.5,19,400/-) WAS SHOWN AS CLOSING BAL ANCE AS ON 31.03.2006 IN THE STATEMENT OF AFFAIRS FILED BY THE ASSESSEE AS ON 31.03.2006. ON PERUSAL OF THE STATEMENT OF AFFAI RS, HE NOTICED THAT THE ASSESSEE HAD SHOWN CLOSING CASH BA LANCE OF RS.76,527.60 ONLY AS ON 31.3.2006 IN HER STATEMENT OF AFFAIRS WHEREAS CASH REMAINING UN-UTILIZED AFTER WITHDRAWAL FROM STATE BANK OF INDIA WAS RS.5,80,600/- (RS.11,00,000 - RS. 5,19,400). SINCE THERE WAS APPARENT CONFLICT IN THE EXPLANATIO N OF THE ASSESSEE IN THIS BEHALF ALSO, THE AO REJECTED THE E XPLANATION GIVEN BY THE ASSESSEE. 8. ACCORDING TO THE AO, THE KARIGARS WERE NOT PRODU CED FOR CROSS- EXAMINATION INSPITE OF REPEATED OPPORTUNITIES GIVEN TO THE ASSESSEE AND HENCE THE AFFIDAVITS OF KAARIGARS AS FILED BY THE A SSESSEE WOULD NEED TO BE IGNORED. 9. IN VIEW OF THE AFORESAID FACTORS, THE AO REJECTE D THE EXPLANATION OF THE ASSESSEE AS REGARDS THE NATURE AND SOURCE OF IN VESTMENT IN GOLD JEWELLERY VALUED AT RS. 10,00,000/-. SINCE THE GOLD JEWELLERY WAS RECOVERED FROM THE POSSESSION OF THE ASSESSEE AT THE TIME OF SEARCH, I.E., OCTOBER, 2006, THE AO TAXED THE ENTIRE AMOUNT OF UNEXPLAINED JEWELLERY ITA 281/CHD/2011 MONIKA MITTAL, AMBALA CITY 5 (RS.10,00,000/-) AS UNEXPLAINED INCOME IN THE HANDS OF THE ASSESSEE IN AY 2007-08. 10. AGGRIEVED BY THE ORDER PASSED BY THE AO, THE AS SESSEE FILED APPEAL BEFORE THE CIT(A). LD. CIT(A), HOWEVER, DISMISSED T HE APPEAL FOR THE DETAILED REASONS GIVEN BY HIM IN HIS APPELLATE ORDE R. 11. AGGRIEVED BY THE ORDER PASSED BY THE CIT(A). TH E ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 12. IN SUPPORT OF THE APPEAL, THE LD. COUNSEL FOR T HE ASSESSEE HAS FILED A PAPER-BOOK CONTAINING, (1) COPY OF STATEMENT OF FAC TS WITH GROUNDS OF APPEAL FILED BEFORE THE CIT(A); (2) COPY OF WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A); (3) COPY OF ASSESSEES REPLY FILED WITH THE ASSESSING AUTHORITY; (4) COPY OF WEALTH-TAX ASSESSMENT ORDER FILED BEFOR E THE CIT(A); (5) PHOTO COPY OF THE ASSESSMENT ORDER OF NARESH KUMAR, HUF ( ASSESSMENT YEAR 1996-97) FILED BEFORE CIT(A); AND (6) COPY OF BALAN CE SHEET AS ON 31.03.2007 FILED BEFORE AO/CIT(A). IN ADDITION, THE LD. COUNSEL FOR THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS WHICH READ A S UNDER: 1. ASSESSEE IS AN INDIVIDUAL AND IS A REGULAR INCOM E TAX ASSESSEE. SHE USED TO FILE RETURN ALONGWITH BALANCE SHEET, CA PITAL ACCOUNT AND CASH FLOW STATEMENT. 2. THE SAID AMOUNT OF RS.10 LACS FROM WHICH THE JEW ELLERY WAS PURCHASED WAS UTILIZED FROM RS.11 LACS WITHDRAWN FR OM M/S N.N.AGGARWAL JEWELLERS WITH WHOM THE AMOUNT WAS LYI NG SINCE LONG AS DEPOSIT ON WHICH INTEREST WAS BEING RECEIVE D AND TDS WAS PROPERLY DEDUCTED. 3. KINDLY REFER TO PAPER BOOK PAGE 48 BEING BALANCE SHEET OF ASSESSMENT YEAR 2005-06 I.E. 31.3.2005 WHEREIN THER E WAS DEPOSIT OF RS.11,05,457/- WITH M/S N.N.AGGARWAL JEW ELLERS. ALSO REFER TO PAPER BOOK PAGE 45 BEING COPY OF ACCO UNT OF APPELLANT IN THE BOOKS OF M/S N.N.AGGARWAL JEWELLER S. 4. SAME ITEM ALREADY STAND DECLARED IN THE INCOME T AX RETURN FOR ASSESSMENT YEAR 2006-07 I.E. 31.3.2006. KINDLY REFE R TO PAGE 32 OF PAPER BOOK AND PAGE 49 AND 50 BEING SBI ACCOU NT 601 OF THE APPELLANT WHERE THE AMOUNT OFRS.11 LACS WAS DEP OSITED. 5. THAT OUT OF AMOUNT OF RS.11,05,457/- LYING WITH N.N.JEWELLERS RS.11 LACS TAKEN BACK VIDE CHEQUE DEPOSITED IN SBI A/C ON 12.01.2006, COPY AT PAGE 49 & 50 OF PAPER BOOK BY M R.SWARUP CHAND WHO IS EMPLOYEE OF HER HUSBAND MR.NIKHIL MITT AL C/O N.N. ITA 281/CHD/2011 MONIKA MITTAL, AMBALA CITY 6 JEWELLERS. THE ASSESSEE PLANNED TO PURCHASE JEWELLE RY FOR RS.10 LACS SINCE JEWELLERY RATES WERE DUE TO GO SKY HIGH AND DECLARED THE SAME AMOUNT UNDER GOLD ACCOUNT. KINDLY REFER TO PAGE 5 OF A.OS ORDER BEING REPRODUCTION OF CASH FL OW STATEMENT FOR THE YEAR ENDING 31.3.2006 FILED ALONG WITH INCOME TAX RETURN OF ASSESSMENT YEAR 2006-07, COPY AT PAPE R BOOK PAGE 33. THAT OUT OF WHICH SOME AMOUNTS WERE GIVEN TO KAARIGARS (WHO WERE REGULAR JOB WORKERS OF THE FAMI LY BUSINESS OF THE APPELLANT) FOR THE PURCHASE OF JEWELLERY AND MAKING OF SPECIAL DESIGNS. 6. THAT IN THE YEAR UNDER CONSIDERATION I.E. ASSESS MENT YEAR 2007- 08 THE SAID AMOUNT WAS DECLARED AS GOLD JEWELLERY I N THE BALANCE SHEET (KINDLY REFER TO PAGE 20 OF PAPER BOO K) OUT OF THE GOLD ACCOUNT OF ASSESSMENT YEAR 2006-07 (KINDLY REFER TO PAGE 33 OF PAPER BOOK) SINCE THE COMPLETE JEWELLERY AS PER THE DESIGNS GIVEN TO THE KAARIGARS WAS DELIVERED TO THE APPELLANT. 7. THAT LD. AO, INADVERTENTLY ADDED THE SAID AMOUNT OF RS.10 LACS WHICH ALREADY STOOD DECLARED IN EARLIER YEARS BEFOR E INCOME TAX DEPARTMENT BY MIXING THE SAID AMOUNT WITH JEWEL LERY/ITS VALUE FOUND DURING SEARCH FOR WHICH DUE EXPLANATION ALREADY GIVEN IN THE HANDS OF HUSBAND MR.NIKHIL MITTAL AS P ER EXPLANATION GIVEN (KINDLY REFER TO PAPER BOOK PAGE 4-9) 13. IN THE REPLY, THE LD. DR SUPPORTED THE ORDER PA SSED BY THE AO/CIT(A). 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ENTIRE JEWELLERY WAS RECOVERED FROM THE POSSESSION OF THE ASSESSEE DURING THE COURSE OF SEARCH AND SEIZURE OP ERATIONS CARRIED OUT BY THE DEPARTMENT ON OR AROUND 13.10.2006. NOT ONLY TH AT THE DEPARTMENT RECOVERED THE ENTIRE JEWELLERY FROM THE POSSESSION OF THE ASSESSEE DURING THE SEARCH, THE ASSESSEE HAS ALSO ACCEPTED THE FACT THAT THE JEWELLERY WAS RECOVERED FROM HER POSSESSION. SEARCH AND SEIZURE O PERATIONS IN THE COURSE OF WHICH JEWELLERY WAS RECOVERED FROM THE POSSESSIO N OF THE ASSESSEE WERE CARRIED OUT BY THE DEPARTMENT IN OR AROUND OCTOBER, 2006. IT IS WELL ESTABLISHED THAT TITLE FOLLOWS POSSESSION. THE ASSE SSEE WOULD BE DEEMED TO BE THE OWNER OF THE JEWELLERY AS ON THE DATE ON WHI CH IT WAS RECOVERED FROM HER POSSESSION. SINCE THE JEWELLERY WAS FOUND FROM HER POSSESSION IN THE FINANCIAL YEAR 2006-07, THE INVESTMENT IN JEWEL LERY IS LIABLE TO BE CONSIDERED IN ASSESSMENT YEAR 2006-07 ONLY AND IN N O OTHER YEAR UNLESS THE ASSESSEE IS IN POSITION TO EITHER ESTABLISH SATISFA CTORILY THE NATURE AND ITA 281/CHD/2011 MONIKA MITTAL, AMBALA CITY 7 SOURCE OF THE INVESTMENT IN JEWELLERY OR THE FACT T HAT THE JEWELLERY WAS ACQUIRED BY HER IN A YEAR EARLIER THAN THE ASSESSME NT YEAR UNDER APPEAL. 15. ON BEING CALLED UPON TO EXPLAIN THE NATURE AND SOURCE OF INVESTMENT IN JEWELLERY, THE ASSESSEE EXPLAINED BEFORE THE AO THAT JEWELLERY VALUED AT RS.10,00,000/- WAS PURCHASED BY HER FROM KARIGARS. IT WAS THE CASE OF THE ASSESSEE THAT SHE HAD PURCHASED JEWELLERY VALUED AT RS.5,19,400/- IN THE FINANCIAL YEAR ENDING 31.3.2006 (ASSESSMENT YEAR 20 06-07) AND FURTHER JEWELLERY VALUED AT RS.4,96,500/-. IN SUPPORT OF HE R CASE THAT THE JEWELLERY WAS PURCHASED IN FINANCIAL YEARS RELEVANT TO ASSESS MENT YEAR 2006-07 AND 2007-08, SHE FILED PHOTO COPIES OF KARIGARS BILLS. SHE ALSO FILED AFFIDAVITS FROM KAARIGARS CONFIRMING THE FACT THAT THEY HAD SO LD THE JEWELLERY IN BOTH THE AFORESAID YEARS. ASSESSEE ALSO EXPLAINED THE FA CT THAT THE JEWELLERY WAS PURCHASED FROM THE KAARIGARS AS IT WAS SPECIFIC TO DESIGN AND CHEAPER IN COST. SHE FURTHER EXPLAINED THAT A SUM OF RS.11,00, 000/- WAS WITHDRAWN FOR PURCHASING THE JEWELLERY. THE AO HOWEVER REJECTED T HE AFORESAID EXPLANATION GIVEN BY THE ASSESSEE. 16. PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE FIRST CLAIMED THAT SHE WAS IN POSSESSION OF GOLD JEWELLERY VALUED AT RS.10,00,000/- AS ON 31.3.2006 AS PER HER STATEMENT OF AFFAIRS AS ON 31. 3.2006 FILED BY HER BEFORE THE AO IN THE COURSE OF PROCEEDINGS FOR ASSE SSMENT YEAR 2006-07. ON BEING CALLED UPON TO EXPLAIN THE NATURE AND SOUR CE OF INVESTMENT IN JEWELLERY DURING THE COURSE OF ASSESSMENT PROCEEDIN GS FOR THE ASSESSMENT YEAR UNDER APPEAL, THE SAME ASSESSEE EXPLAINED BEFO RE THE AO THAT SHE HAD PURCHASED JEWELLERY VALUED AT RS.5,19,400/- IN FINA NCIAL YEAR ENDING 31.3.2006 AND FURTHER JEWELLERY VALUED AT RS.4,96,5 00/- IN THE FINANCIAL YEAR ENDING 31.3.2007. BOTH THE STATEMENTS OF THE A SSESSEE CANNOT GO TOGETHER. IN THE STATEMENT OF AFFAIRS, SHE CLAIMS T O BE IN POSSESSION OF JEWELLERY VALUED AT RS.10,00,000/- AS ON 31.3.2006 BUT IN HER EXPLANATION SHE SAYS THAT SHE PURCHASED JEWELLERY VALUED AT RS. 5,19,400/- ALONE IN FINANCIAL YEAR ENDING 31.3.2006 AND FURTHER JEWELLE RY VALUED AT RS.4,96,500/- IN THE FINANCIAL YEAR ENDING 31.3.200 4. BOTH THE STANDS TAKEN BY THE ASSESSEE ARE COMPLETELY INCONSISTENT AND HEN CE UNRELIABLE. THE AO HAS RIGHTLY TAKEN ADVERSE VIEW OF THE MATTER. ITA 281/CHD/2011 MONIKA MITTAL, AMBALA CITY 8 17. THE ASSESSEE CLAIMS TO HAVE PURCHASED JEWELLERY FROM KARIGARS. SHE FILED THEIR AFFIDAVITS TO SUPPORT HER CLAIM. ON BEI NG CALLED UPON TO PRODUCE KARIGARS FOR EXAMINATION AND VERIFICATION, SHE DID NOT PRODUCE THEM. IN ORDER TO HELP THE ASSESSEE, THE AO ISSUED SUMMONSES TO THE KARIGARS BUT THEY WERE ALSO NOT COMPLIED WITH. SINCE IT WAS THE CLAIM OF THE ASSESSEE THAT SHE HAD PURCHASED JEWELLERY FROM KARIGARS, BUR DEN WAS OBVIOUSLY ON HER TO PRODUCE THEM FOR VERIFICATION. SIMILARLY, IT WAS THE ASSESSEE WHO FILED AFFIDAVITS OF KARIGARS BEFORE THE AO AND IT W AS THEREFORE, FOR THE ASSESSEE TO PRODUCE KARIGARS FOR CROSS-EXAMINATION BY THE AO. SHE DID NOT DO SO. AFFIDAVITS ARE NOT INCLUDED IN THE DEFINITIO N OF EVIDENCE IN THE EVIDENCE ACT BUT ARE ADMISSIBLE IF THE CONDITIONS O F ORDER XIX, CPC ARE SATISFIED. RULE 2 OF ORDER XIX, CPC EMPOWERS THE CO URT TO ORDER THE ATTENDANCE OF DEPONENT OF THE AFFIDAVIT FOR CROSS E XAMINATION. THE AO DIRECTED THE ASSESSEE TO PRODUCE THE DEPONENT OF TH E AFFIDAVITS FOR CROSS- EXAMINATION BUT THEY WERE NOT PRODUCED. IT IS WELL ESTABLISHED THAT IF THE PARTY FAILS TO PRODUCE THE DEPONENT OF THE AFFIDAVI T FOR CROSS EXAMINATION DESPITE ORDER OF THE COURT, AFFIDAVIT OF THE DEPONE NT FAILING TO ATTEND THE COURT IS TO BE IGNORED. THE AO HAS THEREFORE RIGHTL Y IGNORED THE AFFIDAVITS OF KARIGARS. 18. THE ASSESSEE CLAIMED BEFORE THE AO THAT A SUM O F RS.11,00,000/- WAS WITHDRAWN FROM SBI FOR PURCHASING JEWELLERY. THE AO MADE ENQUIRIES FROM THE BANK AND FOUND THAT THE BANK HAD PAID A SUM OF RS.11,00,000/- TO SHRI SWAROOP CHAND ON 12.01.2006. THE AO NOTICED THAT TH E ASSESSEE HAD PURCHASED JEWELLERY VALUED AT RS.5,19,400/- TILL 31 .3.2006 AND THUS THE ASSESSEE SHOULD HAVE REFLECTED CLOSING CASH BALANCE OF RS.5,18,600/- IN HER STATEMENT OF AFFAIRS AS ON 31.3.2006. HE, HOWEVER F OUND THAT THE ASSESSEE HAD SHOWN CLOSING CASH IN HAND OF RS.76,527/- ALONE IN THE SAID STATEMENT OF AFFAIRS. IT IS THUS QUITE APPARENT THAT EITHER T HE POSITION TAKEN IN THE STATEMENT OF AFFAIRS IS WRONG OR THE STATEMENT OF T HE ASSESSEE THAT A SUM OF RS.11,00,000/- WAS UTILIZED FOR PURCHASING JEWEL LERY IS WRONG. THESE FACTS ARE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSES SEE. SINCE THE ASSESSEE FAILED TO OFFER SATISFACTORY EXPLANATION AND RECONC ILE THE AFORESAID ISSUES ITA 281/CHD/2011 MONIKA MITTAL, AMBALA CITY 9 BEFORE THE AO, THE AO HAD NO OTHER ALTERNATIVE EXCE PT TO REJECT THE EXPLANATION GIVEN BY THE ASSESSEE. 19. PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT JEWE LLERY WAS CLAIMED TO HAVE BEEN PURCHASED FROM KARIGARS. KARIGARS ARE PEO PLE WHO SIMPLY PERFORM CRAFTSMANSHIP ON THE GOLD SUPPLIED TO THEM. THEY AR E NOT SELLERS OF JEWELLERY. IT IS, THEREFORE UNBELIEVABLE THAT KARIG ARS COULD HAVE SOLD JEWELLERY TO THE ASSESSEE. THIS POSITION ASSUMES SI GNIFICANCE IN THE FACE OF THE FACT THAT KARIGARS WERE NOT PRODUCED FOR EXAMIN ATION BEFORE THE AO. THE AO HAS BROUGHT SUFFICIENT MATERIALS ON RECORD T O ESTABLISH UNSATISFACTORY NATURE OF THE EXPLANATION TENDERED B Y THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF INVESTMENT IN JEWE LLERY. LD. CIT(A) HAS RIGHTLY CONCURRED WITH THE VIEW TAKEN BY THE AO FOR THE DETAILED REASONS GIVEN BY HIM IN HIS APPELLATE ORDER. WE SEE NO VALI D REASON TO INTERFERE WITH THE ORDER PASSED BY THE CIT(A). 20. RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE I S DISMISSED. ORDER PRONOUNCED ON 24 TH JUNE 2011 SD/- SD/- (SUSHMA CHOWLA) (D K SR IVASTAVA) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED: 24 TH JUNE 2011 POONAM COPY TO: 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH ASSISTANT REGISTRAR, ITAT, CHANDIGARH