SANJEEV KHANDELWAL, MUMBAI V. ACIT CENT. CIR.11, MUMBAI

ITA 4391/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56153 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 30-11-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Search and seizure; Salary income; Opportunity of being heard; Additional evidence; Valuation report
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 4391/MUM/2010 ASSESSMENT YEAR : 2008-09. SHRI SANJEEV KHANDELWAL, ASSTT. COMMISSIONER OF 13, PREM NIWAS, ALTAMOUNT ROAD, VS. INCOME-TAX, CIRCLE-II, MUMBAI 400026. MUMBAI. PAN AAKPK 3439K. APPELLANT. RESPONDENT APPELLANT BY : SHRI SURINDER MEHTA. RESPONDENT BY: SHRI PAV AN VED. DATE OF HEARING : 30-11-2011. DATE OF PRONOUNCEMENT : 23-12-2011. O R D E R. PER P.M. JAGTAP, A.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED CIT(APPEALS)-37, MUMBAI DATED 27-04-2010. 2. THE ISSUE RAISED IN GROUND NO. 1 OF THIS APPEAL RELATES TO THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LEARNED CIT(APPEALS) TO THE EXTENT OF RS.65,50,000/- ON ACCOUNT OF THE VALUE OF PAINTINGS FOUND AT THE RESIDENCE OF THE ASSESSEE DURING THE COURSE OF SEARCH. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO DERIVES INCOME FROM SALARY, HOUSE PROPERTY AND OTHER SOURCES. A SEARCH AND SEIZURE ACTION U/S 132 WAS CONDUCTED IN HIS CASE. DURING THE SEARCH CONDUCTED AT THE RESIDENCE OF THE ASSESSEE 2 ITA NO. 4391/MUM/2010 ASSESSMENT YEAR:2008-09 AT ALTAMOUNT ROAD, MUMBAI, 26 PIECES OF ART WORK WE RE INTER ALIA, FOUND. THE ASSESSEE WAS CALLED UPON BY THE AO DURING THE COURS E OF ASSESSMENT PROCEEDINGS TO EXPLAIN THE NATURE, MODE AND SOURCE OF POSSESSI ON OF THE SAID ITEMS. THE EXPLANATION OFFERED BY THE ASSESSEE IN THIS REGARD WAS FOUND TO BE SATISFACTORY BY THE AO IN RESPECT OF 11 PIECES OF ART WORK. SINCE T HE EXPLANATION OF THE ASSESSEE IN RESPECT OF REMAINING 15 PIECES OF ART WORK WAS NOT FOUND SATISFACTORY BY THE AO, HE TREATED THE SAID PIECES AS UNEXPLAINED AND THE V ALUE THEREOF AS ESTIMATED BY THE EXPERTS AT RS.70 LAKHS WAS ADDED BY HIM TO THE TOTA L INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES HE HELD THAT T HERE WAS FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE THE DOCUMENTARY EVIDENCE IN SUPPORT OF HIS EXPLANATION OFFERED ABOUT THE SOURCE AND MODE OF ACQUISITION OF 15 PIECES OF PAINTINGS. 4. THE MATTER WAS CARRIED BEFORE THE LEARNED CIT(AP PEALS) AND AN ELABORATE SUBMISSION WAS MADE ON BEHALF OF THE ASSESSEE BEFOR E HIM EXPLAINING THE SOURCE OF 15 PIECES OF PAINTINGS IN THE LIGHT OF EVIDENCE PLA CED ON RECORD INCLUDING THE RELEVANT INVOICES. THE LEARNED CIT(APPEALS) CONSIDE RED AND DEALT WITH THE SAID SUBMISSION IN RESPECT OF EACH AND EVERY ITEM OF PAI NTINGS IN PARAGRAPH NO. 2.3.4 TO 2.3.13 OF HIS IMPUGNED ORDER WHICH ARE REPRODUCED B ELOW : 2.3.4 WHEREAS, THE SRL. NO. 1 OF THE AFORESAID 15 PIECES OF PAINTINGS (ART WORKS) ADDED BY THE LEARNED ASSESSING OFFICER IS TI TLED AS ABSTRACT AND MEASURED AT 36X36 AND VALUED AT RS.6,00,000/- BY THE SAID EXPERT TEAM, LEARNED AR HAS TRIED TO EXPLAIN THE SAME BY CERTAIN INVOICES DATED 19-10- 2001, WHEREIN TITLE ABSTRACT IS NOT MENTIONED. EV EN THE SIZE 36X36 IS NOT MENTIONED AND THE VALUE IS ONLY RS.96,852/- ALL -INCLUSIVE. APART FROM THE SAID THREE DISCREPANCIES, EVEN THE INVOICES ARE IN THE NAME OF M/S. RAVISONS AGRO PVT. LTD. 15 ARUN CHAMFBERS, TARDEO, MUMBAI. I N OTHER WORDS, NEITHER DESCRIPTION OF THE RELEVANT ABSTRACT ART WORK (PA INTING) IS TALLYING WITH THE SAID INVOICE DATED 19-10-2001, NOR THE VALUE IS TAL LYING NOR SIZE IS TALLYING NOR THE NAME OF THE APPELLANT IS AVAILABLE ON THE I NVOICE. 3 ITA NO. 4391/MUM/2010 ASSESSMENT YEAR:2008-09 2.3.5 REGARDING ITEM NUMBER 2, A PAINTING TITLED MAN & WOMAN, IT IS A PAINTING ON A MEDIUM OF INK ON PAPER DATED 1981 WIT H HE SIZE OF 45.5X64 AND VALUED AT RS.1,00,000/-. LEARNED AR FURNISHED O N INVOICE DATED 26-03- 2004 WHICH MENTIONS A PAINTING IN THE NAME OF LOVE RS, WHICH IS ON WATER COLOUR & INK ON PAPER, THE SIZE IS NOT GIVEN, THE V ALUE IS DIFFERENT. EVEN THE INVOICE IS IN THE NAME OF M/S. RAVISUM AGRO INVESTM ENT PVT. LTD., SURVEY NO. 134/2, WAGDHARA ROAD, DADRA (UT) 396191. NEED LESS TO SAY, THE ITEM NO. 2 IS ALSO NOT TALLYING. 2.3.6 REGARDING ITEM NO. 3, IT IS A WATER COLOR PAI NTING TITLED FIELDS DATED 1960 HAVING SIZE OF 19X11.5 AND VALUED AT RS.2,50 ,000/-. THE LEARNED AR HAS FURNISHED AN INVOICE DATED 26-03-2004 WHICH MEN TIONS LANDSCAPE SERIES PASTEL & WATER COLOUR PAPER 1956. IT IS A S ET OF 23 PAINTINGS AND HE COULD NOT EXPLAIN AS TO WHICH OUT OF THE SET OF 23 ACTUALLY PERTAINS TO THE IMPUGNED PAINTINGS. NEITHER THE TITLE NOR THE SIZED NOR THE VALUE TALLIED. EVEN THE INVOICE WAS IN THE NAME OF PREVIOUSLY MENTIONED M/S. RAVISUM AGRO INVESTMENT PVT. LTD., SURVEY NO. 134/2, WAGDHRA RO AD, DADRA (UT) 396191. 2.3.7 REGARDING ITEM NO. 4, LEARNED ASSESSING OFFIC ER HAS ADDED RS.9,00,000/- WHICH WAS THE VALUE DECIDED BY THE EX PERT COMMITTEE WHILE VALUING THE ARTWORK (PAINTING) TITLED AS MONKS. I T IS A PAINTING ON A MEDIUM OF WATER COLOUR WITH THE SIZE OF 9.5X14. LEARNED AR FURNISHED INVOICE DATED 26-03-2004 WHICH MENTIONS THE PAINTING BY THE NAME SEASCAPE WITH WATER COLOUR AND PASTED ON PAPER DATED 1909. NEITHE R SIZE NOR THE TITLE NOR THE YEAR NOR THE VALUE ARE TALLYING. EVEN THE INVOI CE IS IN THE NAME OF M/S RAVISUM AGRO INVESTMENT PVT. LTD., SURVEY NO. 134/2 , WAGDHRA ROAD, DADRA (UT) 396191. 2.3.8 REGARDING ITEM NO. 5, THE ADDITION HAS BEEN M ADE WITH REFERENCE TO A PAINTING TITLED 3 DANCING WOMEN ON A GOUCHE MEDIU M WITH THE SIZE OF 9X5 AND VALUED AT RS.3,50,000/-. THE LEARNED AR H AS ARGUED THAT THE PAINTING LISTED AT SRL. NOS. 5 TO 8 OF THE ASSESSME NT ORDER OF THE AGGREGATE VALUE OF RS.25,50,000/-, WERE OLD AND INHERITED BY THE APPELLANT. THE LEARNED AR WAS NOT ABLE TO FURNISH ANY OTHER EVIDENCE IN SU PPORT OF THE INHERITANCE OF THE AFORESAID 4 PAINTINGS LISTED AT SRL. NOS. 5 TO 8 OF THE ASSESSMENT ORDER. NO MATERIAL NOR ANY EVIDENCE FILED BEFORE THE UNDER SIGNED TO EXPLAIN THE NATURE, MODE AND SOURCE OF ACQUISITION / POSSESSION OF THE PAINTINGS BY THE APPELLANT. 4 ITA NO. 4391/MUM/2010 ASSESSMENT YEAR:2008-09 2.3.9 REGARDING ITEM NO. 9 OF THE IMPUGNED ASSESSME NT ORDER, IT IS AN ART WORK TITLED :BIRTH OF KRISHNA (INDIAN MINIATURE) O N A WATER COLOUR MEDIUM HAVING SIZE 23X19.5 AND VALUED AT RS.4,00,000/-. LEARNED AR HAS TRIED TO EXPLAIN THE SAID PIECE OF ARTWORK WITH THE HELP OF INVOICE DATED 27-11-1999. HERE THE DESCRIPTION OF THE PAINTING AND THE TITLE REMAINS SIMILAR AND THE VALUE ALSO SHOWS AT RS.1,62,500/- (RS.1,25,000 + RS . 37,500/-). THE INVOICE IS ALSO IN THE NAME OF THE APPELLANT SANJEEV KHANDE LWAL, 501, ARUN CHAMBERS, TARDEO, MUMBAI 400 034. THE APPELLANT H AS ALSO EXPLAINED THE NATURE, MODE, AND SOURCE OF PAYMENT IN RESPECT OF I NVOICE DATED 27-11-1999. THEREFORE, ADDITION OF RS.4,00,000/- WITH REFERENCE TO ITEM NO. 9 IS TO BE REDUCED. 2.3.10 REGARDING ITEM NO. 10 OF THE IMPUGNED ASSESS MENT ORDER, IT IS AN ARTWORK TITLED HANUMAN (INDIAN MINIATURE) ON A WA TER COLOUR MEDIUM AND VALUED AT RS.50,000/-. LEARNED AR HAS SOUGHT TO EXP LAIN THIS ITEM NO. 10 WITH THE HELP OF INVOICE DATED 27-1-1999, WHERE THE TITLE IS ALMOST THE SAME I.E. HANUMANJI AS BHAKTA, AND VALUED AT RS.1,04,0 00/-. THE APPELLANT HAS EXPLAINED THE NATURE, MODE, AND SOURCE OF PAYMENT O F THIS ITEM. THEREFORE, ITEM NO. 10 IS ALSO EXPLAINED. THEREFORE, ADDITION OF RS.50,000/- WITH REFERENCE TO ITEM NO. 10 IS ALSO TO BE REDUCED. 2.3.11 ITEM NO. 11 THE SAME IS A PAINTING TITLED FIERY HORSE, ON A MEDIUM OF METAL & MARBLE (SCULPTURE) AND HAVING THE DIMENSIONS OF H 17XW 18XD 5.5 AND VALUED AT RS.10,00,000/-. LEAR NED AR TRIED TO EXPLAIN THE SAID ARTWORK AT ITEM NO. 11 WITH THE HE LP OF AN INVOICE DATED 03- 02-2007. HOWEVER, THE SAID INVOICE NARRATES THE ITE M ON A BRONZE MEDIUM AND NOT ON METAL & MARBLE AND EVEN THE TITLE IS DIF FERENT. MOREOVER, THE INVOICE IS IN THE NAME OF ONE RAVISUM AGRO INVESTME NTS PVT. LTD., AND THEREFORE, THE SAME REMAINS UNEXPLAINED. 2.3.12 ITEM NO. 12 IS TITLED AS MAN & CHILD IN B RONZE MEDIUM WITH DIMENSION H 7.5XW 6XD 6.5 AND VALUED AT RS.10,00 ,000/-. LEARNED AR HAS SOUGHT TO EXPLAIN THE SAID PIECE OF ARTWORK BY INVOICE DATED 15-10-2004 WHICH IS AN ART PIECE TITLED AS WRESTLER, VALUED AT RS.1,61,000/-. THE SIZE AND DIMENSION NOT MENTIONED AND THE INVOICE IS IN T HE NAME OF RAVISUM AGRO INVESTMENTS PVT.LTD., SURVEY NO. 137/2, WAGDHR A ROAD, DADRA (UT) 396191. NEITHER THE TITLE, NOR THE SIZE, NOR THE PR ICE TALLY. EVEN THE INVOICE IS NOT IN THE NAME OF THE APPELLANT. THEREFORE, THE SA ME REMAINS UNEXPLAINED. 2.3.13 ITEM NOS. 13, 14 & 15 ARE TITLED AS LOBSTER , STONES, AND ABSTRACT. ITEM NO. 13 IS ON WATER COLOUR MEDIUM W ITH SIZE 15.5X10 AND 5 ITA NO. 4391/MUM/2010 ASSESSMENT YEAR:2008-09 VALUED AT RS.10,000; ITEM NO. 14 IS A PHOTOGRAPH OF THE SIZE OF 18X27.5 AND VALUED AT RS.10,000/-. ITEM NO. 15 IS ON A MEDI UM OF OIL ON CANVAS WITH THE SIZE OF 42X30 AND VALUED AT RS.40,000/-. LEAR NED AR HAS SOUGHT TO EXPLAIN THE SAID LOBSTER PIECE OF ART WORK BY STA TING THAT THE SAME WAS PURCHASED MANY YEARS AGO. HOWEVER, NEITHER ANY INVO ICE NOR THE NATURE, MODE AND SOURCE OF POSSESSION OF THE SAME HAVE BEEN SATISFACTORY EXPLAINED. REGARDING ITEM AT SERIAL NO. 14, THE AR TRIED TO EX PLAIN THIS ITEM VIDE INVOICE DATED 03-12-2006 IN THE NAME OF STAR X ENGI NEERING VENTURES PVT. LTD. WADALA, MUMBAI. HOWEVER, THE SAID INVOICE DESC RIBES ARTWORK AS A PHOTOGRAPH OF ANCIENT PEOPLE LAND LOTUS SEA. NEIT HER THE DESCRIPTION NOR THE SIZE TALLY AND THE INVOICE IS IN THE NAME OF A THIRD PERSON, WHICH IS AN INDEPENDENT COMPANY AND APPELLANTS POSSESSION OF T HIRD PARTIES PAINTING HAVE NOT BEEN SATISFACTORY EXPLAINED. LEARNED AR HA S ALSO SOUGHT TO EXPLAIN ITEM AT SERIAL NO. 15 TITLED ABSTRACT BY STATING THAT THE SAID PAINTING WAS PURCHASED BY ONE RAVISUM AGRO INVESTMENTS PVT. LTD. HOWEVER, NEITHER THE TITLE NOR THE SIZE NOR VALUE MATCH WITH THE CORRESP ONDING VOUCHERS OF THE ARTICLE FOUND AND SEIZED FROM THE PREMISES OF THE A PPELLANT. EVEN THE INVOICE IS NOT IN THE NAME OF THE APPELLANT. THE LEARNED CIT(APPEALS) THUS FOUND THE EXPLANATION OF THE ASSESSEE ONLY IN REGARD TO TWO ITEMS OF PAINTINGS AS SATISFACTORY A ND REJECTING THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF REMAINING ITE MS OF PAINTINGS, HE SUSTAINED THE ADDITION OF RS.70 LAKHS MADE BY THE AO ON THIS ISSU E TO THE EXTENT OF RS.65,50,000/-. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE PAPER BOOK FILED BY THE ASSESSEE, THE FOLLOWING DOCUMENTS PLACED AT PAGE NOS. 115 TO 120 (SR. NOS. 14 TO 18) HAVE BEEN FILED FOR THE FIRST TIME BEFORE THE TRIBUNAL AND THE SAME, TH EREFORE, CONSTITUTE ADDITIONAL EVIDENCE : 14. COPY OF PAINTING IN RESPECT OF LOT NO. 97 TAKEN FROM THE CATALOGUE ISSUED BY OSIANSS TITLED INDIA: A HISTORICAL LILA . 15. COPY OF PAINTING IN RESPECT OF LOT NO. 75 TAKEN FROM THE CATALOGUE ISSUED BY OSIANS TITLED OSIANS MASTERPIECE & MUS EUM QUALITY III. 6 ITA NO. 4391/MUM/2010 ASSESSMENT YEAR:2008-09 16. COPY OF PAINTING IN RESPECT OF LOT NO. 5 TAKEN FROM THE CATALOGUE ISSUED BY OSIANS TITLED INDIA: A HISTORICAL LILA . 17. COPY OF PAINTING IN RESPECT OF LOT NO. 47 TAKEN FROM THE CATALOGUE ISSUED BY OSIANS TITLED MASTERPIECE & MUSEUM QUAL ITY SERIES ISSUED ON 15.10.2004. 18. COPY OF PAINTING IN RESPECT OF LOT NO. 20 TAKEN FROM THE CATALOGUE ISSUED BY OSIANS TITLED INDIAN CONTEMPORARY ART P AINTING, DRAWINGS AND CULTURE ISSUED ON 9.2.2005. IN THIS REGARD, AN APPLICATION HAS BEEN FILED BY TH E ASSESSEE SEEKING ADMISSION OF THE SAID ADDITIONAL EVIDENCE ON THE FOLLOWING GROUN DS : THE APPEAL OF THE APPELLANT BEFORE THE TRIBUNAL WA S FILED ON 28.5.2010 AND IS PENDING. THE CIT(A) IN THE APPELLATE ORDER HAS P OINTED OUT THE DISCREPANCY THAT IN PURCHASE INVOICES, THE SIZE OF THE PAINTING IS NOT MENTIONED. AS PER THE GENERAL PRACTICE, THE SIZE OF THE PAINTING IS NOT MENTIONED IN THE PURCHASE INVOICE AND THE ASSESSING OFFICER HAD NEVER RAISED ANY QUESTION ON THE SAME. THE CIT(A) HAS NEVER QUES TIONED THE APPELLANT REGARDING THE SAME AND HE HAS ERRED IN MENTIONING T HE SAID DISCREPANCY IN THE ORDER PASSED BY HIM. IN ORDER TO REBUT THE DISC REPANCY POINTED OUT BY THE CIT(A) REGARDING THE SIZE OF THE PAINTINGS, COPIES OF THE PAINTINGS AS APPEARING IN THE CATALOGUES ISSUED PRIOR TO THE AUC TION OF THE PAINTINGS HAS BEEN ENCLOSED IN THE PAPER BOOK AT SR. NO. 14 TO 18 OF THE PAPER BOOK. AS MENTIONED ABOVE, THE ASSESSING OFFICER HAS NEVER RA ISED THE ISSUE REGARDING THE SIZE OF THE PAINTINGS AND THE CIT(A) HAD ALSO N EVER DISCUSSED THE SAME WITH THE APPELLANT DURING THE COURSE OF HEARING AND HE HAS POINTED THE SAID DISCREPANCY ONLY IN THE ORDER PASSED BY HIM. TO CON TRADICT THE SAID OBSERVATIONS OF THE CIT(A) THE FILING OF THE COPIES OF THE PAINTINGS AS APPEARING IN THE CATALOGUE ISSUED PRIOR TO THE AUCT ION IS ESSENTIAL AS IN THE SAID CATALOGUE THE SIZE OF THE PAINTINGS IS MENTION ED. KEEPING IN VIEW THE ABOVE REASONS GIVEN BY THE ASSE SSEE IN HIS APPLICATION AND TAKING INTO CONSIDERATION THE FACT THAT THE DOCUMEN TS NOW BEING FILED BY THE ASSESSEE AS ADDITIONAL EVIDENCE CONSTITUTE A RELEVA NT EVIDENCE FOR THE PURPOSE OF DECIDING THE ISSUE UNDER CONSIDERATION, WE ADMIT TH E SAID ADDITIONAL EVIDENCE. HAVING ADMITTED THE SAID ADDITIONAL EVIDENCE FILED BY THE ASSESSEE FOR THE FIRST TIME 7 ITA NO. 4391/MUM/2010 ASSESSMENT YEAR:2008-09 BEFORE THE TRIBUNAL, WE ARE OF THE VIEW THAT AN OPP ORTUNITY NEEDS TO BE GIVEN TO THE DEPARTMENT TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE SAID ADDITIONAL EVIDENCE WHICH WAS EARLIER NOT AVAILABLE TO THEM. WE, THEREF ORE, REMAND THIS ISSUE TO THE FILE OF THE LEARNED CIT(APPEALS) FOR DECIDING THE SAME A FRESH IN THE LIGHT OF THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AFTER GIV ING THE ASSESSEE A PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD. GROUND NO. 1 OF THE ASSESSEES APPEAL IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURP OSES. 6. THE ISSUE INVOLVED IN GROUND NO.2 OF THE ASSESSE ES APPEAL RELATES TO THE ADDITION OF RS.5,76,061/- MADE BY THE AO AND CONFIR MED BY THE LEARNED CIT(APPEALS) ON ACCOUNT OF JEWELLERY FOUND DURING T HE COURSE OF SEARCH AS PER SR. NO. 1 TO 33 OF ANNEXURE-J TO PANCHNAMA. 7. THE ITEMS OF JEWELLERY FOUND DURING THE COURSE O F SEARCH AND LISTED AT SR. NO. 1 TO 33 OF ANNEXURE-J WERE EXPLAINED BY THE AS SESSEE AS SMALLER ITEMS OF DIAMONDS JEWELLERY BELONGING TO HIS TWO DAUGHTERS, NAMELY, MS. SANJANA AND MS. AARYA. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE F ILED BY THE ASSESSEE TO SUPPORT AND SUBSTANTIATE THE SAID EXPLANATION, THE AO DID N OT FIND THE SAME TO BE SATISFACTORY AND THE VALUE OF THE SAID ITEMS OF JEW ELLERY TAKEN AT RS.5,76,061/- WAS ADDED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE. B EFORE THE LEARNED CIT(APPEALS), THE SUBMISSION MADE BEFORE THE AO WAS REITERATED BY THE ASSESSEE. IT WAS ALSO SUBMITTED THAT THE VALUE OF THE ITEMS OF JEWELLERY LISTED AT SR. NO. 1 TO 33 OF ANNEXURE-J WAS ONLY RS.4,60,965/- WHICH WAS WRONGLY TAKEN BY THE AO AT RS.5,76,061/-. THE LEARNED CIT(APPEALS) DID NOT FIN D MERIT IN THE MAIN SUBMISSION MADE BY THE ASSESSEE ON THIS ISSUE IN THE ABSENCE O F ANY DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE TO SUPPORT AND SUBSTANTIAT E HIS EXPLANATION IN RESPECT OF THE RELEVANT ITEMS OF JEWELLERY. AS REGARDS THE OTH ER SUBMISSION OF THE ASSESSEE THAT THERE WAS MISTAKE COMMITTED BY THE AO IN TAKING THE VALUE OF THE SAID ITEMS AT 8 ITA NO. 4391/MUM/2010 ASSESSMENT YEAR:2008-09 RS.5,76,061/- AS AGAINST RS.4,60,965/-, THE LEARNED CIT(APPEALS) DIRECTED THE AO TO VERIFY THE RELEVANT RECORD AND ALLOW APPROPRIATE RELIEF TO THE ASSESSEE. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THA T ALTHOUGH THE ITEMS OF JEWELLERY FOUND DURING THE COURSE OF SEARCH AND IDENTIFIED AT SR. NO. 1 TO 33 OF ANNEXURE-J WERE SOUGHT TO BE EXPLAINED BY THE ASSESSEE AS SMAL LER ITEMS OF DIAMOND JEWELLERY BELONGING TO HIS TWO DAUGHTERS, NO DOCUMENTARY EVID ENCE WAS PRODUCED BY HIM EITHER BEFORE THE AO OR BEFORE THE LEARNED CIT(APPE ALS) TO SUPPORT AND SUBSTANTIATE THE SAID EXPLANATION. EVEN BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO RELY ON ANY DOCUMENTA RY EVIDENCE WHICH CAN SUPPORT THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF THE SAID ITEMS AND IN THE ABSENCE THEREOF, WE FIND NO JUSTIFIABLE REASON TO I NTERFERE WITH THE IMPUGNED ORDER OF THE LEARNED CIT(APPEALS) CONFIRMING THE ADDITIO N MADE BY THE AO TREATING THE RELEVANT ITEMS OF JEWELLERY AS UNEXPLAINED. THE SAM E IS, THEREFORE, UPHELD ON THIS ISSUE DISMISSING GROUND NO. 2 OF THE ASSESSEES APP EAL. 9. THE ISSUE RAISED IN GROUND NO. 3 RELATES TO THE ADDITIONS OF RS.3,42,582/- AND RS.95,700/- MADE BY THE AO AND CONFIRMED BY THE LEA RNED CIT(APPEALS) IN RESPECT OF ITEMS OF JEWELLERY FOUND DURING THE COURSE OF SE ARCH AND LISTED AT SR. NO. 38 AND 43 OF ANNEXURE-J TO THE PANCHNAMA. 10. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E AO COMPARED VALUATION REPORT OF THE GOVERNMENT APPROVED VALUER WITH VALUA TION REPORTS FURNISHED BY THE ASSESSEE IN RESPECT OF JEWELLERY FOUND DURING THE C OURSE OF SEARCH. ON SUCH COMPARISON, HE FOUND CERTAIN DISCREPANCIES IN THE D ESCRIPTION GIVEN IN THESE TWO REPORTS OF ITEM NO. 38 AND 43 OF ANNEXURE-J. HE HEL D THAT THE SAID ITEMS FOUND DURING THE COURSE OF SEARCH THUS WERE DIFFERENT FRO M THE ITEMS REFLECTED IN THE 9 ITA NO. 4391/MUM/2010 ASSESSMENT YEAR:2008-09 VALUATION REPORTS FURNISHED BY THE ASSESSEE. ACCORD INGLY THE EXPLANATION OF THE ASSESSEE IN RESPECT OF THE SAID ITEMS OFFERED ON TH E BASIS OF VALUATION REPORTS WAS NOT ACCEPTED BY THE AO AND THE VALUE OF THE SAID IT EMS AT RS.3,42,582/- AND RS.95,700/- WAS ADDED BY HIM TO THE TOTAL INCOME OF THE ASSESSEE. BEFORE THE LEARNED CIT(APPEALS), IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT BOTH THE ITEMS OF JEWELLERY AT SR. NO. 38 AND 43 WERE DULY R EFLECTED IN THE VALUATION REPORT FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS AND THERE WAS NO REASON FOR THE AO TO IGNORE THE SAID VALUATION REPORT AND TREA T THE SAID ITEMS AS UNEXPLAINED MERELY ON THE BASIS OF MINOR DISCREPANCY IN THE DES CRIPTION GIVEN IN THE REPORT. THE LEARNED CIT(APPEALS) DID NOT FIND THIS STAND OF THE ASSESSEE TO BE ACCEPTABLE. HE FOUND ON PERUSAL OF THE RELEVANT REPORTS THAT THE I TEMS OF JEWELLERY FOUND DURING THE COURSE OF SEARCH AND LISTED AT SR. NO. 38 AND 43 WE RE NOT TALLIED WITH THE VALUATION REPORT FURNISHED BY THE ASSESSEE. HE, THEREFORE, CO NFIRMED THE ADDITION MADE BY THE AO ON ACCOUNT OF VALUE OF THE SAID TWO ITEMS OF JEWELLERY TREATING THE SAME A UNEXPLAINED. 11. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. ALTHOUGH THE LEARNED COUNSEL FO R THE ASSESSEE HAS MADE AN ATTEMPT TO SHOW THAT THERE IS NO MATERIAL DIFFERENC E IN THE DESCRIPTION OF ITEM NO. 38 AND 43 AS GIVEN IN THE REPORT OF THE GOVERNMENT VALUER AND AS GIVEN IN THE VALUATION REPORTS FURNISHED BY THE ASSESSEE, A PERU SAL OF THE COMPARATIVE STATEMENT GIVEN BY THE LEARNED CIT(APPEALS) ON PAGE NO. 14 OF HIS IMPUGNED ORDER SHOWS THAT THERE IS A MATERIAL DIFFERENCE IN THE DESCRIPT ION SO GIVEN IN THE TWO REPORTS. NOT ONLY THERE IS A DIFFERENCE IN THE DESCRIPTION OF TH E ITEMS GIVEN IN THE SAID TWO REPORTS BUT THERE IS ALSO A DIFFERENCE IN THE WEIGH T OF GOLD AND CARATS OF THE DIAMOND. IN OUR OPINION, THE ITEMS FOUND DURING THE COURSE OF SEARCH AT SR. NO. 38 AND 43 OF ANNEXURE-J, THEREFORE, CANNOT BE SAID TO BE THE SAME AS REFLECTED IN THE 10 ITA NO. 4391/MUM/2010 ASSESSMENT YEAR:2008-09 VALUATION REPORTS FURNISHED BY THE ASSESSEE AS RIGH TLY HELD BY THE AUTHORITIES BELOW. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LEA RNED CIT(APPEALS) CONFIRMING THE ADDITION MADE BY THE AO ON THIS ISSUE AND DISMI SS GROUND NO. 3 OF THE ASSESSEES APPEAL. 12. THE ISSUE RAISED IN GROUND NO. 4 RELATES TO THE ADDITION OF RS.1,94,600/- MADE BY THE AO AND CONFIRMED BY THE LEARNED CIT(APP EALS) ON ACCOUNT OF ITEMS OF JEWELLERY APPEARING AT SR. NO. 39, 41 AND 42 OF ANNEXURE-J TO THE PANCHNAMA. 13. THE ITEMS OF JEWELLERY FOUND DURING THE COURSE OF SEARCH AND LISTED AT SR. NO. 39, 41 AND 42 WERE NOT REFLECTED IN THE VALUATI ON REPORTS FURNISHED BY THE ASSESSEE. THE VALUE THEREOF AMOUNTING TO RS.1,94,60 0/-, THEREFORE, WAS ADDED BY THE AO TO THE TOTAL INCOME OF THE ASSESSEE TREATING THE SAME AS UNEXPLAINED. BEFORE THE LEARNED CIT(APPEALS), IT WAS CONTENDED ON BEHAL F OF THE ASSESSEE THAT THE SAID ITEMS OF JEWELLERY WERE BELONGING TO SHRI MAHENDRA NATH KHANDELWAL, EXECUTOR OF SMT. CHANDRAVATI KHANDELWAL ESTATE AND NOT TO THE A SSESSEE. IT WAS CONTENDED THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF VALUE OF THE SAID ITEMS IN THE HANDS OF THE ASSESSEE WAS NOT JUSTIFIED. THE LEARNED CIT(APP EALS) DID NOT CONSIDER THIS EXPLANATION OF THE ASSESSEE AND PROCEEDED TO CONFIR M THE ADDITION MADE BY THE AO ON THIS ISSUE ON THE GROUND THAT THE ITEMS OF JEWEL LERY LISTED AT SR. NO. 39, 41 AND 42 OF ANNEXURE-J WERE NOT REFLECTED IN THE VALUATIO N REPORT FURNISHED BY THE ASSESSEE. 14. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS SUBMITTED BY THE LEARNED COU NSEL FOR THE ASSESSEE, THE SUBMISSION SPECIFICALLY MADE ON BEHALF OF THE ASSES SEE BEFORE THE LEARNED CIT(APPEALS) STATING THAT THE ITEMS OF JEWELLERY AT SR. NO. 39, 41 AND 42 OF ANNEXURE-J WERE BELONGING TO OTHER PERSON AND NOT T O THE ASSESSEE HAS NOT BEEN 11 ITA NO. 4391/MUM/2010 ASSESSMENT YEAR:2008-09 CONSIDERED AND DEALT WITH BY HIM AND THIS POSITION CLEARLY MANIFEST FROM THE IMPUGNED ORDER OF THE LEARNED CIT(APPEALS), HAS NOT BEEN DISPUTED EVEN BY THE LEARNED DR. WE, THEREFORE, CONSIDER IT JUST AND PR OPER TO REMAND THIS MATTER TO THE LEARNED CIT(APPEALS) FOR DECIDING THE SAME AFRESH A FTER CONSIDERING THE SAID SUBMISSION MADE BY THE ASSESSEE SPECIFICALLY BEFORE HIM. GROUND NO. 4 OF THE ASSESSEES APPEAL IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF DEC.,2011. SD/- SD/ - (V. DURGA RAO) (P.M. J AGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED : 23 RD DEC., 2011. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, G-BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI. WAKODE