VIJAY L. BHAWE, THANE V. ACIT CEN CIR-12, MUMBAI

ITA 3296/MUM/2009

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3894 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: F
• Next Hearing Date: 24-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 19-05-2009
• Court: TRIBUNAL
• Assessee Lawyers: S C GUPTA
• Keywords: Unexplained investment; Gift; Income from undisclosed sources; Valuation report
• Section: 143(3); 132

Judgement Text

, , F, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.3296/MUM/2009 ASSESSMENT YEAR: 2006-07 VIJAY L. BHAWE, BHAWE HOUSE, OPP. GADKARI RANGAYATAN DR. MOOSE ROAD, THANE-400602 MUMBAI / VS. A CIT 12 OLD CGO GLDG. ANNEXE, 8 TH FLOOR, 803, 101, M.K. ROAD, MUMBAI-20 ( AP PELLANT ) (RESPONDENT ) P.A. NO. ADWPB1871F ITA NO.3650/MUM/2009 ASSESSMENT YEAR: 2006-07 ACIT 12 OLD CGO GLDG. ANNEXE, 8 TH FLOOR, 803, 101, M.K. ROAD, MUMBAI-20 / VS. VIJAY L. BHAWE, BHAWE HOUSE, OPP. GADKARI RANGAYATAN DR. MOOSE ROAD, THANE-400602 MUMBAI (REVENUE ) (RESPONDENT ) P.A. NO. ADWPB1871F ASSESSEE BY SHRI S.C. GUPTA (AR) REVENUE BY SHRI G.M. DOSS (DR) / DATE OF HEARING: 13/07/2016 VIJAY L. BHAWE 2 / DATE OF ORDER: 05/08/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND DEPARTMENT AGAINST ORDER OF LD. COMMISSIONER OF INC OME TAX(APPEALS), MUMBAI, {(IN SHORT CIT(A)}, DATED 2 6.03.2009 PASSED AGAINST ASSESSMENT ORDER U/S 143(3) OF THE A CT, DATED 28.12.2007. FIRST WE SHALL TAKE UP APPEAL OF THE ASSESSEE IN IT A NO.3296/MUM/2009 FOR THE A.Y.2006-07 ON THE FOLLOWI NG GROUNDS: 1.THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 5,86,900/- MADE AS UNACCOUNTED CASH DESPITE THE FACT THAT AT THE TIME OF SEARCH, THE APPELLANT CATEGORICALLY STATED U/S 132( 4) THAT THE SAID CASH IS ACCUMULATION OF FUNDS WITHDRA WN FROM THE BANK AND EVIDENCE FOR SUCH WITHDRAWALS WERE ALSO PLACED OIL OF THE AUTHORITIES BELOW BESID ES EXPLAINING THE CIRCUMSTANCES. THUS, THE ADDITION SHOULD BE DELETED. 2.THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.14,07,682/- MADE ON ACCOUNTS OF UNEXPLAINED INVESTMENTS IN GOLD ORNAMEN TS BY IGNORING THE SUBMISSION AND CIRCUMSTANCES . THUS , THE ADDITION SHOULD BE DELETED. 3. THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 9,48,867/- MADE ON ACCOUNT OF DIAMOND JEWELLERY THOUGH THE SOURCE OF ACQUISITION OF THE SAME WERE EXPLAINED AND HAS BEEN ACCEPTED FOR THE MAJOR ITEMS BY HIM IN THE APPELLAT E ORDER. THUS, THE ADDITION SHOULD BE DELETED. 4.THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AM END THE GROUPS OF APPEAL ON OR BEFORE THE HEARING OF TH IS APPEAL. ADDITIONAL GROUND OF APPEAL TAKEN ON 26.10.2010 VIJAY L. BHAWE 3 5. REVENUE ERRED IN LAW IN BASING ASSESSMENT ORDER UND ER SECTION 143(3) FOR ASSESSMENT YEAR 2006-07 ON THE OUTCOME OF SEARCHES CONDUCTED UNDER SECTION 132 WHE N WARRANT WAS IN THE NAME OF VIJAY L. BHAWE, PRATIBHA V BHAWE, ANIKET BHAWE (AS INDICATED IN PANCHNAMAS) AND WHEN REVENUE WAS REQUIRED TO EXAMINE THE MATTER IN THE CASE OF AOP AS HELD BY ALLAHABAD HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SMT. VANDANA VERMA 227 CTR 388. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI S.C. GUPTA, AUTHORISED REPRESENTATIVES (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI G.M. DOSS, DEPARTMENTAL REPRESENTATIVE (CIT-DR) ON BEHALF OF THE REVENUE. 3. THE ADDITIONAL GROUND WAS NOT PRESSED DURING THE C OURSE OF HEARING AND THEREFORE, SAME IS DISMISSED. 4. GROUND NO.1: THIS GROUND DEALS WITH THE ADDITION MADE ON ACCOUNT OF CASH FOUND AT THE TIME OF SEARCH WHICH H AS BEEN TREATED AS UNACCOUNTED CASH AND THEREFORE ADDED AS UNEXPLAINED INCOME OF THE ASSESSEE. 4.1. BRIEF BACKGROUND IS THAT A SEARCH & SEIZURE OPERAT ION WAS CARRIED OUT AT THE RESIDENCE OF THE ASSESSEE U/ S 132 OF THE ACT. DURING THE COURSE OF SEARCH, CASH AMOUN TING TO RS.6,36,900/- WAS FOUND, OUT OF WHICH RS.5,51,000/- WAS SEIZED. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURC E OF CASH FOUND AT RS.6,36,900/-. IT WAS EXPLAINED BEFOR E THE AO THAT SOURCE OF CASH FOUND AT THE TIME OF SEARCH WAS OUT OF WITHDRAWALS MADE AT DIFFERENT TIMES DURING THE P ERIOD OF' SEVERAL YEARS FROM THE BANK ACCOUNTS OF THE FAMILY MEMBERS. THE ASSESSEE ALSO SUBMITTED A STATEMENT GI VING DETAILS OF WITHDRAWALS MADE BY THE ASSESSEE AND HIS FAMILY MEMBERS TO EXPLAIN THE SOURCE OF AMOUNT OF RS. VIJAY L. BHAWE 4 6,36,900/-. THE AO WAS NOT CONVINCED WITH THE ASSES SEE'S REPLY AND RELIED ON THE STATEMENT OF ASSESSEE RECOR DED DURING THE COURSE OF SEARCH ON 24.01.2006 WHEREIN T HE ASSESSEE ADMITTED THAT CASH WAS NOT ACCOUNTED FOR I N ITS BOOKS AND CASH OF RS. 5,51,000/ - WAS OFFERED FOR TAXATION AS INCOME OF THE IMPUGNED YEAR. 4.2. BEING AGGRIEVED, THE ASSESSEE FILED BEFORE THE LD. CIT(A) WHEREIN ASSESSEE FURNISHED DETAILS OF WITHDRAWALS O F PAST VARIOUS YEARS OF ALL THE FAMILY MEMBERS COMPRISING OF ASSESSEE, HIS WIFE, HIS THREE DAUGHTERS, HIS SON, A ND DAUGHTER- IN-LAW AND GRANDDAUGHTER. IT WAS SUBMITTED THAT DUE TO CONFUSION AND PRESSURE, THE ASSESSEE COULD NOT UNDE RSTAND THE PROPER FACTS AT THE TIME OF RECORDING OF STATEM ENT AND UNDER SOME MISUNDERSTANDING OF LAW THAT IF THE CASH BOOKS ARE NOT MAINTAINED, EVEN BY THE INDIVIDUAL ASSESSEE , THEN, CASH CANNOT BE SAID TO BE EXPLAINED UNDER THE LAW A ND THAT BOWING DOWN TO THE PRESSURE OF THE SEARCH TEAM, CAS H WAS OFFERED AS UNACCOUNTED INCOME. BUT, LD. CIT(A) WAS NOT SATISFIED WITH THE SUBMISSIONS OF THE ASSESSEE AND THEREFORE, HE CONFIRMED THE ADDITION MADE BY THE AO BY RELYING UPON THE STATEMENT OF THE ASSESSEE MADE AT THE TIME OF SEARC H AND ALSO ON THE GROUND THAT THOUGH THE ASSESSEE HAD SUBMITTE D THE DETAILS OF WITHDRAWALS, BUT THE ASSESSEE HAD FAILED TO FURNISH DETAILS OF EXPENSES INCURRED OUT OF THESE WITHDRAWA LS. 4.3. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE TRIBUNAL. 4.4. DURING THE COURSE OF HEARING BEFORE US, LD. COUNSE L MADE HIS ARGUMENTS AT LENGTH AND REITERATED THE SUBMISSI ONS MADE VIJAY L. BHAWE 5 BEFORE THE LOWER AUTHORITIES. OUR ATTENTION WAS ALS O DRAWN UPON THE STATEMENTS RECORDED AT THE TIME OF SEARCH AND ALSO UPON THE DETAILS OF CASH WITHDRAWALS AND HOUSEHOLD EXPENSES OF ASSESSEE AND HIS FAMILY MEMBERS FOR THE ASSESSME NT YEARS 2000-01 TO 2006-07 (I.E. UPTO DATE OF SEARCH). IT W AS ALSO SUBMITTED THAT THE STATEMENT WAS MADE AT THE TIME O F SEARCH UNDER ACUTE PRESSURE AND MISUNDERSTANDING OF FACTS AND LEGAL POSITION AS WAS NARRATED IN DETAIL BEFORE LD. CIT(A ) ALSO. 4.5. PER CONTRA, LD. DR SUBMITTED THAT THOUGH THE ASSES SEE HAD SUFFICIENT WITHDRAWALS DURING THE PAST FEW YEAR BUT DETAILS OF HOUSEHOLD EXPENSES AND OTHER EXPENSES WHICH HAVE BEEN MET OUT OF THE WITHDRAWALS HAVE NOT BEEN FURNISHED AND SINCE ASSESSEE HAD OFFERED THAT THIS AMOUNT AS UNDISCLOSE D INCOME, THEREFORE, ADDITION WAS RIGHTLY MADE BY THE LOWER A UTHORITIES AND SHOULD BE UPHELD. 4.6 . WE HAVE GONE THROUGH THE ENTIRE FACTS AND CIRCUMS TANCES OF THE CASE. IT IS NOTED THAT PRIMARY EVIDENCES REL IED UPON BY THE REVENUE FOR MAKING THIS ADDITION IS STATEMENT O F THE ASSESSEE RECORDED AT THE TIME OF SEARCH, AND RELEVA NT PART OF THE SAME READS AS UNDER: Q. DURING THE COURSE OF SEARCH U/S 132 TODAY AT YOUR RESIDENCE CASH OF RS.6,36,900/- WERE FOUND AND OUT OF THAT RS.5,51,000/- IS SEIZED. PLEASE EXPLAIN THE SOURCE OF THIS CASH? ANS. THE CASH WHICH IS FOUND TODAY DURING THE SEARCH IS IN FACT ACCUMULATED IN MY HOUSE THROUGH DAY TO DAY WITHDRAWALS FROM BANKS AND OTHER MEANS. BUT THE CASH IS NOT ACCOUNTED FOR IN MY BOOKS AS MY BOOKS IS NOT MAINTAINED FOR THIS PURPOSE. THIS CASH CANNOT BE EXPLAINED IN BOOKS. THE SEIZED CASH OF RS.5,51,000/- IS OFFERED FOR TAXATION AS INCOME OF CURRENT FINANCIAL YEAR. VIJAY L. BHAWE 6 4.7. THE PERUSAL OF THE AFORESAID ANSWER GIVEN BY THE A SSESSEE CLEARLY ESTABLISHED THAT THE CASH FOUND WAS OUT OF THE WITHDRAWALS FROM THE BANKS AND OTHER MEANS. BUT, TH E SAME WAS NOT RECORDED IN THE BOOKS, THEREFORE, SAME WAS OFFERED AS INCOME. THE ANSWER CLEARLY SHOWS THAT THE ASSESSEE WAS UNDER THIS IMPRESSION THAT UNLESS THE CASH IS RECORDED IN THE BOOKS. IT CANNOT BE TREATED AS EXPLAINED. THE ASSESSEE IS AN INDIVIDUAL ASSESSEE AND NOT REQUIRED TO MAINTAIN TH E BOOKS LIKE A FIRM OR A COMPANY AND THEREFORE, IT IS NOT C OMPULSORY THAT THE CASH HAS TO BE NECESSARILY RECORDED IN SOM E BOOKS. THE CASH SHOULD BE TREATED AS EXPLAINED IF THE SOUR CE OF CASH IS EXPLAINED TO BE OUT OF DISCLOSED INCOME OR OTHER SOURCES ON WHICH TAXES HAVE BEEN PAID. IT APPEARS THAT, AT THE TIME OF SEARCH, THE ASSESSEE WAS NOT CLEAR ABOUT THIS POSIT ION OF LAW. UNDER THESE CIRCUMSTANCES, IN OUR VIEW THE ASSESSEE CANNOT BE BOUND WITH ITS SUBMISSIONS IN ALL TIMES TO COME, PARTICULARLY WHEN THE STATEMENT WAS GIVEN BY HIM UN DER SOME CONFUSION, PRESSURE AND MISUNDERSTANDING OF FACTS A ND LEGAL POSITION. 4.8. THE CORRECT LEGAL POSITION IN THIS REGARD WAS CLAR IFIED BY HONBLE SUPREME COURT WAY BACK IN ITS LANDMARK JUDG MENT IN PULLANGODE RUBBER PRODUCCE CO. LTD. V. STATE OF KER ALA 91 ITR 18 WHEREIN IT WAS HELD THAT AN ADMISSION IS AN EXTREM ELY IMPORTANT PIECE OF EVIDENCE, BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE, AND THEREFORE, IT WAS OPEN TO THE PERSO N WHO MADE THE ADMISSION TO SHOW THAT IT WAS INCORRECT. THE JU DGMENT HAS BEEN FOLLOWED SUBSEQUENTLY BY MANY COURTS IN OUR CO UNTRY VIJAY L. BHAWE 7 WHICH ARE NOT DISCUSSED HERE FOR THE SAKE OF BREVIT Y. THUS, THE SITUATION THAT EMERGES BEFORE US FOR OUR CONSIDERAT ION IS THAT WHETHER THE IMPUGNED ADDITION COULD HAVE BEEN MADE DE- HORSE THE AFORESAID STATEMENT OF THE ASSESSEE WHEREIN TH E ASSESSEE HAD OFFERED THE IMPUGNED AMOUNT OF CASH FO R TAXATION AS ITS INCOME. IT IS NOTED THAT THE ASSESS EE IS LIVING IN A JOINT FAMILY COMPRISING OF VARIOUS FAMILY MEMBERS AS HAVE BEEN DISCUSSED ABOVE. THOUGH, THE ENTIRE HOUSE WAS COVERED IN THE SEARCH AND ALL THE FAMILY MEMBERS WERE ALSO COVERED IN THE SEARCH BUT RECOVERY OF CASH HAS BEEN SHOWN IN T HE NAME OF ASSESSEE ONLY. IT IS QUITE IMPROBABLE THAT NO CA SH AT ALL WAS FOUND FROM THE POSSESSION OF ANY OTHER FAMILY MEMBE R(S). THIS FACT IS ON RECORD THAT MANY OTHER FAMILY MEMBERS WE RE ALSO FILING THEIR INCOME TAX RETURNS AS WELL AS WEALTH T AX RETURNS SEPARATELY. THUS, IT APPEARS THAT ENTIRE CASH HAS B EEN WRONGLY SHOWN AS SEIZED FROM PERSONAL POSSESSION OF ASSESSE E AND THUS, THE ENTIRE CASH HAS BEEN WRONGLY ADDED IN THE HANDS OF ASSESSEE ONLY. 4.9. FURTHER, IT IS NOTED THAT ASSESSEE HAS BEEN CLAIMI NG RIGHT FROM THE STAGE OF THE AO THAT ASSESSEE IS HAVING SU FFICIENT AMOUNT OF CASH WITHDRAWALS SINCE LAST MANY YEARS. T HE POINT WORTH NOTING HERE IS THAT THIS FACT WAS STATED BY T HE ASSESSEE IN HIS STATEMENT ALSO AT THE TIME OF SEARCH. LD. AO HAS CHOSEN TO RELY ONLY UPON THAT PART OF STATEMENT WHICH SUIT ED HIM AND IGNORED THE REMAINING ONE. IT IS WELL ACCEPTED POSI TION OF LAW THAT IN THE INCOME TAX PROCEEDINGS THEORY OF APPROBATION AND REPROBATION IS NOT APPLICABLE. THE REVENUE AUTHORITIES ARE NOT EXPECTED TO BLOW HOT AND COLD TOGETHER. THE AO APPE ARS TO VIJAY L. BHAWE 8 HAVE FOLLOWED THE RULE OF HEAD I WIN TAIL YOU LOSE , WHEREAS THE REVENUE AUTHORITIES ARE EXPECTED TO WORK IN FAIR AN D TRANSPARENT MANNER. BEFORE MAKING ANY ADDITION, IT IS EXPECTED FROM THE AO THAT ALL THE FACTS AND CIRCUMS TANCES, PLEADINGS AND EVIDENCES BEFORE THE AO WOULD BE TAKE N INTO ACCOUNT. THE STATEMENT OF THE ASSESSEE SHOULD BE RE AD IN ITS ENTIRETY, PARTICULARLY WHEN IT IS BEING USED AGAINST THE ASSESSEE. THUS, IN OUR CONSIDERED VIEW, THE REVENUE AUTHORITIES WERE DUTY BOUND TO CONSIDER THE ASPECT OF SOURCE OF CASH CLAIMED TO BE OUT OF THE WITHDRAWAL FROM BA NKS AND OTHER MEANS. IT IS NOTED FROM THE PERUSAL OF THE OR DERS OF THE LOWER AUTHORITIES THAT ASSESSEE HAD SUBMITTED THAT TOTAL AMOUNTS OF WITHDRAWALS DURING THE LAST 7 YEARS BY T HE ASSESSEES FAMILY STOOD AT RS.127.25 LAKH. UNDER TH ESE CIRCUMSTANCES, AMOUNT OF CASH FOUND AT THE TIME OF SEARCH OF RS.6,36,900/- IS EASILY EXPLAINED AND COVERED THERE IN. THE APPREHENSION OF THE LOWER AUTHORITIES THAT THERE WE RE HUGE EXPENSES, OTHER HOUSEHOLD EXPENSES AND MARRIAGE EXP ENSES WHICH MIGHT HAVE BEEN MADE FROM THESE WITHDRAWALS I S CERTAINLY NOT OUT OF CONTEXT BUT NO EVIDENCES WERE FOUND DURING THE COURSE OF SEARCH INDICATING THAT ENTIRE WITHDRAWALS WERE EXHAUSTED IN MEETING HOUSEHOLD, MARRIAGE AND O THER EXPENSES. THUS, WE CANNOT IGNORE THE AVAILABILITY O F CASH ON ACCOUNT OF HUGE AMOUNT OF WITHDRAWALS FROM THE BANK JUST ON THE BASIS OF DOUBTS AND SURMISE, ESPECIALLY WHEN NO CONTRARY MATERIAL HAS BEEN BROUGHT ON RECORD. IN OUR VIEW, T HE ASSESSEE HAS DULY EXPLAINED THE AVAILABILITY OF CASH OF RS.6 ,36,900/- FOUND AT THE TIME OF SEARCH OUT OF THE CASH AVAILAB LE ON VIJAY L. BHAWE 9 ACCOUNT OF WITHDRAWALS MADE BY THE ASSESSEE AND HIS FAMILY MEMBERS IN THE CURRENT YEAR AS WELL AS DURING THE L AST 7 YEARS. WE FIND THAT ADDITION MADE BY THE AO IS NOT SUSTAIN ABLE AND THEREFORE SAME IS DIRECTED TO BE DELETED. 5. GROUND NOS. 2 & 3: THESE GROUNDS DEAL WITH THE GRIEVANCES OF THE ASSESSEE WITH REGARD TO ADDITION OF RS.14,07 ,682/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GOLD ORNAME NTS AND ADDITION OF RS.9,48,867/- MADE ON ACCOUNT OF DIAMON D JEWELLERY. 5.1 . THE BRIEF BACKGROUND AND THE FACTS AS CULLED OUT FROM THE ORDERS OF THE LOWER AUTHORITIES ARE THAT DURING THE COURSE OF SEARCH, GOLD JEWELLERY OF RS.47,07,818/-, DIAMOND JEWELLERY OF RS.35,35,166/- AND SILVER ARTICLES OF RS.70,9021- WERE FOUND, OUT OF WHICH GOLD JEWELLERY OF RS. 14,84,600/- AND DIAMOND JEWELLERY OF RS.21,32,9 58/- WERE SEIZED. THE ASSESSEE EXPLAINED THAT OUT OF 526 6.490 GMS OF GOLD JEWELLERY, 3485 GMS WAS EITHER ANCESTRA L OR PURCHASED SOMETIME PRIOR TO 1970, 3485 GMS OF GOLD JEWELLERY WAS SHOWN IN THE VALUATION REPORT PREPARE D FOR FILING WEALTH TAX RETURNS IN RESPECT OF THE MEMBERS OF ASSESSEE'S FAMILY, ABOUT 350 GMS OF GOLD JEWELLERY WAS PURCHASED SOMETIME AROUND 1997 AT THE TIME OF WEDDI NG OF ASSESSEE'S DAUGHTER, ABOUT 500 GMS WERE PURCHASED I N THE YEAR 2000 AT THE TIME OF THE WEDDING OF ASSESSEES SON AND BALANCE OF ABOUT 931.49 GMS WERE PURCHASED SOMETIME IN THE YEAR 2002. IT WAS SUBMITTED THAT ALL THE JEWELLERY WAS PURCHASED OUT OF CASH WITHDRAWALS FROM THE BANK. TH E ASSESSEE CLAIMED THAT HIS TWO UNMARRIED SISTERS WER E VIJAY L. BHAWE 10 STAYING WITH HIM AND ONE MARRIED SISTER WAS ALSO RE SIDING AT HIS HOUSE, JEWELLERY OF ALL THE SISTERS WERE PLA CED IN ASSESSEE'S HOUSE. IT WAS ALSO CONTENDED THAT JEWELL ERY OF ASSESSEE'S DAUGHTER GIFTED TO HER BY HER GRANDFATHE R WAS ALSO PLACED AT ASSESSEE'S RESIDENCE. THE AO HELD TH AT THE ASSESSEE DID NOT SUBMIT ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CONTENTIONS AND ONLY COPIES OF VALUA TION REPORT OF JEWELLERY AND COMPUTATION OF WEALTH ALONG WITH ACKNOWLEDGEMENTS FOR FILING OF RETURNS WERE SUBMITT ED. THE AO EXAMINED THE VALUATION REPORT AND FOUND THAT IN CASE OF MRS PRATIBHA V.BHAWE GOLD JEWELLERY WAS 450.45 G MS AND NOT OF 473.7 GMS AS CLAIMED BY THE ASSESSEE. THE AO WAS NOT CONVINCED WITH THE CLAIM OF THE ASSESSEE THAT B ALANCE GOLD JEWELLERY WEIGHING 350 GMS WAS PURCHASED IN 19 97, 500 GMS IN 2000 AND 931.49 GMS IN 2002 OUT OF CASH WITHDRAWALS. THE AO OBSERVED THAT AT THE TIME OF GI VING DETAILS OF WITHDRAWALS MADE BY THE ASSESSEE AND HIS FAMILY MEMBERS THEY DID NOT STATE THAT OUT OF WITHDRAWALS, SOME AMOUNT WAS SAVED AND WAS UTILISED FOR PURCHASE OF JEWELLERY NOR ANY DOCUMENTARY EVIDENCE IN SUPPORT O F PURCHASE OF JEWELLERY WEIGHING 350 GMS WAS SUBMITTE D. ACCORDINGLY, THE AO TREATED THE BALANCE 1781.49 GMS (350GMS + 500 GMS + 931.49 GMS) AS UNEXPLAINED. BESIDES, THERE WAS A DIFFERENCE OF 23.25 GMS OF GOL D JEWELLERY IN THE CASE OF MRS. PRATIBHA V.BHAWE. THEREFORE, TOTAL JEWELLERY WEIGHING 1804.74 GMS (23 .25 GMS + 1781.49 GMS ) WAS TREATED AS UNEXPLAINED JEWE LLERY VIJAY L. BHAWE 11 AND WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE W HICH RESULTED IN ADDITION OF RS. 14,07,682/-. 5.2. SIMILARLY, ADDITION OF RS.21,32,958/-WAS MADE ON ACCOUNT OF UNACCOUNTED DIAMOND JEWELLERY. THE ADDIT ION WAS MADE FOR THE AMOUNT OF DIFFERENT BETWEEN THE VALUE SHOWN AS PER WEALTH TAX RETURNS AND VALUE ADOPTED BY THE DEP ARTMENTAL VALUER ARISING ON ACCOUNT OF MISMATCH IN THE ITEMS AS SHOWN IN THE WEALTH TAX RETURNS AND AS DESCRIBED BY THE V ALUER IN ITS VALUATION REPORT. THE ASSESSEE MADE DETAILED SUBMIS SIONS BEFORE THE LD. CIT(A). BUT, THE ADDITION ON ACCOUNT OF UNACCOUNTED GOLD JEWELLERY WAS CONFIRMED AND PART R ELIEF WAS GIVEN OF RS.11,84,091/- ON ACCOUNT OF DIAMOND JEWEL LERY. BEFORE US, LD. COUNSEL MADE DETAILED SUBMISSIONS. H IS PRIMARY OBJECTION WAS THAT IN THIS CASE JEWELLERY H AS BEEN RECOVERED FROM INDIVIDUAL AND PERSONAL POSSESSION O F VARIOUS FAMILY MEMBERS AND HAS BEEN ACCORDINGLY RECORDED IN THE PANCHNAMA AND ACCORDINGLY VALUED BY THE DEPARTMENTA L VALUER SEPARATELY AT THE TIME OF SEARCH. OUR ATTENT ION WAS DRAWN ON THE VALUATION REPORT SHOWING VALUE OF THE JEWELLERY DONE SEPARATELY FOR THE JEWELLERY FOUND FROM THE PE RSONAL POSSESSION OF THE EACH OF THE FAMILY MEMBERS. BUT, THE ENTIRE ADDITION HAS BEEN WRONGLY MADE IN THE HANDS OF THE ASSESSEE. LD. COUNSEL SUBMITTED THAT SUBSTANTIAL PART OF THE JEWELLERY HAS BEEN DISCLOSED BY THE FAMILY MEMBERS IN THEIR R ESPECTIVE WEALTH TAX RETURNS SINCE LAST MANY YEARS AND SUBSEQ UENTLY, THERE HAS BEEN ADDITION IN THE NUMBER OF FAMILY MEM BERS AND THE SOME JEWELLERY HAS BEEN ADDED ON ACCOUNT OF FRE SH PURCHASES MADE FROM THE DISCLOSED SOURCES. VIJAY L. BHAWE 12 5.3. PER CONTRA, LD. DR RELIED UPON THE ORDERS OF THE L OWER AUTHORITIES. 5.4. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHO RITIES. WE HAVE FIRST OF ALL CONSIDERED THE PRIMARY OBJECTI ON OF THE ASSESSEE. IT IS NOTED THAT JEWELLERY HAS BEEN FOUND FROM THE SEPARATE AND PERSONAL POSSESSION OF 8 FAMILY MEMBER S AND HAS BEEN RECORDED ACCORDINGLY IN THE PUNCHNAMA AS W ELL AS VALUATION REPORT PREPARED BY THE DEPARTMENTAL VALUE R AT THE TIME OF SEARCH. FURTHER, ALL THE FAMILY MEMBERS ARE MAJOR AND SEPARATELY ASSESSED AND SEPARATE INCOME TAX AND WEA LTH TAX RETURN ARE FILED BY THE FAMILY MEMBERS. NO ALLEGATI ON HAS BEEN MADE AND NO EVIDENCES HAVE BEEN BROUGHT ON RECORD B Y THE AO TO SHOW THAT INVESTMENT WAS MADE BY THE ASSESSEE IN ACQUIRING JEWELLERY ON BEHALF OF ALL THE FAMILY MEM BERS. UNDER THESE CIRCUMSTANCES, IN OUR OPINION, LAW DOES NOT P ERMIT TO MAKE ENTIRE ADDITION ON ACCOUNT OF DIFFERENCE FOUND IN THE JEWELLERY RECOVERED AND JEWELLERY DISCLOSED IN WEAL TH TAX RETURNS/BOOKS OF ACCOUNTS, IN THE HANDS OF ASSESSEE ONLY. UNDER THESE CIRCUMSTANCES, WE FIND IT APPROPRIATE T O SEND THIS ISSUE BACK TO THE FILE OF THE AO WITH THE DIRECTION THAT AO IS PERMITTED TO MAKE ADDITION ONLY WITH RESPECT TO THE JEWELLERY FOUND FROM THE ASSESSEE THAT TOO ONLY FOR THE AMOUN T WHICH REMAINS UNEXPLAINED. THE ASSESSEE IS FREE TO SUBMIT REQUISITE DETAILS AND DOCUMENTARY EVIDENCES TO EXPLAIN THE SO URCE OF THE JEWELLERY FOUND FROM HIS POSSESSION. THE ASSESSEE I S ALSO FREE TO SUBMIT BEFORE THE AO, COPIES OF JUDGMENTS AND CB DT CIRCULAR WHICH HAVE BEEN RELIED BEFORE US TO EXPLAI N THE JEWELLERY FOUND FROM ITS POSSESSION. THE AO SHALL G IVE VIJAY L. BHAWE 13 ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE BEF ORE DECIDING THIS ISSUE AFRESH AND SHALL ALSO CONSIDER THE SUBMISSIONS, EVIDENCES AND JUDGMENTS AS MAY BE PLAC ED BY THE ASSESSEE BEFORE THE AO. THUS, WITH THESE DIRECT IONS GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD ARE S ENT BACK TO THE FILE OF THE AO AND MAY BE TREATED AS ALLOWED FO R STATISTICAL PURPOSES. NOW, WE SHALL TAKE UP REVENUES APPEAL IN ITA NO. 3650/MUM/2009: 6. THE ONLY GROUND RAISED BY THE REVENUE IS WITH REGA RD TO RELIEF GIVEN BY THE LD. CIT(A) ON ACCOUNT OF DIAMON D JEWELLERY FOUND AT THE TIME OF SEARCH. SINCE, WE HAVE REMITTE D THE ISSUE WITH REGARD TO GOLD JEWELLERY AS WELL AS DIAMOND JE WELLERY BY THE AO TO DECIDE THE SAME AFRESH WITH OUR DIRECTION AS GIVEN ABOVE, THE GROUNDS RAISED BY THE REVENUE ALSO SENT BACK TO THE AO WITH SIMILAR DIRECTIONS. UNDER THESE CIRCUMSTANC ES, APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STAT ISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST, 2016. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; # DATED : 05/08/2016 VIJAY L. BHAWE 14 CTX? P.S/. .. FIT FOR PUBLICATION SD/- SD/- (JM) (AM) #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. % &' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. * * ( % ) / THE CIT, MUMBAI. 4. * * / CIT(A)- , MUMBAI 5. -. / (01 , * % 012 , / DR, ITAT, MUMBAI 6. / 34 5 / GUARD FILE. / BY ORDER, ) -% ( //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI