M/s. Badani Jewellers, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-2(2), RAJKOT-GUJARAT

ITA 326/RJT/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0174 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D R CHHATRE
• Section: 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AH MEDABAD] (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 326/RJT/2013 (ASSESSMENT YEAR: 2009-10) M/S. BADANI JEWELLARS 20- RAJ PLAZA, PALACE ROAD, RAJKOT- 360001 V/S THE INCOME TAX OFFICER WARD-2(2), RAJKOT (APPELLANT) (RESPONDENT) PAN: AAEFB3305R APPELLANT BY : SHRI KALPESH DOSHI, A.R. RESPONDENT BY : SHRI D.R. CHHATRE, SR. D.R. ( )/ ORDER DATE OF HEARING : 11-08-2016 DATE OF PRONOUNCEMENT : 17 -08-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF LD. CIT(A)-III, RAJKOT DATED 04.06.2013 PERTAINING TO A .Y. 2009-10. ITA NO. 326/ RJT/2013 . A.Y.2009-10 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE A DDITION OF RS. 2,19,856/- MADE U/S. 69 OF THE ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE IS ENGAGED IN THE MANUFACTURING AND TRADING OF SILVER AND SILVER ORNAMENTS. A SURVEY ACTION WAS CONDUCTED U/S. 133A OF THE ACT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 26/27-06-2008 BY THE IN VESTIGATING WING, RAJKOT. A SURVEY ACTION WAS A RESULT OF THE INFORMATION RECEIVED FROM THE AIR INTELLIGENCE UNIT, CHENNAI WHICH INFOR MED THAT SHRI KAMALBHAI BADANI PARTNER OF THE ASSESSEE FIRM WAS C ARRYING GOLD ORNAMENTS AND WAS DETAINED AT THE CHENNAI AIRPORT. AS A RESULT OF THE SURVEY OPERATION, THE STOCK WAS INVENTORISED AND WA S RECONCILED WITH THE BOOK STOCK. WHILE MAKING SUCH RECONCILIATION PE RSONAL JEWELLERY OF SMT. RUPABEN BADANI OF 514.320 GRAMS WAS REDUCED FR OM THE JEWELLERY FOUND. HOWEVER, SMT. RUPABEN BADANI CLAIM ED TO HAVE KEPT 914 GRAMS OF ORNAMENTS WITH THE ASSESSEE AND THE EX PLANATION WAS FILED WITH THE A.O. THE EXPLANATION DID NOT FIND AN Y FAVOUR WITH THE A.O. WHO WAS OF THE OPINION THAT THE SURVEY WAS CON DUCTED ON 26.06.2008 AND IN THE BALANCE SHEET OF SMT. RUPABEN BADANI, SHE HAS SHOWN GOLD ORNAMENTS AT 310 GRAMS AS ON 31.03.2007 WHEREAS AS ON 31.03.2008, THE GOLD ORNAMENTS HAVE BEEN SHOWN AT 9 14 GRAMS. THE A.O. WAS OF THE STRONG BELIEF THAT THIS BALANCE SHE ET WAS PREPARED AFTER THE DATE OF SURVEY AND, THEREFORE, SMT. RUPAB EN BADANI HAS INCREASED HER GOLD ORNAMENTS BY CREDITING THE CAPIT AL ACCOUNT AS STRIDHAN. THE A.O. ACCORDINGLY MADE THE ADDITION OF RS. 2,19,856/- U/S. 69 OF THE ACT. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. ITA NO. 326/ RJT/2013 . A.Y.2009-10 3 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT WHEN THE PARTNER SHRI KAMALBHAI BADANI WAS APPREHEN DED AT THE CHENNAI AIRPORT. AT THAT VERY MOMENT, IT WAS EXPLAI NED TO THE AIR INTELLIGENCE UNIT THAT THE STOCK AVAILABLE IN THE F IRM INCLUDES ONE BOX OF JEWELLERY PERTAINING TO SMT. RUPABEN BADANI. THE LD. COUNSEL FURTHER DREW OUR ATTENTION TO THE STATEMENT OF SMT. RUPABEN BADANI WHEREIN HE HAS CATEGORICALLY STATED THAT HER PERSON AL JEWELLERY IS KEPT WITH THE FIRM FOR SAFETY PURPOSES. IT IS THE SAY OF THE LD. COUNSEL THAT SINCE SMT. RUPABEN BADANI HAS ACCEPTED THE OWNERSHI P OF THE IMPUGNED JEWELLERY AND HAS SHOWN THE SAME IN HER ST ATEMENT OF ACCOUNTS, THE ASSESSEE HAS DISCHARGED THE ONUS CAST UPON IT BY SECTION 69 OF THE ACT. 6. PER CONTRARY, THE LD. D.R. STRONGLY SUPPORTED THE F INDINGS OF THE REVENUE AUTHORITIES. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CAREFULLY PERUSED T HE RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD IN THE LIGH T OF RULE 18(6) OF THE APPELLATE TRIBUNAL RULES. IN HIS STATEMENT RECO RDED AT THE CHENNAI AIRPORT, SHRI KAMALBHAI BADANI WAS CONFRONTED WITH THE FOLLOWING QUESTION TO WHICH HE REPLIED AS UNDER:- 23. HOW MUCH STOCK IS AVAILABLE IN THE BUSINESS PRE MISES OF M/S. BADANI JEWELLERS? A. THE STOCK AVAILABLE IN OUR FIRM M/S BADANI JEWEL LERS AS ON TODAY IS ABOUT 6250.00 GMS EXCLUDING (1). ONE BOX OF JEWELLERY PER TAINING TO MRS RUPA BADANI W/O MY BROTHER MR PARESH BADANI AND (2). THE STOCK (5500.00 GMS) CARRIED ALONG WITH ME TO CHENNAI NOW. THE QUANTITY OF JEWEL LERY PERTAINING TO M/S BADANI JEWELLERS IS NOT KNOWN TO ME AND THAT PERTAI NS TO HER PERSONAL JEWELLERY. ITA NO. 326/ RJT/2013 . A.Y.2009-10 4 8. THUS, IT IS ABSOLUTELY CLEAR THAT THE PARTNER, AT T HE VERY FIRST OPPORTUNITY, AND WITHOUT ASSISTANCE OF LD. COUNSEL, EMPHATICALLY STATED THAT ONE BOX OF JEWELLERY PERTAINING TO SMT. RUPABE N BADANI IS KEPT ALONG WITH THE BUSINESS STOCK OF THE ASSESSEE FIRM. 9. WHEN SMT. RUPABEN BADANI WAS QUESTIONED BY THE ASSE SSING OFFICER, A SIMILAR QUESTION WAS ASKED TO HER WHETHER ANY PER SONAL ORNAMENTS BELONGING TO HER OR ANY OF HER FAMILY MEMBERS LYING IN M/S. BADANI JEWELLERS. SHE ADMITTED THAT HER PERSONAL ORNAMENTS WERE KEPT WITH THE FIRM FOR SECURITY REASONS. EVEN, IN THE LIST OF INVENTORY DRAWN AT THE TIME OF SURVEY OPERATION, WE FIND THAT THERE IS A SPECIFIC MENTION OF THE JEWELLERY CLAIMED TO BE BELONGING TO SMT. RU PABEN BADANI. WE ALSO FIND THAT IN HER STATEMENT OF ACCOUNTS SMT. RU PABEN BADANI HAS SHOWN THE GOLD ORNAMENTS ON THE ASSETS SIDE OF HIS BALANCE SHEET. 10. CONSIDERING THESE UNDISPUTED FACTS, IN OUR CONSIDER ED OPINION, IF THERE IS ANY INCREASE IN THE STRIDHAN OF SMT. RUP ABEN BADANI, THE ASSESSEE CANNOT BE CALLED FOR TO GIVE THE EXPLANATI ON. THE A.O. SHOULD HAVE QUESTIONED SMT. RUPABEN BADANI FOR SUCH INCREA SE IN THE STRIDHAN. IN OUR APPRECIATION OF THE FACTS MENTI ONED HEREINABOVE, THE ASSESSEE HAS DISCHARGED THE ONUS CAST UPON IT B Y THE PROVISIONS OF SECTION 69 OF THE ACT INASMUCH AS THE ASSESSEE HAS IDENTIFIED THE PERSON TO WHOM THE JEWELLERY BELONGED THE ASSESSEE HAS FILED NECESSARY DETAILS IN SUPPORT OF ITS CONTENTION AND THE OTHER PERSON HAS ACCEPTED. THEREFORE, WE DO NOT FIND ANY REASON FOR MAKING THE IMPUGNED ADDITIONS IN THE HANDS OF THE ASSESSEE. WE , ACCORDINGLY, SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETED THE ADDITION OF RS. 2,19,856/-. ITA NO. 326/ RJT/2013 . A.Y.2009-10 5 11. APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 17- 08 - 2 016 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJ KOT