RAKSHA BULLION, MUMBAI V. ACIT CIR-8, MUMBAI

ITA 5209/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1333 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 11-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R N JHA
• Assessee Lawyers: H N MOTIWALA; P S CHHAJED
• Keywords: Principle of natural justice; Corroborative evidences
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D,MUMBAI BEFORE SHRI N.V. VASUDEVAN (JM) & SHRI R.K. PANDA ( AM) I.T.A.NO.5209/MUM/2009 (A.Y. : 2007-08 ) M/S. RAKSHA BULLION, 118/120, DHANJI STREET, SILVER PLAZA, R.NO.9, MUMBAI-400 003. PAN: AAHFR2224C VS. ASST.COMMR. OF INCOME-TAX, CIR-8, MUMBAI. APPELLANT RESPONDENT APPELLANT BY S/S HRI H.N. MOTIWALA & P.S. CHHAJED. RESPONDENT BY SHRI R .N. JHA O R D E R PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 27-07- 2009 OF THE CIT(APPEALS), CENTRAL-II, MUMBAI, RELAT ING TO ASSTT. YEAR 2007-08. 2. GROUND NO.1 BY THE ASSESSEE READS AS UNDER : 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.45.50 LACS AS UNEXPLAINED STOCK OF 5 KGS OF GOLD BARS FOUND FROM LOCKER NO. 375, DURING THE COURSE OF SEARCH PROCEEDINGS AG AINST THE APPELLANT FIRM. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEALING IN PRECIOUS META LS AND COMMODITIES LIKE GOLD BULLION AND SILVER AT 118/120, DHANJI STREET, SILVE R PLAZA BLDG., OFFICE NO.9, 3 RD FLOOR, MUMBAI-400 003. A SEARCH & SEIZURE ACTION U/ S.132 OF THE I.T. ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESS EE ON 29-12-2006. SUBSEQUENTLY, LOCKERS NO.103, 375, 54, 251, 342 AND 597 AT DALICHAND JUGRAJ JAIN SAFE DEPOSIT VAULT, 31/33-35, RANGWALA BLDG., 3 RD AGIARI LANE, ZAVERI BAZAR, MUMBAI-03, WERE SEARCHED ON 30-12-2006. LOCKER NO.3 051 AT BANK OF INDIA, ITA 5209/M/09 RAKSHA BULLION 2 BULLION EXCHANGE BRANCH, ZAVERI BRANCH, MUMBAI-02, WAS SEARCHED ON 02-01- 2007. THE SEARCH & SEIZURE PROCEEDINGS CONTINUED F ROM 29-12-2006 TO 06-02- 2007. DURING THE SAID SEARCH, UNEXPLAINED CASH OF R S.80,20,000/- WAS FOUND AND SEIZED FROM THE ASSESSEES OFFICE PREMISES. SIMILAR LY, 20 GOLD BARS OF 1 KG. EACH WERE FOUND FROM LOCKER NO. 103 AND 15 GOLD BARS OF 1 KG. EACH WERE FOUND FROM LOCKER NO. 375 AT DALICHAND JUGRAJ JAIN SAFE DEPOSI T VAULT. SINCE GOLD BULLIONS WERE STOCK IN TRADE OF THE ASSESSEE, THE TRADING ST OCK WAS NOT SEIZED UNDER THE PROVISIONS OF THE ACT. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E AO NOTED THAT THE PARTNER OF THE ASSESSEE FIRM, MR. KAMLESH SHAH, IN HIS STATEMENT DURING THE SEARCH PROCEEDINGS, HAD STATED THAT 15 GOLD BULLION BARS OF 1 KG. EACH WERE PURCHASED FROM HDFC BANK, MUMBAI, ON 29-12-2006. HE NOTED FROM THE LETTER OF HDFC BANK THAT ON 29-12-2006 HDFC BANK HAS SUPPLIED ONLY 10 GOLD BARS TO THE ASSESSEE FIRM. THE NUMBER OF THESE 10 BARS TALLIED WITH THE 10 GOLD BARS PRESENT IN LOCKER NO.375, BUT THE REMAINING 5 GOLD BARS, HA VING SERIAL NOS.119804, 119807, 119809, A037651 AND A037658, COULD NOT BE R ECONCILED BY THE ASSESSEE FIRM DURING THE POST SEARCH PROCEEDINGS. THE AO, TH EREFORE, ASKED THE ASSESSEE TO EXPLAIN WITH SUPPORTING EVIDENCE THAT THE ABOVES AID 5 KG. GOLD BARS WERE FULLY ACCOUNTED FOR. 4. THE ASSESSEE IN ITS REPLY SUBMITTED THAT AS DEA LER IN PREVIOUS METALS, THE ASSESSEE FIRM MAINTAINS DAILY STOCK REGISTER ON THE BASIS OF TOTAL WEIGHT, RECORDS PURCHASES DATEWISE AND PARTYWISE ALONG WITH QUANTIT Y. SIMILARLY, IT RECORDS ALL ITS SALES DATEWISE AND PARTYWISE IN QUANTITY. THIS PRAC TICE IS FOLLOWED SINCE LAST MANY YEARS WHICH HAS BEEN DULY ACCEPTED BY THE AUDITORS AND THE INCOME-TAX DEPTT. IT WAS SUBMITTED THAT THE ANNUAL TURNOVER IN GOLD IS M ORE THAN 10,000 KGS. APPROXIMATELY AND THE ASSESSEE MADE PURCHASES FROM MORE THAN 30 TO 35 ITA 5209/M/09 RAKSHA BULLION 3 PARTIES AND SELLS THE BULLION TO MORE THAN 650 PART IES. IT WAS SUBMITTED THAT THE ASSESSEE DOES NOT MENTION THE SERIAL NUMBER OF THE GOLD BARS SOLD TO VARIOUS PARTIES IN THEIR SALES INVOICES. SIMILARLY, EXCEPT 3 OR 4 PARTIES, NONE OF ITS SUPPLIERS MENTIONS THE SERIAL NUMBER OF THE GOLD B ARS IN THE SALES INVOICES. THE ASSESSEE ALSO ENCLOSED SAMPLE COPIES OF 50 PURCHASE AND SALE INVOICES FOR THE PURCHASES AND SALES MADE DURING THE FINANCIAL YEAR 2006-07. IT WAS SUBMITTED THAT IT IS PRACTICALLY IMPOSSIBLE TO MAINTAIN/TRACK STOCKS OF GOLD BARS BASED ON SERIAL NUMBER OF THE GOLD BARS. FINALLY, IT WAS SUB MITTED THAT THE ENTIRE STOCK OF 34.87 KGS. APPROXIMATELY 35 KGS. AS REFLECTED IN I TS STOCK REGISTER AS ON 29-12- 2006 TALLIES WITH THE ACTUAL 35 KGS. FOUND IN THE LOCKERS BEARING SERIAL NO.103 AND SERIAL NO. 375. IT WAS ACCORDINGLY SUBMITTED TH AT NON-TALLYING OF SERIAL NUMBERS IN 5 GOLD BARS IS OF NO SIGNIFICANCE AND HE NCE THERE IS NO REASON TO SUSPECT THE SAME. 5. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPL ANATION GIVEN BY THE ASSESSEE IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE WITH RESPECT TO PURCHASE OF ABOVESAID 5 KG. GOLD BARS ALONG WITH PURCHASE BILL, NAME AND ADDRESS OF THE PARTY, DETAILS OF PAYMENTS, EVIDENCE FOR PAYMENT, E TC. IN VIEW OF PRINCIPLES OF NATURAL JUSTICE, THE AO GAVE ONE MORE OPPORTUNITY T O THE ASSESSEE TO EXPLAIN AS TO HOW THE 5 KG. GOLD BARS WERE ACCOUNTED FOR. THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE EARLIER AND ALSO REFERRED TO TH E REPLIES GIVEN BY THE PARTNER DURING THE COURSE OF SEARCH PROCEEDINGS. THE ASSESS EE ALSO BROUGHT TO THE NOTICE OF THE AO ITS REPLIES TO THE QUESTIONS PUT BY THE D DI, MUMBAI. IN THE SAID REPLY, IT WAS SUBMITTED THAT 11 KGS. OF GOLD BARS WERE PURCHA SED FROM M/S. SOLAR TRADE LINKS (P) LTD. ON 29-12-2006, OUT OF WHICH 6 KGS. OF GOLD BARS WERE SOLD ON THE SAME DAY AND THE REMAINING 5 KGS. OF GOLD BARS WERE LYING WITH THE ASSESSEE. ON THE BASIS OF THESE SUBMISSIONS, THE INVESTIGATING O FFICER HAD RELEASED/LIFTED ITA 5209/M/09 RAKSHA BULLION 4 PROHIBITORY ORDER FROM THE SAID LOCKER NO. 375 AND HANDED OVER THE SAID 5 KGS. OF GOLD BARS OF 1 KG. EACH TO THE ASSESSEE. 6. HOWEVER, THE AO DID NOT ACCEPT THE ABOVE SUBMISS IONS MADE BY THE ASSESSEE. HE NOTED THAT THE ASSESSEE FAILED TO FURN ISH DOCUMENTARY EVIDENCE WITH RESPECT TO PURCHASE OF 5 KGS. OF GOLD BARS AND RECO NCILE THE EXACT SOURCE OF PAYMENT IN THIS REGARD. NOT BEING SATISFIED WITH TH E EXPLANATION GIVEN BY THE ASSESSEE, THE AO MADE AN ADDITION OF RS.45.50 LAKHS AS UNEXPLAINED STOCK OF 5 KGS. OF GOLD BARS U/S.69A OF THE I.T. ACT AND ACCOR DINGLY ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE FOR THE ASSTT. YEAR 20 07-08. 7. BEFORE THE CIT(A), THE ASSESSEE REITERATED THE S AME SUBMISSIONS AS MADE BEFORE THE AO. IT WAS SUBMITTED THAT DURING THE CO URSE OF ASSESSMENT PROCEEDINGS THE AO HIMSELF HAD ISSUED NOTICE U/S.13 3(6) OF THE I.T. ACT TO M/S. SOLAR TRADE LINKS (P) LTD. WHO HAD CONFIRMED THE TR ANSACTIONS DONE WITH THE ASSESSEE. INVOKING OF SEC. 69A BY THE AO WAS ALSO C HALLENGED BEFORE THE CIT(A) ON THE GROUND THAT THE AO HAS NOT BROUGHT ON RECORD ANY DOCUMENTARY EVIDENCE OR CIRCUMSTANTIAL EVIDENCE TO PROVE THAT THE ASSESS EE HAS MADE UNACCOUNTED PURCHASE/INVESTMENT IN HE SAID 5 KGS. OF GOLD BARS . IT WAS SUBMITTED THAT GOLD WEIGHING 35 KGS. FOUND PHYCICALLY DURING THE COURSE OF SEARCH TALLIED WITH THE STOCK AS PER THE STOCK REGISTER ON THE DATE OF SEAR CH WHICH WAS SHOWN AT 34.87 KGS. THEREFORE, THE ACTION OF THE AO IN MAKING THE ADDITION U/S.69A IS UNCALLED FOR. 8. HOWEVER, THE CIT(A) WAS NOT CONVINCED WITH THE A RGUMENTS ADVANCED BEFORE HIM. HE NOTED THAT THE ASSESSEE FIRM FAILED TO FURNISH THE NECESSARY DOCUMENTS REGARDING THE PURCHASE/ACQUISITION/POSSES SION OF THE AFORESAID 5 KGS. OF GOLD BARS BEARING SERIAL NOS.119804, 119807, 119 809, A037651 & A0337658 WHICH WERE FOUND IN LOCKER NO. 375. HE NOTED THAT T HE ASSESSEE HAS FAILED TO ITA 5209/M/09 RAKSHA BULLION 5 PRODUCE THE MOST IMPORTANT DOCUMENTS LIKE DELIVERY CHALLANS CONTAINING THE SPECIFIC SERIAL NOS. OF THE AFORESAID GOLD BARS, CO RRESPONDENCE WITH THE ALLEGED SELLERS OF THE AFORESAID GOLD BARS, SECURITY SERVIC E RECORDS AND ALSO THE EVIDENCE OF INWARD REGISTER AND THE STAMP OF THE ASSESSEE ON THE INWARD DELIVERY CHALLAN AS WELL AS THE SOURCE OF PAYMENT FOR THE ACQUISITIO N OF THE AFORESAID SPECIFIC GOLD BARS. HE NOTED THAT THE PURCHASE OF 11 KGS. OF GOLD BARS FROM M/S . SOLAR TRADE LINKS (P) LTD. ON 29-12-2006 HAD NOT BEEN EXPLAINED SATISFACTORILY IN ABSENCE OF MOVEMENT OF THESE GOLD BARS AND ITS PART DISPOSAL A ND ITS ENTRY INTO LOCKER NO.375 ON A DAY WHEN THE SEARCH & SEIZURE ACTION WA S GOING ON IN THE BUSINESS PREMISES OF THE ASSESSEE AS WELL AS IN THE BUSINESS PREMISES OF M/S. DALICHAND JUGRAJ JAIN SAFE DEPOSIT VAULT. THE LD. CIT(A) DISC USSED THE PROVISIONS OF SEC.69A, SEC. 110 OF THE EVIDENCE ACT AND A HOST O F OTHER DECISIONS AND UPHELD THE ACTION OF THE AO IN MAKING THE ADDITION OF RS. 45.50 U/S.69A OF THE I.T. ACT. AGGRIEVED WITH THE ORDER OF THE CIT(A), THE ASSESSE E IS IN APPEAL BEFORE US. 9. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE AO AND CIT(A). REFERRING TO THE COPY OF STOCK REGISTER FROM 16-12- 2006 TO 31-12-2006, COPIES OF WHICH ARE PLACED AT P AGE NOS.1 TO 7, HE SUBMITTED THAT THE ASSESSEE IS MAINTAINING ITS STOC K RECORD ON DAY TO DAY BASIS CONTAINING THE DATE OF PURCHASE, BILL NUMBER, NAME OF THE PARTY, QUANTITY RECEIVED, QUANTITY ISSUED/SOLD AND THE CLOSING BALA NCE. HE SUBMITTED THAT THE ASSESSEE PURCHASES ITS GOLD FROM REGISTERED DEALERS AND SELLS TO VARIOUS CUSTOMERS AND ITS CLOSING STOCK ON THE DATE OF SEAR CH AS PER THE STOCK REGISTER MORE OR LESS TALLIED WITH THE STOCKS PHYSICALLY FOU ND. HE SUBMITTED THAT OUT OF 10,000 KGS. OF GOLD TRANSACTIONS DURING THE YEAR TH E DISPUTE IS ONLY FOR 5 KGS. WHICH IS A VERY NEGLIGIBLE QUANTITY. HE SUBMITTED T HAT THE ASSESSEE HAS EXPLAINED 15 GOLD BARS OF 1 KG. EACH SATISFACTORILY. IT HAS A LREADY EXPLAINED THAT OUT OF 15 ITA 5209/M/09 RAKSHA BULLION 6 KGS. OF GOLD BARS, 10 KGS. WERE PURCHASED FROM HDFC BANK AND THE REMAINING 5 KGS. WAS EXPLAINED TO BE OUT OF THE TOTAL PURCHASE OF 11 KGS. GOLD BARS FROM M/S. SOLAR TRADE LINKS (P) LTD. HE SUBMITTED THAT SINCE MOST OF THE PURCHASES AND SALES OF GOLD BARDS DO NOT CONTAIN THE SERIAL NUMBE R OF THE GOLD BARS, THEREFORE, NON-TALLING OF SERIAL NOS. OF 5 GOLD BARS OF 1 KG. EACH AS PER DETAILS GIVEN IN THE ASSESSMENT ORDER IS OF NO SIGNIFICANCE AND IT SHOUL D NOT BE DOUBTED. 10. THE LD. D.R., ON THE OTHER HAND, WHILE SUPPORTI NG THE ORDER OF THE CIT(A), SUBMITTED THAT OUT OF 15 GOLD BARS FOUND FROM THE LOCKER THE ASSESSEE WAS UNABLE TO GIVE SATISFACTORY EXPLANATION REGARDING 5 GOLD BARS. HE SUBMITTED THAT MERELY BECAUSE SOME STOCK IS APPEARING IN THE STOCK REGISTER, THE SAME CANNOT BE ACCEPTED AS THE SAME GOLD FOUND IN THE LOCKER. R EFERRING TO PARA 3.3.3 OF CIT(A)S ORDER, HE SUBMITTED THAT HE HAS GIVEN THE CORRECT OBSERVATION THAT IT IS AN IMPOSSIBLE THING THAT ON THE DATE OF SEARCH PURC HASES WERE MADE, SALES WERE MADE AND THE LOCKER WAS OPERATED. SINCE THE ASSESSE E, IN THE INSTANT CASE, WAS UNABLE TO EXPLAIN SATISFACTORILY REGARDING THE ACQU ISITION OF 5 GOLD BARS OF 1 KG. EACH, THEREFORE, THE CIT(A) WAS JUSTIFIED IN UPHOLD ING THE ACTION OF THE AO IN MAKING THE ADDITION U/S.69A OF THE I.T. ACT. 11. THE LD. COUNSEL FOR THE ASSESSEE, IN HIS REJOIN DER, SUBMITTED HAT THE DEPARTMENT DID NOT EXAMINE OR SUMMON THE OWNER OF THE LOCKER, NAMELY, M/S. DALICHAND JUGRAJ JAIN SAFE DEPOSIT VAULT, TO ASCERT AIN WHETHER THE LOCKER WAS OPERATED ON THAT DAY OR NOT. HE SUBMITTED THAT THE SEARCH WAS COMMENCED ON 29-12-2006 AT 7.30 P.M. AND WAS CLOSED ON 30-12-200 6 AT 5.50 A.M. AS PER THE COPY OF PANCHNAMA DATED 30-12-2006. THEREFORE, IT I S NOT CORRECT ON THE PART OF THE CIT(A) TO SAY THAT IT IS AN IMPOSSIBLE THING TH AT ON THE DATE OF SEARCH PURCHASES WERE MADE, SALES WERE MADE AND THE LOCKER WAS OPERATED. ITA 5209/M/09 RAKSHA BULLION 7 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE B Y BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER F ILED ON BEHALF OF THE ASSESSEE. THE ONLY DISPUTE IN THE IMPUGNED APPEAL I S REGARDING THE ACQUISITION OF 5 GOLD BARS OF 1 KG. EACH, THE SERIAL NOS. OF WHICH , ACCORDING TO THE AO, COULD NOT BE RECONCILED BY THE ASSESSEE FIRM. WE FIND THE AO MADE THE ADDITION U/S.69A ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE LIKE PURCHASE INVOICE, DATE OF PAYMENT, EVIDENCE OF PAYM ENT, ETC., ON ACCOUNT OF 5 KGS. OF GOLD BARS OF 1 KG. EACH. HE ALSO REJECTED T HE CONTENTION OF THE ASSESSEE THAT IT HAD PURCHASED 11 GOLD BARS OF 1 KG. EACH FR OM ONE M/S. SOLAR TRADE LINKS (P) LTD., OUT OF WHICH 6 GOLD BARS OF 1 KG. EACH WE RE SOLD ON THE SAME DAY AND THE REMAINING 5 GOLD BARS OF 1 KG. EACH ALONG WITH 10 GOLD BARS OF 1 KG. EACH PURCHASED FROM HDFC BANK TALLIES WITH THE 15 GOLD B ARS OF 1 KG. EACH FOUND IN LOCKER NO.375. THE AO ALSO REJECTED THE SUBMISSION OF THE ASSESSEE THAT THE STOCK FOUND ON THE DATE OF SEARCH TALLIED WITH THE STOCK AS PER THE STOCK REGISTER MAINTAINED BY THE ASSESSEE. THE CIT(A) ALSO CONFIRM ED THE ACTION OF THE AO ON THE GROUND THAT WHEN THE SEARCH WAS GOING ON IT IS HIGHLY IMPOSSIBLE THAT THE ASSESSEE PURCHASED GOLD BARS, SOLD A PART OF THE SA ME AND KEPT THE BALANCE QUANTITY IN THE LOCKER. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE SEARCH WAS COMMENCED AT 7.30 P.M. ON 29-12 -2006, THE OWNER OF THE LOCKER WAS NEITHER EXAMINED NOR SUMMONED AND THE QU ANTITY PHYSICALLY FOUND APPROXIMATELY TALLIES WITH THE STOCK AS PER THE STO CK REGISTER MAINTAINED BY THE ASSESSEE. WE FIND SUFFICIENT FORCE IN ABOVE THE CON TENTION OF THE LD. COUNSEL FOR THE ASSESSEE. FROM A PERUSAL OF PARA 8 OF THE COPY OF THE PANCHNAMA IN THE NAME OF M/S. RAKSHA BULLION, WE FIND THAT THE SEARC H COMMENCED ON 29-12-2006 AT 7.30 P.M. AND THE PROCEEDINGS WERE CLOSED ON 30- 12-2006 AT 5.50 AM. THEREFORE, THE SUBMISSION OF THE ASSESSEE BEFORE TH E AO THAT PURCHASES WERE ITA 5209/M/09 RAKSHA BULLION 8 MADE FROM M/S. SOLAR TRADE LINKS (P) LTD. ON 29-12- 2006 OUT OF WHICH 6 GOLD BARS OF 1 KG. EACH WERE SOLD ON THE SAME DAY AND 5 GOLD BARS OF 1 KG. EACH WERE KEPT IN THE LOCKER COULD NOT BE SIMPLY BRUSHED ASID E, ESPECIALLY WHEN THE ASSESSEE WAS FREE TO DO ITS NORMAL BUSINESS UPTO 7. 30 P.M. ON THE DATE OF SEARCH. FURTHER, THE SALE OF 6 GOLD BARS OF 1 KG. E ACH HAS NEVER BEEN DOUBTED BY THE AO. WE FURTHER FIND THAT THE REVENUE AT NO POIN T OF TIME HAS EITHER SUMMONED OR EXAMINED THE OWNER OF THE LOCKER SO AS TO NEGATIVE THE CONTENTION OF THE ASSESSEE THAT IT HAS OPERATED THE LOCKER ON 29-12-2006. SIMILARLY, WE FIND IN RESPONSE TO NOTICE U/S.133(6) BY THE AO M/S. SO LAR TRADE LINKS (P) LTD. HAVE CONFIRMED TO HAVE SOLD THE GOLD BARS TO THE ASSESSE E. THE ABOVE FACT STATED BEFORE THE AO WAS NOT FOUND TO BE FALSE OR UNTRUE B Y THE AO OR THE CIT(A). WE ALSO FIND SUFFICIENT FORCE IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE TOTAL QUANTITY OF GOLD AT 35 KGS. FOUND ON THE DATE OF SEARCH APPROXIMATELY TALLIED WITH THE STOCK AS PER STOCK RECORDS MAINTAI NED BY THE ASSESSEE, WHICH IS 34.87 KGS. APPROXIMATELY. WHEN THE ASSESSEE DEALS W ITH GOLD OF THE VOLUME OF MORE THAN 10,000 KGS. IN A YEAR, THIS DIFFERENCE, I N OUR OPINION, IS VERY NEGLIGIBLE. 13. CONSIDERING THE TOTALITY OF THE FACTS OF THE C ASE AND CONSIDERING THE FACT THAT THE STOCK FOUND ON THE DATE OF SEARCH MORE OR LESS TALLIES WITH THE STOCK AS PER THE STOCK REGISTER AND FURTHER CONSIDERING THE FACT THAT THE PURCHASE OF GOLD ON 29-12-2006 FROM M/S. SOLAR TRADE LINKS (P) LTD. HAS BEEN CONFIRMED BY THE PARTY IN RESPONSE TO NOTICE U/S.133(6) BY THE AO WH ICH HAS NOT BEEN PROVED TO BE FALSE OR UNTRUE, WE ARE OF THE CONSIDERED OPINIO N THAT THE ASSESSEE HAS SATISFACTORILY EXPLAINED THE ACQUISITION OF 5 GOLD BARS OF 1 KG. EACH. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE ADDITION. GROUND NO.1 BY THE ASSESSEE IS ACCORDINGLY ALLOWED. ITA 5209/M/09 RAKSHA BULLION 9 14. GROUND NO.2 BY THE ASSESSEE READS AS UNDER : 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN HOLDING THAT ONLY A SUM OF RS.30.66 LACS SHOULD BE CONSIDERED AS ADVANCE TAX WHILE GIVING EFFECT OF CALCULATION OF TAX AND INTEREST LIABILITY ALTHOUGH, THE APPELLANT FIRM HAD MADE SEVERAL WRITTEN SUBMISSIONS FOR CONSIDERING THE ENTIRE AMOUNT OFRS.80.20 LACS (CASH SEIZED) TOWARDS THE ADVANCE TAX LIABILITY OF THE FIRM. THE FACTS OF THE CASE, IN BRIEF, ARE THAT DURING TH E COURSE OF SEARCH ON 29-12- 2006 CASH AMOUNTING TO RS.80,20,000/- WAS FOUND AND SEIZED. THE SAID CASH WAS DEPOSITED BY THE DDI (INV.) IN THE P.D. ACCOUNT IN THE NAME OF THE DIRECTOR OF INCOME-TAX (INVESTIGATION), MUMBAI. THE ASSESSEE, V IDE LETTER DATED 15-03- 2007, REQUESTED THE ADDL. DIT (INV.), MUMBAI, TO A DJUST RS.30,66,000/- AGAINST THE ASSESSEES ADVANCE-TAX INSTALMENTS FOR THE RELE VANT ASST. YEAR 2007-08 OUT OF THE SEIZED CASH OF RS.80,20,000/-. A SIMILAR REQUES T WAS ALSO MADE TO THE JURISDICTIONAL AO VIDE ASSESSEES LETTER DATED 15-0 3-2007. THEREAFTER, THE ASSESSEE MADE ANOTHER REQUEST TO THE JURISDICTIONAL AO VIDE LETTER DATED 30-03- 2007 EXPLAINING THE PROVISIONS OF SEC. 132B OF THE ACT AND REITERATED ITS REQUEST THAT ADVANCE-TAX DUE OF RS.30,66,000/- SHOULD BE AD JUSTED OUT OF THE SEIZED CASH OF RS.80,20,000/-. SIMILAR LETTERS WERE ADDRES SED TO THE RANGE ADDL.CIT AS WELL AS THE ADDL. DIT(INV.). THEREAFTER, THE ASSESS EE WROTE ANOTHER LETTER TO THE AO AFTER CENTRALIZATION OF SEARCH CASES OF THE GROU P CONCERNS AND MADE FRESH REQUEST FOR ADJUSTING ADVANCE-TAX DUE OF RS.30,66,0 00/- OUT OF THE SEIZED CASH OF RS.80,20,000/- BELONGING TO THE ASSESSEE. SIMILAR R EQUESTS WERE MADE TO THE ADDL. DIT(INV.). THEREAFTER, AS PER LETTER DATED 28 -09-2007 ADDRESSED TO THE ADDL. DIT-II(INV.), MUMBAI, THE ASSESSEE REQUESTED RELEASE OF RS.30,66,000/- OUT OF THE SEIZED CASH TOWARDS ADVANCE-TAX ALREADY FALLEN DUE. THEREAFTER, THE ASSESSEE, VIDE ITS LETTER DATED 12-12-2007, ADDRESS ED TO THE ADDL. DIT(INV.), THE CONCERNED AO AND DIT(INV.) REQUESTED TO ADJUST RS. 30,66,000/- OUT OF THE ITA 5209/M/09 RAKSHA BULLION 10 SEIZED CASH TOWARDS ADVANCE-TAX. THE ASSESSEE AGAI N VIDE ITS LETTER DATED 18- 12-2008 REQUESTED THE CONCERNED AO TO ADJUST THE TA X DEMAND OF RS.81.87 LAKHS OUT OF SEIZED CASH OF RS.80,20,000/-. THIS TIME, TH E JURISDICTIONAL AO ADJUSTED THE TAX AGAINST THE SEIZED CASH VIDE CHALLAN DATED 28-0 2-2009. THERE IS NO DISCUSSION OF NON-ADJUSTMENT OF SEIZED CASH AGAINST ADVANCE-TA X DUE IN THE ORDER OF THE AO. 15. BEFORE THE CIT(A), THE ASSESSEE ARGUED THAT THE ENTIRE AMOUNT OF RS.80,20,000/- SEIZED ON THE DATE OF SEARCH MAY BE CONSIDERED AS ADVANCE-TAX WHILE GIVING EFFECT TO CALCULATION OF TAX AND INTER EST LIABILITY. THE FOLLOWING DECISIONS WERE ALSO CITED BEFORE THE CIT(A) : 1) CIT. VS. KESR KIMAM KARYALAYA [(2005) 196 CTR ( DEL) 611: (2005) 278 ITR 596 (DELHI HIGH COURT)]. 2) ACIT VS. RAGHU NANDAN LAL [(2002) 76 TTJ (CHD) 1 86: (2002) 82 ITD 436 (CHANDIGARH TRIBUNAL)]. 3) SUDHAKAR M.SHETTY VS. CIT [(2008) 10 DTR (MUMB AI) (TRIB) 173]. 4) SATPAUL D.AGARWAL (HUF) VS. ACIT [(1998) 62 TT J (MUMBAI) 98]. 15.1 HOWEVER, THE CIT(A), DISTINGUISHING THE DECI SIONS CITED BEFORE HIM AND CONSIDERING THE PROVISIONS OF SEC. 132B, 158BC(D) A ND 153A OF THE I.T. ACT 1961, DIRECTED THE AO TO TREAT AN AMOUNT OF RS.30,66,000/ - AS ADVANCE TAX OF MARCH 2007 AND GIVE CREDIT THEREOF WHILE CALCULATING THE TAX AND INTEREST LIABILITY. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS I N APPEAL BEFORE US. 16. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE CIT(A) AND SUBMITTED THAT SINCE THE DEPA RTMENT HAD SEIZED RS.80,20,000/-, THE SAME SHOULD HAVE BEEN CONSIDERE D AS ADVANCE-TAX FOR THE ASSTT. YEAR 2007-08. 17. THE LD. D.R., ON THE OTHER HAND, WHILE SUPPORTI NG THE ORDER OF CIT(A), SUBMITTED THAT THE SEIZED CASH WAS DEPOSITED IN THE P.D. ACCOUNT IN THE NAME OF DIRECTOR OF INCOME-TAX (INV.) WHO IS JUST A CUSTODI AN OF THE CASH FOR THE ASSESSEE ITA 5209/M/09 RAKSHA BULLION 11 FOR FUTURE APPROPRIATION AGAINST THE DEMAND. HE SUB MITTED THAT THE ASSESSMENT IN THE INSTANT CASE WAS COMPLETED ON 15-12-2008 AND THE DEMAND WAS CREATED IN THE NAME OF THE ASSESSEE ON THAT DATE. THE AO HAS G IVEN CREDIT FOR THE FULL AMOUNT ON 18-12-2008. SINCE THE CIT(A) HAS GIVEN DI RECTION TO THE AO TO TREAT AN AMOUNT OF RS.30,66,000/- AS ADVANCE-TAX OF MARCH 2007 AS PER THE REQUEST MADE BY THE AO VIDE ITS VARIOUS LETTERS, THEREFORE, THE ASSESSEE SHOULD NOT HAVE ANY GRIEVANCE AND THE GROUND BY THE ASSESSEE IS RAT HER MISLEADING. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE B Y BOTH THE SIDES, PERUSED THE ORDERS OF AO AND CIT(A) AND THE VARIOUS DECISIO NS RELIED UPON BY THE ASSESSEE. THERE IS NO DISPUTE TO THE FACT THAT CASH AMOUNTING TO RS.80,20,000/- WAS FOUND AND SEIZED BY THE DEPARTMENT AND KEPT IN THE P.D. ACCOUNT OF THE DIT(INV.). THERE IS ALSO NO DISPUTE TO THE FACT THA T THE ASSESSEE THROUGH A SERIES OF REQUESTS/REMINDERS REQUESTED THE TAX AUTHORITIES TO ADJUST AN AMOUNT OF RS.30,66,000/- TOWARDS ITS ADVANCE-TAX LIABILITY FO R THE ASST. YEAR 2007-08. THERE IS ALSO NO DISPUTE TO THE FACT THAT THE ENTIR E AMOUNT OF RS.80,20,000/- WAS ADJUSTED BY THE AO ON 18-12-2008 AFTER COMPLETION OF THE ASSESSMENT ON 15- 12-2008 AND DEMAND WAS RAISED. WE FIND THE CIT(A), ON THE BASIS OF THE VARIOUS LETTERS ADDRESSED BY THE ASSESSEE TO THE TAX AUTHOR ITIES, HAS DIRECTED THE AO TO TREAT AN AMOUNT OF RS.30,66,000/- AS ADVANCE-TAX FO R MARCH 2007. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ENTIRE AMOUNT OF RS.80,20,000/- SHOULD BE TREATED AS ADVANCE-TAX. WE DO NOT FIND ANY MERIT IN THE ABOVE SUBMISSIONS OF THE LD. COUNSEL FOR THE AS SESSEE. ADMITTEDLY, ON THE DATE OF SEARCH, THERE WAS NO DEMAND AGAINST THE ASS ESSEE AND THE DEMAND WAS CREATED ONLY AFTER COMPLETION OF THE ASSESSMENT U/S .133(3) READ WITH SEC. 153A ON 15-12-2008. PRIOR TO THAT, THE ASSESSEE, VIDE A SERIES OF LETTERS/REMINDERS/REQUESTS HAS SPECIFICALLY ASKED F OR ADJUSTMENT OF ITA 5209/M/09 RAKSHA BULLION 12 RS.30,66,000/- ONLY TOWARDS ADVANCE TAX LIABILITY OUT OF THE SEIZED CASH. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE CIT(A) DIRECTING THE AO TO GIVE CREDIT FOR AN AMOUNT OF RS.30,66,000/- TOWARDS ADVANCE-TAX OF MARCH 2007 WHILE CALCULATING THE TAX AND INTEREST LIABILITY OF THE ASSESSEE. ACCORDINGLY, THE SAME IS UPHELD. THE GROUND RAISED BY THE ASSESSEE I S ACCORDINGLY DISMISSED. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THE25TH DAY OF JUNE, 2010. SD/- SD/- (N.V. VASUDEVAN) ( R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 25TH JUNE , 2010. NG: COPY TO : 1. ASSESSEE. 2.DEPARTMENT. 3 CIT(A)CENTRAL-II,MUMBAI. 4 CIT,CENTRAL-I,MUMBAI. 5.DR,D BENCH,MUMBAI. 6. MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA 5209/M/09 RAKSHA BULLION 13 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 16-06-2010 SR.PS/ 2 DRAFT PLACED BEFORE AUTHOR 18-06-2010 SR.PS/ 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER