Ram Babu Agarwal, V. ITO Ward,3(3),

ITA 60/AGR/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6919 (ITAT-AGRA)
• Duration Of Justice: 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 21-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 25-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: NAVIN GARGH
• Keywords: Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO.60/AGR/2011 ASSESSMENT YEAR: 2006-07 SHRI RAM BABU AGARWAL, VS. INCOME TAX OFFICER, GALI DURGA CHAND, WARD 3(3), MATHURA. CHOWK BAZAR, MATHURA. (PAN: AAWPA 0554 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NAVIN GARGH, ADVOCATE RESPONDENT BY : SHRI A.K. SHARMA, JR. D.R. DATE OF HEARING : 21.11.2011 DATE OF PRONOUNCEMENT : 23.11.2011 ORDER PER BENCH : THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER O F LD. CIT(A)-I, AGRA DATED 14.12.2010 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. BECAUSE, THE LD I.T.O. HAS BEEN WRONGLY ADDED S UM OF RS.3,46,085.00 TO THE INCOME OF THE ASSESSEE AS INC OME FROM UNDISCLOSED SOURCES. THIS AMOUNT IS NOT THE INCOME OF THE ASSESSEE. ITA NO.60/AGR/2011 A.Y. 2006-07 2 BUT IT IS THE SALE PROCEEDS OF SILVER COINS AND THE UTENSILS WHICH WERE RECEIVED AS PER WILL OF HIS FATHER. ON THIS SALE P ROCEEDS THE ASSESSEE HAS PAID LONG TERM CAPITAL GAIN TAX. THE LD. CIT(APPEAL) HAS ALSO ERRED IN NOT ACCEPTING THE CAPITAL GAIN INCOME. 2. BECAUSE, THE LD. ASSESSING OFFICER AS WELL AS LD . CIT(APPEAL) HAS NOT ACCEPTED THE WILL OF THE ASSESSEES FATHER AND ALSO SALE PROCEEDS OF SILVER COINS AND UTENSILS WITHOUT ANY B ASIS. 3. BECAUSE, THE WILL OF THE ASSESSEES FATHER IS GE NUINE AND IT SHOULD BE ACCEPTED. THE SALE PROCEEDS ARE ALSO SUP PORTED BY CASH MEMO AND RECORDED IN REGULAR ACCOUNT BOOKS. 3. THE FACTS IN ALL THE GROUNDS OF THE ASSESSEE ARE THAT THE ASSESSEE HAD DECLARED A LONG TERM CAPITAL GAIN OF RS.1,02,414/- ON THE SA LE OF SILVER COINS AND SILVER UTENSILS AFTER DEDUCTING INDEXED COST OF THESE ITEM S. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS CLAIMED BY THE ASSES SEE THAT THESE ITEMS WERE EXPLAINED TO HAVE BEEN RECEIVED ON 09.07.1995 FROM HIS FATHER LATE SHRI CHANDRA BHAN AGARWAL WHO EXPIRED ON 11.07.1995. IT WAS THE VIEW OF THE A.O. THAT THE WILL IS NOT A REGISTERED ONE AND THE SILVER COINS A ND SILVER UTENSILS HAVE BEEN SOLD ON 25.02.2006 WHICH WERE ACCOUNTED FOR IN A CASH BO OK. THE SALE HAS BEEN CLAIMED TO HAVE BEEN MADE THROUGH A BROKER WHO BROU GHT ALL THE CUSTOMERS IN A SINGLE DAY. THE A.O. OBSERVED THAT THE SALE OF SIL VER COINS WERE MADE WITH 75 COINS EACH WERE SOLD TO DIFFERENT PERSONS VIDE CASH MEMOS 1 TO 12 AND THE REMAINING 50 COINS WERE SOLD TO LAST PERSON VIE CAS H MEMO NO.13. AFTER CLOSING ITA NO.60/AGR/2011 A.Y. 2006-07 3 THE SALE OF SILVER COINS, THE SALE OF SILVER UTENSI LS WAS STARTED. OUT OF 5150 GRAMS OF SILVER UTENSILS, 950 GRAMS OF SILVER UTENSILS EA CH WERE SOLD TO 5 PERSONS VIDE CASH MEMO 14 TO 18 AND THE BALANCE OF 400 GRAMS OF SILVER UTENSILS WERE SOLD TO LAST PERSON. AFTER OBSERVING THIS PATTERNING OF SA LE, THE A.O. DOUBTED THE GENUINENESS OF THE SALES OF THE SILVER COINS AND SI LVER UTENSILS AND IT WAS DISCUSSED IN THE ASSESSMENT ORDER BY HIM THAT IT IS IMPORTANT TO NOTE THAT IT IS NOT PRACTICAL TO SELL SILVER UTENSILS OF EXACTLY SAME WEIGHT OF 950 GRAMS EACH TO 5 DIFFERENT PERSONS. EVEN THE WEIGHT OF TO IDENTICAL LOOKING SILVER UTEN SILS REMAINS DIFFERENT. THE A.O. RECORDED STATEMENT OF THE ASSESSEE DURING THE ASSES SMENT PROCEEDINGS AND IT WAS DISCUSSED BY THE A.O. IN THE ASSESSMENT ORDER THAT THE ASSESSEE IN HIS STATEMENT COULD NOT EXACTLY TELL THE TYPE OF SILVER UTENSILS RECEIVED AS PER WILL AND SOLD BY HIM. THE ASSESSING OFFICER CONCLUDED THAT RECEIPT OF RS.3,46,085/- FROM SALE OF SILVER COINS AND SILVER UTENSILS IS NOTHING BUT OWN MONEY OF THE ASSESSEE ROUTED THROUGH THE GARB OF SALE PROCEEDS OF THESE ITEMS AN D ACCORDINGLY ASSESSED THE SAME AS HIS INCOME FROM UNDISCLOSED SOURCES UNDER THE HE AD INCOME FROM OTHER SOURCES. THE LD. CIT(A)(A) CONFIRMED THE ACTION OF THE A.O. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS THE CASE. THE FIRST ALLEGATION AGAINST THE ASSESSEE IS THAT THE WILL IS NOT A REGISTERED ONE. IT IS FOR THE ASSESSING OFFICER TO VERIFY THROUGH THE WITNESSES O F THE WILL WHETHER THE WILL IS ITA NO.60/AGR/2011 A.Y. 2006-07 4 GENUINE OR NOT. IT IS NOT NECESSARY THAT WILL SHOU LD BE REGISTERED. THEREFORE, THE EXISTENCE AND ACQUISITION OF SLIVER COINS AND SILVE R UTENSILS AS MENTIONED IN THE WILL CANNOT BE DOUBTED. AS REGARDS THE SALES, THE ASSESSEE HAD CLAIMED THAT THESE SALES HAVE BEEN MADE THROUGH A BROKER WHO BROUGHT A LL THE CUSTOMERS IN A SINGLE DAY AS HAS BEEN OBSERVED BY THE LD. CIT(A) IN HIS O RDER. SINCE THE SALE IS MADE IN CASH AND THEREFORE, THE ASSESSEE HAS NOT NOTED THE ADDRESSES OF THE BUYERS AND ONLY THE SIGNATURES OF THE BUYERS ARE THERE ON IN THE CA SH MEMOS. THE WEIGHT OF THE UTENSILS AND THE COINS AS OBSERVED BY EACH OF THE A UTHORITIES BELOW CANNOT BE SAME APPEARS TO BE CONVINCING. THEREFORE, IN SUCH CIRCU MSTANCES AND FACTS OF THE CASE THE A.O. SHOULD HAVE SUMMONED THE BROKERS WHICH HAS NOT BEEN DONE BUT THE FACT REMAINS THAT THE ASSESSEE HAS SOLD THE SILVER COILS AND SILVER UTENSILS. IF THEY ARE NOT SOLD TO THE CUSTOMERS THROUGH BROKER AS CLAIMED, TH EN THEY MUST HAVE BEEN SOLD IN THE OPEN MARKET. AT THE BEST, THE SALE CAN BE COMP UTED AT MARKET VALUE ON THE DATE OF SALE. THEREFORE, IN SUCH CIRCUMSTANCES AND FACT S OF THE CASE, THE SALES MADE BY THE ASSESSEE CANNOT BE DENIED BUT THE SAID SALE HAS TO BE ON THE MARKET VALUE AND THE LONG TERM CAPITAL GAIN ALSO CANNOT BE DENIED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE SEND THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHO WILL FIND OUT THE MARKET VALUE OF THE SILVER COINS AND SILVER UTENSILS OF THE WEIGHT MENTIONED IN THE WILL AND TO COMPUTE THE SALE CONSIDERATION A ND ACCORDINGLY LONG TERM CAPITAL GAIN AND DECIDE THE CASE ACCORDINGLY, BUT B Y PROVIDING OPPORTUNITY OF ITA NO.60/AGR/2011 A.Y. 2006-07 5 BEING HEARD TO THE ASSESSEE. THE ASSESSING OFFICER IS DIRECTED TO ACT ACCORDINGLY. THUS, GROUND NOS.1 TO 4 OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 60/AGR/2011 IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 23.11.2011) SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 23 RD NOVEMBER, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY