SHRI RADHEYSHYAM MITTAL, Jaipur V. DCIT, Jaipur

ITA 420/JPR/2012

• Counselvise Citation: 42023114 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Keywords: Unexplained investment; Income from undisclosed sources; Document seized; Bonafide belief; Wrong claim; Retraction; Documents seized
• Section: 153A; 132

Judgement Text

1 ITA 420-12 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH : JAIPUR. BEFORE SHRI B.R. JAIN AND SHRI KUL BHARAT ITA NO. 420/JP/2012 ASSESSMENT YEAR : 2009-10. SHRI RADHEYSHYAM MITTAL, VS. THE DCIT, CENTRAL CI RCLE-3, B-18, SARDAR PATEL MARG, JAIPUR. CHOMU HOUSE, JAIPUR. PAN : ADAPM3684R. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIJAY GOYAL RESPONDENT BY : SHRI A.K. KHANDELWAL DATE OF HEARING : 20.08.2013. DATE OF PRONOUNCEMENT : 26.08.2013. ORDER PER B.R. JAIN, A.M. THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 01 .02.2012 OF LD. CIT (A), CENTRRAL, JAIPUR RAISES THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 19, 15,303/- MADE BY THE A.O. MERELY ON THE BASIS OF STATEMENT RECORDED U/S 132(4) OF THE I.T. ACT, 1961 WITHOUT HAVING ANY CORROBORATIVE EVIDENCE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 8,2 4,618/- ON ACCOUNT OF ALLEGED UNEXPLAINED JEWELLERY OF GOLD AT 798.430 GM S VALUING AT RS. 8,24,618/- BY REJECTING THE CLAIM OF THE ASSESSEE T HAT THESE JEWELLERY BELONG TO THE FOLLOWING PERSONS : 2 S.NO NAME OF PERSON GOLD (GM) 1. SHRI MUKTI LAL AGARWAL 240.000 2. SHRI PRAFUL MITTAL 258.430 3. LAL CHAND MITTAL & FAMILY 300.000 TOTAL 798.430 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE BENEFIT OF TELESCOPING, RECYCLING AND ROTATION OF FUNDS. 2. IN GROUND NO. 1 RAISED IN APPEAL, BRIEFLY THE FA CTS ARE THAT A SEARCH UNDER SECTION 132 OF THE IT ACT WAS CONDUCTED ON ASSESSEE GROUP O N 27.08.2008. THE APPELLANT IS ENGAGED IN THE BUSINESS OF DISTRIBUTORSHIP OF PREPA ID MOBILE SIM CARDS AND RETURNED AN INCOME OF RS. 2,50,110/- IN PURSUANT TO NOTICE UNDE R SECTION 153A OF THE ACT. THE ASSESSING OFFICER RECORDED FINDINGS AND HELD THAT D URING THE COURSE OF SEARCH, STATEMENT OF ASSESSEE WAS RECORDED UNDER SECTION 132(4) OF TH E ACT ON 28.8.2008. IN THE STATEMENT, THE ASSESSEE OFFERED TO TAX INCOME OF RS. 30,00,000 /- IN HIS INDIVIDUAL CAPACITY EARNED FROM MEDICAL BUSINESS. THE ASSESSEE RECONFIRMED TH E ABOVE SURRENDER IN HIS STATEMENT DATED 5.9.2008. THE INCOME, HOWEVER, WAS NOT REFLE CTED IN THE RETURN OF INCOME FILED ON 30.9.2009. THE ASSESSING OFFICER IN HIS ORDER HELD THAT STATEMENT TAKEN DURING THE COURSE OF SEARCH HAS GREAT EVIDENTIARY VALUE AND THE RETRA CTION CAN BE TREATED VALID ONLY WHEN THE COERCION HAS BEEN PROVED. THE FACT THAT THE ASSESSE E RETRACTED HIS STATEMENT AFTER A LAPSE OF 7 MONTHS IS NOTHING BUT AN AFTER THOUGHT, BECAUS E HAD HE BEEN SO PERTURBED OF THE COERCION COMMITTED BY THE INCOME-TAX AUTHORITIES, H E WOULD HAVE RETRACTED THE STATEMENT WITHIN A FEW DAYS OF TIME AND NOT AFTER CONSIDERABL E TIME HAS ELAPSED. THE ASSESSEE ALSO FAILED TO DISCHARGE THE ONUS OF PROVING THAT COERCI ON WAS USED WHILE RECORDING THE STATEMENT. HOWEVER, THE ASSESSING OFFICER ALLOWED SET OFF OF INCOME OFFERED TO TAX 3 AMOUNTING TO RS. 10,84,897/- REPRESENTING THE UNACC OUNTED EXPENSES ON MARRIAGES IN THE FAMILY AND RENOVATION OF BUILDING AS UNEXPLAINED CA SH CREDITORS IN PRECEDING ASSESSMENT YEARS I.E. 2003-04, 2005-06 AND 2006-07 ASSESSED TH E BALANCE AMOUNT OF RS. 19,15,303/- AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 3. THE LD. CIT (A) TOOK NOTE OF THE REPLY OF THE AS SESSEE TO QUESTION NO. 12 (PAPER BOOK PAGE 49). IN HIS STATEMENT RECORDED ON 28.8.2 008 WHERE HE HAD ADMITTED THAT HE HAS EARNED UNACCOUNTED INCOME OF RS. 30,00,000/- IN HIS INDIVIDUAL CAPACITY FROM THE TRADING OF VARIOUS ITEMS OF PHARMACEUTICAL COMPANIES. THE ASSESSEE IN HIS STATEMENT RECORDED ON 05.09,2008 RECONFIRMED HIS UNACCOUNTED INCOME IN RE PLY TO QUESTION NO. 11. THE LD. CIT (A) DID NOT AGREE WITH THE ASSESSEES PLEA THAT THE SURRENDER HAS BEEN TAKEN UNDER DURESS AND BY PUTTING PRESSURE ON THE ASSESSEE. THE RETRAC TION FILED BY THE ASSESSEE IS AN AFTER 6-7 MONTHS OF SEARCH. THE BURDEN LAY UPON THE ASSESSEE TO PROVE THAT WHAT WAS ADMITTED DURING THE COURSE OF SEARCH IS NOT CORRECT AND THIS BURDEN CAN ONLY BE TREATED TO BE DISCHARGED WITH THE RETRACTION BY WAY OF AN AFFIDAV IT IS FILED IMMEDIATELY ON COMPLETION OF SEARCH. THE ARGUMENT THAT MEDICAL BUSINESS CANN OT BE RUN WITHOUT PROPER LICENCE IS OF NO MERIT IN THE BACK DROP OF THE FACT THAT THE APPE LLANT HAS NOT DISCLOSED THIS BUSINESS TO THE DEPARTMENT AND SIMILARLY HAS NOT DISCLOSED THIS BUSINESS TO THE RELEVANT MEDICAL AUTHORITIES. THE ASSESSEES AFFIDAVIT CAME AS LATE AS ON 31.3.2009 WHICH WAS NOT TAKEN AS A TIME LIMIT RETRACTION. SINCE THE ASSESSING AUTHO RITY HAS ACTED ON THE BASIS OF STATEMENT OF THE ASSESSEE AND THE SET OFF OF RS. 10,84,697/- HAS ALREADY BEEN GIVEN BY THE ASSESSING OFFICER AND THEREAFTER THE REMAINING AMOUNT OF RS. 19,15,303/- HAS BEEN ADDED DURING THE YEAR. HE, THEREFORE, FOUND NO MERIT IN THE ARGUMENT ADVANCED BY THE ASSESSEE AND THUS CONFIRMED THE ADDITION OF RS. 19,15,303/-. 4 4. ASSESSEES COUNSEL SHRI GOYAL IN HIS WRITTEN SUB MISSIONS AS WELL AS ORALLY CONTENDS THAT IN THE STATEMENT OF THE ASSESSEE DATE D 27.8.2008/28.8.2008 RECORDED AT C-1, MITTAL CHAMBERS, C-SCHEME, JAIPUR AND STATEMENT REC ORDED AT B-19, SARDAR PATEL MARG, CHOMU HOUSE, JAIPUR, THERE WERE NO ANY POSITIVE QUE STION ON THE BASIS OF CORROBORATIVE EVIDENCE OR MATERIAL SHOWING UNDISCLOSED INCOME OR INVESTMENT MADE BY THE ASSESSEE. NO ANY DOCUMENT WAS FOUND TO SHOW THAT THE ASSESSEE WAS ENGAGED IN UNDECLARED PHARMACEUTICAL BUSINESS. NEITHER SUCH SHOW-ROOM OR SHOP WAS FOUND NOR ANY STOCK OF MEDICINES WAS FOUND SHOWING EXISTENCE OF UNDECLARED MEDICAL BUSINESS OF THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. NO ANY BANK ACCOUNT, PURC HASE AND SALE BILLS WERE FOUND TO SHOW THE EXISTENCE OF SUCH BUSINESS. FURTHERMORE, THE A SSESSEE DID NOT HAVE DRUG LICENCE, THEREFORE, IT WAS NOT POSSIBLE TO CARRY ON BUSINESS OF MEDICINES IN HIS INDIVIDUAL CAPACITY. IN ABSENCE OF ANY DOCUMENTARY EVIDENCE REVEALING UN DISCLOSED INCOME, THE ASSESSEE WAS UNDER GOOD FAITH THAT THE STATEMENT SO MADE WILL NO T BE USED AGAINST HIM. THE APPELLANT, HOWEVER, HAS REPEATEDLY REQUESTED TO THE AUTHORIZED OFFICER AS WELL AS TO THE ASSESSING OFFICER TO GIVE COPIES OF THE STATEMENT RECORDED UN DER SECTION 132(4) OF THE ACT. IT IS AS LATE AS ON 13.3.2009 THE COPY OF THE STATEMENT WAS PROVIDED. THIS FACT IS EVIDENT FROM THE REQUEST LETTER FILED AND PLACED IN THE PAPER BOOK O F ITA NO. 443/JP/2012 AT PAPER BOOK PAGE 203. IMMEDIATELY AFTER RECEIPT OF COPY OF STA TEMENT, THE ASSESSEE RETRACTED THE STATEMENT ON 31.3.2009 BY FILING AFFIDAVIT TO THIS EFFECT. THIS AFFIDAVIT IS PLACED AT ASSESSEES PAPER BOOK PAGES 64 TO 68. THE ASSESSIN G OFFICER MADE NO ENQUIRY ON THE AFFIDAVIT NOR CALLED UPON THE ASSESSEE TO PROVE CON TENTS THEREOF. NO CROSS EXAMINATION HAS BEEN DONE BY THE ASSESSING AUTHORITY. THE ASSESSEE , THEREFORE, TOOK THAT THE RETRACTION MADE BY HIM THROUGH HIS AFFIDAVIT STANDS ADMITTED. EVEN OTHERWISE, THE ADMISSION TAKEN 5 DURING THE SEARCH IS CONTRARY TO THE INSTRUCTIONS I SSUED BY CBDT VIDE F.NO. 286/2/2003- IT(INV.) DATED 110.3.2003, COPY OF WHICH IS APPENDE D WITH THE WRITTEN SUBMISSIONS OF THE ASSESSEE. THE ASSESSING AUTHORITY WAS DUTY BOUND T O MAKE ASSESSMENT ON THE BASIS OF MATERIAL FOUND AS A RESULT OF SEARCH. THIS, HOWEVE R, HAS NOT BEEN DONE. IT WAS OPEN TO THE ASSESSEE TO SHOW THAT THE ADMISSION TAKEN DURIN G THE COURSE OF SEARCH IS NOT CORRECT AND THIS STANDS PROVED AS THE SAME IS NOT CORROBORA TED BY ANY EVIDENCE FOUND AS A RESULT OF SEARCH. FOR THIS PROPOSITION RELIANCE HAS BEEN PLACED ON THE JUDGMENT BY HON'BLE APEX COURT IN THE CASE OF PULLANGODE RUBBER PRODUCE CO. LTD. VS. STATE OF KERALA (1973) 91 ITR 18 (SC). RELIANCE HAS ALSO BEEN PLACED ON T HE JUDGMENT BY HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ASHOK KUMAR SONI, 291 ITR 172 (RAJ.) WHEREIN IT HAS BEEN HELD THAT ADMISSION IN STATEMENT DURING SEARCH IS NOT CONCLUSIVE PROOF OF FACT AND CAN ALWAYS BE EXPLAINED. THE ASSESSEE HAVING SUCCE SSFULLY MADE THE RETRACTION, THERE WAS NO OCCASION OR BASIS TO MAKE ADDITION OF RS. 19 ,15,303/- AS UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE HAS ALSO PLACED RELIANC E ON THE WRITTEN SUBMISSIONS AND CASE LAWS REFERRED THEREIN AND ALSO BY DISTINGUISHING TH E CASE LAWS RELIED UPON BY THE AUTHORITIES BELOW IN THEIR RESPECTIVE ORDERS. 5. ON THE OTHER HAND, THE LD. D/R CONTENDS THAT THE ADDITION CAN BE MADE ON THE BASIS OF STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. THE APPELLANT HAD MADE AN ADMISSION OF INCOME EARNED OUTSIDE BOOKS FROM UNACC OUNTED PHARMACEUTICAL BUSINESS AND SUCH INCOME STATED TO HAVE BEEN EARNED TO THE T UNE OF RS. 30,00,000/- AND THEREAFTER ADMITTED OF MAKING THE SURRENDER OF HIS INCOME OF R S. 30,00,000/-. THE ASSESSEE IS A EDUCATED PERSON. THE ASSESSEE HAS NOT MADE RETRACT ION WELL IN TIME. THE PUNE BENCH OF THE TRIBUNAL IN CASE OF HOTEL KIRAN, 82 ITD 453 (PU NE) HAS DISCUSSED ELABORATELY THE 6 CIRCUMSTANCES UNDER WHICH A VALID RETRACTION CAN BE MADE. THIS RETRACTION, HOWEVER, DOES NOT MEET SUCH CIRCUMSTANCES. THE ASSESSING OF FICER AT INTERNAL PAGES 5 TO 7 OF THE ASSESSMENT ORDER HAS MADE ELABORATE DISCUSSION. TH E ASSESSING OFFICER HAS ALREADY GIVEN SET OFF OF RS. 10,84,697/- AGAINST THE INCOME SURRENDERED BY THE ASSESSEE IN PRECEDING YEARS. SINCE THE RETRACTION IS NOT VALID AND STATEMENT RECORDED UNDER SECTION 132(4) HAS EVIDENTIAL VALUE, THE AUTHORITIES BELOW HAVE ACTED JUDICIOUSLY. THEREFORE, THE ADDITION CANNOT BE DELETED ON THE BASIS OF SELF SER VING AFFIDAVIT FILED BY THE ASSESSEE. IT, THEREFORE, HAS BEEN CONTENDED THAT THE GROUND RAISE D IN APPEAL NEEDS TO BE REJECTED. 6. WE HAVE HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECORD AND CASE LAWS BROUGHT TO OUR NOTICE. THE ACTION UNDER SECTION 132 WAS CA RRIED OUT AT ASSESSEES PREMISES ON 27.8.2008 AND IN THE STATEMENT ASSESSEE MADE SURREN DER OF INCOME OF RS. 30,00,000/- ON ACCOUNT OF INCOME EARNED FROM TRADING OF ITEMS IN P HARMACEUTICAL BUSINESS OUTSIDE THE BOOKS. THE APPELLANT, HOWEVER, HAD BEEN APPROACHIN G THE AUTHORIZED OFFICER TO PROVIDE COPY OF STATEMENT SO OBTAINED IN PROCEEDINGS UNDER SECTION 132 OF THE ACT. WHEN THESE STATEMENTS WERE NOT PROVIDED, THE APPELLANT VIDE LE TTER DATED 3.10.2008 ADDRESSED TO THE AUTHORIZED OFFICER AND ANOTHER LETTER DATED 18.12.2 008 ADDRESSED TO THE ASSESSING AUTHORITY REQUESTED TO PROVIDE THE COPY OF STATEMEN T IN CASE THE SAME WERE TO BE USED AGAINST HIM. TILL SUCH TIME THE COPY OF STATEMENT W AS NOT PROVIDED, ASSESSEE ENTERTAINED A BONAFIDE BELIEF THAT IN THE ABSENCE OF ANY DOCUMENT ARY EVIDENCE OR CORROBORATIVE EVIDENCE HAVING BEEN FOUND AS A RESULT OF SEARCH, S UCH STATEMENT WOULD NOT BE USED AGAINST HIM. IF SUCH STATEMENTS WERE TO BE USED, T HE DEPARTMENT WAS UNDER LEGAL OBLIGATION TO HAVE PROVIDED THE COPY THEREOF TO THE APPELLANT. IT IS ONLY ON PERSISTENT EFFORTS OF THE APPELLANT, COPIES OF STATEMENT WERE PROVIDED ONLY ON 13.3.2009. THE 7 APPELLANT AFTER UNDERSTANDING THE LEGAL IMPLICATION OF SUCH STATEMENT MADE A VALID RETRACTION AS THE SURRENDER WAS NOT SUPPORTED BY AN Y CORROBORATIVE EVIDENCE. THE AFFIDAVIT FILED IN THIS REGARD IS LAID ON ASSESSEE S PAPER BOOK PAGES 64 TO 68. THIS AFFIDAVIT HAS CAREFULLY BEEN PERUSED. AFTER THE AF FIDAVIT WAS FILED BEFORE THE ASSESSING AUTHORITY, HE REMAINED SILENT ON THE FACE OF IT AND CARRIED NO ENQUIRY THEREON TO VERIFY THE CORRECTNESS THEREOF. THE ASSESSEE WAS ALSO NOT CRO SS EXAMINED ON THE POINT OF RETRACTION NOR WAS REQUIRED TO PRODUCE ANY DOCUMENTARY EVIDENC E OR ANY OTHER EVIDENCE. ASSESSEE WAS, THEREFORE, ENTITLED TO ASSUME THAT THE INCOME TAX AUTHORITIES WERE SATISFIED WITH THE AFFIDAVIT AS SUFFICIENT ON THIS POINT. THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SOHAN LAL GUPTA VS. CIT (1958) 33 ITR 786 (ALL.), A S ALSO PUT TO THE PARTIES DURING THE COURSE OF ARGUMENT, HAS MADE ELABORATE DISCUSSION O N THE EVIDENTIARY VALUE OF THE AFFIDAVIT. THE RELEVANT PASSAGE FROM THE AFORESAID JUDGMENT AT PAGE 791 OF THE REPORT IS REPRODUCED AS UNDER :- THE MOST IMPORTANT POINTS ON WHICH THE TRIBUNAL R ELIED, IS THAT MENTIONED AT NO. 2, VIZ., THAT, ACCORDING TO THE TR IBUNAL, THE ASSESSEE HAD NOT SATISFACTORILY ESTABLISHED THAT T HE SHARES HAD TO BE SOLD AS THE PURCHASER OF THE JASWANT SUGAR MILLS W AS NOT WILLING TO PURCHASE THAT MILL UNLESS THE SHARES IN THE STRAW BOARD MILLS LTD. HELD BY THE FAMILY WERE ALSO TRANSFERRED TO HIM AT THE SAME TIME. ON THIS POINT, THE ONLY MATERIAL AVAILABLE ON THE RECORD IS THE AFFIDAVIT WHICH WAS FILED BY THE ASSESSEE BEFORE T HE INCOME-TAX OFFICER. THE ASSESSEE IN HIS AFFIDAVIT, HAD DEFINI TELY STATED THAT THE PURCHASER WANTED TO PURCHASE BOTH THE GOING CONCER NS, THE JASWANT SUGAR MILLS AND THE STRAW BOARD MILLS LTD., TOGETHER AND ONE OF HIS CONDITIONS OF PURCHASE WAS THAT ALL THE SHARES OF LALA JASWANT RAI, HIS SONS AND OTHER RELATIVES HAD TO BE TRANSFERRED TO THE PURCHASER. THE INCOME-TAX APPELLATE TRIBUNAL RE JECTED THIS AFFIDAVIT OF THE ASSESSEE ON THE MERE GROUND THAT T HERE WAS NO DOCUMENTARY EVIDENCE IN CORROBORATION IN THE FORM OF ANY CORRESPONDENCE OF OTHERWISE ON THIS POINT. SHRI G.S . PATHAK CONTENDED RIGHTLY BEFORE US THAT THE TRIBUNAL WAS NOT ENTITLED TO REJECT THE AFFIDAVIT ON THIS POINT ON SUCH A GROUN D. AFTER THE 8 ASSESSEE HAD FILED THE AFFIDAVIT, HE WAS NEITHER C ROSS-EXAMINED ON THAT POINT, NOR WAS HE CALLED UPON TO PRODUCE ANY DOCUMENTARY EVIDENCE. CONSEQUENTLY, THE ASSESSEE WAS ENTITLED T O ASSUME THAT THE INCOME-TAX AUTHORITIES WERE SATISFIED WITH THE AFFIDAVIT AS SUFFICIENT PROOF ON THIS POINT. IF IT WAS NOT TO BE ACCEPTED AS A SUFFICIENT PROOF EITHER BY THE INCOME-TAX OFFICER O R BY THE APPELLATE ASSISTANT COMMISSIONER OF INCOME-TAX OR BY THE INCOME-TAX APPELLATE TRIBUNAL, THE ASSESSEE SHOULD HAVE BEEN CALLED UPON TO PRODUCE DOCUMENTARY EVIDENCE, OR, AT LEAST HE SHOULD HAVE BEEN CROSS-EXAMINED TO FIND OUT HOW FA R HIS ASSERTIONS IN THE AFFIDAVIT WERE CORRECT. (EMPHASIS SUPPLIED) THE RELIANCE PLACED BY THE ASSESSEE ON THE JUDGMENT BY HON'BLE APEX COURT IN THE CASE OF PULLANGODE RUBBER PRODUCE CO. LTD. (SUPRA) AND H ON'BLE RAJASTHAN HIGH COURT IN THE CASE OF ASHOK KUMAR SONI (SUPRA) ARE WELL PLACED AS THE ASSESSEE HAS SUCCESSFULLY DEMONSTRATED THAT THE ADMISSION MADE DURING THE COU RSE OF SEARCH IS NOT CORRECT. THE INGREDIENT FOR RETRACTION OF STATEMENT MADE DURING THE SEARCH, THEREFORE, STAND DULY SATISFIED AS THE ASSESSEE IS FOUND TO HAVE MADE RET RACTION WITHIN A REASONABLE TIME IMMEDIATELY AFTER THE COPIES OF STATEMENT WERE PROV IDED TO HIM. FURTHERMORE, THERE BEING NO MATERIAL OR EVIDENCE ON RECORD TO SHOW THA T APPELLANT HAS CARRIED ANY BUSINESS OUTSIDE THE BOOKS FOR SALE AND PURCHASE OF ITEMS OF PHARMACEUTICAL COMPANIES THAT COULD GIVE RISE TO INCOME TO THE EXTENT OF RS. 30,00,000/ -, ADDITION MERELY ON THE BASIS OF SUCH STATEMENT WHICH STOOD VALIDLY RETRACTED COULD NOT H AVE BEEN MADE. ON SIMILAR BASIS AND REASONING IN THE CASE OF SURESH MEDICAL AGENCY ANOT HER ASSESSEE OF THE GROUP WHO WERE ALSO SEARCHED ON THE SAME DAY ALONG WITH THIS APPEL LANT, VIDE OUR ORDER DATED 21.8.2013 IN ITA NO. 443/JP/2012 HAVE FOUND THE RETRACTION MA DE AS VALID AND ALSO DELETED THE ADDITION. WE, THEREFORE, FIND NO FACTUAL OR LEGAL JUSTIFICATION IN SUSTENANCE OF ADDITION BY LD. CIT (A) IN THIS REGARD. AS A RESULT, THE ADDIT ION SUSTAINED BY LD. CIT (A) IS DELETED AND GROUND NO. 1 RAISED IN APPEAL IS ALLOWED. 9 7. GROUND NO. 2 RAISED IN APPEAL RELATES TO ADDITIO N OF RS. 8,24,618/- SUSTAINED BY LD. CIT (A) ON ACCOUNT OF UNEXPLAINED JEWELLERY FOU ND AT THE TIME OF SEARCH. 8. THE BRIEF FACTS OF THE CASE ARE THAT AS A RESULT OF ACTION UNDER SECTION 132 OF THE ACT THE SEARCH PARTY FOUND JEWELLERY WEIGHING 4491 GRAMS FROM THE POSSESSION OF VARIOUS FAMILY MEMBERS OF THE ASSESSEE AND LOCKERS IN THE N AMES OF FAMILY MEMBERS OF THE ASSESSEE. THE ASSESSEE EXPLAINED THAT JEWELLERY BE LONGS TO VARIOUS FAMILY MEMBERS WHICH INCLUDES THE JEWELLERY OF 300 GMS BELONGING T O HIS TWO BROTHERS, NAMELY, SHRI LAL CHAND MITTAL AND SHRI MADAN LAL MITTAL AND JEWELLER Y OF 240 GRAMS BELONGS TO HIS BROTHER IN LAW SHRI MUKTI LAL AGARWAL WHO RESIDES A T GRAM GHATWADA VIA CHOMU. THE ASSESSING AUTHORITY REJECTED THE EXPLANATION GIVEN BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT FILED EVIDENCE IN SUPPORT OF THIS CLAIM AND HE TREATED THE JEWELLERY WEIGHING 968.43 GMS AS UNEXPLAINED AND MADE THE ADD ITION OF RS. 10,21,135/-. 9. THE LD. CIT (A) ACCEPTED THE JEWELLERY OF 170 GM S CLAIMED BY ASSESSEE AS BELONGING TO SMT. RITU MITTAL, DAUGHTER-IN-LAW OF T HE ASSESSEE RESIDING AT THE SAME PREMISES AS EXPLAINED BY GIVING THE BENEFIT OF CBDT INSTRUCTION NO. 1916 AND ALLOWED RELIEF OF RS. 1,96,517/- AND SUSTAINED THE ADDITION OF RS. 8,24,618/- BY TREATING 798.430 GMS JEWELLERY AS UNEXPLAINED. 10. THE ASSESSEES COUNSEL SHRI GOYAL IN HIS WRITTE N SUBMISSIONS AS WELL AS ORALLY CONTENDS THAT IN SEARCH STATEMENT THE TOTAL SURREND ER AGAINST JEWELLERY POSSESSED BY THE FAMILY OF THE ASSESSEE AND FAMILY OF HIS BROTHER SH RI MURARI LAL MITTAL WAS RS. 15,00,000/- AS STATED IN REPLY TO QUESTION NO. 17 I N STATEMENT DATED 28.8.2008 (PAPER BOOK PAGE 44) AND AS AGAINST THIS SURRENDER THEY HAVE DE CLARED ADDITIONAL INCOME OF RS. 15,09,562/- IN THE RETURN FILED BY SHRI MURARI LAL MITTAL AND SHRI PRAFUL MITTAL, IN 10 PURSUANCE OF NOTICE UNDER SECTION 153A OF THE ACT. AS REGARDS THE CLAIM OF ASSESSEE FOR 240 GMS JEWELLERY BELONGING TO SHRI MUKTI LAL AGAR WAL, BROTHER-IN-LAW OF THE ASSESSEE, THE LD. A/R CONTENDS THAT DURING THE COURSE OF SEAR CH STATEMENT UNDER SECTION 132(4) OF THE ACT WAS RECORDED ON 27.8.2008 AT B-19, SARDAR P ATEL MARG, JAIPUR. WHILE EXPLAINING THE SOURCE OF JEWELLERY, IN REPLY TO QUESTION NO. 8 , THE ASSESSEE STATED THAT ABOUT 15 TO 20 TOLAS OF JEWELLERY BELONGING TO HIS BROTHER-IN-LAW SHRI MUKTI LAL AGARWAL OF VILLAGE GHATWADA, CHOMU WAS LYING IN THE HOUSE OF ASSESSEE FOR SAFETY PURPOSE (PAPER BOOK PAGE 35). THE ASSESSING OFFICER NEITHER ASKED THE ASSESSEE TO FILE ANY FURTHER SPECIFIC DOCUMENT OR CONFIRMATION FOR FURTHER VERIFICATION. THE ASSESSEE WAS UNDER GOOD FAITH THAT THE ASSESSING OFFICER WAS SATISFIED WITH HIS EXPLAN ATION FILED BEFORE THE ASSESSING OFFICER AND SUPPORTED BY SEARCH STATEMENT UNDER SEC TION 132(4) OF THE ACT. THE ASSESSEE CLAIMED 258.430 GMS JEWELLERY PURCHASED BY HIS SON SHRI PRAFUL MITTAL DURING THE FINANCIAL YEAR 2008-09 FROM HIS UNACCOUNTED INCOME. SHRI PRAFUL MITTAL HAS MADE SURRENDER OF RS. 27,15,292/- ON ACCOUNT OF PEAK UNA CCOUNTED WITHDRAWAL ON 19.7.2008 CALCULATED ON THE BASIS OF ENTRIES OF WITHDRAWALS R ECORDED IN THE SEIZED DOCUMENT. THE ASSESSMENT OF SHRI PRAFUL MITTAL WAS MADE BY THE SA ME ASSESSING OFFICER UNDER SECTION 153A OF THE ACT. THE ASSESSING OFFICER HAS NOT REJE CTED THE PEAK CALCULATION SUBMITTED BEFORE HIM. IN THE ASSESSMENT PROCEEDINGS OF SHRI P RAFUL MITTAL THE SAME CLAIM WAS MADE AND THE ASSESSING OFFICER HAS MADE THE FOLLOWING FI NDINGS ON THIS ISSUE AT PARA 6 PAGE 2 OF HIS ORDER:- 6. ISSUE OF UNEXPLAINED JEWELLERY : DURING THE COURSE OF SEARCH JEWELLERY FOUND FROM TH E RESIDENTIAL PREMISES OF ASSESSEE AT B-19, CHOMU HOUSE, JAIPUR W AS INVENTORIZED AS PER ANNEXURE-J. EXPLANATION WITH REGARD TO THE SAM E WAS FILED VIDE LETTER 11 DATED 13.04.2010. BESIDES STATING JEWELLERY BELONGI NG TO VARIOUS FAMILY MEMBERS AS PER THE EXPLANATION, EEWELLERY WEIGHING 258.430 WAS CLAIMED COVERED IN THE ADDITIONAL INCOME OF RS. 27,15,292/- OFFERED TO TAX IN THE HANDS OF SHRI PRAFUL MITTAL, THE ASSESSEE. IT IS PE RTINENT TO MENTIONED HERE THAT ON QUERY IT WAS EXPLAINED VIDE LETTER FILED ON 11.08.2010 THAT THE JWEELLERY WAS PURCHASED OUT OF UNACCOUNTED INCOME O FFERED TO TAX OF RS. 27,15,292/-. IT WAS FURTHER CLAIMED THAT PURCHASE OF JEWELLERY EVIDENCED BY TRANSACTION RECORDED ON PAGE 20 OF ANNEXURE A-2 SEIZED FROM B-19, CHOMUM HOUSE, JAIPUR. THE ASSESSEE CONTENDED THAT ON PAGE 20 OF ANNEXURE A-2 SEIZED FROM B-19, CHOMU HOUSE, JAIPUR NARRATES DETAILS OF PURCHASE OF JEWELLERY OF RS. 3,41,875/-. THE CONTENTION OF THE ASSESSEE I S NOT ACCEPTABLE ON ACCOUNT OF THE FACT THAT THE SAID PAPER IS A DUMB D OCUMENTS WITHOUT ANY DATE AND ENTRIES DIFFICULT TO UNDERSTAND, CANNOT BE TREATED AS A BILL FOR PURCHASE OF JEWELLERY. THEREFORE, NO CREDIT OF JEWE LLLERY PURCHASED ON THE BASIS OF THIS DOCUMENT WILL BE ALLOWED WHILE COMPUT ING THE EXPLAINED/UNEXPLAINED JEWELLERY FOUND FROM VARIOUS PREMISES OF THE GROUP AND CONSIDERED AFTER DETAILED DISCUSSION IN THE HAN DS OF SHRI RADHEYSHYAM MITTAL IN A.Y. 2009-10. THE COPY OF INCOME-TAX RETURN AND ASSESSMENT ORDER OF SHRI PRAFUL MITTAL FOR ASSESSMENT YEAR 2009-10 WAS PLACED ON RECORD AT PAPER BOOK PAG ES 134 TO 139. THE LD. A/R CONTENDS THAT WHEN SHRI PRAFUL MITTAL HAS ACCEPTED THE PURCHASE OF JEWELLERY TO THE EXTENT OF 458.43 GMS FROM HIS OWN UNACCOUNTED INCOME, THEN THERE WAS NO OCCASION TO MAKE THE ADDITION IN THE HANDS OF THIS ASSESSEE. 11. THE ASSESSEE CLAIMED THAT LADIES OF THE FAMILY WERE USING JEWELLERY OF ONE ANOTHER. THE FAMILY OF HIS BROTHER SHRI LAL CHAND MITTAL AND SHRI MADAN LAL MITTAL WERE RESIDING IN ADJOINING HOUSE AT B-19, CHOMU HOUSE, J AIPUR. THE JEWELLERY OF 300 GMS THOUGH BELONGS TO SHRI MADAN LAL AND SHRI LAL CHAND , THE SAME WERE LYING AT HIS HOUSE AS THE LADIES OF THE FAMILY WERE USING THE JEWELLER Y OF ONE ANOTHER WHICH IS COMMON PRACTICE IN JOINT FAMILY SYSTEM. THE ASSESSEE HAS S UBMITTED THAT SHRI MADAN LAL MITTAL AND SHRI LAL CHAND MITTAL BOTH WERE SEARCHED ALONG WITH ASSESSEE AND THEIR ASSESSMENTS 12 WERE ALSO MADE BY THE SAME ASSESSING OFFICER UNDER SECTION 153A OF THE ACT. THE LD. A/R SUBMITTED THAT IT HAS BEEN EXPLAINED IN THE ASS ESSMENT PROCEEDINGS OF SHRI LAL CHAND MITTAL AND SHRI MADAN LAL MITTAL THAT 150 GMS JEWEL LERY OF EACH BELONGING TO SHRI LAL CHAND MITTAL AND SHRI MADAN LAL MITTAL WAS LYING WI TH THE ASSESSEE. THIS EXPLANATION IN THEIR RESPECTIVE CASES AMOUNTS TO CONFIRMATION OF F ACTS BY THESE ASSESSEES. THE LD. ASSESSING OFFICER DID NOT MAKE ANY FURTHER ENQUIRY NOR ASKED ASSESSEE TO PRODUCE FURTHER EVIDENCE IN SUPPORT OF THIS CLAIM IN THEIR ASSESSME NT PROCEEDINGS. THE ASSESSMENT OF SHRI LAL CHAND MITTAL AND SHRI MADAN LAL MITTAL WERE MAD E BY THE SAME ASSESSING OFFICER AND NO ADVERSE VIEW HAS BEEN TAKEN BY THE ASSESSING OFFICER IN THIS REGARD. THE ASSESSEE PLACED COPIES OF ASSESSMENT ORDERS OF SHRI MADAN LA L MITTAL AND SHRI LAL CHAND MITTAL AT PAPER BOOK PAGES 69 TO 75 AND 76 TO 77 RESPECTIVELY . FURTHER, AN ALTERNATE PLEA WAS MADE BY THE LD. A/R OF THE ASSESSEE THAT IF ANY ADDITION IS SUSTAINED ON ACCOUNT OF UNEXPLAINED JEWELLERY, THE TELESCOPING BENEFIT SHOULD BE GIVEN AGAINST THE UNDISCLOSED INCOME SURRENDERED BY SHRI PRAFUL MITTAL AMOUNTING TO RS. 27,15,292/- ON THE BASIS OF PEAK WITHDRAWAL RECORDED IN THE SEIZED DOCUMENTS. THE A PPELLANT RELIED ON A DECISION OF JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF V.K. RA NA IN ITSSA NO. 10/JP/2001 DATED 27.11.2002 AND DECISION IN THE CASE OF INDRAJIT ARO RA IN ITSSA NO. 32/JP/2003 DATED 9.8.2004 STATING THAT IN THESE CASES THE TELESCOPIN G BENEFIT OF FIRMS INCOME WAS GIVEN AGAINST THE UNDISCLOSED INVESTMENT IN JEWELLERY/CAS H IN THE HANDS OF THE PARTNER. 12. ON THE OTHER HAND, THE LD. D/R CONTENDS THAT TH E ASSESSEE HAS NOT SPELT OUT THE DETAILS OF JEWELLERY CLAIMED IN SEARCH STATEMENT BE LONGING TO SHRI MUKTI LAL AGARWAL. THE ASSESSEE HAS NOT FILED ANY EVIDENCE IN SUPPORT OF T HIS CLAIM THAT 240 GMS JEWELLERY BELONGS TO SHRI MUKTI LAL AGARWAL, 258.43 GMS JEWEL LERY PURCHASED BY SHRI PRAFUL 13 MITTAL FROM HIS UNACCOUNTED INCOME AND 300 GMS JEWE LLERY BELONGS TO SHRI LAL CHAND MITTAL AND SHRI MADAN LAL MITTAL. FURTHER, THE ASSE SSEE HAS NOT STATED THIS FACT IN THE STATEMENT U/S 132(4) OF THE ACT THAT THE JEWELLERY BELONGING TO SHRI LAL CHAND AND SHRI MADAN LAL MITTAL WAS LYING AT HIS RESIDENCE. IT, T HEREFORE, HAS BEEN CONTENDED THAT THE GROUND RAISED IN APPEAL NEEDS TO BE REJECTED. 13. WE HAVE HEARD THE PARTIES WITH REFERENCE TO MAT ERIAL ON RECORD AND THE CASE LAWS BROUGHT TO OUR NOTICE. IN THE STATEMENT RECORDED U /S 132(4) OF THE ACT, RECORDED ON 27.08.2008 A SPECIFIC QUESTION NO. 8 WAS ASKED WHET HER THE ASSETS BELONGING TO ANY OTHER PERSON WAS LYING WITH THE ASSESSEE. IN HIS REPLY TO THIS QUESTION, THE APPELLANT STATED THAT JEWELLERY ABOUT 15 TO 20 TOLAS BELONGING TO HIS BRO THER IN LAW SHRI MUKTI LAL AGARWAL WAS LYING AT THE RESIDENCE OF ASSESSEE FOR SAFETY P URPOSE. THE SEARCH PARTY DID NOT ASK ANY FURTHER QUESTION IN THIS REGARD AND NO FURTHER DETA IL WAS REQUIRED FROM HIM. THE ASSESSING OFFICER ALSO DID NOT MAKE ANY ENQUIRY AFT ER HE RECEIVED THE EXPLANATION OF THE ASSESSEE CLAIMING THAT 240 GMS JEWELLERY BELONGS TO HIS BROTHER IN LAW SHRI MUKTI LAL AGARWAL. THE EXPLANATION FILED BY THE ASSESSEE, HOW EVER, HAS BEEN REJECTED BY THE ASSESSING OFFICER WITHOUT MAKING ANY FURTHER ENQUIR Y OR REQUIRING THE APPELLANT TO ADDUCE FURTHER EVIDENCE. THE EXPLANATION SO GIVEN H AS NOT BEEN FOUND FALSE. THEREFORE, THE CLAIM OF 240 GMS JEWELLERY EXPLAINED BY THE ASS ESSEE AS BELONGING TO SHRI MUKTI LAL AGARWAL CANNOT BE REJECTED ON SURMISES AND CONJECTU RES. WE, THEREFORE, DIRECT DELETION OF ADDITION ON THIS ACCOUNT. 13.1. AS REGARDS THE CLAIM OF JEWELLERY BELONGING T O HIS SON SHRI PRAFUL MITTAL STATED TO HAVE BEEN ACQUIRED BY HIM FROM HIS UNDISCLOSED RECE IPTS SURRENDERED IN THE RETURN, THE ASSESSING OFFICER HAS MADE ELABORATE DISCUSSION IN THE ASSESSMENT ORDER OF SHRI PRAFUL 14 MITTAL FOR A.Y. 2009-10. THE ASSESSING OFFICER HAS ADMITTED THAT SHRI PRAFUL MITTAL HAS EXPLAINED VIDE LETTER FILED ON 11.8.2010 THAT JEWEL LERY WAS PURCHASED OUT OF UNACCOUNTED INCOME OFFERED TO TAX BY RS. 27,15,292/-. IT WAS F URTHER CLAIMED THAT PURCHASE OF JEWELLERY IS EVIDENCED BY THE TRANSACTION FOUND REC ORDED AT PAGE 20 OF ANNEXURE A-2 SEIZED FROM B-19, CHOMU HOUSE, JAIPUR. THE ASSESS ING OFFICER REJECTED THIS CLAIM BY SAYING THAT THE SAID PAPER IS A DUMB DOCUMENT AND W ITHOUT ANY DATE AND IN THE ABSENCE OF ANY BILL FOR PURCHASE OF JEWELLERY CLAIM WAS NOT AL LOWED. ON THE PECULIAR FACTS OF SURRENDER OF INCOME BY SHRI PRAFUL MITTAL AND ENTRI ES SHOWING PURCHASE OF JEWELLERY IN THE SEIZED DOCUMENTS THE VALID EXPLANATION OUGHT TO HAVE BEEN ACCEPTED. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION IN SUSTENANCE OF ADDI TION ON THIS BASIS AND DIRECT DELETION THEREOF. 13.2. AS REGARDS JEWELLERY WEIGHING 300 GMS BELONGI NG TO SHRI LAL CHAND MITTAL AND SHRI MADAN LAL MITTAL, ADMITTEDLY BOTH THESE PERSON S WERE ALSO SEARCHED ALONG WITH THE APPELLANT AND WERE ASSESSED BY THE SAME ASSESSING O FFICER WHO COMPLETED THE ASSESSMENT IN THE CASE OF THIS APPELLANT BEFORE US. WHILE COMPLETING THE ASSESSMENT OF SHRI LAL CHAND MITTAL AND SHRI MADAN LAL MITTAL, BO TH THESE PERSONS HAD CLAIMED AND ALSO TENDERED EXPLANATION THAT JEWELLERY WEIGHING 1 50 GMS EACH BELONGING TO THEM WAS LYING AT THE RESIDENCE OF SHRI RADHEYSHYAM MITTAL. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT DID NOT MAKE ANY ADVERSE COMMENT ON SUCH EXPLANATION AND ACCEPTED THE STATEMENT AS MADE BY THESE TWO PERSONS . HE DID NOT EMBARK ANY ENQUIRY FROM THE APPELLANT ON THIS ISSUE AFTER THE APPELLAN T HAD EXPLAINED THAT JEWELLERY WEIGHING 150 GMS EACH BELONG TO SUCH TWO PERSONS, NAMELY, SH RI LAL CHAND MITTAL AND SHRI MADAN LAL MITTAL NOR HE WAS REQUIRED TO PRODUCE BOT H THESE PERSONS FOR CROSS 15 EXAMINATION OR VERIFICATION OF FACTS STATED BY THE APPELLANT. IF THE CLAIM MADE BY THESE TWO PERSONS FOR THEIR JEWELLERY HAVING BEEN LEFT IN THE HOUSE OF SHRI RADHEYSHYAM MITTAL WHO WAS RESIDING NEXT DOOR WAS TO BE TAKEN AS WRONG CLAIM, THE ASSESSING OFFICER COULD HAVE MADE ADDITION AS OF UNEXPLAINED INVESTMENT IN JEWELLERY IN THEIR RESPECTIVE HANDS. THIS, HOWEVER, HAS NOT BEEN DONE. THE APPELLANT HAV ING FURNISHED A REASONABLE EXPLANATION AND CONSIDERING THE PECULIAR FACTS OF T HE CASE, WE DO NOT FIND ANY JUSTIFICATION IN SUSTENANCE OF ADDITION ON ACCOUNT OF THE JEWELLE RY WEIGHING 300 GMS IN THE HANDS OF THE APPELLANT AS UNEXPLAINED INVESTMENT. WE, THEREF ORE, DIRECT DELETION THEREOF AND ALLOW RELIEF TO THE APPELLANT. AS A RESULT, ASSESSEES A PPEAL STANDS ALLOWED. 14. GROUND NO. 3 IN APPEAL CALLS FOR NO TELESCOPING IN VIEW OF OUR DECISION IN GROUND NOS. 1 &2 ABOVE. THE SAME, THEREFORE, STANDS DISMI SSED. 15. IN THE RESULT, APPEAL STANDS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 26.08 .2013. SD/- SD/- ( KUL BHARAT ) ( B. R. JAIN ) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 26/08/2013. D/- COPY FORWARDED TO :- SHRI RADHEYSHYAM MITTAL, JAIPUR. THE DCIT, CENTRAL CIRCLE-3, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 420/JP/2012) BY ORDER, AR ITAT JAIPUR. 16