RAJENDRA JAYANTILAL SHAH, MUMBAI V. DCIT CEN CIR 31, MUMBAI

ITA 2866/MUM/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4574 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 13-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V S JADHAVDR
• Assessee Lawyers: VIJAY C KOTHARI
• Keywords: Unexplained investment; Search and seizure; Loose papers; Accommodation entries
• Section: 40A(3); 133A; 69; 132

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.2866/MUM/2015 ASSESSMENT YEAR: 2011-12 SHRI RAJENDRA JAYANTILAL SHAH, C/101, PANCHSHIL HEIGHT, DHANUKAR WADI, MAHAVIR NAGAR, KANDIVALI WEST, MUMBAI-400067 / VS. DCIT, CENTRAL CIRCLE-31, MUMBAI / ASSESSEE / REVENUE P.A. NO. AAIPS7082A $ % & / ASSESSEE BY SHRI VIJAY C. KOTHARI $ % & / REVENUE BY SHRI V.S. JADHAV-DR / DATE OF HEARING 14/01/2016 & / DATE OF ORDER: 18/01/2016 & / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 06/02/2015 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. THE FIRST GROUND RAISED IN THIS APPEAL PERT AINS TO ITA NO.2866/MUM/2015 RAJENDRA JAYANTILAL SHAH 2 THE ADDITION OF RS.3,75,000/-, AS INVESTMENT IN FUR NITURE, UNDISCLOSED SOURCES. 2. DURING HEARING OF THIS APPEAL, THE LD. COUNSEL FOR THE ASSESSEE, SHRI VIJAY C. KOTHARI, ADVANCED ARGUM ENTS WHICH IS IDENTICAL TO THE GROUND RAISED BY EXPLAINI NG THAT SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE INCO ME TAX ACT, 1961, (HEREINAFTER THE ACT) WAS CARRIED OUT ON AVON CORPORATION GROUP ON 04/02/2011 AND ALSO AT THE PREMISES OF THE ASSESSEE. CERTAIN LOOSE PAPERS WER E SEIZED SHOWING THE INVESTMENT OF RS.3,75,000/- BY THE ASSE SSEE FOR PURCHASING THE FURNITURE, WHICH WAS ADDED AS UNEXPLAINED INVESTMENT. MY ATTENTION WAS INVITED T O PARA 3 OF THE ASSESSMENT ORDER ALONG WITH PAGES 11 & 25. THE CRUX OF THE ARGUMENT IS THAT NECESSARY DETAILS WERE DULY FILED BY THE ASSESSEE. ON THE OTHER HAND, SMT. SUN ITA BILLA, LD. DR, DEFENDED THE ADDITION BY CONTENDING THAT THE ASSESSEE COULD NOT EXPLAIN THE INVESTMENT MADE IN T HE FURNITURE, THEREFORE, THE ADDITION WAS RIGHTLY MADE /UPHELD. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE, AT THE RELEVANT TIME, WAS EM PLOYEE OF M/S AVON CORPORATION LTD., WHEREIN, A SEARCH AND SE IZURE ACTION U/S 132 WAS CARRIED OUT ON 04/02/2011 ALONG WITH THE PREMISES OF THE ASSESSEE. FURTHER, CERTAIN PREM ISES OF M/S AVON GROUP WERE ALSO COVERED BY A SURVEY, SIMULTANEOUSLY, CONDUCTED U/S 133A OF THE ACT. THE ITA NO.2866/MUM/2015 RAJENDRA JAYANTILAL SHAH 3 ASSESSEE IS ALSO WORKING AS A INSURANCE AGENT FOR I CICI PRUDENTIAL LIFE INSURANCE COMPANY AND EARNED SOME COMMISSION INCOME. THE ASSESSEE DECLARED INCOME OF RS.2,84,810/- FOR THE IMPUGNED ASSESSMENT YEAR ON 19/12/2012. DURING THE COURSE OF SEARCH, CERTAIN L OOSE PAPERS WERE SEARCHED, WHICH WERE SHOWN AS ANNEXURE A-1, SHOWING INVESTMENT OF RS.3,75,000/- ON PURCHASE OF FURNITURE. AS PER THE REVENUE, NO SATISFACTORY EXP LANATION WITH RESPECT TO SOURCE OF INVESTMENT WAS FURNISHED BY THE ASSESSEE, THEREFORE, THE IMPUGNED AMOUNT WAS ADDED AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. I HAVE PE RUSED THE RECORD AND NOTE THAT AS PER PARA 3 OF THE ASSES SMENT ORDER, CERTAIN INCRIMINATING DOCUMENTS WERE SEIZED SUGGESTING THAT THE ASSESSEE WAS INVOLVED IN PROVID ING ACCOMMODATION ENTRIES TO M/S AVON CORPORATION. IT F URTHER STATES THAT HOWEVER, IN THE INSTANT CASE, THERE WA S NO ADMISSION OF UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. AT PAGE 10 OF THE ASSESSMENT ORDER, WHIL E REPLYING TO QUESTION NO. 4 WITH RESPECT TO DETAILS OF FIRMS/PROPRIETARY CONCERNS & COMPANIES, THE ASSESSE E EXPLAINED THAT HE WAS HAVING TWO PROPRIETARY CONCER NS NAMELY JAI CHAMUNDA ENTERPRISE AND SHRI HARI ENTERP RISE AND ALSO DIRECTOR IN ENOSIS MERCANTILE PVT. LTD. AN D FURTHER STATED THAT HE HAD NO OTHER PROPRIETARY CONCERN NOR A PARTNER IN ANY FIRM OR A DIRECTOR IN ANY COMPANY IN THE LAST SIX YEARS. HE EXPLAINED THE INCORPORATION OF THE P ROPRIETARY CONCERN. AT PAGE 25 OF THE ASSESSMENT ORDER, SO FAR AS, THE ITA NO.2866/MUM/2015 RAJENDRA JAYANTILAL SHAH 4 SOURCE OF INVESTMENT MADE IN THE FURNITURE AMOUNTIN G TO RS.3,75,000/-, THE ASSESSEE FILED LETTER ON 20/03/2 013 EXPLAINED THAT PURCHASING OF FURNITURE AND THE ADD ITION WAS MADE MERELY ON PRESUMPTION BY THE DEPARTMENT AS IS OOZING OUT FROM PARA 11.2 OF THE ASSESSMENT ORDER. THE CLAIM OF THE ASSESSEE IS FURTHER SUBSTANTIATED FROM PARA 11.4 OF THE ASSESSMENT ORDER AS IN THE DOCUMENTS IT SELF, PAGE NO 39 OF THE DOCUMENTS WAS EXPLAINED BY THE ASSESSEE, THUS, THE TOTALITY OF FACTS INDICATES THA T THE ADDITION WAS MERELY BASED ON PRESUMPTION. THUS, TH E ADDITION IS DELETED, CONSEQUENTLY, THE GROUND IS AL LOWED. 3. THE NEXT GROUND PERTAINS TO CONFIRMING THE ADDITION OF RS.1,82,309/- U/S 69 OF THE ACT. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSEE, INVITED MY ATTENTION TO PARA 11.4 AND PAGE 25 OF THE ASSESSMEN T ORDER BY CONTENDING THAT THE NECESSARY DETAILS WERE DULY SUBMITTED BEFORE THE LD. ASSESSING OFFICER. ON THE OTHER HAND, THE LD. DR, DEFENDED THE ADDITION. 3.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO TED THAT CERTAIN HANDWRITTEN PAGES WERE RECOVERED, WHEREIN, AT PAGE 39, THE AMOUNT OF RS.1,82,309/- WAS FOUND MENTIONED . IT IS ALSO OBSERVED THAT DURING SEARCH PROCEEDINGS, TH E ASSESSEE EXPLAINED AS UNDER:- THIS PAGE IS WORKING OF ROUGH PURCHASE BILLS STATEM ENT OF AMBIKA INDUSTRIES AMOUNTING TO RS.1,82,309 /- ITA NO.2866/MUM/2015 RAJENDRA JAYANTILAL SHAH 5 3.2. HOWEVER, DURING POST SEARCH PROCEEDINGS, THE ASSESSEE EXPLAINED THAT HE PURCHASED FURNITURE FROM CHARMI, A FURNITURE DEALER FOR HIS RESIDENCE. THE ASSESSEE ALSO PRODUCED A CASH MEMO ISSUED BY CHARMI. THE LD. ASSESSING OFFICER WAS OF THE VIEW, THAT IT WAS A CA SH PURCHASE, THUS THE SOURCE OF INVESTMENT WAS NOT EXP LAINED AND ADDED THE SAME FROM UNACCOUNTED SOURCES BY TREA TING THE SAME AS UNEXPLAINED INVESTMENT U/S 69 OF THE AC T. HOWEVER, IT IS FURTHER NOTED THAT THE DETAILS ARE E XPLAINED BY THE ASSESSEE AS AVAILABLE IN PARA 11 (PAGE 25 OF THE ASSESSMENT ORDER) ALONG WITH EXPLANATION AND EVIDEN CE ATTACHED. THE ASSESSEE ENCLOSED THE LEDGER ACCOUNT , THEREFORE, I FIND NO MERIT IN THE ADDITION, THEREFO RE, DELETED, RESULTANTLY, THIS GROUND IS ALSO ALLOWED. 4. THE LAST GROUND RAISED PERTAINS TO ADDING RS.24,250/- U/S 40A(3) OF THE ACT. THE EXPLANATION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT INDIVIDUAL BIL LS WERE SUBMITTED BEFORE THE ASSESSING OFFICER WHICH ARE LE SS THAN RS.20,000/-. ON THE OTHER HAND, THE LD. DR, DEFEND ED THE ADDITION. 4.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND TH AT ON THE BASIS OF HANDWRITTEN NOTING ON PAGE 32 OF THE LOOSE PAPERS, THE ADDITION OF RS.24,450/- WAS MADE WITH RESPECT T O CERTAIN HARDWARE ITEMS. THE ASSESSEE ADMITTED THE S AME TO BE CASH PURCHASES AND NO EXPLANATION WAS OFFERED. E VEN ITA NO.2866/MUM/2015 RAJENDRA JAYANTILAL SHAH 6 BEFORE THIS TRIBUNAL, NO PLAUSIBLE EXPLANATION WAS ADDUCED; THEREFORE, THIS GROUND IS REJECTED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 14/01/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 18/01/2016 F{X~{T? P.S / ! & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI