VIJAY BAHADUR SINGH, MUMBAI V. ACIT CIR 10, MUMBAI

ITA 3967/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54833 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 03-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 14-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUBACHAN RAM
• Assessee Lawyers: B N RAO
• Keywords: Income from undisclosed sources; Additional evidence; Valuation report; Assessment record
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI F BENCH BEFORE SHRI D.MANMOHAN, VICE PRESIDENT & SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.A.NO.3967/MUM/2010 A.Y 2004-05 SHRI VIJAY BAHADUR SINGH, 501, AKHILESH KUNJ, VIKHROLI (E), MUMBAI 400 083. PAN: AAFP 53362 Q VS. ASST. COMMISSIONER OF I.T., CENTRAL CIRCLE 10, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B. N. RAO. RESPONDENT BY : SHRI SUBACHAN RAM, CIT DR DATE OF HEARING: 03/08/2011 DATE OF PRONOUNCEMENT: 10/8/2011 O R D E R PER T.R.SOOD, AM: IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING THE ADDIT ION OF RS.15,395/- ALLEGING LOWER WITHDRAWAL FOR HOUSE HOL D EXPENSES. 2. THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING THE ADDIT ION OF RS.37,152/- HOLDING THAT THE SAME FOR PURCHASE OF J EWELLERY IS NOT PROVED. 3. THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING THE ADDIT ION OF RS.66,678/- BASED ON THE BILLS FOR JEWELLERY FOUND IN THE HOUSE OF THE APPELLANT DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR. 4. THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING THAT JEWE LLERY VALUED AT RS.2,58,720/- WAS NOT EXPLAINED AS TO SOURCES. THE CIT(APPEALS) OUGHT TO HAVE GIVEN DUE CREDIT FOR THE WEIGHT EXPLA INED WHICH WAS ALSO FORMING PART OF JEWELLERY DISCLOSED UNDER VDI SCHEME. 2. GROUND NO.1 : AFTER HEARING BOTH THE PARTIES, WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS AO NOTED THAT ASSESSEE HAS S HOWN WITHDRAWAL FOR HOUSE HOLD EXPENSES INCLUDING THE WITHDRAWAL OF THE WIFE AT RS.1,04,605/-. ON QUERY, IT WAS FOUND THAT ASSESSEE HAS THREE CHILDREN WHO WERE ALL SCHOOL GOING. SINCE NO FURTHER DETAILS WERE SUPPLIED AO ITA NO.3967/M/2010 2 ESTIMATED THE HOUSE HOLD EXPENSES AT RS.1,20,000/- I.E. RS.10,000/- P.M. AND MADE AN ADDITION OF RS.15,395/-. 3. ON APPEAL, ACTION OF THE AO HAS BEEN CONFIRMED B Y THE LD. CIT(A). 4. BEFORE US LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ASSESSEE ALONG WITH HIS FOUR BROTHERS WAS LIVING IN THE SAME COMPLEX IN DIFFERENT FLATS BUT HAD A COMMON KITCHEN AND, THEREFORE, THE EXPENDITURE WAS ON LOWER SIDE. HE FURTHER SUBMITTED THAT THE TWO DAUGH TERS WHO WERE GOING TO ST. JOSEPHS SCHOOL WERE NOT REQUIRED TO P AY ANY FEES AND, THEREFORE, THIS ALSO HAS TO BE CONSIDERED AND, ACCO RDINGLY, THE EXPENDITURE INCURRED BY THE ASSESSEE WAS JUSTIFIED. 5. ON THE OTHER HAND, LD. DR SUBMITTED THAT ASSESSE E HAD ONE SON AGED ABOUT 10 AND TWO DAUGHTERS AGED ABOUT 16 AND 1 4 AND, THEREFORE, WITHDRAWAL OF RS.1,04,605/- WAS ON A VER Y LOW SIDE. NO EVIDENCE WAS EVER FILED TO SHOW THAT NO FEES WAS PA YABLE ON ACCOUNT OF DAUGHTERS. IN FACT, THERE IS A SCHEME IN THE STA TE OF MAHARASHTRA THAT GIRLS ARE NOT REQUIRED TO PAY ANY FEES BUT SUC H RELIEF IS AVAILABLE ONLY IN GOVERNMENT SCHOOLS AND NOT IN PRIVATE SCHOO LS. HE ALSO SUBMITTED THAT THERE IS NO FORCE IN THE ARGUMENT TH AT FOUR BROTHERS LIVING IN FOUR DIFFERENT BUILDINGS IN THE SAME COMP LEX CAN POSSIBLY HAVE A COMMON KITCHEN. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND ARE UNABLE TO AGREE WITH THE SUBMISSIONS OF THE LD. COU NSEL OF THE ASSESSEE. IN A MODERN WORLD WHERE NUCLEAR FAMILY CU LTURAL IS PREVALENT, ITA NO.3967/M/2010 3 PEOPLE ARE NOT LIKELY TO HAVE A COMMON KITCHEN EVEN IF THEY ARE STAYING IN ADJACENT FLATS. IN THE CASE BEFORE US, A DMITTEDLY, ASSESSEE ALONG WITH HIS FOUR BROTHERS WAS STAYING IN DIFFERE NT BUILDINGS IN THE SAME COMPLEX, BUT IT IS PRACTICALLY NOT POSSIBLE TO HAVE A COMMON KITCHEN. FURTHER, ASSESSEE HAS NOT BEEN ABLE TO GIV E ANY PROOF THAT NO FEE WAS PAYABLE FOR THE TWO DAUGHTERS GOING TO SCHO OL AS IT IS A COMMON KNOWLEDGE THAT SCHOOL FEES ARE VERY HIGH IN MUMBAI. CONSIDERING THE OVER ALL FACTS THE WITHDRAWAL ESTIM ATED BY THE AO AT RS.10,000/- P.M. IS MORE THAN REASONABLE AND, THERE FORE, WE DECLINE TO INTERFERE AND REJECT THIS GROUND. 7. GROUNDS NOS.2, 3 & 4 : THESE GROUNDS ARE BEING CONSIDERED TOGETHER BECAUSE LD. COUNSEL OF THE ASSESSEE HAS MA DE COMMON ARGUMENTS. BRIEF FACTS ARE THAT A SEARCH WAS CONDU CTED AT THE PREMISES OF THE ASSESSEE ALONG WITH OTHER PARTNERS AND OTHER GROUP CONCERNS. DURING THE SEARCH TWO BILLS FOR PURCHASE OF JEWELLERY WERE FOUND AND IN THE STATEMENT RECORDED IT WAS ADMITTED THAT THE JEWELLERY HAS BEEN PURCHASED AMOUNTING TO RS.37,152/- AND RS. 66,678/- OUT OF THE UNDISCLOSED INCOME. WHEN AO SOUGHT TO ADD THE S AME U/S.69B IT WAS SUBMITTED THAT THE SAID JEWELLERY WAS PURCHASED OUT OF THE INCOME DECLARED U/S.153A. HOWEVER, THIS SUBMISSION WAS REJ ECTED BECAUSE ASSESSEE FAILED TO PRODUCE ANY SUPPORTING DOCUMENTS OR EXPLANATION IN SUPPORT OF SUCH PURCHASES. 8. BEFORE THE CIT(A) IT WAS MAINLY CONTENDED THAT S AID JEWELLERY SHOULD BE CONSIDERED AS COVERED BY THE DECLARED INC OME IN THE HANDS ITA NO.3967/M/2010 4 OF FLAGSHIP ENTITY OF SHREE SAI STONE CRUSHING QUER Y A PARTNERSHIP FIRM WHERE ALL MEMBERS OF THE FAMILY WERE PARTNERS. THE LD. CIT(A) ADJUDICATED THE ISSUE VIDE PARA 6.4 WHICH IS AS UND ER: 6.4 I HAVE CAREFULLY CONSIDERED THE ORDER OF THE A SSESSING OFFICER AND THE SUBMISSION MADE BY THE APPELLANT. I FIND TH AT IN RESPECT OF THE ABOVE MENTIONED ADDITION THE CONTENTION OF THE APPELLANT IS NOT ACCEPTABLE ESPECIALLY REGARDING THE REQUEST FOR TEL ESCOPING AGAINST THE INCOME OF THE FIRM I FIND THAT THIS REQUEST OF THE APPELLANT IS NOT AT ALL TENABLE OR ACCEPTABLE AS BOTH THE APPELLANT AND THE FIRM IN WHICH HE IS A PARTNER ARE DIFFERENT TAXABLE ENTITIES. THE APPLI CATION OF UNDISCLOSED INCOME AS A SOURCE CAN ONLY BE SET OFF AGAINST UNDI SCLOSED ASSET OR INVESTMENT IN THE HANDS OF THE SAME APPELLANT. NO S ET OFF CAN BE GIVEN IN RESPECT OF UNDISCLOSED INCOME DECLARED BY ANOTHER APPELLANT. THE INCOME TAX ACT DOES NOT RECOGNIZE THE CONCEPT OF GROUP ASSESSMENTS. EVEN FOR A MOMENT IF ONE CONSIDERS THE APPELLANTS REQUEST, IT IS SEEN FROM THE OBSERVATION MADE BY TH E HON'BLE SUPREME COURT IN THE CASE OF KALE KHAN MOHD. HANIF VS. CIT 5 0 ITR 1 S.C THAT THE ONUS OF PROVING THE SOURCE OF THE ASSET FOUND I S ON THE APPELLANT. IN THIS CASE, BESIDES MAKING A GENERAL STATEMENT NO EVIDENCE HAD BEEN PRODUCED TO LINK THE SAID ASSET WITH THE UNDIS CLOSED INCOME OF THE FIRM. BESIDES, IT IS TO BE KEPT IN MIND HERE TH AT OUT OF RS.93320 WORTH OF JEWELLERY SHOWN IN THE HANDS OF THE MRS. U RMILA SINGH, THE ASSESSING OFFICER HAS ADDED ONLY RS.66,678/- WORTH AS PURCHASED FROM UNDISCLOSED INCOME AS THE APPELLANT HAD CATEGO RICALLY STATED SO IN HIS STATEMENT. NOW THE APPELLANT IS TRYING TO TA KE REFUGE REFERRING TO THE FILMS UNDISCLOSED INCOME AND THE RETURN OF I NCOME FILED BY HIS WIFE AND THIS CANNOT BE ACCEPTED UNLESS THE APPELLA NT CONCLUSIVELY PROVES HIS CASE THAT JEWELLERY IDENTIFIED AS UNDISC LOSED BY THE ASSESSING OFFICER HAS A NEXUS WITH THE INCOME OF TH E FIRM OR WITH THAT DECLARED IN THE RETURN OF INCOME OF HIS WIFE. AS SU CH ON THIS GROUND ALSO THE APPELLANTS CONTENTION FAILS. THEREFORE, TH E AOS ORDER IS UPHELD AND THE GROUND OF APPEAL DISMISSED. 9. THE NEXT ADDITION OF RS.2,58,720/- WAS MADE ON T HE BASIS OF EXCESS JEWELLERY FOUND. THE JEWELLERY FOUND DURING THE SEARCH WAS AS UNDER: A) JEWELLERY FOUND DURING THE SEARCH 1118 GMS. B) JEWELLERY APPEARING IN BALANCE SHEET AS ON 31-3-98 VALUED AT RS.320 PER GM 489 GMS. C) JEWELLERY PURCHASED IN ASSESSMENT YEAR 167 GMS. YEAR 2004-05 D) UNEXPLAINED JEWELLERY [A-(B+C) 462 GMS. E) VALUATION OF UNEXPLAINED JEWELLERY@ 560 GM. AS VALUED BY VALUER AS ON THE DAY OF SEARCH RS.2,5 8,720 ITA NO.3967/M/2010 5 THE AO WAS OF THE VIEW THAT THERE IS NO EXPLANATION FOR EXCESS JEWELLERY FOUND, THEREFORE, SAME WAS ADDED TO THE I NCOME OF THE ASSESSEE. 10. BEFORE THE LD. CIT(A) THE SUBMISSIONS REGARDING AVAILABILITY OF SOURCE FROM THE UNDISCLOSED INCOME DECLARED IN THE HANDS OF THE PARTNERSHIP FIRM SHREE SAI STONE CRUSHING QUERY WAS REITERATED AND IT WAS SUBMITTED THAT TELESCOPING SHOULD BE DONE. SOME ADDITIONAL EVIDENCE WAS ALSO FILED WHICH WAS SENT BY THE LD. C IT(A) TO THE AO FOR THE REMAND REPORT. THE REMAND REPORT WAS SUBMITTED, WHICH WAS GIVEN TO THE ASSESSEE WHO IN TURN GAVE CERTAIN REPLIES. U LTIMATELY, THE ISSUE WAS ADJUDICATED BY THE LD. CIT(A) VIDE FOLLOWING PA RAS 7.7 TO I HAVE CAREFULLY CONSIDERED THE ORDER OF THE ASSESS ING OFFICER ARID THE SUBMISSION MADE BY THE APPELLANT. ON THE R EQUEST OF THE APPELLANT, I HAVE TAKEN INTO CONSIDERATION THE ASSESSMENT RECORDS OF THE FIRM SLID SAL STONE CRUSHING QUAY AN D OTHERS ALONG WITH THAT OF THE OTHER PARTNERS OF THE FIRM N AMELY 1) SHRI SHYAM BAHADUR JALKARAN SINGH 2) SHRI KRISHNA BAHADU R SINGH. THE APPELLANT HAS STATED THAT THE FACTS OF THE APPE LLANTS CASE REGARDING THE ISSUE OF UNDISCLOSED JEWELLERY IS SIM ILAR TO THAT OF THE CASE OF THE OTHER PARTNERS MENTIONED ABOVE. IN THE CASE OF SLID SHYAM BAHADUR JAIKARAN SINGH FOR ASSESSMENT YE AR 2004- 05 I FIND THAT THE CASE HAS REACHED A FINALITY AND THEREFORE IT SHOULD BE USED AS A REFERENCE ISSUE. THE FACTS OF T HE ABOVE MENTIONED CASE ARE AS UNDER: DURING THE COURSE OF ACTION UNDER SECTION 132 OF TH E IS ACT, 1961, JEWELERY WAS FOUND. THE ASSESSING OFFICER DECI DED THE ISSUE AGAINST THE APPELLANT SIDE ORDER DATED 31.3.2 006. THE ORDER OF THE ASSESSING OFFICER WAS CONFIRMED BY THE ID. CLT(A) VIDE HIS ORDER DATED 15.12.2006. THE APPELLANT PREF ERRED AN APPEAL BEFORE THE HONBLE ITAT. WHO VIDE ORDER DATED 2YTH)09 SET ASIDE THE CASE TO THE TILE OF THE ASSESSING OFF ICER WITH DIRECTIONS. THE ASSESSING OFFICER, I FIND. PASSED A N ORDER UL/ 143(3) RWS 254 OF THE I.T ACT, 1961 ON 17.6.2009 AC CEPTING THE EXPLANATION OF THE APPELLANT AND TREATED THE JE WELERY AS DISCLOSED BECAUSE I) THE WEIGHT OF THE JEWELERY DISCLOSED IN THE BALANCE SHEET AS ON 31.3.98 DECLARING IT UNDER VDIS AND AFT ER REDUCING THE WEIGHT HELD WAS 853.4 GMS. ITA NO.3967/M/2010 6 II) JEWELLERY WEIGHING 714.930 GINS WAS FOUND DURING TH E SEARCH OPERATIONS AND AS IT WAS FULLY COVERED BY TH E AMOUNT OF JEWELLERY DISCLOSED UNDER VDIS III) THERE WAS NO NEWLY ACQUIRED OR PURCHASED JEWELLERY. 7.8 THE APPELLANT HAS SUBMITTED THAT IN THE CASE O F THE APPELLANT, THE SAME LOGIC SHOULD B APPIED AND ADDI TION MADE DELETED. WHEN THE REFERRED CASE IS COMPARED WI TH THAT OF THE APPELLANT, I FIND THAT THERE IS A MATER IAL DIFFERENCE. IN THE APPELLANTS CASE, I FIND THAT TH E JEWELLERY FOUND AT 1118 GRAINS IS MUCH MOM THAN THA T DECLARED UNDER VDIS AT 489 GINS AND FINALLY APPEARI NG IN THE BALANCE SHEET AS ON 31.3.98. FURTHER, IN THE CA SE OF THE APPELLANT, THERE HAS BEEN FRESH PURCHASE OF JEW ELLERY IN THE YEAR OF 167 GMS. THE ASSESSING OFFICER IN TH E ASSESSMENT ORDER HAS TAKEN ALL THIS INTO CONSIDERAT ION AND ARRIVED AT THE FIGURE OF RS258720L- AS UNEXPLAINED JEWELLERY ADOPTING THE VALUE OF RS.560 PER GRAIN FO R 482 GMS. AS VALUED BY THE VALUER ON DAY OF SEARCH. THER EFORE, THE CASE OF MR S B J SINGH WILL NOT APPLY TO THE AP PELLANT AND THIS CASE HAS TO BE DECIDED INDEPENDENTLY. 7.9 DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E APPELLANT HAD SUBMITTED THAT WHILE CALCULATING THE VALUE OF JEWELLERY AND DECIDING THE ISSUE, THE ASSESALNG4KEJ )AS OMITTED TO LAKE UNDER CONSIDERATION THE VALUE OF JE WELLERY AT RS.3,08,548/- PURCHASED BY THE WIFE OF THE APPEL LANT IN ASSESSMENT YEAR 2004-05 ON 15.12.03 I.E. BEFORE THE ACTION U/S 132 AND WHAT HAD BEEN DECLARED BY HER IN HER RETURN OF INCOME THE APPELLANT HAD CONSIDERED RS.3,06,9181- AS REPRESENTING 548 GMS OF JEWELLERY AND HAD SUBMITTED THAT THE DIFFERENCE OF 88 GMS REPRESE NTS LOSS ON ACCOUNT OF ESTIMATION AND CHANGES EFFECTED IN THE JEWELLERY. THE APPELLANT HAS ALSO ARGUED THAT THE JEWELLERY DECLARED UNDER VDIS SHOULD BE VALUED AT RS.164.50 PER GM AND NOT RS.320/- AND IF DONE SO, T HE JEWELLERY HELD WOULD AMOUNT TO 951 GMS INSTEAD OF 4 89 GMS FULLY EXPLAINING THE AMOUNT FOUND DURING SEARCH . 7.10 I HAVE CONSIDERED THE ABOVE TWO ISSUES. I FIND THAT THE CONTENTION OF THE APPELLANT TO ADOPT THE RATE OF @1 64.50 PER GRAM CANNOT BE ACCEPTED. IN THE VALUATION REPOR T SUBMITTED ALONG WITH THE VDIS CERTIFICATE, I FIND T HAT THE AVERAGE RATE OF VALUATION IS AT RS.256 PER GRAM. HOWEVER, A BILL OF ARORA BULLION CORPORATION DT. 9. 2S8 RECORDING SALE & GOLD ORNAMENTS BY THE WIFE OF THE APPELLANT SHOWS THAT A RATE OF RS.361 PER GRAM WAS APPLIED. THEREFORE, I FIND THAT THERE IS NO INFIRML Y IN THE ORDER OF THE ASSESSING OFFICER IN ADOPTING THE RATE OF RS.320 PER GRAM. THE ACTION OF THE ASSESSING OFFICE R IS ITA NO.3967/M/2010 7 UPHELD AS ON THAT DATE THE VALUE WAS AT AROUND RS.3 20 PER GRAM. 7.11 NOW COMING TO THE JEWELLERY PURCHASED BY THE APPELL ANTS WIFE AS ON 15.12.03. APPELLANT STATES THAT 578 GMS WERE PURCHASED. HOWEVER, NO BILLS TO SUBSTANTIATE THE HA S BEEN SUBMITTED. IT HAS BEEN STATED THAT THE VALUE ADOPTED IS THAT WHICH HAS BEEN ADOPTED BY THE ASSES SING OFFICER WHILE VALUING UNDISCLOSED JEWELLERY. I AM N OT INCLINED TO ACCEPT THIS. FOR CLAIMING THE CREDIT TH E APPELLANT WAS REQUIRED TO PROVE CONCLUSIVELY THAT T HE JEWELLERY PURCHASED WAS 578 GRAMS WORTH. UNLESS THE EVIDENCE OF ACTUAL PURCHASE IS SUBMITTED AND NEXUS ESTABLISHED THAT IT IS THE SAME JEWELLERY AS TREATE D BY THE ASSESSING OFFICER AS UNDISCLOSED, I FIND THAT BENEF IT AS ASKED BY THE APPELLANT CANNOT BE GIVEN. ALTERNATIVE LY TOO, IF THE APPELLANTS VERSION IS ACCEPTED, IT IS SEEN THAT THE TOTAL WEIGHT OF THE JEWELLERY WOULD EXCEED THE AMOU NT FOUND BY 86 GRAMS FOR WHICH NO ACCEPTABLE REASONS EXISTS. THE APPELLANT HAS TRIED TO EXPLAIN THE DIFF ERENCE ACCRUING BY ELATING THAT THE LADLES INDULGED IN CHA NGING THE FORM OF JEWELLERY TO SUIT FASHION. HOWEVER, IT COULD NOT BE EXPLAINED AS TO WHICH PIECE UNDER WENT A FOR M CHANGE OR WAS EXCHANGED. THE JEWELLERS BILL WAS AL SO NOT PRODUCED TO PROVE THIS. BESIDES, IT COULD NOT BE EX PLAINED AS TO WHAT NECESSITATED A CHANGE IN A PIECE OF JEWE LLERY ACQUIRED AND THE APPELLANT WAS UNABLE TO CORRELATE THE PIECE CHANGED OR EXCHANGED WITH WHAT WAS AVAILABLE IN THE SANE ASSESSMENT YEAR. THEREFORE, I AM INCLINED TO AGREE WITH THE ASSESSING OFFICER ON THIS ISSUE AS P ER THE OBSERVATION MADE IN THE ASSESSMENT ORDER AND THE REMAND REPORT THAT SECTION 690 IS CLEARLY ATTRACTED IN THIS CASE. REGARDING THE ISSUE OF TELESCOPING AS REQUEST ED, I FIND THAT ON THIS ISSUE TOO THE FINDING REMAIN THE SAME AS MENTIONED EARLIER IN THE ORDER IN RESPECT OF THE GR OUND OF APPEAL NO.4. THE ADDITION MADE IS THEREFORE, CONFIR MED AND THE GROUND OF APPEAL DISMISSED. 11. BEFORE US LD. COUNSEL OF THE ASSESSEE MADE THRE E FOLD SUBMISSIONS. HIS FIRST SUBMISSION IS THAT THE FIRM SHREE SAI STONE CRUSHING QUERY WAS ALSO SEARCHED IN WHICH ALL THE F OUR BROTHERS WERE PARTNERS AND ULTIMATELY IN THAT CASE SOME UNDISCLOS ED INCOME WAS DETERMINED. THEREFORE, SAME WAS AVAILABLE IN THE HA NDS OF ALL THE FOUR BROTHERS. HE ARGUED THAT BASICALLY TELESCOPING SHOU LD BE DONE FOR ITA NO.3967/M/2010 8 UNDISCLOSED JEWELLERY FOUND AGAINST THE UNDISCLOSED INCOME OF THE FIRM. IN THIS REGARD HE RELIED ON THE DECISIONS OF THE MU MBAI BENCH OF THE TRIBUNAL IN THE CASES OF DCIT VS. SUNIL UMASHANKAR RUNGTA [94 TTJ 329] AND JAGMOHAN SINGH ARORA & ORS. VS. DCIT [101 TTJ 682]. HE ALSO FILED A CHART ALONG WITH THE ORDER OF THE CIT( A) IN THE CASE OF THE FIRM. THE CHART SHOWS THAT ULTIMATELY UNDISCLOSED I NCOME DECLARED BY THE ASSESSEE WAS RS.58,47,847/- OUT OF WHICH ONLY A CASH DEPOSIT AND EMPLOYEES DEPOSITS WERE ALSO THERE AND AFTER REDUCI NG THESE ITEMS, NET AMOUNT AVAILABLE WAS RS.37,39,412/- WHICH IS AV AILABLE FOR CREATION OF ASSET IN THE HANDS OF THE FAMILY MEMBERS AND THU S TELESCOPING SHOULD BE ALLOWED. SECONDLY, SINCE ADDITION HAS BEE N MADE SEPARATELY AGAINST THE JEWELLERY ITEMS PURCHASED FOR WHICH BIL LS WERE FOUND, THEREFORE, CREDIT AGAINST THE SAME SHOULD BE ALLOWE D WHILE MAKING OVER ALL ADDITION. THIRDLY, HE SUBMITTED THAT THE GOVERN MENT VALUER HAS VALUED THE JEWELLERY AT A VERY HIGH RATE WHICH IS N OT JUSTIFIED IN VIEW OF THE RATES GIVEN IN THE READY RECKONER FOR THE GOLD. 12. ON THE OTHER HAND, LD. DR REFERRED TO VARIOUS P ARAS OF LD. CIT(A)S ORDER AND POINTED OUT THAT ALL THESE ARGUM ENTS HAVE ALREADY BEEN DULY CONSIDERED AND CIT(A) HAS GIVEN VALID REA SONS FOR NOT ACCEPTING THE SAME. ULTIMATELY HE SUPPORTED THE ORD ER OF THE CIT(A). 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. NO DOUBT, PRINCIPALLY CONCEPT OF TELESCOPING IS APPLICABLE IN CASE OF SEARCH MATTER, BUT THE SAME CANNOT BE APPLIED IN THE CASE OF THE A SSESSEE BECAUSE THE SURPLUS INCOME, IF ANY, DECLARED IN THE HANDS O F THE FIRM CANNOT BE ITA NO.3967/M/2010 9 ALLOCATED FOR PERSONAL ASSETS. BEFORE US ONLY AN OR DER OF THE CIT(A) IN THE CASE OF THE FIRM HAS BEEN FILED AND IT IS NOT C LEAR WHETHER ASSESSEE HAS PREFERRED ANY APPEAL AGAINST THAT ORDER BEFORE THE TRIBUNAL, THEREFORE, THE SAME ORDER CANNOT BE CONSIDERED AS F INAL. FURTHER IT IS NOT CLEAR WHETHER ANY CREDIT HAS BEEN TAKEN BY OTHE R PARTNERS OR NOT AND IF ASSESSEE WANTED TO CLAIM SUCH CREDIT, IT WAS THE DUTY OF LEARNED COUNSEL TO POINT OUT HOW THE CREDIT IS AVAILABLE. S IMPLY FURNISHING OF A CHART CANNOT LEAD TO ANY CONCLUSION. IN ANY CASE, I N THE STATEMENT RECORDED DURING THE SEARCH, IT WAS CLEARLY ADMITTED THAT JEWELLERY WAS PURCHASED OUT OF UNACCOUNTED INCOME AND NOWHERE WAS IT STATED THAT JEWELLERY WAS PURCHASED OUT OF THE INCOME OF THE FI RM. THE LD. COUNSEL OF THE ASSESSEE THOUGH HAS FILED A CHART THAT UNDIS CLOSED INCOME OF RS.58,47,847/- WAS OFFERED AND AFTER ACCOUNTING FOR CASH DEPOSITS A SUM OF RS.37,39,412/- WAS AVAILABLE, BUT HE HAS NOT FILED ANY ACCOUNTS OR ASSESSMENT ORDER OR REFERRED TO ANY PARA OF THE APPELLATE ORDER TO SHOW HOW THIS AMOUNT WAS AVAILABLE. A PERUSAL OF TH E APPELLATE ORDER IN THE CASE OF THE FIRM SHOWS THAT APART FROM CASH AMOUNTING TO RS.10,86,435/- HELD BY VARIOUS PERSONS, SOME OF THE OTHER MAJOR ADDITIONS ARE ON ACCOUNT OF DISALLOWANCE OF EXPENSE S CLAIMED AGAINST UNDISCLOSED SALES, LABOUR EXPENSES AND OTHER EXPENS ES AMOUNTED TO RS.22,26,812/-, RS.1,84,000/- AND RS.18,000/- RESPE CTIVELY. THUS, MAJOR ADDITIONS HAVE BEEN MADE ON ACCOUNT OF DISALL OWANCE OF EXPENDITURES AND, THEREFORE, THERE IS NO QUESTION O F AVAILABILITY OF CASH. IN ANY CASE, AS OBSERVED EARLIER, NO SPECIFIC DETAI LS HAVE BEEN FILED THAT ITA NO.3967/M/2010 10 OUT OF WHICH PARTICULAR ADDITION THE AMOUNT WAS AVA ILABLE, HENCE TELESCOPING CANNOT BE ALLOWED. 14. AS FAR AS THE DECISIONS OF THE TRIBUNAL IN THE CASES OF DCIT VS. SUNIL UMASHANKAR RUNGTA AND JAGMOHAN SINGH ARORA & ORS. VS. DCIT [CITED SUPRA] ARE CONCERNED, SAME ARE DISTINGUISHAB LE ON THEIR OWN FACTS AND THERE IS NO NEED TO DEAL WITH THOSE FACTS . 15. WE FURTHER FIND THAT THERE IS NO FORCE IN THE S UBMISSION THAT CREDIT HAS NOT BEEN GIVEN AGAINST THE PURCHASE OF J EWELLERY FOR WHICH BILLS WERE FOUND. WE HAVE ALREADY REPRODUCED THE CH ART SHOWING THE ADDITION FOR BALANCE OF JEWELLERY WHICH READ AS UND ER: A) JEWELLERY FOUND DURING THE SEARCH 1118 GMS. B) JEWELLERY APPEARING IN BALANCE SHEET AS ON VALUED AT RS.320 PER GM 489 GMS. C) JEWELLERY PURCHASED IN ASSESSMENT YEAR 167 GMS. 2004-05 D) UNEXPLAINED JEWELLERY [A-(B+C) 462 GMS. E) VALUATION OF UNEXPLAINED JEWELLERY@ 560 GM. AS VALUED BY VALUER AS ON THE DAY OF SEARCH RS.2,58,720 FROM THE ABOVE IT IS CLEAR THAT OUT OF THE TOTAL JE WELLERY OF 1118 GMS, 489 GMS. WAS HELD TO BE EXPLAINED BECAUSE SAME WAS TAKEN IN THE BALANCE SHEET. FURTHER, CREDIT FOR JEWELLERY OF 167 GMS. PURCHASED HAS BEEN SPECIFICALLY ALLOWED AND ONLY JEWELLERY OF 462 GMS. HAS BEEN TREATED AS UNEXPLAINED. THEREFORE, THE SECOND SUBMI SSION IS NOT MAINTAINABLE BECAUSE SPECIFIC CREDIT HAS ALREADY BE EN GIVEN FOR JEWELLERY ALREADY PURCHASED. 16. AS FAR AS THE LAST SUBMISSION REGARDING VALUATI ON IS CONCERNED, THE SAME CAN ALSO NOT BE ENTERTAINED BECAUSE COPY O F VALUATION REPORT ITSELF WAS NOT FILED TO SHOW THAT WHICH PARTICULAR ITEM HAS BEEN WRONGLY ITA NO.3967/M/2010 11 VALUED. IT IS A COMMON KNOWLEDGE THAT SOMETIMES GOL D JEWELLERY IS EMBEDDED WITH VARIOUS PRECIOUS STONES AND VALUE WOU LD DEPEND ON THE SAME. SIMPLY THE RATE OF GOLD CANNOT BE COMPARE D ON A PARTICULAR DATE. THEREFORE, IN THE ABSENCE OF VALUATION REPORT AND SPECIFIC OBJECTION REGARDING VALUATION OF A PARTICULAR ITEM, THIS CLAIM CANNOT BE ENTERTAINED. IN VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT LD. CIT(A) HAS CORRECTLY DECIDED THE ISSUE AND CONFIRM HIS ORD ER. 17. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 0/08/2011. SD/- SD/- (D.MANMOHAN) (T.R.SOOD) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI: 10/08/2011. P/-*