HIREN N. PATEL, MUMBAI V. ACIT CEN CIR-10, MUMBAI

ITA 42/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1787 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 04-02-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 04-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V G GINDE
• Keywords: Gift; Valuation report

Judgement Text

ITA NO.42 OF 2010 HIREN N PATEL MUMBAI PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL 'H' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 42/MUM/2010 (ASSESSMENT YEAR: 2007-08) HIREN N. PATEL, 43/11 RAJABAHADUR BUILDING, 2 ND FLOOR, TAMRIND LANE, FORT, MUMBAI 400001 PAN: AAFPP 1153 Q VS. ACIT, CENTRAL CIRCLE-10, 8 TH FLOOR, OLD CGO ANNEXE, MK ROAD, MUMBAI 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI V.G. GINDE DEPARTMENT BY: SMT. NEERAJA PRADHAN, DR DATE OF HEARING: 05/02/2013 DATE OF PRONOUNCEMENT: 07/02/2013 O R D E R PER B. RAMAKOTAIAH, A.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDERS O F THE CIT (A)-37 MUMBAI, DATED 23.10.2009. THE ISSUE IN THE G ROUNDS RAISED BY ASSESSEE IS WITH REFERENCE TO AN ADDITION OF ` .3,53,890 BROUGHT TO TAX ON ACCOUNT OF UNEXPLAINED JEWELLERY. 2. THE FACTS RELATING TO THE PRESENT CASE ARE THAT THE RE WAS A SEARCH ON 25.11.2006 ON ASSESSEE AND HIS FAMILY MEM BERS. DURING THE COURSE OF SEARCH, JEWELLERY FOUND IN ASSESSEES AND HIS WIFES CASE WAS AT ` .7,09,615. ASSESSEE FURNISHED THE DETAILS OF THE JEWELLERY AND EXPLAINED THAT AT THE TIME OF MARRIAG E AND OTHER FUNCTIONS, JEWELLERY VALUED AT ` .1,76,155 RECEIVED FROM WIFES FATHER AND AFFIDAVIT CONFIRMING JEWELLERY GIFT WAS FILED. THIS WAS ACCEPTED BY AO. WITH REFERENCE TO THE BALANCE OF JEWELLERY, ASSESSEE FURNISHED THE COPIES OF THE OLD BILLS BUT COULD NOT FURNISH SOME BILLS AND CLAIM OF GIFT OF SMALL ITEMS RECEIVED. WHILE AC CEPTING THAT ASSESSEE FURNISHED A STATEMENT SHOWING THE SOURCES OF THE CHEQUES ISSUED AGAINST THE BILLS FURNISHED AND THE SOURCES ARE, MAINLY ITA NO.42 OF 2010 HIREN N PATEL MUMBAI PAGE 2 OF 4 ASSESSEES INCOME OF THAT YEAR OR ADVANCE/LOAN RECE IVED FROM FAMILY CONCERNS, AO IN THE ABSENCE OF WEALTH TAX RETURN AN D YEAR-WISE BALANCE SHEET, BROUGHT TO TAX VALUE OF JEWELLERY AM OUNTING TO ` .3,53,890 EXCLUDING AN AMOUNT OF ` .1,80,000 WHICH WAS OFFERED BY ASSESSEE HIMSELF IN THE RETURN OF INCOME. THE DISPU TE IS WITH REFERENCE TO THE ADDITION OF JEWELLERY WHICH ACCORD ING TO ASSESSEE WAS EXPLAINED JEWELLERY. 3. THE LEARNED CIT (A) WHILE EXTRACTING THE FACTS IN P ARA 2.2.1 ACCEPTS THAT ASSESSEE HAS FURNISHED COPIES OF OLD B ILLS FOR PROVING THE PURCHASE OF SUCH JEWELLERY AND EVIDENCE OF PAYM ENT BY CHEQUES BUT IN PARA 2.3.2 OBSERVES THAT THE SOURCE OF EXCES S JEWELLERY EITHER BY WAY OF PURCHASING VOUCHERS, NOR BY WAY OF BANK S TATEMENT, NOR BY WAY OF WEALTH TAX RETURN WAS NOT FURNISHED. AFTE R DISCUSSING THE LEGAL PROVISIONS, THE CIT (A) CONFIRMED THE ADD ITION. 4. IT WAS THE CONTENTION OF ASSESSEE THAT HE HAS EXPLA INED THE JEWELLERY IN THE FOLLOWING MANNER: (I) TOTAL JEWELLERY FOUND AS PER THE : ` .7,09,615 VALUATION REPORT (II) JEWELLERY COVERED BY AFFIDAVIT: ` .1,76,155 --------------- ` .5,33,460 (III) BILLS AVAILABLE/PRODUCED : ` .4,73,965 (IV) BILLS MISPLACED : ` . 50,925 (V) GIFT ; ` . 8,570 TOTAL : ` .5,33,460 5. IT WAS SUBMITTED BY LD. AR THAT EVEN THOUGH ASSESS EE WAS ABLE TO FURNISH THE BILLS TO AN EXTENT OF ` .4,73,965 ALONG WITH THE CHEQUE PAYMENTS AND THE EVIDENCE BUY WAY OF BANK ST ATEMENT, AO DID NOT ACCEPT THEM ON THE REASON THAT THE WEALTH T AX STATEMENTS WERE NOT FURNISHED. IT WAS THE SUBMISSION THAT ASSE SSEES WEALTH DOES NOT REQUIRE ANY WEALTH TAX RETURNS AND THE SUC H SMALL VALUE JEWELLERY WAS NOT SUBJECT TO WEALTH TAX AT ALL. EVE N THOUGH THE BILLS MISPLACED AND THE GIFT AMOUNTS WERE SMALL, ASSESSEE IN ORDER TO ITA NO.42 OF 2010 HIREN N PATEL MUMBAI PAGE 3 OF 4 AVOID ANY COMPLICATIONS HAS OFFERED UNDISCLOSED JEW ELLERY OF ` .1,80,000 WHICH IS MORE THAN THE VALUE OF ITEMS WH ICH COULD NOT BE FURNISHED BEFORE AO. IT WAS SUBMITTED THAT THERE IS NO NEED FOR ANY ADDITION ON THIS ISSUE. 6. THE LEARNED DR RELIED ON THE ORDERS OF AO AND THE C IT (A) AS IT IS ONLY A FACTUAL ISSUE AND REITERATED THE FACTS THEREIN. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AO MADE T HE ADDITION STATING AS UNDER: 5. THE JEWELLERY FOUND IN HIS AND HIS WIFES CASE WAS AT ` .7,09,615. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE DETAILS OF THE JEWELLERY FOUND HAS BEEN FURNISHED. IT IS NOTICED THAT ASSESSEE HAS RECEIVED AT THE TIME OF MARRIAGE AND OTHER FUNCTIONS JEWELLERY VALU ED AT ` .1,76,155 FROM WIFES FATHER. AN AFFIDAVIT CONFIRMI NG THE JEWELLERY GIFTED BY FATHER OF HIS WIFE HAS BEEN FIL ED. HOWEVER, FOR REMAINING JEWELLERY, ASSESSEES HAVE FURNISHED COPIES OF OLD BILLS FOR PROVING THEIR PUR CHASES. FOR SOME JEWELLERY THEY CLAIMED THAT THE BILLS ARE MISPLACED. SOME JEWELLERY THEY CLAIMED AS GIFTS RECEIVED. ASSESSEE HAS ALSO FURNISHED A STATEMENT SHOWING SOURCES OF THE CHEQUES ISSUED AGAINST THE B ILLS FURNISHED AND THE SOURCES ARE MAINLY ASSESSEES INC OME OF THAT YEAR OR ADVANCES/LOANS RECEIVED FROM FAMILY CONCERNS. BUT THESE CLAIMS ARE NOT VERIFIABLE IN TH E ABSENCE OF WEALTH TAX RETURNS IN THEIR CASES AND SI NCE ASSESSEES HAVE NOT FURNISHED YEAR WISE BALANCE SHEE T. IN THE CIRCUMSTANCES, THE VALUE OF THE JEWELLERY AMOUNTING TO ` .3,53,890 HAS BEEN UNVERIFIABLE AND AS SUCH THEY ARE TREATED AS UNEXPLAINED IN ASSESSEES CASE AND ADDED TO TOTAL INCOME UNDER SECTION 69A OF THE I.T. ACT. I AM SATISFIED THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND HENCE PENA LTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE I.T. ACT ARE INITIATED SEPARATELY. 8. EVEN THOUGH HE ACCEPTS THAT ASSESSEE FURNISHED STAT EMENT SHOWING THE SOURCES OF THE CHEQUES ISSUED, HE SURPR ISINGLY REJECTS THE CONTENTION THAT IN THE ABSENCE OF WEALTH TAX RE TURNS, THE CLAIMS ARE NOT VERIFIABLE. WE ARE UNABLE TO ACCEPT AOS CO NTENTION AS THERE CAN NOT BE WEALTH TAX RETURN WHEN ASSESSEES WEALTH IS BELOW THE TAXABLE LIMITS. ASSESSEE HAS FURNISHED MOST OF THE BILLS AND ALSO EVIDENCED BY CHEQUE PAYMENTS THROUGH BANK TO AN EXT ENT OF ITA NO.42 OF 2010 HIREN N PATEL MUMBAI PAGE 4 OF 4 ` .4,73,965. WHAT COULD NOT BE EXPLAINED ARE BILLS MI SPLACED TO THE EXTENT OF ` .50,925 AND GIFT OF SMALL ITEMS OF ` .8,570. AS AGAINST THESE TWO OF ABOUT ` .59,000, ASSESSEE HAS OFFERED AN AMOUNT OF ` .1,80,000 IN THE RETURN OF INCOME. THEREFORE, WE AR E OF THE OPINION THAT THERE IS NO NEED TO MAKE ANY ADDITION AS MADE OUT BY AO. IT IS SURPRISING THAT EVEN THE LEARNED CIT (A) WHILE ACCE PTING THAT ASSESSEE HAS FILED NECESSARY DETAILS OF BILLS/CHEQU ES ETC, HOWEVER GIVES A FINDING THAT ASSESSEE DID NOT PROVE THE SOU RCES OF EXCESS JEWELLERY. AFTER EXAMINING THE STATEMENTS AND THE B ILLS AND DETAILS FILED BEFORE AO, ENCLOSED IN THE PAPER BOOK, WE ARE CONVINCED THAT THERE IS NO NEED TO MAKE ANY ADDITION. THE JEWELLER Y IS EXPLAINED, PURCHASED FROM EXPLAINED SOURCES, SO THE ADDITION A S UNEXPLAINED DOES NOT ARISE. ACCORDINGLY, WE DELETE THE ADDITION . ASSESSEES GROUNDS ARE ALLOWED. 9. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH FEBRUARY, 2013 SD/- SD/- ( AMIT SHUKLA ) (B. RAMAKOTAI AH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 7 TH FEBRUARY, 2013. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, H BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI