Shri Manish N.Soni, Gandhinagar V. The Income tax Officer,GNR Ward-3, Gandhinagar

ITA 3371/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5922 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-06-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 10-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Principle of natural justice; Retraction
• Section: 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI N.S.SAINI, ACCOUNTANT MEMBER DATE OF HEARING: 15.06.10 DRAFTED ON:15.06.10 ITA NO.3371/AHD/2008 ASSESSMENT YEAR : 2004-2005 SHRI MANISH N. SONI PLOT NO.474/1, SECTOR-6/A, GANDHINAGAR. VS. INCOME TAX OFFICER, GANDHINAGAR WARD.3, GANDHINAGAR. PAN/GIR NO. : ANWPS2901E (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI MANISH J. SHAH RESPONDENT BY: SHRI K. MADHUSUDAN SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), GANDHINAGAR DATED 3.10.2007 BY TAKING THE FOLLOWING GROUNDS OF APPEAL. 1. THE C.I.T.(APPEALS) ERRED IN NOT APPRECIATING THE LEGAL CONTENTIONS AND OBJECTIONS RAISED AT THE TIME OF HEARING AND IN THE PROCESS ERRED IN REJECTING TH E SAME. 2. THE C.I.T.(APPEALS) ERRED IN UPHOLDING THE ADDIT ION OF RS.10,00,893/- UNDER SEC.69A AS ALLEGED UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY WA S CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 17. 10.2003. - 2 - DURING THE COURSE OF SURVEY, STOCK WAS INVENTORISED AND AFTER COMPARING WITH THE STOCK AS AVAILABLE ON 1.04.2003 PLUS THE UPTO DATE PURCHASES MINUS THE SALES, EXCESS STOCK O F 1853.97 GMS. OF GOLD WAS FOUND. THE VALUE OF SUCH STOCK WAS ARRIVED AT RS.9,64,992/-. ALSO STOCK OF NOSE RINGS WORTH RS.15 ,000/- AND GEM STONE WORTH RS.20,901/- WAS FOUND AND THUS, THE TOTAL UNACCOUNTED STOCK WAS ARRIVED AT RS.10,00,893/-. 4. SUBSEQUENTLY, THE ASSESSEE FILED RETURN OF INCOM E FOR ASSESSMENT YEAR 2004-05 ON 1.11.2004 WITHOUT DECLAR ING THE INCOME WHICH WAS PROMISED IN HIS STATEMENT RECORDED UNDER SECTION 133A. DURING THE ASSESSMENT PROCEEDINGS, AS SESSEE RAISED A NEW CONTENTION THAT NOT ONLY THE ASSESSEE S PROPRIETARY FIRM M/S.DURGA JEWELLERS OPERATED FROM THE PREMISES WHERE SURVEY UNDER SECTION 133A WAS CONDUCTED BUT ANOTHER FIRM OWNED BY HIS FATHER SHRI NAVINCHANDRA SONI AS KARTA OF NAVINCHANDRA SONI HUF WAS ALSO OPERATING FROM THAT PLACE SINCE 1998-99 REGARDING THE OTHER ITEMS LIKE NOSE RING AN D GEM STONE, THE ASSESSEE SUBMITTED THAT SOURCE OF ITS WA S SALES PROCEEDS OF SILVER ITEMS TAKEN AT HOME BEFORE THE D ATE OF SURVEY. SINCE THE BOOKS OF ACCOUNTS HAD BEEN WRITTE N ONLY UPTO 2006, THE SALE OF SILVER AND SUBSEQUENT PURCHASE OF GEMS STONE REMAIN TO BE RECORDED WHICH WERE DULY RECORDED ON 1 8.12.2006. 5. THE LEARNED ASSESSING OFFICER AFTER CONSIDERING THE VARIOUS SUBMISSIONS PUT FORTH BY THE ASSESSEE OBSER VED THAT AT NO STAGE DURING THE SURVEY INCLUDING THE STATEMENT RECORDED UNDER SECTION 131(1), IT WAS STATED THAT HUF BUSINE SS IN THE NAME OF NAVINCHANDRA SONI WAS ALSO RUNNING FROM THE SAME PREMISES. EVEN AFTER THE SURVEY, THE ASSESSEE DID NOT REBUT - 3 - THE FACT OF DISCREPANCY IN THE STOCK WHICH WAS BEIN G DONE AT THIS STAGE AFTER SUCH A LAPSE OF TIME TO SAVE TAX. THE D OCUMENTARY EVIDENCE NOW BEING PRODUCED ARE NOT VERIFIABLE AND THE STATEMENT RECORDED DURING THE COURSE OF SURVEY AND HAS GOT SIGNIFICANT LEGAL BINDING. THE LEARNED ASSESSING OF FICER FURTHER OBSERVED THAT THE ASSESSEES BOOKS OF ACCOUNT WERE NOT FOUND COMPLETE DURING THE SURVEY AND HENCE CANNOT BE RELI ED UPON. HE ALSO REFERRED TO THE FACT THAT THE CONDUCT OF TH E ASSESSEE IN PAYING ADVANCE TAX TO THE EXTENT OF RS.75,000/- IN TWO INSTALLMENT SHOWED THAT AT ONE STAGE HE WAS TRYING TO ACT IN ACCORDANCE WITH THE STATEMENT RECORDED AT THE TIME OF SURVEY. ACCORDINGLY, THE LEARNED ASSESSING OFFICER REJECTED THE SUBMISSIONS MADE BY THE ASSESSEE AND MADE ADDITION OF RS.10,00,893/- UNDER SECTION 69A AS UNEXPLAINED INV ESTMENT MADE BY THE ASSESSEE. 6 IN APPEAL, BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS) IT WAS SUBMITTED THAT STATEMENT RECORD ED UNDER SECTION 133A HAD NO EVIDENTIARY VALUE AND RELIED UP ON THE DECISION OF KERALA HIGH COURT IN THE CASE OF PAUL M ATHEWS & SONS 263 ITR 101. FURTHER, IT WAS STATED THAT SURVE Y WAS UNDERTAKEN AT THE TIME OF DIWALI WHEN THE BUSINESSM AN IS MORE INTERESTED IN DOING BUSINESS KEEPING IN MIND ASSESS EES NATURE OF BUSINESS THE FACT THAT THE STATEMENT WAS NOT REC ORDED UNDER FREE WILL WAS BROUGHT TO THE NOTICE OF LEARNED ASSE SSING OFFICER VIDE LETTER DATED 31.3.2004 BEFORE THE END OF THE P REVIOUS YEAR AND BEFORE FILING OF RETURN OF INCOME. 7. IT WAS FURTHER SUBMITTED THAT THE RECONCILIATION OF THE STOCK WAS FILED ALONG WITH LETTER DATED 31.03.2004 WHICH - 4 - SHOWED EXISTENCE OF STOCK OF HUF AND IF THE SAME AC COUNTED FOR IT MATCHES WITH THE STOCK FOUND AT THE TIME OF SURV EY. THE HUF WAS FILING RETURN FOR PAST FEW YEARS SINCE IT START ED ITS BUSINESS AND STOCK STATEMENT WAS ANNEXED TO ALL THE RETURNS. THE HUF IS ALSO FILING RETURN WITH THE SAME WARD AND IS ASSESS ED BY THE SAME OFFICER WHO HAS PASSED THE ASSESSMENT ORDER. I T WAS FURTHER SUBMITTED THAT THE ASSESSEE AND HIS FATHER AS KARTA OF HUF HAS FILED AFFIDAVIT AFFIRMING FACTUAL SITUATION WHICH HAS BEEN ACCEPTED BY THE LEARNED ASSESSING OFFICER AS THE HO N'BLE GUJARAT HIGH COURT IN THE CASE OF GLASS LINE EQUIPM ENT 253 ITR 454 HAS HELD THAT WHEN AFFIDAVIT WAS NOT CONTROVERT ED, IT HAS TO BE TAKEN AS ACCEPTED. 8. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AFTER CONSIDERING THE SUBMISSIONS HELD AS UNDER :- 11. THE MATTER HAS BEEN GIVEN SERIOUS CONSIDERATION AND THE VARIOUS POINTS NEED TO BE CONSIDERED SEPARATELY. TO EVALUATE THE VARIOUS ISSUES, LET US TAKE UP THE ISSUE REGARDING THE STATEMENT RECORDED U/S.133A. THE AUTHORIZED REPRESENTATIVE HAD VERY VEHEMENTLY ARGUED THAT THE STATEMENT RECORDED U/S.133A COULD NOT HAVE BEEN RECORDED UNDER AN OATH, AND HAS NO EVIDENTIARY VALUE. WHILE IT IS TRUE THAT SUCH A STATEMENT COULD NOT HAVE BEEN RECORDED UNDER OATH. I DO NOT AGREE THAT IT HAS NO EVIDENTIARY VALUE. TH E SECTION ITSELF TALKS OF THE PROCEDURE AS TO WHAT CA N BE DONE WHILE CARRYING OUT THE SURVEY EXERCISES AND ONE OF THE STEPS NEEDED TO BE DONE IS RECORDING THE STATEMENT OF 'ANY PERSON WHICH MAY BE USEFUL FOR OR RELEVANT TO, ANY PROCEEDING UNDER THIS ACT'. THEREFORE, THE ACT ITSELF MANDATES THAT THE STATEMENT RECORDED DURING THE COURSE OF SURVEY ACTION IS A USEFUL PIECE OF INFORMATION. IT IS POS SIBLE THAT IT IS NOT TO BE TAKEN AS EVIDENCE IN THE STRIC T SENSE OF TERM BUT IT IS ALSO A FACT THAT THE STRICT RIGOUR OF EVIDENCE ACT IS ALSO NOT APPLICABLE TO TH E - 5 - INCOME-TAX PROCEEDINGS. THE RECORDING OF THE STATEMENT PROVIDES AN ON-THE-SPOT OPPORTUNITY, AS FAR AS THE PERSON SURVEYED IS CONCERNED, TO EXPLAIN HIS POSITION AND THEREFORE IS PART OF THE NATURAL JUSTICE PROCEDURE. THEREFORE, THIS CANNOT BE NOBODY'S CASE THAT THE STATEMENT ONCE RECORDED AT THE TIME OF SURVEY CAN BE IGNORED WHILE FRAMING THE ASSESSMENT. HENCE, IN DECIDING THE ISSUES HERE ALS O WE WILL KEEP THE STATEMENT OF THE APPELLANT SHRI MANISHBHAI N. SONI IN MIND. 12. THE SECOND TECHNICAL ISSUE STRONGLY POINTED OUT BY THE AUTHORIZED REPRESENTATIVE IS ABOUT NON- REBUTTAL OF THE AFFIDAVIT. IT IS TRUE THAT AS AN AX IM, ONCE AN AFFIDAVIT IS FILED, ITS NON-REBUTTAL MEANS ACCEPTANCE BY THE DEPARTMENT. YET, IT IS ALSO AN ESTABLISHED JUDICIAL POSITION THAT THE AFFIDAVIT SO FILED HAS TO BE IN ABSOLUTE PROPER CONDITION AND DULY VERIFIED, ETC. IN THE INSTANT CASE, THE AFFIDAVIT I N QUESTION HAS NOT BEEN FILED IN ANY PENDING PROCEEDING BUT APPARENTLY ATTACHED ALONGWITH AN ISOLATED LETTER DATED NIL (RECEIVED IN THE ASSESSIN G OFFICER'S OFFICE ON 31 ST MARCH 2004) ADDRESSED TO THE ASSESSING OFFICER, STATING ABOUT THERE BEEN NO DIFFERENCE OF STOCK ACTUALLY FOUND AND THE BOOK STO CK OF BOTH THE ASSESSEE AND NAVINCHANDRA SONI-HUF WERE AVAILABLE AT THE PREMISES. INTERESTINGLY, WHIL E STAMP PAPER IS OF 31 ST MARCH 2004, THE CONTENTS REFERRED TO IS THE SURVEY ACTION ON 17/10/2003 BUT THE VERIFICATION IS DATED 31 ST DAY OF MARCH 2003. SECONDLY, THE AFFIDAVIT'S LANGUAGE IS IN TERMS I BUT REFERS TO AVERMENTS OF BOTH SHRI MANISH N SONI AND SHRI NAVINCHANDRA M SONI AS KARTA OF N.M. SONI- HUF. THIRDLY, THERE IS NO SEPARATE AND PROPER VERIFICATION OF THE AFFIDAVIT BY THE INDIVIDUAL SIG NING IT AND TO THAT EXTENT IT BECOMES ONLY REITERATION O F THE WRITTEN STATEMENT FILED BEFORE THE ASSESSING OFFICER, CONTAINING NEITHER ANY FRESH INFORMATION N OR ANY SWORN STATEMENT. 13. COMING TO THE ISSUE OF EXISTENCE OF THE BUSINES S OF SHRI NAVINCHANDRA SONI-HUF, THE PAPERS FILED BEFORE ME DO PROVE ITS EXISTENCE. COPIES OF RETURNS OF INCOME, SHOWING INCOME FROM BUSINESS AND PROFESSION AND INCOME FROM OTHER SOURCES HAVE BEEN FILED FOR ASSESSMENT YEARS 2001-02 AND 2002- - 6 - 03, BEFORE THE DATE OF THE SURVEY. NO RETURN OF INCOME WAS FILED FOR ASSESSMENT YEAR 2003-04 BUT RETURN OF INCOME HAS BEEN FILED FOR ASSESSMENT YEAR 2004-05 ON 1 ST NOVEMBER, 2004 CONTAINING THEREIN THE DETAILS OF STATEMENT FOR PREVIOUS YEAR 2002-03 RELEVANT TO ASSESSMENT YEAR 2003-04. HENCE THE EXISTENCE OF THAT BUSINESS IS PROVED. BUT IT IS SEE N THAT THE RETURNS FILED BEFORE THE DATE OF THE SURVE Y BEAR THE ADDRESS OF SECTOR-6, GANDHINAGAR, WHEREAS THE APPELLANT'S PREMISES IS SITUATED IN SECTOR-21, GANDHINAGAR. THE ASSESSEE SEEMS TO HAVE RECONCILED IT BY ADDING A NOTE IN THE RETURN FOR ASSESSMENT YEAR 2004-05 THAT RESIDENTIAL ADDRESS IS BEING GIVEN IN THE RETURN FOR THE SAKE OF CONVENIENCE OF CORRESPONDENCE. THIS IS A VERY IMPORTANT FACT TO BE CONSIDERED. DURING THE COURSE OF SURVEY, IT IS AN ADMITTED POSITION THAT BOOKS OF ACCOUNTS OF THE ASSESSEE'S FIRM HAD NOT BEEN MAINTAINED. THE HUF'S CURRENT BOOKS HAVE ALSO NOT BEEN FOUND DURING THE COURSE OF SURVEY. ALTHOUGH, I T HAS BEEN STATED IN THE WRITTEN SUBMISSIONS AND SO CALLED AFFIDAVIT THAT THE SURVEY PARTY WAS TOLD THA T THERE IS STOCK OF NAVINCHANDRA SONI-HUF, AT NO STAGE, IT HAS BEEN ASSERTED THAT THE HUF'S BOOKS WERE LYING THERE, WHICH WERE IGNORED BY THE SURVEY PARTY. AS MENTIONED EARLIER, THE HUF HAD NOT FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2003-04. PROFIT & LOSS ACCOUNT AND BALANCE SHEET FOR THIS PERIOD HAVE BEEN FILED WITH THE RETURN OF INCOME FO R ASSESSMENT YEAR 2004-05. BESIDES THE FACT THAT THIS MAKES THE DOSING STOCK OF THE PREVIOUS YEAR ENDING ON 31 ST MARCH 2003 UNVERIFIABLE, IT IS INTERESTING TO NOTE THAT THE HUF HAS NOT SHOWN ANY SALES OR PURCHASE FOR THE FINANCIAL YEAR 2003-04 AND HIS CARRYING FORWARD THE SAME CLOSING STOCK AS ON FINANCIAL YEAR 2002-03 (ASSESSMENT YEAR 2003-04). ALL THESE FACTS WILL POINT TO A SITUATION WHERE IT CAN BE QUESTIONED WHETHER THE HUF WAS RUNNING A BUSINESS FROM THE SAME PREMISES OF THE APPELLANT AND WHETHER THIS BUSINESS WAS A LIVE. 14. COMING TO THE APPELLANT'S RETRACTION OF THE STATEMENT MADE DURING THE COURSE OF SURVEY U/S.133A, IT IS FOUND THAT THERE IS NOT AN IOTA OF CONDITIONALITY ATTACHED IN THE ANSWERS GIVEN BY THE APPELLANT. THE QUESTION ANSWERED NEED TO BE VIEWED - 7 - IN THE NORMAL BACKDROP OF RECORDING A STATEMENT WHEREIN THE APPELLANT WAS ASKED CERTAIN QUESTIONS ABOUT THE STOCK AVAILABLE IN HIS SHOP AND HE GAVE CERTAIN ANSWERS AFTER THE DUE VERIFICATION HAD TAKE N PLACE. IT WAS NOT A COURT-ROOM KIND OF CROSS- EXAMINATION WHEREIN WHEN ASKED ABOUT THE BUSINESS, HE REPLIED ONLY REGARDING HIS BUSINESS AN D NOT THE HUF'S BUSINESS OPERATING FROM THE SAME PREMISES. BOOKS OF ACCOUNTS HAD NOT BEEN UP-TO- DATE, WHICH WERE DONE BY THE SEARCH PARTY. IF THE SITUATION BEING RECORDED WAS INCORRECT, HE COULD HAVE POINTED OUT THE SAME IN THE STATEMENT EVEN IF IT WAS DIWALI TIME AND THE APPELLANT WAS BUSY OR TH E APPELLANT WAS OVERWHELMED BECAUSE OF THE PRESENCE OF THE SURVEY PARTY. RETRACTING THAT STATEMENT/STAN D AFTER A PERIOD OF FIVE MONTHS BY REFERRING TO THE AVAILABILITY OF STOCK SHOULD NORMALLY MEAN AN AFTER - THOUGHT ONLY. IT MAY BE COUNTER STATED THAT NO TIME LIMIT CAN BE FIXED ABOUT BRINGING THE TRUTH AND IN ANY CASE IT WAS DONE BEFORE THE FILING OF THE RETUR N BUT WHERE IN A SITUATION WHEN THE ASSESSEE TAKES TWO EXTREME STANDS, THE CONDUCT OF THE ASSESSEE, BOTH AT THE TIME OF THE SURVEY AS ALSO POST SURVEY, BECOMES QUITE IMPORTANT. UNDER NORMAL CIRCUMSTANCES WHERE THE OTHER FIRM IS NOT EVEN DOING ANY WORK, RECONCILIATION OF STOCK CAN NOT TAK E THAT LONG. 15. THEREFORE, TO SUM UP ALL THE ISSUES INVOLVED, I THINK, AS FAR AS THE TECHNICAL OBJECTION WITH RESPE CT TO THE STATEMENT U/S.133A AND THE AFFIDAVIT ARE CONCERNED, THEY CANNOT STAND. THE ASSESSING OFFICER WAS WELL ENTITLED TO USE THE STATEMENT GIVEN BY THE ASSESSEE AGAINST HIM. AS PER THIS STATEMENT, HE HAD DECLARED THAT STOCK AMOUNTING TO RS.10,00,893/- IS NOT RECORDED IN THE BOOKS OF ACCOUNTS. THE RETRACTION OF ITS STAND BY FILING A JOINT AFFIDAVIT CANNOT TAKE AWAY THE RIGHT OF THE ASSESSING OFFICER TO GO INTO THE DISCREPANCY OF THE STOCK FOUND. THE DISCREPANCY HAS BEEN ATTRIBUTED SOLELY TO THE STOCK BELONGING TO NAVINCHANDRA SONI-HUF. THIS FACT WAS NOT BROUGHT BEFORE THE SURVEY PARTY OR THE ASSESSING OFFICER FOR FIVE AND HALF MONTHS AFTER TH E SURVEY AND ONLY IN THE RETURN FILED IN THE YEAR LAT ER I.E. 1 ST NOVEMBER 2004, THE AVAILABILITY OF STOCK GETS EXPLAINED TO THE ASSESSING OFFICER. THE SAID - 8 - BUSINESS OF THE HUF, THOUGH WELL IN EXISTENCE, APPEARS TO BE RUNNING FROM THE RESIDENCE OF THE KARTA SHRI NAVINCHANDRA SONI FROM THE AVAILABLE RECORDS. THEREFORE, HARMONIZING ALL THESE FINDINGS, THE NET CONCLUSION WOULD BE THAT ON THE DATE OF SURVEY, EXCESS STOCK WAS FOUND FROM THE ASSESSEE'S PREMISES, WHICH WERE LATER ON (AS AN AFTERTHOUGHT) ATTRIBUTED TO THE STOCK OF THE HUF. THEREFORE, THE APPELLANT'S STAND CANNOT BE ACCEPTED THAT THE MAJOR DISCREPANCY OF STOCK IS EXPLAINED BY THE STOCK BELONGING TO M/S. NAVINCHANDRA M SONI, HUF CAN NOT BE ACCEPTED. 16. FURTHER, SINCE THE BOOKS OF ACCOUNTS HAD NOT BEEN FOUND UPDATED AT THE.-TIME OF SURVEY, TO RAISE THE ISSUE OF INCORRECT RECORDING OF SALES OF GOLD EXPLAINING-CERTAIN PURCHASES TO SALE OF SILVER CANN OT BE ACCEPTED ON THE SAME LINES AS ABOVE. 17. THEREFORE, TO SUM UP, THE ACTION OF THE ASSESSING OFFICER IS UPHELD AND THE APPEAL IS DISMISSED. ALTHOUGH, ASSESSING OFFICER HAS USED WORDS LIKE 'FAKE PURCHASE', ETC., THE ADDITION IS BEING UPHELD AS UNEXPLAINED INVESTMENT U/S.69A. 9. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED THAT AT PAGE 49 OF THE PAPER BOOK, COPY O F NOTICE DATED 2.02.2003 OF GUJARAT SALES TAX DEPARTMENT IS FILED WHICH SHOWS THAT SONI NAVINCHANDRA MAGANBHAI HUF WAS OPER ATING FROM THE SAME PREMISES FROM WHICH THE ASSESSEE WAS DOING BUSINESS. AT THE TIME OF SURVEY, THE STOCK BELONGI NG TO THE ASSESSEE AND THE HUF WAS LYING AND WHICH WAS INVENT ORISED WITHOUT BIFURCATING THE SAME. IF THE STOCK IS BIFUR CATED BETWEEN THE ASSESSEE AND THE HUF THEN THERE IS NO EXCESSIVE STOCK AVAILABLE WITH THE ASSESSEE FROM THE DATE OF SURVEY . HE FURTHER SUBMITTED THAT THE AFFIDAVIT FILED BY HIMSELF AND H IS FATHER IN THE CAPACITY AS KARTA OF HUF REMAINED UNCONTROVERTED AN D THEREFORE, IT IS DEEMED TO BE ACCEPTED IN VIEW OF T HE DECISION OF GUJARAT HIGH COURT. HE FURTHER REFERRED TO PAGE 5 PARA 2 OF THE - 9 - ASSESSMENT ORDER, IT IS SUBMITTED THAT THE STATEMEN T RECORDED UNDER SECTION 133 ON 17.10.2003 IN GUJARATI WAS TRA NSLATED INTO ENGLISH BY THE LEARNED ASSESSING OFFICER IS WRONG A ND READS AS UNDER:- Q.10. PLEASE STATE WHETHER ANY STOCK OF GOLD AND SILVER OTHER THAN YOUR IS LYING ELSE WHERE. ANS.10. THE STOCK OF GOLD OF MY BUSINESS IS LYING H ERE ONLY. ONLY 2.200 GM. OF SILVER IS LYING WITH SHUKLAKAKA IN SECTOR NO.30. HE SAID THAT THE CORRECT TRANSLATION IS PLACED AT P AGE 3 OF THE PAPER BOOK WHICH IS AS BELOW:- Q.10 THERE HAS BEEN THE GOODS OF GOLD AND SILVER I N YOUR SHOP TODAY. HOWEVER, WHETHER THERE HAVE BEEN YOUR GOODS AT ANY OTHER PLACE EXCEPT YOUR SHOP? A.10. THERE HAS BEEN NO GOODS OF GOLD AT ANY PLACE EXCEPT MY SHOP, BUT THE SILVER OF 2 KG. 200. GRAMS HAS BEEN GIVEN FOR GILDING TO SHRI SHUKLA UNCLE RESIDING AT SECTOR -3, WHO IS DOING GILDING WORK. AND APPROXIMATELY THE SILVER OF ABOUT -2 KG. HAS BEEN TAKEN TO THE RESIDENCE BECAUSE DURING DIWALI IT IS SOLD FROM THE RESIDENCE ALSO. 10. THE LEARNED AUTHORISED REPRESENTATIVE OF THE AS SESSEE FURTHER SUBMITTED THAT AS WILL BE OBSERVED FROM PAG E 1 OF THE ASSESSMENT ORDER THAT THE ASSESSEE ALONG WITH HIS F ATHER SHRI NAVINCHANDRA SONI WAS APPEARING BEFORE THE LEARNED ASSESSING OFFICER DURING THE COURSE OF THE ASSESSMENT PROCEED ING. THE ASSESSEES FATHER WAS NOT EXAMINED BY THE LEARNED A SSESSING OFFICER TO ASCERTAIN THE TRUE FACT. - 10 - 11. IN THE ABOVE FACTS AND CIRCUMSTANCES, IT WAS SU BMITTED THAT IT WOULD BE IN THE INTEREST OF JUSTICE IF THE MATTER IS REMANDED BACK TO THE LEARNED ASSESSING OFFICER TO A DJUDICATE THE ISSUE AFRESH AFTER EXAMINING THE FATHER OF THE ASSESSEE, THE TRUE TRANSLATION OF THE STATEMENT RECORDED ON 17.10 .2003 AND AFTER EXAMINING THE DEPONENTS WITH REGARD TO THE AF FIDAVITS FILED BY THEM. 12. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, DURING THE COURSE OF SURVEY CARRIED OUT ON 17.10.2003 EXCESS S TOCK OF RS.10,00,893/- WAS FOUND ON PHYSICAL VERIFICATION W HICH THE ASSESSEE ADMITTED AS UNACCOUNTED STOCK AND DECLARED THE SAME AS UNDISCLOSED INVESTMENT IN STOCK UNDER SECTION 69 A OF THE ACT AND AGREED TO PAY TAX THEREON. LATER ON WHEN THE AS SESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05, I T DID NOT DECLARE THE UNDISCLOSED INCOME. ON QUERY BY THE LEA RNED ASSESSING OFFICER, ASSESSEE SUBMITTED THAT THE STOC K INVENTORISED ON 17.10.2003 INCLUDED THE STOCK OF NA VINCHANDRA SONI HUF OF WHICH HIS FATHER SHRI NAVINCHANDRA SONI IS KARTA. IN THIS REGARD, THE ASSESSEE FILED AFFIDAVIT OF HIM SELF AND HIS FATHER. THE LEARNED ASSESSING OFFICER OBSERVED THAT THE EXPLANATION OF THE ASSESSEE IS AN AFTER THOUGHT AND MADE ADDITION OF RS.10,00,893/- TO THE INCOME OF THE ASS ESSEE AS UNEXPLAINED STOCK ADMITTED AT THE TIME OF SURVEY. I N APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ALSO CO NFIRMED THE ADDITION. THE LEARNED AUTHORISED REPRESENTATIV E OF THE ASSESSEE CONTENDED THAT THE AFFIDAVITS FILED BY THE ASSESSEE - 11 - REMAINED UNCONTROVERTED AND THEREFORE, THE CONTENTS OF THE SAME CANNOT BE REJECTED. HE ALSO SUBMITTED THAT FAT HER OF THE ASSESSEE SHRI NAVINCHANDRA SONI WAS NOT EXAMINED TO ASCERTAIN THE TRUE FACT AND WITHOUT EXAMINING HIM, THE EXPLAN ATION OF THE ASSESSEE CANNOT BE REJECTED THAT THE STOCK INVENTOR ISED ON THE DATE OF SURVEY ALSO INCLUDED STOCK OF NAVINCHANDRA SONI HUF AND IF THAT IS CONSIDERED THEN NO EXCESS STOCK WAS THERE ON THE DATE OF SURVEY. THE LEARNED AUTHORISED REPRESENTAT IVE OF THE ASSESSEE SUBMITTED THAT THE MATTER MAY BE RESTORED BACK TO THE LEARNED ASSESSING OFFICER FOR NECESSARY VERIFIC ATION AND TO REDECIDE THE ISSUE ACCORDINGLY. THE LEARNED AUTHORI SED REPRESENTATIVE OF THE ASSESSEE ALSO POINTED OUT THA T THE ENGLISH TRANSLATION OF STATEMENT RECORDED IN GUJARATI UNDER SECTION 133A ON 17.10.2003 MADE BY THE LEARNED ASSESSING OFFICER WAS NOT CORRECT IN RESPECT OF REPLY TO QUESTION NO.10. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE ALSO POIN TED OUT FROM PAGE NO.49 OF THE PAPER BOOK THAT IT CONTAINS COPY OF NOTICE ISSUED BY SALES TAX DEPARTMENT WHICH SHOWED ADDRESS OF M/S.NAVINCHANDRA SONI HUF SAME AS THAT OF THE ASSES SEES BUSINESS PREMISES AND THIS EVIDENCE WAS NOT TAKEN I NTO CONSIDERATION BY THE LOWER AUTHORITIES AT THE TIME OF THE ADJUDICATION OF THE ISSUE UNDER CONSIDERATION. 14. WE FIND THAT IT IS NOT IN DISPUTE THAT THE ASSE SSEE AND HIS FATHER BOTH FILED AFFIDAVITS BEFORE THE LOWER AUTHO RITIES IN SUPPORT OF THEIR CONTENTION THAT THE STOCK OF M/S.N AVINCHANDRA SONI HUF WAS ALSO KEPT IN THE BUSINESS PREMISES OF THE ASSESSEE. THE SAID AFFIDAVITS WERE REJECTED BY THE LOWER AUTHORITIES WITHOUT EXAMINATION OF THE DEPONENTS. I N OUR CONSIDERED VIEW, THE LOWER AUTHORITIES WERE NOT JUS TIFIED IN REJECTING THE AFFIDAVIT WITHOUT EXAMINING THE DEPON ENTS OR - 12 - WITHOUT BRINGING ANY MATERIAL ON RECORD TO SHOW THA T THE AVERMENTS MADE IN THE AFFIDAVITS CANNOT BE TRUE AND CORRECT OR ARE UNACCEPTABLE. HOWEVER, IT IS ALSO OBSERVED THAT IN THE STATEMENT RECORDED AT THE TIME OF SURVEY UNDER SECT ION 133A, THE ASSESSEE NEVER STATED BEFORE THE SURVEY OFFICIA LS THAT THE STOCK FOUND AND INVENTORISED ALSO CONTAINS THE STOC K WHICH DOES NOT BELONG TO THE ASSESSEE. FROM THE MATERIALS AVAI LABLE BEFORE US, IT IS NOT CLEAR THAT WHETHER ANY DOCUMENT OR BO OKS OF ACCOUNT ETC. WAS FOUND DURING THE COURSE OF THE SUR VEY WHICH COULD INDICATE THAT THE BUSINESS OF NAVINCHANDRA SO NI HUF WAS ALSO CARRIED OUT FROM THE SAME PREMISES AND STOCK O F THE HUFS BUSINESS WAS ALSO LYING IN THE VERY SAME PREMISES. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, IT SHALL BE IN THE INTEREST OF THE JUSTICE TO RESTORE THIS ISSUE BACK TO THE FILE OF LEARNED ASSESSING OFFICER FOR ADJUDICATION AFRESH A FTER PROPER VERIFICATION OF ALL THE MATERIALS WHICH WERE FOUND DURING THE COURSE OF THE SURVEY AND AFTER EXAMINING THE DEPONE NTS WHO MADE AVERMENTS IN THE FORM OF AFFIDAVIT FILED BEFOR E HIM AND AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AS PER LAW. WE ORDER ACCORDINGLY. THEREFORE, THESE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 18 TH DAY OF JUNE, 2010. SD/- SD/- (MUKUL SHRAWAT) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT M EMBER AHMEDABAD; ON THIS 18 TH DAY OF JUNE, 2010 PARAS - 13 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-VIII, AHMEDABAD. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 15.06.2010 -------------- ----- 2. DRAFT PLACED BEFORE AUTHORITY 16.06.2010 ---- --------------- 3. DRAFT PROPOSED & PLACED 16.06.2010 ---------- --------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 16.06.2010 ---------- --------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 16.06.2010 -------- ------------ 6. KEPT FOR PRONOUNCEMENT ON 18.06.2010 --------- ----------- 7. FILE SENT TO THE BENCH CLERK 18.06.2010 ------ -------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------