NARAYAN P. BELANI, MUMBAI V. DCIT CEN CIR 36, MUMBAI

ITA 491/MUM/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3155 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 23-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VINITA MENON
• Assessee Lawyers: G T KA R M AN I
• Keywords: Unexplained investment; Gift; Search and seizure; Salary income; Additional evidence
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B , MUMBAI , , BEFORE SHRI D KARUNAKAR RAO , ACCOUNTANT MEMBER AND SHRI AMIT SHU KLA , JUDICIAL MEMBER IT A NO. : 491 /MUM/20 1 2 ( A SSESSMENT Y EAR: 200 8 - 0 9 ) NARAYAN P BELANI , 21 VEEMA BEEMA. GROUND FLOOR, OPP BANDRA RLY STN. BANDRA (WEST), MUMBAI - 400 05 0 PAN : A EUPB 0922 J VS D CIT - CENTRAL CIRCLE 3 6 , AAYAKAR BHAVAN, M K MARG, CHURCHGATE, MUMBAI - 400 020 ( APPLICANT ) (RESPONDENT) APPELLANT BY : SHRI G T KA R M AN I RESPONDENT BY : S MT VINITA MENON /DATE OF HEARING : 24 - 0 8 - 201 6 / DATE OF PRONOUNCEMENT : 24 - 0 8 - 201 6 ORDER : . . : PER AMIT SHUKLA , JM : T HE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 11.11.2 011 , PASSED BY LD. CIT(APPEALS) 4 1 , MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 14 3 (3) FOR THE ASSESSMENT YEAR 200 8 - 0 9 ON THE FOLLOWING GROUNDS: - 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LEARNED COMMISS IONER OF INCOME - TAX (APPEALS) , ERRED IN CONFIRMING THE INTEREST INCOME OF RS.1,52,730/ - . NARAYAN P BELANI IT A NO. 4 91 /MUM/201 2 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), ERRED IN CONFIRMING THE UNEXPLAINED JEWELLERY OF RS .1,71,844/ - . 3. APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE, ALL OR ANY OF THE GROUNDS OF APPEAL, AT ANY TIME. 2. THE FACTS IN BRIEF ARE THAT, THE ASSESSEE IS AN INDIVIDUAL AND IS DIRECTOR IN COMPANY PBA INFRASTRUCTURE LTD. A SEARCH AND SEIZU RE OPERATION WAS CARRIED OUT UNDER SECTI O N 132 (1) IN PBA GROUP OF CASES , INCLUDING ASSESSEE ON 06.09.2007. DURING THE YEAR UNDER CONSIDERATION, WHICH IS THE YEAR OF SEARCH, THE ASSESSEE HAD SHOWN HIS INCOME FROM SALARY AND INCOME FROM OTHER SOURCES. TH E AO NOTED THAT, DURING THE COURSE OF SEARCH, CERTAIN JEWELLERY WERE FOUND, DETAILS OF WHICH ARE AS UNDER: - PLACE VALUE OF JEWELLERY RESIDENCE OF N P BELANI 58,475 LOCKER NO.67, OF ORIENTAL BANK OF N P BELANI 6,63,092 LOCKER NO.81, ALLAHABAD BANK OF S N BELANI 1,71,844 TOTAL 8,93,411 IN THE STATEMENT RECORDED UNDER SECTION 132( 4 ), THE ASSESSEE HAD THEN OFFERED AN AMOUNT OF RS.1,72,000/ - AS UNDISCLOSED INVESTMENT ON ACCOUNT OF JEWELLERY FOUND. HOWEVER, IN THE RETURN OF INCOME , NO SUCH INCOME WAS OFFERED. THE AO FURTHER NOTED THAT THE, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION WITH REGARD TO THE SOURCE OF ACQUISITION OF THE JEWELLERY , A CCORDINGLY, HE TREATED THE AMOUNT OF RS.1,78,844/ - AS INCOME OF THE A SSESSEE UNDER SECTION 69B. THAT APART, AN ADDITION OF RS.1,52,730/ - ON ACCOUNT OF INTEREST INCOME WAS ALSO MADE BY THE AO. THE ASSESSEE HAD SHOWN INTEREST INCOME AT RS.1,52,730/ - UNDER THE HEAD INCOME FROM OTHER SOURCES FOR WHICH EQUAL AMOUNT NARAYAN P BELANI IT A NO. 4 91 /MUM/201 2 3 OF EXPENSES OF RS.1,52,730/ - TO EARN THIS INCOME WAS ALSO DEBITED. HOWEVER, BEFORE THE AO, NO EVIDENCE IN RESPECT OF SUCH INCOME COULD BE FILED , HENCE , THE AO MADE THE ADDITION. 3. BEFORE THE CIT(A) ALSO AS NOTED BY LD. CIT(A) NO PROPER EXPLANATION WITH REGARD TO BO TH THE ADDITIONS WERE G IVEN BY THE ASSESSEE . AS REGARDS THE ADDITION ON ACCOUNT OF INTEREST INCOME, THE OBSERVATION AND FINDING OF THE CIT(A) READS AS UNDER: - 2.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE AO AND FACTS OF THE CASE CAREFULLY. IT IS NOTICED THAT THE ASSESSEE HAS SHOWN INTEREST INCOME OF RS.1,52,730/ - AND ALSO CLAIMED EXPENSES OF THE SAME AMOUNT TO EARN THIS INCOME. NO EVIDENCE WAS SUBMITTED BEFORE THE AO TO PROVE THIS CLAIM. EVEN IN THE APPELLANT PROCEEDINGS, THE APPE LLANT HAS FAILED TO SUBMIT ANY EVIDENCE TO PROVE THAT ANY EXPENDITURE WAS INCURRED TO EARN INTEREST ON FDS. IN ABSENCE OF ANY EVIDENCE, THE CLAIM OF THE APPELLANT IS NOT ACCEPTED, HENCE REJECTED. THE GROUND OF APPEAL IS DISMISSED. SO FAR AS THE ADDITI ON ON ACCOUNT OF UNEXPLAINED JEWELLERY, THE ASSESSEES SUBMISSIONS WAS THAT, THE SAID JEWELLERY BELONGS TO ASSESSEES DAUGHTER , DEEPA WHO IS WORKING FOR THE LAST 12 YEARS AND IS HAVING SALARY INCOME. THE CONFIRMATION FROM HIS DAUGHTER WAS ALSO FILED. HOWEV ER, THE LD. CIT(A) HAS CONFIRMED THE SAID ADDITION AFTER OBSERVING AND HOLDING AS UNDER: - I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE AO AND FACTS OF THE CASE THAT DURING THE SEARCH AND SEIZURE OPERATION, SOME DISCREPANCIES IN THE JEWELLERY WERE FOUND WHICH WERE CONFRONTED TO THE ASSESSEE. IN THE STATEMENT RECORDED U/S 132(4), THE ASSESSEE HAS DECLARED THIS JEWELERY OF RS.1,72,000/ - AS NARAYAN P BELANI IT A NO. 4 91 /MUM/201 2 4 UNEXPLAINED INVESTMENT AND OFFERED FOR TAXATION. HOWEVER, IN THE RETURN FILED, IT WAS NOT DECLARE D AND ARGUED THAT THIS JEWELLERY WAS BELONGING TO HIS DAUGHTER BUT NO PURCHASE BILL OR ANY OTHER EVIDENCE TO PROVE THAT IT WAS BELONGING TO HIS DAUGHTER WAS SUBMITTED BEFORE THE AO OR BEFORE ME. SINCE THE APPELLANT HAS DECLARED THIS JEWELLERY IN THE STATEM ENT RECORDED U/S 132(4) AS UNEXPLAINED INVESTMENT, THEREFORE, IN THE STATEMENT RECORDED U/S 132(4) AS UNEXPLAINED INVESTMENT, THEREFORE, THE ADDITION MADE BY THE AO IS UPHELD AND GROUND OF APPEAL IS DISMISSED. 4. AT THE TIME OF HEARING, NONE APPEAR ED O N BEHALF OF THE ASSESSEE . H OWEVER, ON THE PERUSAL OF THE FILE, IT IS SEEN THAT THE ASSESSEE HAS FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 29, WHEREBY, AFFIDAVIT OF ASSESSEES DAUGHTER , DEEPA N BILLANI HAS BEEN FILED WHEREIN, SHE HAS AFFIRMED ON O A T H THAT THE SAID AMOUNT OF JEWELLERY BELONGS TO HER WHICH HAS BEEN ACQUIRED OUT OF HER SALARY INCOME AND GIFTS . 5. AFTER CONSIDERING THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER AS WELL AS THE MATERIAL PLACED BEFORE US, WE FIND THAT , SO FAR AS THE ADDITION ON ACCOUNT OF INTEREST OF RS.1,52,750/ - IS CONCERNED, THE ASSESSEE HAS BEEN UNABLE TO SUBSTANTIATE THAT FOR EARNING OF THE INTEREST INCOME, AN EQUAL AMOUNT OF EXPENDITURE, THAT IS, RS.1,52,750/ - HAS BEEN INCURRED. IF ASSESSEE MAKES ANY CLAIM FOR EARNING OF THE INCOME FOR WHICH DEDUCTION IS BEING CLAIMED, THE N ONUS LIES HEAVILY UPON THE ASSESSEE TO SHOW THAT SUCH AN EXPENSE HAD BEEN GENUINELY INCURRED FOR THE EARNING OF THE INCOME . THERE IS CLEAR CUT FINDING BY BOTH A UTHO R I TIES THAT NO SUCH EVIDENCE HAS BEEN FILED TO PROVE THAT ANY EXPENDITURE HAS BEEN INCURRED TO EARN THE INTEREST WHICH IS EARNED MAINLY ON FDRS. NARAYAN P BELANI IT A NO. 4 91 /MUM/201 2 5 THUS, THE FINDING OF THE CIT(A) ON THIS SCORE IS AFFIRMED AND GROUND NO.1 IS THUS DISMISSED. 6. AS REGARDS THE ADDITION ON ACCOUNT UNEXPLAINED INVESTMENT IN JEWELLERY FOR SUM OF RS.1,71,844/ - , WE FIND THAT, ASSESSEE HAS BEEN CONSISTENTLY PLEADING THAT THE SAID JEWELLERY BELONGS TO HIS DAUGHTER , DEEPA WHO HAS ACQUIRED THIS JEWELLERY FROM HER OWN EARNING AND G IFT RECEIVED FROM HER IN - LAWS. NOW, BEFORE US, AN AFFIDAVIT GIVING HER AVERMENT ON OATH HAS BEEN FILED IN SUPPORT OF SUCH A CONTENTION. THUS, IN THE INTEREST OF JUSTICE, WE FEEL, THIS MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO , WHO SHALL EXAMINE THE CONTENTS OF TH E AVERMENTS MADE IN THE AFFIDAVIT AND ALSO EXAMINED THE O TH ER EVIDENCE OR F ACTS ON RECORD TO SHOW THAT JEWELLERY BELONG S TO ASSESSEES DAUGHTER. THUS, THIS MATTER IS RESTORED BACK TO THE FILE FOR DECIDING IT AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSES SEE TO PRESENT ITS CASE. ACCORDINGLY, GROUND NO.2 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH AUGUST , 2016. SD/ - SD/ - ( ) ( ) ( D KARUNAKAR RAO ) ( AMIT SHUKLA ) ACCOU NTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 24 TH AUGUST , 2016 NARAYAN P BELANI IT A NO. 4 91 /MUM/201 2 6 / COPY TO: - 1 ) / THE APPLICANT . 2 ) / THE RESPONDENT. 3) THE CIT (A) - 4 1 , MUMBAI . 4 ) THE COMMISSIONER OF INCOME TAX - CENTRAL - III/ CONCERNED ___, M UMBAI . 5 ) , , / THE D.R. B BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *C HAVAN, SR.PS