M/s. ALANKAR ORNAMENTS & JEWELLERS, MUMBAI V. ITO 15(1)(4), MUMBAI

ITA 4255/MUM/2005

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8534 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 17-10-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 07-06-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 131; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH MUMBAI . , BEFORE SHRI B.R.JAIN , A M & SHRI VIVEK VARMA , J M ITA NO. 4255 / MU M/ 20 05 ( ASSESSMENT YEAR: 2000 - 20 0 1 ) ALANKAR ORNAMENTS & JEWELLERS, PARIMAL BUILDING, 9, BHULESHWAR ROAD, 2 ND FLOOR ABOVE SURTI HOTEL, MUMBAI - 02 VS. ITO 15(1)(4), M UMBAI PAN/GIR NO. : AAFGA 1223 K ( APPELLANT ) .. ( RESPONDENT ) /A SSESSEE BY : MS. AARTI SATHE /RE VENUE BY : MR. RAKESH RANJAN DATE OF HEARING : 1 7 TH OCT ., 2012 DATE OF PRONOUNCEMENT : 19 TH OCT.,2012 O R D E R PER B.R. JAIN ( A .M. ) : THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 18 - 3 - 2005 OF LEANED CIT(A) - XV , MUMBAI, IN VARIOUS GROUNDS CHALLENGES THE SUSTENANCE OF ADDITION OF RS.9,03,824/ - MADE UNDER SECTION 69A OF THE ACT. 2. THE ASSESSEES APPLICATION FOR ADJOURNMENT STOOD REJECTED FOR THE REASONS STATED IN THE ORDERSHEET AS UNDER : - MS. AARTI SATHE, ADVOCATE PRESENTS AN APPLICATION FOR ADJOURNMENT ON THE GROUND THAT THE ADVOCATE SHRI RA JES H ITA NO. 4255 /20 05 2 POOJARI , WHO HAS BEEN HANDLING THIS MATTER , IS SUFFERING FROM JAUNDICE. NO MEDICAL CERTIFICATE HAS BEEN LAID ON RECORD. THIS IS AN OLD MATTER AND ON EARLIER OCCASIONS ALSO ADJOURNMENTS WERE SOUGHT SEVERAL TIMES AND THE EX - PARTE ORDERS WERE ALSO RECALLED. UNDER THESE CIRCUMSTAN CES, WE DO NOT FIND THIS TO BE A FIT CASE FOR GRANT OF ADJOURNMENT. REQUEST FOR ADJOURNMENT IS REJECTED. LD. D R . SHRI RAKESH RANJAN HAS BEEN HEARD EX - PARTE QUA ASSESSEE IN PRESENCE OF MS. AARTI SATHE, LD. ADVOCATE HAS NOTHING TO AD D IN THE MATTER. 3 . HA VING HEARD LEARNED DR WITH REFERENCE TO MATERIAL ON RECORD, IT IS REVEALED THAT ON 25 - 3 - 2000, THE RAJKOT RAILWAY POLICE SEIZED GOLD ORNAMENTS WEIGHING 9031.680 GMS. FROM ONE OF THE PARTNER SHRI KAUSHIK MEHTA OF THE ASSESSEE - FIRM. ON THE BASIS OF THE INFORM ATION AS RECEIVED BY THE DIT(INV.),RAJKOT, THE JOINT DIT(INV.) MUMBAI, CONDUCTED ENQUIRIES TO FIND OUT THE OWNERSHIP OF THE SEIZED JEWELLERY . COPY OF THE REPORT ALONG WITH VARIOUS DOCUMENTS WAS FORWARDED TO THE ASSESSING OFFICER, WHO ISSUED NOTICE UNDER SE CTION 148 OF THE ACT. IN RESPONSE THERETO THE ASSESSEE FILED RETURN OF INCOME ON 30 - 8 - 2000 DECLARING LOSS OF RS. 18,941/ - . OUT OF THE SAID JEWELLERY, IT WAS EXPLAINED THAT JEWELLERY WEIGHING 5046.340 GMS. OF GOLD BELONGED TO THE ASSESSEE FIRM WHILE REST OF THE JEWELLERY WEIGHING 4372.550 GMS. WAS CLAIMED TO BE BELONGING TO SIX KARGARS (GOLDSMITHS) . OUT OF THESE SIX KARIGARS , THREE KARIGARS HAD APPEARED BEFORE THE ASSESSING AUTHORITY AND ADMITTED THE FACT THAT THE GOLD ORNAMENTS BELONGED TO THEM. THE ASSESSI NG OFFICER ACCEPTED THE SOURCE OF GOLD ORNAMENTS TO THE EXTENT OF 5046.340 GMS. ITA NO. 4255 /20 05 3 BELONGING TO THE ASSESSEE FIRM AND 1718.850 GMS. BELONGING TO THE THREE KARIGARS , WHO HAD APPEARED AND CONFIRMED THAT FACT . THE FOLLOWING THREE KARIGARS, WHO HAD FILED AFFIDAVI TS BEFORE THE DDIT(INV.), MUMBAI CL A IMING OWNERSHIP OF THE GOLD JEWELLERY, WERE NOT PRODUCED BEFORE THE ASSESSING AUTHORITY AS THE SUMMONS ISSUED TO THEM, STOOD RETURNED WITH THE REMARK NOT FOUND/NOT KNOWN : - I) SHRI POKALDAS MAHTRE 898.900 II) SHRI BHA GWAN GADA 782.450 III) SHRI SATHYA BABU 972.350 TOTAL 2653.700 4 . THE ASSESSEE CLAIM BEFORE THE ASSESSING AUTHORITY THAT ALL THE ABOVE THREE PERSONS HAVE REFUSED TO APPEAR BEFORE HIM WHEN HE REQUESTED THEM TO DO SO WAS NOT PURSUED FURTHER . HE, THEREFORE, FURNISHED A CERTIFICATE DATED 25 - 3 - 2004 ISSUED BY THE GREATER BOMBAY JEWELLERS ASSOCIATION. THIS CERTIFICATE ISSUED BY THE ASSOCIATION WAS NO T FOUND TO BE A RELIABLE DOCUMENT. ACCORDINGLY, THE ASSESSING OFFICER PROCEEDED TO TREAT THE JEWELL ERY AS THE VALUE OF RS. 9,03,824/ - AS UNEXPLAINED UNDER SECTION 69A OF THE ACT. THE LEARNED CIT(A) ALSO CONFIRMED THE ADDITION. 5. THE PERUSAL OF THE IM PUGNED ORDER, HOWEVER, REVEALS THAT THE ASSESSING OFFICER IS NOT SHOWN TO HAVE SERVED SUMMONS ISSUED UND ER SECTION 131 OF THE IT ACT ON THE AFORESAID THREE KARIGARS (GOLDSMITHS) , NAMELY, SHRI POKALDAS MAHTRE , SHRI BHAGWAN GADA AND SHRI SATHYA BABU FOR VERIFYING THE CORRECTNESS OF THE FACTS STATED IN THE AFFIDAVIT S ITA NO. 4255 /20 05 4 FILED BY THOSE KARIGARS IN POST SEARCH ENQUI RY BEFORE THE DDIT(INV.), MUMBAI. WHEN THE ASSESSEE WAS CALLED UPON TO PRODUCE THESE THREE KARIGARS, HE HAS SHOWN HIS INABILITY TO DO SO AS THEY HA D DECLINED TO APPEAR BEFORE HIM ON HIS REQUEST. THAT BEING SO, THE ASSESSEE BROUGHT COLLATERAL EVIDENCE ON RE CORD BUT THE ASSESSING OFFICER DID NOT RELY TH E REON FOR THE REASON THAT THE GOLD BEING IN THE CUSTODY OF RAJKOT RAILWAY POLICE , COULD NOT HAVE BEEN RETURNED TO THE THREE KARIGARS ON 30 - 3 - 2000. THE ASSESSING OFFICER, THEREFORE, DISBELIEVED THE CERTIFICATE I SSUED BY THE GREATER BOMBAY JEWELLERY ASSOCIATION WITHOUT AFFORDING AN OPPORTUNITY TO THE ASSESSEE TO SHOW AS TO HOW HE COULD RETURN THE JEWELLERY WHEN THE SAME WAS LYING IN POLICE CUSTODY. THE AUTHORITIES BELOW ARE FOUND TO HAVE TAKEN A DECISION ON THE BA SIS OF COLLATERAL EVIDENCE ONLY BUT DID NOT REJECT THE AFFIDAVITS WHICH ARE FOUND TO HAVE BEEN PRODUCED BEFORE THE INVESTIGATION WING, NOR EXAMINED THE CORRECTNESS AND TRUTHFULNESS THEREOF AFTER ISSUING NOTICE UNDER SECTION 131 OF THE IT ACT. WE, THEREFORE , IN THE INTEREST OF SUBSTANTIAL JUSTICE, SET ASIDE THE ORDER AND REMIT THE MATTER BACK TO THE ASSESSING AUTHORITY SO THAT REASONABLE STEPS ARE TAKEN FOR EFFECTING SERVICE OF SUMMONS AND ENFORCE OR REQUIRE ATTENDANCE OF ALL THE AFORESAID THREE KARIGARS SO AS TO TEST THE VERACITY OF THE ASSESSEE THAT THE JEWELLERY WEIGHING 2653.700 GMS . BELONGED TO THE THREE KARIGARS. NEEDLESS TO ADD, THE ASSESSEE SHALL BE UNDER A DUTY TO DISCHARGE THE BURDEN AND EXPLAIN THE INVESTMENT. ITA NO. 4255 /20 05 5 6 . IN THE RESULT, APPEAL BY THE ASSE SSEE STANDS ALLOWED FOR STATISTICAL PURPOSES ONLY . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF OCT . , 2012. 19 TH OCT . , 2012 SD/ - SD/ - ( ) ( VIVEK V ARMA ) ( . ) ( B.R.JAIN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 19 TH OCT ./ 2012. /PKM , PS COPY OF THE ORDER FORWARDE D TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. / /TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI