RASHMI R. KALE, MUMBAI V. ASST CIT CEN CIR 32, MUMBAI

ITA 3996/MUM/2011

• Counselvise Citation: 399619914 RSA 2011
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 13-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANDEEP MAHESHWARI; R C JAIN AW MR AJAY DAGA
• Keywords: Search and seizure
• Section: 153A; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER, A ND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITAS NO. 3996, 3997, 3998, 3999, /MUM./2011 (A.YS : 2004-05, 2005-06, 2006-07, 2008-09 ) MRS. RASHMI KALE 8, NANDDEEP, KAILASHPURI GOVIND NAGAR, MALAD (EAST) MUMBAI 400 097 PAN AGTPK3426B .. APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE32, AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... RESPONDENT ASSESSEE BY : MR. R.C. JAIN A/W MR. AJAY DAGA & MR. SANDEEP MAHESHWARI REVENUE BY : MR. PRAVIN VERMA DATE OF HEARING 19.03.2012 DATE OF ORDER 09.05.2012 O R D E R PER BENCH THESE APPEALS PREFERRED BY THE ASSESSEE, ARE DIRECT ED AGAINST IMPUGNED SEPARATED ORDERS DATED 7 TH MARCH 2011, PASSED BY THE COMMISSIONER (APPEALS)-XXXXI, MUMBAI, FOR THE ASSES SMENT YEARS 2004-05 TO 2008-09 RESPECTIVELY. 2. IN THIS CASE, THE ASSESSEE IS AN INDIVIDUAL HAVING INCOME UNDER THE HEAD INCOME FROM BUSINESS. ON 26 TH NOVEMBER 2007, A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE MRS. RASHMI KALE 2 ACT ) WAS CONDUCTED IN KALE GROUP OF ENTITIES, WHICH IN CLUDES THE ASSESSEE. SUBSEQUENTLY, THE ASSESSEE WAS ISSUED NOTICE UNDER SECTION 153A OF THE ACT, AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 144 R/W 153A OF THE ACT. WE FIRST TAKE UP ASSESSEES APPEAL IN ITA NO.3996/M UM./2011, FOR ASSESSMENT YEAR 2004-05. THE SOLE GROUND RAISED BY THE ASSESSEE READS AS FOLLOWS:- THE ASSESSING OFFICER HAS ERRED IN ADDING A SUM OF ` 6,08,447, AS RECEIPT OF FIXED ASSETS SOLD AND FURTHER THE LEARNE D CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING O FFICER . 3. THE ASSESSING OFFICER FOUND FROM THE SEIZED DOCUMEN TS, AS TWO DIFFERENT BALANCE SHEETS PERTAINING TO THE ASSESSEE . IN THESE BALANCE SHEETS, THERE IS A VARIATION IN THE FIGURE OF FIXED ASSETS. THE DIFFERENCE WAS OF ` 6,08,447. IT WAS HELD BY THE ASSESSING OFFICER THAT THE DIFFERENCE WAS SALE OF FIXED ASSETS, WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THE SAME WAS TREATED AS INCOME. THE ASSESSEES CASE IS THAT THE FIRST BALANCE SHEET WAS AN INCOMPLETE BALANCE SHEET BASED ON INCOMPLETE ACCOUN TS AND THAT THIS DISCLOSED FIXED ASSET OF ` 4,05,865. SHE SUBMITTED THAT THE FINALIZED BALANCE SHEET DISCLOSES VALUE OF ` 10,14,312, AND THAT THIS CORRECT BALANCE SHEET WAS FILED BY THE ASSESSEE ALONG WITH ORIGINAL RETURN OF INCOME FILED UNDER SECTION 139. THE VARIANCES BETWEEN THE TWO DOCUMENTS WERE E XPLAINED. IT WAS FURTHER EXPLAINED THAT THERE IS NO DIFFERENCE IN TH E FIXED ASSETS DISCLOSED IN THE BALANCE SHEET FILED WITH THE ORIGINAL RETURN OF INCOME ON 31 ST MARCH 2003 AND 31 ST MARCH 2004. HENCE, THERE IS NO TRANSACTION IN FIXE D ASSETS DURING THE YEAR. IN THE REMAND PROCEEDINGS, THE ASSESSING OFFICER COULD NOT DISPUTE THE SUBMISSIONS OF THE ASSESSEE. DESPITE THE SAME, THE COMMISSIONER (APPEALS) CONFIRMED THE ADDITION. 4. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINI ON THAT THE ADDITION IS UNCALLED FOR. THE INCOMPLETE BALANCE SHEET FOUND DURING THE COURSE OF SEARCH IS A DUMB DOCUMENT. IF SUCH BALANCE SHEET IS TO BE CONSIDERED AS A CORRECT BALANCE SHEET, THEN, THE OTHER FIGURES APPE ARING IN THE BALANCE SHEET I.E., CAPITAL ACCOUNT, THE PROFIT EARNED FROM THE C URRENT PERIOD AND OTHER MRS. RASHMI KALE 3 FIGURES OUGHT TO HAVE BEEN TAKEN ALSO. THERE IS NO EVIDENCE FOUND DURING THE COURSE OF SEARCH OR LATER ON POST-SEARCH INVESTIGAT ION THAT THE ASSESSEE HAS DISPOSED OFF ANY OF THE ASSETS. THE ADDITION IS MAD E ON PRESUMPTIONS AND CONJECTURES. HOW CAN THERE BE AN ASSUMPTION THAT TH E ASSESSEE SOLD ASSETS AND THAT SHE MADE PROFITS FROM THE SAME. THE COMMIS SIONER (APPEALS) ASSUMED THAT THE ASSESSEE SOLD ASSETS WHEN IN THE R ETURN OF INCOME AND BALANCE SHEET FILED BEFORE THE REVENUE, THE ASSESSE E CONTINUES TO DISCLOSE THESE ASSETS AS AVAILABLE WITH HER. HENCE, THE ADDI TION IS DELETED AND THE GROUND IS ALLOWED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. WE NOW TAKE UP APPEAL IN ITA NO.3997/MUM./2011, FOR ASSESSMENT YEAR 2005-06. 6. GROUND NO.1, IS AN ADDITION MADE ON ACCOUNT OF UNEX PLAINED CASH PAID TO M/S. GENESIS MOTEL P. LTD. AMOUNTING TO ` 2,50,000. 7. AFTER HEARING BOTH THE PARTIES, WE FIND THAT IN THE CASE OF MR. RAJENDRA N. KALE, IN ITA NO.4000/MUM./2011, FOR ASSESSMENT Y EAR 2005-06, SIMILAR ADDITION HAS BEEN DELETED FOR THE REASONS STATED TH EREIN. SINCE THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THAT CASE, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE DELETE THE ADDITION AND ALLO W THE GROUND RAISED BY THE ASSESSEE. 8. GROUNDS NO.2 AND 3, ARE ON ACCOUNT OF INVESTMENT IN PURCHASE OF SHARES OF ` 1,00,000, AND UNEXPLAINED CASH DEPOSIT OF ` 75,000, IN THE BANK. 9. THE ASSESSEE MADE INVESTMENT IN PURCHASE OF SHARES OF KALE ENTERTAINMENT P. LTD. THE ASSESSEE FILED A CASH FLO W STATEMENT IN SUPPORT OF THE INVESTMENT. 10. KEEPING IN VIEW THE SMALLNESS OF THE AMOUNT AS WELL AS THE STATUS OF THE ASSESSEE AND HER INCOME AND AS THE REVENUE COUL D NOT FIND ANY DEFECTS IN THE CASH FLOW STATEMENT OR FIND ANY EVIDENCE TO PROVE THAT THIS IS FALSE, WE MRS. RASHMI KALE 4 ARE OF THE CONSIDERED OPINION THAT THE ADDITION CAN NOT BE SUSTAINED. THE ASSESSING OFFICER DID NOT DOUBT THE BOOKS OF ACCOUN T AND ENTRIES THEREIN. NO ENTRY IS FOUND TO BE FALSE. WHEN THE BOOKS OF ACCOU NT OR CASH FLOW STATEMENTS ARE FILED, THE DEFECT SHOULD BE POINTED OUT BEFORE REJECTING THE SAME. FOR THESE REASONS, WE DELETE THESE ADDITIONS AND ALLOW THE GROUNDS RAISED BY THE ASSESSEE. 11. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.3998/MUM ./2011, FOR ASSESSMENT YEAR 2006-07. 12. GROUND NO.1, IS AN ADDITION MADE ON ACCOUNT OF UNEX PLAINED INVESTMENT OF ` 5,30,000, IN PURCHASE OF SHARES. THE ASSESSEE EXPL AINED THE SAME BY PRODUCING A SUMMARY OF CASH BOOK. 13. BEFORE US, A SUMMARY OF CASH BOOK HAS BEEN FILED AS EVIDENCE. THE CASH BOOK SHOWS OPENING BALANCE OF ` 7,07,625. WITHDRAWALS FROM BANK ARE ` 2,67,511, DEPOSIT IN THE BANK WERE ` 10,000, AND SHARES IN KERPL IS SHOWN AS ` 4,80,000. 14. WE ARE UNABLE TO APPRECIATE THE CONTENTIONS OF THE ASSESSEE THAT THE ENTIRE INVESTMENT IS MADE FROM CASH BALANCE AVAILAB LE IN THE HANDS OF THE ASSESSEE. IT IS AGAINST HUMAN PROBABILITIES TO KEEP HUGE CASH BALANCES AT HOME. THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE P ROXIMITY OF SOURCE. THUS, WE CONFIRM THIS ADDITION ON THE GROUND THAT T HE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THE SOURCES OF INVESTMENTS. TH IS GROUND IS, THUS, DISMISSED. 15. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. WE NOW TAKE UP ASSESSEES APPEAL IN ITA NO.3999/MUM ./2011, FOR ASSESSMENT YEAR 2008-09. THE SOLE GROUND RAISED BY THE ASSESSEE READS AS FOLLOWS:- MRS. RASHMI KALE 5 THE ASSESSING OFFICER HAS ERRED IN ADDING A SUM OF ` 4,72,180, AS UNEXPLAINED JEWELLERY WITHOUT PROVIDING ANY OPPORTU NITY TO THE APPELLANT TO EXPLAIN THE SAME AND FURTHER THE COMMI SSIONER (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AS SESSING OFFICER . 16. THE ADDITION HAS BEEN CONFIRMED BY THE COMMISSIONER (APPEALS) ON THE GROUND THAT BENEFIT OF CBDT CIRCULAR NO.1916, W AS GIVEN DURING THE COURSE OF SEARCH AND IT WAS ONLY THE BALANCE OF JEW ELLERY WHICH WAS ADDED AS INCOME. THE ISSUE IN QUESTION HAS BEEN DEALT WITH I N DETAIL IN THE CASE OF MRS. SARITA KALE, IN ITA NO.3991/MUM./2011. AS THE GOLD AND JEWELLERY FOUND IN THE CASE OF THE PRESENT ASSESSEE MRS. RASHMI KAL E, HAS BEEN CONSIDERED VIDE RECONCILING THE FAMILYS GOLD JEWELLERY AND AS THE EXCESS HAS BEEN ADDED IN THE CASE OF MRS. SARITA N. KALE, NO SEPARATE ADD ITION IS WARRANTED IN THE CASE OF PRESENT ASSESSEE. THUS, WE DELETE THE ADDIT ION MADE AND ALLOW THE GROUND OF THE ASSESSEE. 17. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH MAY 2012 SD/- SATBEER SINGH GODARA JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 9 TH MAY 2012 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, G BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI