DCIT (OSD) I CEN RG 7, MUMBAI V. SHYAMSUNDER M SONI, MUMBAI

ITA 4298/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75295 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 21-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 21-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Keywords: Search and seizure; Valuation report
• Section: 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL E EE E BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . . . ! ! ! ! , ' ' ' ' #$ #$ #$ #$ BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI N. K. BILLAIYA N. K. BILLAIYA N. K. BILLAIYA N. K. BILLAIYA, AM , AM , AM , AM ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.4298/M 4298/M 4298/M 4298/MUM/2012 UM/2012 UM/2012 UM/2012 ( % % % % & & & & / ASSESSMENT YEAR :2009-10) ASSISTANT COMMISSIONER OF INCOME TAX (OSD)-I, CENTRAL RANGE-7, ROOM NO. 413, 4 TH FLOOR, AAYAKAR BHAVAN, M. K. MARG MUMBAI-400020 / VS. SHRI SHYAMSUNDER M SONI 7/25, SUBODHGURU CHS, 38, TAGORE ROAD, 7 TH FLOOR, SANTACRUZ (WEST) MUMBAI-400054 $' ' ./ ( ./ PAN/GIR NO. :AAQPS0105C ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) % %% % ,- ,- ,- ,- / 0 / 0 / 0 / 0 /ASSESSEE BY : SHRI SATISH R. MODY $ $ $ $ / 0 / 0 / 0 / 0 / REVENUE BY : SHRI GIRIJA DAYAL / // / -' -' -' -' / DATE OF HEARING : 21 ST JANUARY 2014 12& 12& 12& 12& / // /-' -' -' -' /DATE OF PRONOUNCEMENT: 24 TH JANUARY 2014 #3 / O R D E R PER : , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29.3.2012 OF THE COMMISSIONER OF INCOME TAX(APPEALS ) FOR THE ASSESSMENT YEAR 2009-10. 2. THE REVENUE HAS RAISED ONLY GROUND IN THIS APPEA L AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF ` 16,86,520/- BY ADMITTING THE VALUATION REPORT OF M/S MANDLIK BROTH ERS AS AN EVIDENCE WITHOUT APPRECIATING THE FACT THAT THE SAI D VALUATION REPORT DOES NOT INDICATE ITEM-WISE VALUATION OF JEW ELLERY AND IS A LUMP-SUM VALUATION OF JEWELLERY ITA NO.4298/M/2012 SHRI SHYAMSUNDER M SONI 2 3. A SEARCH AND SEIZURE ACTION U/S 132 OF THE INCOM E TAX ACT WAS CARRIED OUT ON 16.10.2008 AND SUBSEQUENT DATES ON S IMPLEX GROUP OF COMPANIES AND ITS ASSOCIATES. THE SEARCH AND SEIZUR E ACTION U/S 132 WAS ALSO CONDUCTED AT THE ASSESSEES RESIDENTIAL PREMIS ES. DURING THE SEARCH PROCEEDINGS CERTAIN JEWELLERY WAS FOUND AT THE PLAC E OF THE ASSESSEE AS WELL AS LOCKERS WITH ICICI BANK AND JANKALYAN SAHAK ARI BANK. THE TOTAL JEWELLERY FOUND DURING THE SEARCH IS AS UNDER: GOLD JEWELLERY : 2881.29 GMS DIAMONDS JEWELLERY : 69.89 CTS. SILVER JEWELLERY : 4.6 KGS. 4. THE ASSESSEE EXPLAINED THAT OUT OF THE TOTAL JEW ELLERY FOUND DURING THE SEARCH SOME OF THE JEWELLERY WAS ALREADY DECLAR ED BY THE ASSESSEE IN THE VDIS FOR THE ASSESSMENT YEAR 1986-87 AS PER THE VALUATION REPORT OF M/S MANDLIK BROTHERS VALUED THE JEWELLERY AS ON 31. 3.1982. ON COMPARISON WITH THE VALUATION REPORT THE EXCESS JEW ELLERY WAS WORKED OUT TO ` 18,40,748/-. DURING THE ASSESSMENT PROCEED INGS THE ASSESSEE SUBMITTED THAT AFTER CONSIDERING THE JEWELLERY ALRE ADY OFFERED TO TAX IN VDIS AS PER THE VALUATION REPORT OF M/S MANDLIK BRO THERS, THE ASSESSEE HAS OFFERED A SUM OF ` 20,00,000/- AS ADDITIONAL IN COME ON ACCOUNT OF EXCESS JEWELLERY. THE ASSESSING OFFICER DID NOT ACC EPT THE JEWELLERY DISCLOSED IN VDIS BY THE ASSESSEE FOR THE ASSESSMEN T YEAR 1986-87 AND VALUED ON 31.3.1982 AS PER THE REPORT OF M/S MANDLI K BROTHERS ON THE GROUND THAT THE ITEMS/ORNAMENTS WISE COMPARISON IS NOT MATCHING WITH THE VALUATION REPORT OF M/S MANDLIK BROTHERS FURNIS HED BY THE ASSESSEE. THE A.O FURTHER NOTED THAT THE VALUATION REPORT PRO DUCED BY THE ASSESSEE ITA NO.4298/M/2012 SHRI SHYAMSUNDER M SONI 3 HAS GIVEN THE VALUATION OF GOLD ORNAMENTS ON LUMP-S UM BASIS WITHOUT ITEM WISE/ORNAMENT WISE VALUATION. THUS, THE A.O MA DE AN ADDITION OF ` 16,86,529/-. THE ASSESSEE CHALLENGED THE ACTION OF THE A.O BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDERING THE JEWELLERY ALREADY DECLARED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1986-87 AS PER THE VALUATION REPORT AS ON 31.3.1982 FOUND THAT THE A.O HAS MADE AN ADHOC A DDITION WITHOUT ANY SCIENTIFIC AND LEGAL BASIS AND ACCORDINGLY DELETED THE ADDITION ON THIS ACCOUNT. 5. BEFORE US THE LD. D.R HAS SUBMITTED THAT THE CIT (A) HAS GIVEN THE CREDIT OF JEWELLERY DECLARED BY THE ASSESSEE AS PER THE VALUATION REPORT OF M/S MANDLIK BROTHERS WHEREIN THE ITEM WISE VALUATIO N HAS NOT BEEN GIVEN BUT A LUMP-SUM VALUATION OF JEWELLERY IS DONE THER EFORE, THE ASSESSEE HAS FAILED TO PROVE THAT THE JEWELLERY FOUND DURING THE SEARCH AND SEIZURE ACTION IS COMPRISING OF THE JEWELLERY DECLARED BY T HE ASSESSEE IN THE ASSESSMENT YEAR 1986-87 AND VALUED AS PER THE VALUA TION REPORT OF M/S MANDLIK BROTHERS. HE HAS RELIED UPON THE ORDER OF T HE ASSESSING OFFICER. 6. ON THE OTHER HAND, THE LD. A.R HAS SUBMITTED THA T THE ASSESSEE HAS FURNISHED THE RECONCILIATION OF ITEM WISE DIAMOND J EWELLERY WHICH IS NOT DISPUTED BY THE A.O. THE DIFFERENCE AROSE BECAUSE O F THE ESTIMATE MADE BY THE DIFFERENT VALUERS ONE BY THE DEPARTMENT AND ANOTHER VALUATION BY THE ASSESSEE. HE HAS FURTHER SUBMITTED THAT AFTER E XCLUDING THE JEWELLERY DECLARED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 19 86-87 AND VALUED AS PER THE VALUATION REPORT DATED 14.9.1982 WHEREIN TH E VALUATION OF THE JEWELLERY WAS MADE AS ON 31.3.1982, THE TOTAL UNEXP LAINED JEWELLERY WAS ITA NO.4298/M/2012 SHRI SHYAMSUNDER M SONI 4 WORKED OUT AT ` 18,73,148/- AGAINST WHICH THE ASSES SEE HAS ALREADY OFFERED AN ADDITIONAL INCOME OF ` 20,00,000/-. THUS , THE LD. A.R HAS SUBMITTED THAT NO FURTHER ADDITION IS CALLED FOR. H E HAS SUPPORTED THE ORDER OF THE CIT(A). 7. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FUL PERUSAL OF THE RELEVANT MATERIAL ON RECORD WE NOTE THAT THE ASSESS ING OFFICER HAS NOT DISPUTED THE EXCESS JEWELLERY FOUND DURING THE SEAR CH AFTER REDUCTION OF THE JEWELLERY DECLARED BY THE ASSESSEE UNDER VDIS F OR THE ASSESSMENT YEAR 1986-87 VALUED AT ` 18,73,148/-. FOR THIS EXCE SS JEWELLERY FOUND DURING THE SEARCH THE ASSESSEE OFFERED ` 20,00,000/ - AS ADDITIONAL INCOME. THE A.O HAS MADE ADHOC ADDITION OF ` 16,86,529/- ON THE GROUND THAT THE JEWELLERY FOUND DURING THE SEARCH DOES NOT MATCH WI TH THE JEWELLERY DECLARED BY THE ASSESSEE AS PER THE VALUATION REPOR T OF M/S MANDLIK BROTHERS. SINCE, THE VALUATION AS ON 31.3.1982 WAS DONE ON LUMP-SUM BASIS AND THEREFORE, THE A.O DID NOT ACCEPT THE JEW ELLERY DECLARED BY THE ASSESSEE AS PART OF THE JEWELLERY FOUND DURING THE SEARCH. IT IS TO BE NOTED THAT WHEN THERE IS NO DISPUTE ABOUT THE JEWELLERY D ECLARED AND VALUATION THEREOF AS ON 31.3.1982 THEN EVEN IF THE ITEM WISE RECONCILIATION IS NOT POSSIBLE THE SOURCE OF THE JEWELLERY FOUND DURING T HE SEARCH CANNOT BE DISPUTED TO THE EXTENT OF THE JEWELLERY DECLARED BY THE ASSESSEE IN THE VDIS FOR THE ASSESSMENT YEAR 1986-87. THEREFORE, TO THE EXTENT OF THE VALUE OF THE JEWELLERY DECLARED BY THE ASSESSEE IN THE VDIS NO ADDITION CAN BE MADE IN RESPECT OF THE JEWELLERY FOUND DURIN G THE SEARCH. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE DO NOT FIND ANY ERROR OR ILLEGALITY IN ITA NO.4298/M/2012 SHRI SHYAMSUNDER M SONI 5 THE ORDER OF THE CIT(A) IN DELETING THE ADHOC ADDIT ION MADE BY THE A.O ON THIS ACCOUNT. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF JANUARY 2014 SD/- SD/- ( . . ! ) ' #$ (N. K. BILLAIYA) ACCOUNTANT MEMBER ( ) % #$ (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 24 TH JANUARY 2014 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI