ASHWIN S. DANI, MUMBAI V. ACIT 10(3), MUMBAI

ITA 5040/MUM/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3600 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 27-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOMANATH S UKKALI
• Assessee Lawyers: H N MOTIWALLA; D H SHAH
• Keywords: Gift; Additional evidence
• Section: 68; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 5040/MUM/2011 (ASSESSMENT YEAR 2008 - 2009) ASHWIN S. DANI, HOME VILLA, 48, KRISHNA SANGHI PATH, GAMDEVI, MUMBAI 400 007. VS. ACIT - 10(3), MUMBAI ( APPELLANT ) .. ( RESPONDENT ) PAN NO.AAAPD5464H ASSESSEE BY : SHRI H.N. MOTIWALLA & SHRI D.H. SHAH DEPARTMENT BY : SHRI SOMANATH S. UKKALI DATE OF HEARING : 14.01.2016 DATE OF PRONOUNCEMENT : 02 .03.2016 O R D E R PER B.R. BASKARAN, AM : - THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 08 - 04 - 2011 PASSED BY LD CIT(A) - 22, MUMBAI ON THE FOLLOWING ISSUES: - (A) ADDITION MADE U/S 68 OF THE ACT. (B) ADDITION MADE TOWARDS LOW DRAWINGS. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS THE VICE CHAIRMAN AND MANAGING DIRECTOR OF M/S ASIAN PAINTS LTD. THE AO NOTICED THAT THE ASSESSEE HAS CREDITED A SUM OF RS.2,70,000/ - AND THE SAME WAS CLAIMED TO BE SALE PROCEEDS OF JEWELLERY. THE ASSESSEE SUBMITTED T HAT HE HAD INHERITED JEWELLERIES FROM HIS FATHER AND THE SAME WAS SOLD BY HIM. HOWEVER, THE ASSESSEE COULD NOT FURNISH COPY OF ANY WILL OR SALE BILLS. EVEN THOUGH THE ASSESSEE FURNISHED COPIES OF VALUATION CERTIFICATE OBTAINED IN CONNECTION WITH WEALTH T AX RETURNS FILED FOR AY 1981 - 82 OF HIS FATHER AND THE HUF STATUS OF THE FATHER, YET THE AO REJECTED THE CLAIM OF SALE OF JEWELLERY AND ACCORDINGLY ASSESSED THE SAME AS INCOME OF THE ASSESSEE U/S 68 OF THE ACT. IT IS PERTINENT TO NOTE THAT THE ASSESSEE APP EARS TO HAVE CHANGED THE STAND AND HAD SAID THAT THE JEWELLERIES WERE RECEIVED AS GIFT AND IN SUPPORT 2 ASHWIN S. DANI ITA NO. 5040/MUM/2 011 OF THE SAME, HE FILED A GIFT LETTER ADDRESSED TO HIM AND ALSO SIGNED BY HIM AS KARTHA OF HUF. THE SAID LETTER WAS ALSO NOT ACCEPTED BY THE AO. THE LD CIT (A) ALSO CONFIRMED THE SAME. 3. WE HEARD THE PARTIES ON THIS ISSUE. BEFORE US IDENTICAL SUBMISSIONS WERE MADE. THE LD A.R INVITED OUR ATTENTION TO THE COPY OF SALE BILL PERTAINING TO THE JEWELLERIES, WHICH WAS FURNISHED AS ADDITIONAL EVIDENCE, AND SUBMITTED THAT THE ASSESSEE COULD OBTAIN SALE CONFIRMATION LETTER ONLY RECENTLY AND ACCORDINGLY PRAYED FOR ITS ADMISSION. SINCE THE AO, INTER ALIA, HAS REJECTED THE CLAIM FOR WANT OF SALE BILL, WE ADMIT THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE. WE FURTHER NOTICE THAT THE SAID SALE BILL CONSISTS OF SALE OF TWO DIAMOND RINGS. FROM THE VALUATION CERTIFICATE FURNISHED BY ASSESSEES FATHER DURING THE COURSE OF WEALTH TAX PROCEEDINGS, WE NOTICE THAT ONE RING BELONGED TO HIM IN HIS INDIVIDUAL STATUS AN D ANOTHER RING BELONGED TO HIS HUF STATUS. SINCE THE SE DETAILS AS WELL AS THE SALE BILL REQUIRE VERIFICATION AT THE END OF THE AO, WE ARE OF THE VIEW THAT THIS ISSUE SHOULD BE EXAMIN ED AFRESH AT THE END OF THE AO. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) PASSED ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE SAME AFRESH. THE ASSESSEE, IF CONSIDERED TO BE NECESSARY, MAY OBTAIN CONFIRMATION LETTERS FROM OTHER FAMILY MEMBERS TO SUBSTANTIATE HIS CLAIM OF IN HERITANCE /GIFT. THE ASSESSING OFFICER, IF HE CONSIDERS IT NECESSARY, MAY EXAMINE THE PERSON WHO HAD PURCHASED THE JEWELLERY AS WELL AS THE FAMILY MEMBER(S) WHO FURNISH ED CONFIRMATION LETTERS. AFTER EXAMINING THE MATTER, THE AO MAY TAKE APPROPRIATE DECISI ON IN ACCORDANCE WITH THE LAW. 4. THE NEXT ISSUE RELATES TO THE ADDITION MADE BY THE AO ON ACCOUNT OF LOW CASH WITHDRAWALS TOWARDS HOUSE HOLD EXPENSES. THE ASSESSEE HAD WITHDRAWN A SUM OF RS.1,80,000/ - ONLY BY WAY OF CASH TOWARDS HOUSEHOLD EXPE NSES. IT IS NOTICED THAT THE ASSESSEE HAS EMPLOYED 3 DRIVERS AND 4 SERVANTS. SINCE THE ASSESSEE WAS IN OCCUPATION OF FLAT HAVING AREA OF 3000 SQ.FT. LOCATED IN A POSH AREA AND SINCE THE WITHDRAWALS WERE LOW, THE AO TOOK THE VIEW THAT THE WITHDRAWAL OF CA SH OF RS.1,80,000/ - WAS INSUFFICIENT. 3 ASHWIN S. DANI ITA NO. 5040/MUM/2 011 THE AO NOTICED THAT IN AY 2005 - 06, THE THEN ASSESSING OFFICER HAD ESTIMATED THE SALARY OF EMPLOYEES AT RS.5,000/ - PER MONTH PER PERSON AND ACCORDINGLY MADE THE ADDITION. TAKING THE SAME AS BASIS, THE AO DETERMINED TH E SALARY OF PER PERSON PER MONTH AT RS.6,500/ - AND MADE AN ADDITION OF RS.5,46,000/ - . THE LD CIT(A) ALSO CONFIRMED THE SAME. 5. BEFORE US, THE LD A.R SUBMITTED THAT THE ADDITION MADE BY THE AO IN AY 2005 - 06 HAS BEEN REDUCED BY THE TRIBUNAL TO RS.2,00 ,000/ - . HE FURTHER SUBMITTED THAT THE TAX AUTHORITIES HAVE FAILED TO TAKE INTO ACCOUNT THE AGGREGATE WITHDRAWALS MADE BY ALL THE FAMILY MEMBERS. INVITING OUR ATTENTION TO PAGE 19 OF THE PAPER BOOK, THE LD A.R SUBMITTED THAT ALL THE FAMILY MEMBERS HAVE WI THDRAWN A SUM OF RS.28,20,000/ - IN AGGREGATE AND THE SAME IS SUFFICIENT TO MEET THE SALARY EXPENSES OF THE DRIVERS AND SERVANTS. 6. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEE DID NOT SUBSTANTIATE THE CLAIM BY FURNISHING THE DETAILS OF ALL FAMILY MEMBERS, NATURE OF EXPENSES INCURRED BY THEM TOWARDS EDUCATION, MEDICAL AND OTHER HOUSEHOLD EXPENSES. HE SUBMITTED THAT THE ADDITION MADE BY THE AO NEEDS TO BE SUSTAINED, SINCE THE ASSESSEE HAS NOT PROPERLY SUBSTANTIATED HIS CLAIM. 7. WE HEAR D THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. NO DOUBT, THERE IS AGGREGATE CASH WITHDRAWAL OF RS.28.20 LAKHS MADE BY CERTAIN FAMILY MEMBERS. HOWEVER, IT WAS NOT SHOWN AS TO WHETHER THEY ARE ALL RESIDING IN THE SALE FLAT AS JOINT FAMILY. FURTHER TH E DETAILS OF THE CHILDREN AND THEIR EDUCATION AND OTHER EXPENSES HAVE NOT BEEN FURNISHED. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE AO NEEDS TO BE PARTIALLY SUSTAINED. IN AY 2005 - 06, THE TRIBUNAL NOTICED THAT THE FAMILY M EMBERS HAVE WITHDRAWN A SUM OF RS.22.39 LAKHS IN CASH IN AGGREGATE, WHEREAS DURING THE YEAR UNDER CONSIDERATION, THE AGGREGATE WITHDRAWALS WORK OUT TO RS.28.20 LAKHS. CONSIDERING THE COST OF INFLATION, WE ARE OF THE VIEW THAT THE ADDITION MAY BE SUSTAINED AT THE SAME LEVEL OF RS.2.00 LAKHS AS IT WAS MADE IN AY 2005 - 06. ACCORDINGLY, WE MODIFY THE ORDER OF LD CIT(A) 4 ASHWIN S. DANI ITA NO. 5040/MUM/2 011 PASSED ON THIS ISSUE AND DIRECT THE AO TO SUSTAIN THE ADDITION TO THE EXTENT OF RS.2.00 LAKHS. 8. IN THE RESULT, THE APPEAL FILED BY THE AS SESSEE IS TREATED AS PARTLY ALLOWED. ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 02 . 0 3.2016. SD/ - SD/ - (AMARJIT SINGH) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 02 / 0 3 /20 16 SR. P.S SSL COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI