Shri Lokesh Kothari, JAIPUR V. ACIT, UDAIPUR

ITA 511/JODH/2010

• Counselvise Citation: [2012] 129 COUNSELVISE.COM (IT) 9959 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-07-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 14-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBHASH CHANDRA
• Keywords: Unexplained investment; Gift; Search and seizure; Salary income
• Section: 143(3); 153A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.K. SAINI ) ITA NOS. 511 & 512/JODH/2010 ASSTT. YEAR : 2002-03 & 2005-06 PAN: AOBPK 2353 R SHRI LOKESH KOTHARI VS. THE ACIT STREET NO. 5, R.K. COLONY CENTRAL CIRCLE- 1 NIMBAHERA UDIAPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. PARWAL DEPARTMENT BY : SHRI SUBHASH CHANDRA DATE OF HEARING : 24.07.2012. DATE OF PRONOUNCEMENT : 22.08.2012 ORDER DATED : 22/08/2012. PER R.K. GUPTA, J.M. BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST TWO DIFFERENT ORDERS OF THE LD.CIT(A) CENTRAL, JAIPUR DATED 26-08-2010 FOR THE ASSESSMENT YEARS 2002-03 AND 2005-06 RESPECTIVELY. ITA NO. 511/ JODH/2010 A.Y. 2002-03 2.1 IN APPEAL FOR THE ASSESSMENT YEAR 2002-03, THE ASSESSEE IS OBJECTING AS TO CONFIRMING THE ADDITION OF RS. 1.15 LACS ON ACCOUNT OF UNEXPLAINED INVESTMENT IN RESIDENTIAL HOUSE PROPERTY. 2.2 THE BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 1-03-20 05. THE ASSESSEE WAS WORKING AS MANAGER OF ASHOK JAIN GROUP AND LOOKING AFTER THE E NTIRE ADMINISTRATIVE AND BUSINESS OF MINING RELATED WORK. THE AO NOTICED THAT THE ASSESS EE HAS PURCHASED A PLOT OF LAND 2 MEASURING 800 SQ.FT IN ADARSH COLONY AS PER THE SA LE DEED DATED 07-11-2001. THE PURCHASE VALUE OF THE PLOT WAS RS. 2.00 LACS AS PER SALE DEED WHEREAS AT PAGE 41 AND 42 OF ANNEXURE A-1 OF PANCHNAMA DATED 11-03-2005 KACHA A GREEMENT DATED 23-08-2001 WAS SEIZED WHICH INDICATED THE PURCHASED VALUE OF THE P LOT AT RS. 3.15 LACS. ON BEING CONFRONTED, THE ASSESSEE IN HIS STATEMENT SURRENDER ED A SUM OF RS. 3.15 LACS. HOWEVER, THIS AMOUNT WAS NOT SHOWN IN THE RETURN FILED IN RE SPONSE TO NOTICE U/S 153A. ON BEING ASKED, IT WAS SUBMITTED THAT THIS AMOUNT WAS PAID F ROM THE PAST SAVINGS AND IS VERIFIABLE FROM HIS SAVINGS FROM SALARY AND BONUS. THE FUND FL OW STATEMENT WAS ALSO FURNISHED IN SUPPORT OF THE SUBMISSIONS. AFTER EXAMINING THE FUN D FLOW STATEMENT, THE AO ACCEPTED A SUM OF RS. 3,86,400/- AVAILABLE UPTO 31-03-1998 INS TEAD OF RS. 4,71,536/- AS SHOWN BY THE ASSESSEE UPTO THIS DATE. THIS WAS ACCEPTED BY THE AO WHILE PASSING THE ASSESSMENT FOR THE ASSESSMENT YEAR 1999-2000. HOWEVER, WHILE COMPLETING THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION, THE AO HAS NOT ACCEPTED T HE FUND FLOW STATEMENT AND ACCORDINGLY HE HELD THAT AN AMOUNT OF RS. 1.15 LACS PAID BY THE ASSESSEE WAS FROM UNDISCLOSED SOURCES AND THE SAME WAS ALSO ADMITTED BY HIM DURING SEARCH PROCEEDINGS. 2.3 THE LD. CIT(A) ALSO CONFIRMED THE ACTION OF THE AO BY MAKING HIS OBSERVATION IN PARA 2.3 ONWARDS. 2.4 THE COUNSEL OF THE ASSESSEE STATED THAT THE FUN D FLOW STATEMENT HAS BEEN ACCEPTED BY THE AO HIMSELF AND THEREFORE, IF THE AO HAS ACCE PTANCE OF RS. 3.86 LACS AGAINST RS. 4,76,900/- THEN ALSO NO ADDITION IS WARRANTED. NO D OUBT THE ASSESSEE HAS SURRENDERED THIS AMOUNT BUT THERE IS A CORROBORATIVE EVIDENCE IN THE SHAPE OF FUND FLOW STATEMENT WHICH HAS BEEN ACCEPTED BY THE AO DURING THE SCRUTINY PRO CEEDINGS FOR THE ASSESSMENT YEAR 1999-2000 COMPLETED U/S 153A READ WITH SECTION 143( 3) OF THE ACT AND THE COPY OF WHICH IS PLACED AT PAGES 3 TO 6 OF THE PAPER BOOK. IT WAS FURTHER SUBMITTED THAT FUND FLOW 3 STATEMENTS FOR THE SUBSEQUENT YEARS HAVE ALSO BEEN ACCEPTED BY THE AO AND IN THIS FUND FLOW STATEMENT, THE ASSESSEE HAS SHOWN THE VALUE OF PLOT AT RS. 3.15 LACS. THEREFORE, NO ADDITION CAN BE MADE ON ACCOUNT OF UNEXPLAINED INV ESTMENT IN THE PLOT. IT WAS ALSO STATED THAT THE ASSESSEE WAS NOT FILING ANY RETURN OF INCO ME AS INCOME WAS NOT TAXABLE IN ANY OF THE YEAR IN THE PAST AND THEREFORE, ON THE BASIS OF THE SALARY ETC, THE FUND FLOW STATEMENT WAS PREPARED AND WAS FILED BEFORE THE AO. 2.5 ON THE OTHER HAND, LD. DR PLACED RELIANCE ON TH E ORDER OF THE LD. CIT(A). IT WAS STATED THAT ON MERIT THERE IS NO CASE OF THE ASSESS EE AND THEREFORE, THE ORDER OF THE LD. CIT(A) IS LIABLE TO BE SUSTAINED. 2.6 AFTER CONSIDERING THE ORDERS OF THE AO AND THE LD. CIT(A) AND SUBMISSIONS OF BOTH HE PARTIES, WE FOUND THAT THE ASSESSEE DESERVE S TO SUCCEED IN APPEAL FOR THE ASSESSMENT YEAR 2002-03. THE COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 1999- 2000 COMPLETED U/S 153 A READ WITH SECTION 143(3) V IDE ORDER DATED 21-08-2006 IS PLACED ON RECORD AND IN THIS ORDER, THE AO HAS ACCE PTED THE FUND FLOW STATEMENT. HOWEVER, THE SAVINGS OF RS. 3,86,400/- UPTO 31-03-1 998 INSTEAD OF RS. 4,71,536/- SHOWN BY THE ASSESSEE WAS ACCEPTED. IT HAS BEEN FURTHER O BSERVED BY THE AO THAT SAVINGS OF THE ASSESSEE WAS AVAILABLE IN HIS HANDS AND IN HIS WIFE HANDS AT RS. 3,86,400/- AT BEGINNING OF THE ASSESSMENT YEAR 1999-2000. THEREAFTER, THE ASSE SSEE HAS NOT MADE ANY INVESTMENT ACCEPT AN INVESTMENT IN PLOT AT RS. 3.15 LACS AND F DR OF RS. 25,000/-. THEREFORE, IT CANNOT BE SAID THAT THIS AMOUNT WAS NOT AVAILABLE. THE FDR WAS PURCHASED IN ASSESSMENT YEAR 2001-02 FOR RS. 25,000/-. THE PLOT WAS PURCHAS ED IN ASSESSMENT YEAR 2002-03 FOR RS. 3.15 LACS. ANOTHER AMOUNT OF RS. 35,000/- OR SO WAS INCURRED ON STAMP DUTY ETC. AND THUS THE TOTAL PURCHASES OF PLOT IS SHOWN AT RS. 3, 50,822/-. THE ASSESSEE HAS TAKEN A LOAN OF RS. 30,000/- ON 18-08-2001 WHICH HAS BEEN REPAID AT THE END OF THE YEAR ALONGWITH 4 INTEREST OF RS. 1,225/-. A FURTHER SUM OF RS. 27,00 0/- WAS IN R.D. A/C. IF TOTAL OF THESE AMOUNTS ARE TAKEN INTO CONSIDERATION ALONGWITH WITH DRAWAL SHOWN BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2000-01 TO 2002-03 THEN IT WAS AT RS. 36,000/-,37,000/- AND 39,000/- RESPECTIVELY. HENCE, THIS AMOUNT COVERS ALL THE INV ESTMENTS MADE BY THE ASSESSEE OUT OF THE FUNDS AVAILABLE AT RS. 3,86,400/- FOR THE PERIO D 01-04-1998 TO 31-03-1999 , SALARY INCOME OF RS. 71,500/- FOR ASSESSMENT YEAR 1999-200 0 AND RS. 84,500/- EACH FOR ASSESSMENT YEAR 2000-01 AND 2001-02 RESPECTIVELY AN D INCOME OF THE WIFE OF THE ASSESSEE FROM BEAUTY PARLOUR HAS BEEN SHOWN AS RS. 20,000/- TO 23,000/- FOR THESE YEARS AND THEN IT IS SEEN THAT THE AMOUNT OF INVESTMENT IS LESS TH AN THE AMOUNT AVAILABLE WITH THE ASSESSEE. THEREFORE, WE HOLD THAT THOUGH THE ASSESS EE HAS SURRENDERED THE AMOUNT OF RS. 1.15 LACS DURING THE PERIOD OF SEARCH BUT THEREAFTE R THE ASSESSEE PREPARED THE FUND FLOW STATEMENT AND AS PER FUND FLOW STATEMENT, THIS AMOU NT WAS AVAILABLE WITH THE ASSESSEE. ACCORDINGLY, WE HOLD THAT THE LD. CIT(A) WAS NOT JU STIFIED IN NOT DELETING THIS ADDITION. HENCE, WE DELETE THIS ADDITION OF RS. 1.15 LACS. ITA NO. 512/ JODH/2010 A.Y. 2005-06 3.1 IN APPEAL FOR THE ASSESSMENT YEAR 2005-06, THE ASSESSEE IS OBJECTING AS TO CONFIRMING THE ADDITION OF RS. 67,472/- ON ACCOUNT OF INVESTMENT IN GOLD ORNAMENTS AND CONFIRMING THE ADDITION OF RS. 5,000/- ON ACCOUNT O F CASH ADVANCE GIVEN BY THE ASSESSEE. 3.2 THE BRIEF FACTS OF THE CASE ARE THAT DURING THE SEARCH AND SEIZURE OPERATION GOLD ORNAMENTS WEIGHING 5.69 GMS AND VALUING AT RS. 3,22 ,623/- WERE FOUND. THE PURCHASE BILLS/ SLIPS RELATING TO DIFFERENT GOLD ORNAMENTS W ERE SEIZED. THE AO NOTICED THAT THE NEW ORNAMENTS LIKE RINGS, MANGALSUTRA ETC. WERE PURCHAS ED BY PAYING CASH BY THE ASSESSEE. THESE PURCHASES WERE MADE IN THE ASSESSMENT YEAR 20 05-06. AS THE ASSESSEE COULD NOT SUBSTANTIATE THE PURCHASES OF GOLD, THEREFORE, THE ASSESSEE HAS VOLUNTARILY ADMITTED THAT 5 THIS INVESTMENT OF RS. 67,472/- IN THE PURCHASE OF GOLD ORNAMENTS AS PER THE SEIZED PAGES IS OUT OF HIS UNDISCLOSED INCOME. FOR REMAINING GOL D ORNAMENTS, IT WAS EXPLAINED THAT THE SAME WAS RECEIVED BY HIS WIFE ON THE OCCASION OF MA RRIAGE AND AFTERWARDS FROM HER PARENTS AND IN-LAWS. THE AO ACCEPTED THE OLD ORNAME NTS. HOWEVER, THE NEW ORNAMENTS PURCHASED WERE NOT ACCEPTED. THEREFORE, THE AO MADE THE ADDITION OF RS. 67,472/-. 3.3 THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO. 3.4 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AFTER CONSIDERING THE SUBMISSIONS AND TAKING INTO C ONSIDERATION THE FUND FLOW STATEMENT PREPARED UPTO THIS YEAR, IT IS SEEN THAT THE GOLD O RNAMENTS WERE PURCHASED OUT OF THE AMOUNT AVAILABLE WITH THE ASSESSEE. WE HAVE ALREADY CONSIDERED THE FUND FLOW STATEMENT UPTO THE ASSESSMENT YEAR 2002-03 AND FOUND THAT WHA TEVER INVESTMENTS WERE MADE, THEY WERE MADE OUT OF THE AVAILABLE FUNDS UPTO THAT YEAR . THE FUND FLOW STATEMENT FOR THE ASSESSMENT YEAR 01-04-1998 TO 31-03-2005 IS PLACED AT PAGE 8 OF THE PAPER BOOK AND IT IS SEEN THAT THE ASSESSEE HAS EARNED SALARY INCOME OF RS. 91,000/- FOR ASSESSMENT YEAR 2003- 04 AND OF RS. 97,500/- EACH FOR THE ASSESSMENT YEA R 2004-05 AND 2005-06. THE ASSESSEES WIFE HAS SHOWN INCOME FROM BEAUTY PARLOU R AT RS. 24,000/-, 25,000/- AND RS. 26,000/- FOR THE ASSESSMENT YEAR 2003-04 TO 2005-06 RESPECTIVELY. THE ASSESSEE HAS MADE INVESTMENT IN HOUSE AND VEHICLE PURCHASED FOR RS. 4 .05 LACS AND HAS SHOWN PURCHASE OF JEWELLERY OF RS. 2,35,000/- IN FUND FLOW STATEMENTS AND IF THE TOTAL OF THESE AMOUNTS ARE TAKEN INTO CONSIDERATION THEN IT IS ESTABLISHED THA T THE AMOUNT INVESTED IN THE PURCHASE OF JEWELLERY IS OUT OF PAST YEAR SAVINGS AND OUT OF VA RIOUS GIFTS RECEIVED DURING THE OCCASION OF MARRIAGE AND THEREAFTER. THIS IS A PETTY AMOUNT OF RS. 60,000/- OR ODD . THEREFORE, WE HOLD THAT THE SAME WAS OUT OF THE FUNDS AVAILABLE W ITH THE ASSESSEE. ACCORDINGLY, WE DELETE THIS ADDITION. 6 3.5 AS REGARDS T HE REMAINING AMOUNT OF RS. 5,000/- ADVANCED BY THE ASSESSEE, THIS AMOUNT WAS SURRENDERED BY THE ASSESSEE BUT THIS A MOUNT DOES NOT FIGURE IN FUND FLOW STATEMENT. THEREFORE, THE AO MADE THE ADDITION WHIC H HAS BEEN CONFIRMED BY THE LD. CIT(A). 3.6 AFTER CONSIDERING THE ORDERS OF THE AO AND THE LD. CIT(A) AND SUBMISSIONS OF BOTH THE PARTIES, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN THIS RESPECT. ACCORDINGLY, THE ADDITION OF RS. 5,000/- IS CONFIRM ED. 4.0 IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE A SSESSMENT YEAR 2002-03 IS ALLOWED AND THE APPEAL FOR THE ASSESSMENT YEAR 2005-06 IS A LLOWED IN PART. THE ORDER IS PRONOUNCED ON 22-08-2012 . SD/- SD/- ( N.K. SAINI ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR, *MISHRA COPY FORWARDED TO :- 1. SHRI LOKESH KOTHARI, NIMBAHERA. 2. THE ACIT, CENTRAL -1, UDAIPUR BY ORDER 3. THE LD CIT (A) 4. THE LD. CIT 5. THE D/R 6. GUARD FILE (ITA NOS.511 & 512/JODH/2010) AR ITAT JODHPUR.