BHARAT HEMRAJ JETHANI, V. DCIT CEN CIR-1, MUMBAI

ITA 4631/MUM/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62303 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 03-04-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 09-07-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Salary income; Valuation report
• Section: 234B; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, H, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (JM) AND SHRI B.RA MAKOTAIAH (AM) ITA NO.4630/MUM/2008 (ASSESSMENT YEAR: 2005-06) MR.HEMRAJ K.JETHANI, 103, SIDHARTHA TOWERS, KOPRI COLONY, THANE(E). PAN: ABDPJ4124G DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, PAWAR INDL.ESTATE, EDULJI ROAD, CHERAI, THANE(W). APPELLANT V/S RESPONDENT ITA NO.4631/MUM/2008 (ASSESSMENT YEAR: 2005-06) MR.BHARAT HEMRAJ JETHANI, 103, SIDHARTHA TOWERS, KOPRI COLONY, THANE(E). PAN: ABDPJ4125H DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, PAWAR INDL.ESTATE, EDULJI ROAD, CHERAI, THANE(W). APPELLANT V/S RESPONDENT ITA NO.4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) MRS.DARSHANA KAILASH JETHANI, 103, SIDHARTHA TOWERS, KOPRI COLONY, THANE(E). PAN: ABDPJ4123B DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, PAWAR INDL.ESTATE, EDULJI ROAD, CHERAI, THANE(W). APPELLANT V/S RESPONDENT DATE OF HEARING : 3.4.2012 DATE OF PRONOUNCEMENT : 18.4.2012 ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 2 ASSESSEES BY : SHRI M.SUBRAMANIAN RESPONDENT BY : SHRI AJAY O R D E R PER DINESH KUMAR AGARWAL (JM) ALL THESE APPEALS BY THREE RESPECTIVE ASSESSEES AR E DIRECTED AGAINST THE SEPARATE ORDERS DATED 10.4.200 8 PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2005-06. SINCE FACTS ARE IDENTICAL AND ISSUES INVOLVED ARE COMMON, AL L THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER FOR T HE SAKE OF CONVENIENCE. ITA NO.4630/MUM/2008(BY MR.HEMRAJ K.JETHANI) 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE AN INDIVIDUAL DERIVES INCOME FROM SALARY, BUSINES S INCOME AND OTHER SOURCES. THE ASSESSEES BUSINESS PREMI SES AS WELL AS RESIDENTIAL PREMISES WERE SEARCHED U/S 132 OF TH E INCOME TAX ACT, 1961 (THE ACT) ON 9.9.2004 ALONG WITH OTH ER GROUP CASES. THE RETURN WAS FILED ON 31.10.2005 DECLARIN G TOTAL INCOME AT RS.3,17,200/-. HOWEVER, THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.10,86,070/- INCLUDING THE ADDITION OF UNEXPLAINED CASH CREDIT RS.3,88,500/- AND UNEXPLAINED INVESTMENT IN DIAMOND JEWELLERY RS.3,80 ,374/-, VIDE ORDER DATED 13.12.2006 PASSED UNDER SECTION 14 3(3) READ ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 3 WITH SECTION 153B(B) OF THE ACT. ON APPEAL, THE L D.CIT(A) DISMISSED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 4. GROUND NO.1 IS AGAINST THE VALIDITY OF THE ORDE R PASSED BY THE AO AND GROUND NO.2 IS THE GENERAL GROUND. 5. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE ABOVE GROUNDS WHICH WAS NOT OBJE CTED TO BY THE LD.DR. 6. THAT BEING SO AND IN THE ABSENCE OF ANY OTHER SU PPORTING MATERIALS PLACED ON RECORD BY THE LD. COUNSEL FOR T HE ASSESSEE, THE GROUND NOS.1 AND 2 TAKEN BY THE ASSESSEE ARE, T HEREFORE, REJECTED BEING NOT PRESSED. 7. GROUND NO.3 IS AGAINST THE SUSTENANCE OF ADDITIO N OF UNEXPLAINED CASH RS.3,88,500/-. 8. BRIEF FACTS OF THE ABOVE ISSUE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT DU RING THE COURSE OF SEARCH, AT THE RESIDENCE OF ASSESSEE, CA SH OF RS.5,83,350/- WAS FOUND AND OUT OF IT CASH OF RS.3 ,88,500/- WAS FOUND FROM THE BED ROOM OF THE ASSESSEE. ON INQ UIRY ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 4 DURING THE COURSE OF SEARCH THE ASSESSEE WAS UNAB LE TO GIVE THE SOURCE EXCEPT STATING THAT IT IS A COMBINED CASH OF FAMILY. HE ALSO ADMITTED THAT BOOKS OF ACCOUNTS WERE NOT U P-TO-DATE. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDING S THE ASSESSEE SUBMITTED THAT THE CASH OF RS.5,83,350/- FROM THE RESIDENCE BELONG TO VARIOUS FAMILY MEMBERS INCLUDI NG M/S BELL COMPUTRONICS , PROPRIETARY CONCERN OF SHRI BHARAT JETHANI SON OF THE ASSESSEE . THE ASSESSEE FURTHER SUBMIT TED THAT THE CASH WAS KEPT AT THE RESIDENCE FOR THE SAFETY PURPO SES. HOWEVER, THE AO DID NOT ACCEPT THE ASSESSEES EXPLA NATION. ACCORDING TO THE AO THE ASSESSEE HAS NO BUSINESS RELATION WITH M/S BELL COMPUTRONICS . FURTHER M/S BELL COMPUTRONICS HAS BANK ACCOUNT, THEREFORE, IT CANNOT BE BELIEVED THAT FOR SAFETY PURPOSES CASH WAS KEPT AT THE RESIDENCE TH AN INTO BANK ACCOUNT. IN THIS VIEW OF THE MATTER AND KEEPING IN VIEW THAT THE CASH BOOK OF THE FAMILY MEMBERS WERE NOT FOUND TO BE UP- TO-DATE, THE AO TREATED THE CASH OF RS.3,88,500/- AS UNEXPLAINED CASH AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. ON APPEAL, THE LD.CIT(A) WHILE AGGREEING WITH THE VIEWS OF THE AO CONFIRMED THE ADDITION MADE BY TH E AO. 9. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE WHILE REFERRING TO THE RELEVANT QUESTIONS AND ANSWE RS TO STATEMENT OF THE ASSESSEE APPEARING AT PAGES 34 AND 35 OF ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 5 THE ASSESSEES PAPER BOOK, DETAILS OF CASH BALANCES APPEARING BELONGING TO VARIOUS FAMILY MEMBERS APPEARING AT PA GE 75 OF THE ASSESSEES PAPER BOOK, SCHEDULE-F OF THE AUDIT REPORT OF M/S BELL COMPUTRONICS FOR THE PERIOD ENDED 31.3.2005 SHOWING AMOUNT OF CASH SEIZED BY THE DEPARTMENT RS.4,44,061/- APPEARING AT PAGE 125 OF THE ASSESSEE S PAPER BOOK SUBMITS THAT IN VIEW OF THE ENTRIES RECORDED IN THE RESPECTIVE BOOKS OF ACCOUNT OF THE FAMILY MEMBERS, THE CASH FOUND AT THE TIME OF SEARCH MAY BE TREATED AS FULLY EXPLAINED AND THE ADDITION MADE BY THE AO AND SUSTAINED BY T HE LD.CIT(A) BE DELETED. THE RELIANCE WAS ALSO PLACE D ON THE DECISIONS IN (A) AMAR NATVARLAL SHAH V/S ACIT (19 97) 60 ITD 560(AHD) AND (B) MS. AISHWARYA K.RAI V/S DCIT (200 7) 104 ITD 166 (MUM)( TM) 10. ON THE OTHER HAND, THE LD.DR SUPPORTS THE ORDER OF THE AO AND THE LD.CIT(A). 11. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND THAT THERE IS NO DISPUTE THAT IN THE STATEMENT RECO RDED AT THE TIME OF SEARCH, THE AO SPECIFICALLY ASKED ABOUT TH E CASH OF RS.3,88,500/- VIDE QUESTION NO.8 AS UNDER : Q.NO.8 : CASH OF RS.3,88,500/- WAS FOUND FROM YOUR BEDROOM. DO YOU CONFIRM THAT THE SAME BELONGS TO YOU ONLY. ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 6 ANS : IT IS COMBINED CASH OF FAMILY WE FURTHER FIND THAT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS THE ASSESSEE VIDE LETTER DATED 13.10.2 006 HAS STATED AS UNDER : REGARDING SEIZURE OF RS.5,00,000/- I WANT TO STATE THAT DURING THE COURSE OF SEARCH IN MY STATEMENT I STAT ED THAT THIS CASH BELONGS TO US AND OUR FAMILY MEMBERS . ALL OUR FAMILY MEMBERS ARE INCOME TAX PAYER SINCE LAST SO MANY YEARS. IN EVERY CASE WE ARE FILLING BALANCE SH EET AND PAYING INCOME TAX REGULARLY. I HAVE TO MARRIED SONS AND WE ALL THREE ARE ALSO FILING RETURN IN HUF CAP ACITY. WHATEVER CASH WAS FOUND IT WAS ACCOUNTED AND EXPLAI NED AND IT WAS DETAILS OF CASH BALANCES S. NO. DATE NAME CASH SOURCE SEIZED RETURNED 1 2 3 4 5 6 7. 8.9.2004 8.9.2004 8.9.2004 8.9.2004 8.9.2004 8.9.2004 8.9.2004 BHARAT JETHANI (M/S BELL COMPUTERS) BHARAT JETHANI (HUF) KAILASH JETHANI KAILASH JETHANI (HUF) HEMRAJ K JETHANI (OFFICE) HEMRAJ K JETHANI (HUF) [[[ RITU, RASHI, RHEA (MINOR DAUGHTERS) 4,4 4,061 22,669 54,440 39,837 54,000 11,562 10,500 AS PER BOOKS AS PER BOOKS AS PER BOOKS AS PER BOOKS AS PER BOOKS AS PER BOOKS GIFT ON BIRTHDAY & DIFFERENT OCCASIONS 4,44,061 4,540 39,837 . 11,562 .. 18,129 54,440 . 54,000 10,500 . 6,37,069 5,00,000 1,37,069 ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 7 WE FURTHER FIND THAT IN SUPPORT THE ASSESSEE HAS AL SO FILED AUDIT REPORT OF M/S BELL COMPUTRONICS FOR THE ASSE SSMENT YEAR 2005-06 INTERALIA MENTIONING IN SCHEDULE-F UNDE R THE HEAD LOANS AND ADVANCES INCOME TAX DEPARTMENT RS.4,4 4,061/-. MERELY BECAUSE THE BOOKS OF ACCOUNTS WERE NOT FOUN D TO BE UP-TO-DATE AND THE CASH BALANCES WERE NOT STRUCK O FF DOES NOT MEAN THAT THE ASSESSEE HAS NO EXPLANATION ABOUT TH E CASH FOUND AT THE TIME OF SEARCH OR THE EXPLANATION S UBMITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCE EDINGS SUPPORTED BY THE BOOKS OF ACCOUNT IS NOT BELIEVABL E PARTICULARLY WHEN THE CONCERNED BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED BY THE AO. IN THIS VIEW OF THE MATTE R AND KEEPING IN VIEW THE RATIO OF DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE, THE ADDITION OF RS.3,88 ,500/- MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) AS UNEXP LAINED CASH IS DELETED. THE GROUND TAKEN BY THE ASSESSEE IS, THEREFORE, ALLOWED. 12. GROUND NO.4 IS AGAINST THE SUSTENANCE OF ADDITI ON OF RS.3,80,374/- AS UNEXPLAINED INVESTMENTS IN DIAMOND JEWELLERY. 13. THE BRIEF FACTS OF THE ABOVE ISSUE ARE THAT DU RING THE COURSE OF SEARCH AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 8 THE TOTAL JEWELLERY INCLUDING THE GOLD AND DIAMOND JEWELLERY OF RS.28,79,018/- WAS FOUND. ON BEING ASKED, THE ASSE SSEE FILED A CHART SHOWING THE DETAILS OF JEWELLERY OWNED BY T HE ASSESSEE AND HIS FAMILY MEMBERS SUPPORTED BY VDIS CERTIFICAT E, COPY OF WEALTH TAX RETURNS, ASSESSMENT ORDERS AND COPY OF WILL OF SMT.LACHMI UKARMAL MANGTANI. THE ASSESSEE ALSO RELIED ON CBDT CIRCULAR. HOWEVER, THE AO ACCEPTED THE ASSES SEES EXPLANATION PARTLY. IN THE CASE OF THE ASSESSEE, T HE AO OBSERVED THAT THE DIAMOND JEWELLERY OF THE VALUE OF RS.4,20,374/- WAS FOUND. THE DESCRIPTION OF THE DI AMOND JEWELLERY DECLARED UNDER VDIS DOES NOT MATCH WITH T HE DIAMOND JEWELLERY FOUND AT THE TIME OF SEARCH. TH EREFORE, THE AO DID NOT ACCEPT THE ASSESSEES EXPLANATION THAT THE DIAMOND JEWELLERY WAS DISCLOSED IN VDIS. THE AO AFTER TAKI NG INTO ACCOUNT THE AGE OF THE ASSESSEE, PAST SAVINGS, BUS INESS ETC. CONSIDERED THAT THE JEWELLERY OF THE VALUE OF RS.40 ,000/- AS EXPLAINED AND TREATED THE BALANCE INVESTMENT IN DI AMOND JEWELLERY RS.3,80,374/- (420374-40000) AS UNEXPLAIN ED INVESTMENT OUT OF UNDISCLOSED SOURCE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. REGARDING GOLD JE WELLERY, THE AO TREATED THE SAME AS EXPLAINED AND HENCE HE DID NOT MAKE ANY ADDITION. ON APPEAL, THE LD.CIT(A) WHILE OBSER VING THAT IN ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 9 THE ABSENCE OF ANY CONVINCING EVIDENCE, CONFIRMED THE ADDITION MADE BY THE AO. 14. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE PLACED ON RECORD THE FOLLOWING CHART: JETHANI FAMILY DIAMOND JHEWELLERY CHART S. NO. NAME OF THE PERSON TO WHOM DIA- MOND JEWE- LLERY BELONGS QTY.IN GMS/ CARATS VALUE RS. SOURCE OF ACQUISITION REMARKS PAGE NO. AS PER PAPER BOOK 1 NIRMAL HEMRAJ JETHANI 339.800 6,53,340 218.800- DECLARED IN VDIS 127.000- DECLARED IN WEALTH TAX RETURN 339.800 TOTAL DIAMOND JEWELLERY FOUND AND VALUED 190.500 GMS/CRT AT RS.4,20,374/- AO HAS ALLOWED JEWELLERY WORTH RS.40,000/- 79-87 96-97 (HEMRAJ) 2 AASHNA BHARAT JETHANI 90.000 1,73,045 90.00 GIFTS RECEIVED DURING MARRIAGE AND OTHER OCCASIONS DIAMOND JEWELLERY FOUND AND VALUED 309.550 GMS/CRT AT RS.4,86,865/- AO HAS ALLOWED JEWELLERY WORTH RS.30,000/- 3 DARSHNA K JETHANI 270.050 5,19,231 184.100-WILL 85.950- GIFT RECEIVED 270.050-TOTAL DIAMOND JEWELLERY FOUND AND VALUED 202.150 GMS/CRT AT RS.4,38,377/- 65-68 (DARSHANA) ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 10 AO HAS ALLOWED JEWELLERY WORTH RS.NIL. TOTAL 699.850 13,45,616 TOTAL JEWELLERY ALLOWED BY AO IS OF RS.70,000 IN SUPPORT OF THE ABOVE CHART HE ALSO REFERS VDIS C ERTIFICATE OF SMT. NIRMALA HEMRAJ ALONG WITH VALUATION REPORT, C OPY OF RETURN OF INCOME OF SMT.NIRMALA HEMRAJ, COPY OF WE ALTH TAX RETURN OF SHRI HEMRAJ K.JETHANI, COPY OF WEALTH TAX RETURN OF SMT. NIRMALA H.JETHANI, COPY OF WILL OF SMT.LACHM I UKARMAL MANGTANI AND COPY OF BILLS OF JEWELLERY PURCHASED A PPEARING AT PAGES 79 TO 104 OF THE ASSESSEES PAPER BOOK. T HE RELIANCE WAS ALSO PLACED ON THE DECISIONS CITED SUPRA AND IN DCIT V/S ARJUN DASS KALWANI (2006) 101 ITD 337 (JD). HE, TH EREFORE SUBMITS THAT THE ADDITION MADE BY THE AO AND SUSTAI NED BY THE LD.CIT(A) BE DELETED. 15. ON THE OTHER HAND, THE LD.DR WHILE RELYING ON THE ORDER OF THE AO AND LD.CIT(A) FURTHER SUBMITS THAT THE D IAMOND JEWELLERY DECLARED UNDER VDIS DOES NOT MATCH WITH T HE DIAMOND JEWELLERY FOUND AT THE TIME OF SEARCH, THE REFORE, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) BE UPHELD. ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 11 16. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND THAT THE ASSESSEE HAS EXPLAINED THAT HIS WIFE SMT. NIRMALA HEMRAJ JETHANI HAS DISCLOSED THE DIAMOND JEWELLER Y 339.800 GRM. VALUED AT RS.6,53,340/- UNDER VDIS AND BY FILING WEALTH TAX RETURN AS MENTIONED IN THE TABLE REPRODU CED IN PARAGRAPH 14 OF THIS ORDER. IN SUPPORT THE ASSESSEE HAS FILED COPY OF VDIS DISCLOSURE ALONG WITH THE CERTIFICATE AND COPY OF WEALTH TAX RETURN OF SMT. NIRMALA HEMRAJ JETHANI. IT WAS NOT ACCEPTED BY THE AO ON THE GROUND THAT THE JEWELLERY DISCLOSED UNDER VDIS DOES NOT MATCH WITH THE JEWELLERY FOUND AT THE TIME OF SEARCH. MERELY BECAUSE THE JEWELLERY DISCL OSED UNDER VDIS DID NOT MATCH WITH THE JEWELLERY FOUND AT THE TIME OF SEARCH DOES NOT MEAN THAT THE JEWELLERY FOUND AT TH E TIME OF SEARCH IS UNEXPLAINED JEWELLERY INASMUCH AS IT I S NOT THE CASE OF THE REVENUE THAT THE JEWELLERY WHICH WAS DISCLOS ED BY THE ASSESSEES WIFE UNDER VDIS AND IN THE RETURN OF WE ALTH TAX WAS OVER AND ABOVE FOUND AT THE TIME OF SEARCH. SINCE NO OTHER JEWELLERY WAS FOUND DURING THE COURSE OF SEARCH AND KEEPING IN VIEW THAT THE AO HAS ACCEPTED THE GOLD JEWELLERY IN TOTO AND DIAMOND JEWELLERY VALUED AT RS.40,000/- WE ARE OF THE VIEW THAT THE ADDITION OF THE REMAINING AMOUNT OF DIAMO ND JEWELLERY OF RS.3,80,374/- IS NOT SUSTAINABLE AN D ACCORDINGLY ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 12 THE SAME IS DELETED. THE GROUND TAKEN BY THE ASSES SEE IS, THEREFORE, ALLOWED. 17. GROUND NO.5 IS AGAINST THE LEVY OF INTEREST U/S 234A,234B AND 234C. 18. AFTER HEARING RIVAL PARTIES AND PERUSING THE MA TERIAL AVAILABLE ON RECORD AND IN THE ABSENCE OF ANY PLEA, WE DIRECT THE AO TO ALLOW CONSEQUENTIAL RELIEF IN RESPECT OF LEVY OF INTEREST CHARGED U/S 234A, 234B AND 234C OF THE ACT. THE GROUND TAKEN BY THE ASSESSEE IS, THEREFORE, PARTLY ALLOWED. ITA NO.4631/MUM/2008 (BY MR.BHARAT HEMRAJ JETHANI) 19. GROUND NO.1 IS AGAINST THE VALIDITY OF THE ORD ER PASSED BY THE AO AND GROUND NO.2 IS THE GENERAL GROUND. 20. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE ABOVE GROUNDS WHICH WAS NOT OBJE CTED TO BY THE LD.DR. 21. THAT BEING SO AND IN THE ABSENCE OF ANY OTHER S UPPORTING MATERIALS PLACED ON RECORD BY THE LD. COUNSEL FOR T HE ASSESSEE, THE GROUND NOS.1 AND 2 TAKEN BY THE ASSESSEE ARE, T HEREFORE, REJECTED BEING NOT PRESSED. ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 13 22. GROUND NO.3 IS AGAINST THE SUSTENANCE OF ADDIT ION OF UNEXPLAINED INVESTMENTS IN DIAMOND JEWELLERY RS.4,8 6,865/-. 23. THE BRIEF FACTS OF THE ABOVE ISSUE ARE THAT THE DIAMOND JEWELLERY OF THE VALUE OF RS.4,86,865/- WAS FOUN D DURING THE COURSE OF SEARCH. THE AO AFTER TAKING INTO ACCOUN T THE STATUS OF THE FAMILY, PAST SAVINGS AND MARRIAGE GIFTS ETC. ACCEPTED THE DIAMOND JEWELLERY OF THE VALUE OF RS.30,000/- AS EXPLAINED INVESTMENT BY THE ASSESSEE AND TREATED TH E BALANCE INVESTMENT IN DIAMOND JEWELLERY RS.4,56,865/- (4868 65- 30000) AS UNEXPLAINED INVESTMENT OUT OF UNDISCLOSE D SOURCES. ON APPEAL, THE LD. CIT(A) WHILE AGREEING WITH THE V IEWS OF THE AO CONFIRMED THE ADDITION MADE BY THE AO. 24. AT THE TIME OF HEARING, BOTH THE PARTIES HAVE A GREED THAT THE PLEA TAKEN BY THEM IN THE APPEAL OF SHRI HEMRA J K JETHANI (SUPRA) MAY BE CONSIDERED WHILE DECIDING THE ABOVE GROUND OF APPEAL. 25. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND THAT IN THE CHART REPRODUCED IN PARAGRAPH 14 OF T HIS ORDER IT WAS STATED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE WIFE OF THE ASSESSEE SMT.AASHNA B JETHANI RECEIVED 90 GRM. DIAMOND JEWELLERY VALUED AT RS.1,73,045/- OUT OF 699.850 GR. ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 14 JEWELLERY FOUND AT THE TIME OF SEARCH. IT WAS ALSO FURTHER EXPLAINED THAT THE ABOVE DIAMOND JEWELLERY WAS REC EIVED BY HER AT THE TIME OF MARRIAGE AND OTHER OCCASIONS. CO NSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND KEEPING IN VIEW THAT THE ASSESSEES WIFE HAS RECEI VED DIAMOND JEWELLERY AT THE TIME OF HER MARRIAGE AND ON OTHER OCCASIONS WHICH WAS NOT CONTROVERTED BY THE REVENUE, WE ARE O F THE VIEW THAT THE ADDITION MADE BY THE AO RS.4,56,865/- AND SUSTAINED BY THE LD.CIT(A) IS NOT SUSTAINABLE AND ACCORDINGLY THE SAME IS DELETED. THE GROUND TAKEN BY THE ASSESSEE IS, THER EFORE, ALLOWED. 26. GROUND NO.4 IS AGAINST THE LEVY OF INTEREST U/S 234A,234B AND 234C. 27. AFTER HEARING RIVAL PARTIES AND PERUSING THE MA TERIAL AVAILABLE ON RECORD AND IN THE ABSENCE OF ANY PLEA , WE DIRECT THE AO TO ALLOW CONSEQUENTIAL RELIEF IN RESPECT OF LEVY OF INTEREST CHARGED U/S 234A, 234B AND 234C OF THE ACT. THE GROUND TAKEN BY THE ASSESSEE IS, THEREFORE, PARTLY ALLOWED. ITA NO.4632/MUM/2008 (BY.MRS.DARSHNA K.JETHANI) 28. GROUND NO.1 IS AGAINST THE VALIDITY OF THE ORD ER PASSED B BY THE AO AND GROUND NO.2 IS THE GENERAL GROUND. ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 15 29. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE ABOVE GROUNDS WHICH WAS NOT OBJE CTED TO BY THE LD.DR. 30. THAT BEING SO AND IN THE ABSENCE OF ANY OTHER S UPPORTING MATERIALS PLACED ON RECORD BY THE LD. COUNSEL FOR T HE ASSESSEE, THE GROUND NOS.1 AND 2 TAKEN BY THE ASSESSEE ARE, T HEREFORE, REJECTED BEING NOT PRESSED. 31. GROUND NO.3 IS AGAINST THE SUSTENANCE OF ADDIT ION OF DIAMOND AND GOLD JEWELLERY OF RS.5,61,000/-. 32. BRIEF FACTS OF THE ABOVE ISSUE ARE THAT THE AO OBSERVED THAT THE DIAMOND JEWELLERY OF RS.4,38,377/- WAS FO UND. THE ASSESSEE HAS NO SATISFACTORY EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISITION OF THE DIAMOND JEWELLERY. WHI LE EXPLAINING THE SOURCE OF DIAMOND/GOLD JEWELLERY, SHRI HEMRAJ E XPLAINED THAT PART OF THE JEWELLERY FOUND IS BY WAY OF WILL OF LATE SMT. LACHMI UKARMAL MANGTANI. THE AO FURTHER OBSERVED THAT NEITHER WILL IS REGISTERED NOR IT IS NOTARISED AND THE SAME WAS NOT FOUND DURING THE SEARCH. FURTHER IN THE S TATEMENT THE ASSESSEE HAS NOT STATED THAT PART OF THE JEWELLERY FOUND IS BY WAY OF WILL. THUS, ACCORDING TO THE AO IT IS AFTER THOUGHT AND NOT RELIABLE AND HENCE THE AO TREATED THE DIAMOND J EWELLERY OF ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 16 RS.4,38,377/- AS UNEXPLAINED INVESTMENT. BESIDE TH IS, THE AO ALSO TREATED GOLD JEWELLERY OF RS.1,22,580/- AS UN EXPLAINED INVESTMENT OUT OF GOLD JEWELLERY RS.6,38,107/- FOUN D AT THE TIME OF SEARCH AND ADDED THE SAME TO THE TOTAL INCO ME OF THE ASSESSEE. THUS THE TOTAL UNEXPLAINED JEWELLERY WAS ADDED AT RS.5,61,000/-. ON APPEAL, THE LD.CIT(A) IN THE ABSE NCE OF ANY CONVINCING REASONS UPHELD THE ADDITION MADE BY THE AO. 33. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE WHILE REFERRING TO THE CHART FILED IN THE CASE OF S HRI HEMRAJ K.JETHANI SUBMITS THAT OUT OF TOTAL DIAMOND OF JEW ELLERY FOUND WEIGHING 699.850 GRM., THE JEWELLERY 270.050 BELON GS TO SMT. DARSHANA K. JETHANI. IT WAS FURTHER EXPLAINED BY THE ASSESSEE THAT 184.100 GRM. WAS RECEIVED BY WAY OF WILL (SUPRA), JEWELLERY 85.950 GRM. WAS RECEIVED AS A G IFT ON DIFFERENT OCCASIONS. HE FURTHER SUBMITS THAT THE C OPY OF THE WILL OF LATE SMT. LACHMI UKARMAL MANGTANI IS APPEARING AT PAGES 65 TO 68 OF THE ASSESSEES PAPER BOOK. HE, THEREFO RE, SUBMITS THAT THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) BE DELETED. 34. ON THE OTHER HAND, THE LD.DR SUPPORTS THE ORDER OF THE AO AND THE LD. CIT(A). ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 17 35. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND THAT THERE IS NO DISPUTE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WHILE EXPLAINING THE SOURC E OF JEWELLERY INTERALIA STATED THAT MRS. DARSHANA K. J ETHANI HAS RECEIVED JEWELLERY OF GOLD AND DIAMOND BY WAY OF WILL OF SMT.LACHMI UKARMAL MANGTANI, HER GRANDMOTHER. IN SUPPORT, HE ALSO PLACED ON RECORD THE COPY OF THE SAID WILL FOR VERIFICATION AND ALSO STATED THAT THE SAID WILL WAS EXECUTED IN THE PRESENCE OF DR.MURLI M. RATNANI (PAN- ADDRESS) . IT WAS FURTHER STATED THAT THE SAID DOCTOR IS A INCOME TAX PAYEE AND PRACTICING IN THANE CITY ITSELF AND READY TO VISIT YOUR OFFICE FOR A STATEMENT TO PROVE THE GENUINENESS OF THE SAID W ILL. IT WAS ALSO STATED THAT THE TRUE COPY OF THE WILL WAS N OT FOUND AT THE TIME OF SEARCH AS IT WAS LYING WITH THE EXECUTORS OF THE WILL. IT WAS, THEREFORE, SUBMITTED THAT THE JEWELLERY FOUND AT THE TIME OF SEARCH BE TREATED AS EXPLAINED. HOWEVER, THE AO MERELY ON THE GROUND THAT NEITHER THE WILL IS REGISTERED NOR IT IS NOTARISED, THE SAME WAS NOT FOUND AT THE TIME OF SE ARCH AND NOTHING WAS STATED IN THE STATEMENT RECORDED U/S 132(4) REJECTED THE PLEA OF THE ASSESSEE THAT IT IS AFTER THOUGHT. SINCE THE ASSESSEE HAS FILED THE COPY OF THE WILL WITH AN EXPLANATION THAT THE SAME WAS LYING WITH THE EXECUTORS OF THE W ILL AND THE ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 18 ASSESSEE WAS READY TO PRODUCE ONE OF THE EXECUTORS I.E. DR.MURLI M. RATNANI, THEREFORE, WE ARE OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN REJECTING THE VALID DOCUMENT OF WILL FILED BY THE ASSESSEE WITHOUT RECORDING ANY STATEMENT OF DR.MURLI M.RATNANI. IN THIS VIEW OF THE MATTER AND KEEPING IN VIEW THAT THE AO HAS ACCEPTED PART OF THE JEWELLERY AS EXPL AINED AND NO CONTRARY MATERIAL HAS BEEN PLACED ON RECORD BY THE REVENUE TO SHOW THAT THE PART OF THE EXPLANATION GIVEN BY TH E ASSESSEE WAS FOUND TO BE FALSE AND UNTRUE, WE ARE OF THE V IEW THAT THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD.CI T(A) IS NOT SUSTAINABLE AND ACCORDINGLY THE SAME IS DELETED. 36. GROUND NO.4 IS AGAINST THE LEVY OF INTEREST U/S 234A,234B AND 234C. 37. AFTER HEARING RIVAL PARTIES AND PERUSING THE MA TERIAL AVAILABLE ON RECORD AND IN THE ABSENCE OF ANY PLEA , WE DIRECT THE AO TO ALLOW CONSEQUENTIAL RELIEF IN RESPECT OF LEVY OF INTEREST CHARGED U/S 234A, 234B AND 234C OF THE ACT. THE GROUND TAKEN BY THE ASSESSEE IS, THEREFORE, PARTLY ALLOWED. ITA NO.4630 TO 4632/MUM/2008 (ASSESSMENT YEAR: 2005-06) 19 38. IN THE RESULT, ALL THE APPEALS ARE PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 18TH APRIL, 2012. SD SD (B.RAMAKOTAIAH) (DINESH KUMAR AGARWAL) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI, 18TH APRIL, 2012 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI