Anju Devi Mandhani, Vizianagaram, Hyderabad V. DCIT, Central Circle-1(3), Hyd, Hyderabad

ITA 607/HYD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98781 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-11-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 11-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: B SATYANARAYANA MURTHY
• Keywords: Search and seizure; Additional evidence
• Section: 143(3); 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.606 & 607/HYD/2015 ASSESSMENT YEARS 2010-11 & 2011-2012 SMT. ANJU DEVI MANDANI, VIZIANAGARAM. PAN ABVPM2347N VS. THE DCIT, CENTRAL CIRCLE-1(3), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. B. SATYANARAYANA MURTHY FOR REVENUE : MR. K. E. SUNIL BABU DATE OF HEARING : 12.11.2015 DATE OF PRONOUNCEMENT : 30 .11.2015 ORDER PER SMT. P. MADHAVI DEVI, J.M. BOTH ARE ASSESSEES APPEALS FOR THE A.YS. 2010- 11 AND 2011-12 RESPECTIVELY. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S THE WIFE OF MR. BIJAY KUMAR MANDHANI, MANAGING PART NER OF MAHESWARI BROTHERS FIRM. A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE I.T. ACT WAS CON DUCTED IN THE CASES OF MAHESWARI BROHTERS AND ALSO AT THE RESIDENCE OF THE ASSESSEE ON 08.09.2010. DURING THE COURSE OF SURVEY, 1199.4 GRAMS OF GOLD JEWELLERY VA LUED AT RS.23,14,842 AND DIAMOND JEWELLERY VALUED AT RS.9,76,333 WAS FOUND AND SEIZED. SINCE THE ASSETS 2 ITA.NOS.606 & 607/HYD/2015 SMT. ANJU DEVI MANDHANI, VIZIANAGARAM. BELONGING TO THE ASSESSEE WERE SEIZED, NOTICE UNDER SECTION 153C DATED 18.08.2011 WAS ISSUED. IN RESPON SE TO THIS NOTICE, ASSESSEE FILED HER RETURN OF INCOME ON 11.07.2012 ADMITTING TOTAL INCOME OF RS.19,22,166. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A. O. OBSERVED THAT FOR THE FINANCIAL YEAR RELEVANT TO TH E A.Y. 2010-11, ASSESSEE HAS CLAIMED TO HAVE RECEIVED UNSECURED LOANS TO THE EXTENT OF RS.3,55,01,800. THEREFORE, A SHOW CAUSE NOTICE DATED 01.03.2013 WAS ISSUED DIRECTING THE ASSESSEE TO PROVE THE CREDITS WITHIN THE MEANING OF SECTION 68 OF THE I.T. ACT. THE ASSE SSEE, VIDE HER REPLY DATED 15.03.2013, SUBMITTED THAT 8 P ERSONS MENTIONED IN SL. NOS. 1 TO 8 WERE NOT ASSESSED TO I NCOME TAX AND AS REGARDS THE OTHERS, IT WAS SUBMITTED THA T THEY ARE ALL ASSESSED TO INCOME TAX AND GAVE THEIR PAN A ND ALSO FURTHER STATED THAT ALL THE LOANS TAKEN WERE B Y WAY OF BANK PAY ORDERS AND CHEQUES. THE A.O. HOWEVER, OBSE RVED THAT THE ASSESSEE HAS NOT SUBMITTED CONFIRMATION LE TTERS FROM THE ALLEGED LOAN CREDITORS. THEREAFTER, AFTER PERUSAL OF THE EVIDENCE FILED BY THE ASSESSEE, THE A.O. HELD T HAT THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS A ND ALSO THE GENUINENESS OF THE TRANSACTIONS IN THE CASE OF LOANS OBTAINED FROM NON-TAX PAYERS. HE THEREFORE TREATED THE CREDITS TO THE EXTENT OF RS.30,01,800 AS UNEXPLAINE D CASH CREDITS AND ADDED IT TO HER RETURNED INCOME FOR THE A.Y. 2010-2011. 2.1. AGAINST THE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) ALONG WITH AN 3 ITA.NOS.606 & 607/HYD/2015 SMT. ANJU DEVI MANDHANI, VIZIANAGARAM. APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE IN THE FORM OF CONFIRMATION LETTERS FROM THE NON-TAX PAYEE S, THE LOANS FROM WHOM WERE ADDED UNDER SECTION 68 OF THE I.T. ACT AND REQUESTED TO ACCEPT THE SAME AS ADDITIONAL EVIDENCE UNDER RULE 46A OF THE I.T. RULES. IT WAS SUBMITTED BY THE ASSESSEE THAT THE CREDITORS COULD NOT BE CONTACTED AT THE TIME OF ASSESSMENT PROCEEDINGS AND THEREFORE, THE CONFIRMATION LETTERS HAVE BEEN OBTAI NED SUBSEQUENTLY. THE LD. CIT(A) HOWEVER, REFUSED TO AD MIT THE ADDITIONAL EVIDENCE AND CONFIRMED THE ADDITION MADE BY THE A.O. AGGRIEVED BY THE ORDER OF THE LD. CIT(A ), THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3. THE LD. COUNSEL FOR THE ASSESSEE, WHILE REITERATING THE STATEMENTS MADE BY THE ASSESSEE BEF ORE THE LD. CIT(A), HAS FILED A PAPER BOOK CONSISTING O F THE PHOTO COPIES OF THE CONFIRMATION LETTERS FROM THE C REDITORS FROM WHOM THE ASSESSEE HAS ALLEGEDLY TAKEN LOANS AN D WHO ARE NOT INCOME TAX PAYEES. THE DETAILS OF THE S AID LOANS ARE GIVEN AT PAGE NOS. 11 TO 28 OF THE PAPER BOOK AND ON PERUSAL OF THE SAME, WE FIND THAT SOME OF TH E LOANS HAVE BEEN BY WAY OF ACCOUNT PAYEE CHEQUES. IN OUR OPINION, THIS EVIDENCE IS RELEVANT AND CRUCIAL FOR ADJUDICATION OF THE ISSUE. THE LD. CIT(A), THEREFOR E, SHOULD HAVE ADMITTED THE SAID EVIDENCE AND DECIDED THE ISS UE ON MERITS IN ACCORDANCE WITH LAW. THEREFORE, WE DEEM I T FIT AND PROPER TO ADMIT THE ADDITIONAL EVIDENCE FILED B Y THE ASSESSEE AND REMIT THE ISSUE TO THE FILE OF THE A.O . FOR VERIFICATION OF THE SAME AND RE-COMPUTATION OF THE INCOME 4 ITA.NOS.606 & 607/HYD/2015 SMT. ANJU DEVI MANDHANI, VIZIANAGARAM. OF THE ASSESSEE IN ACCORDANCE WITH LAW THEREAFTER. NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE GIVE N FAIR AND REASONABLE OPPORTUNITY OF HEARING. 4. IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE A.Y. 2010-2011 IS ALLOWED FOR STATISTICAL PURPOSES. ASSESSMENT YEAR 2011-2012 : 5. THE ASSESSEE FILED HER RETURN OF INCOME ON 14.08.2012 ADMITTING INCOME OF RS.22,87,178 DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE I.T. ACT. THE A.O. OBSERVED THAT DURING THE SEARCH AT TH E RESIDENCE OF ASSESSEE, 2918.4 GRAMS OF GOLD JEWELLE RY WAS FOUND WHICH WAS VALUED AT RS.52,71,659 AND DIAMOND JEWELLERY FOUND WAS VALUED AT RS.20,18,000. HE OBSE RVED THAT ON THE DATE OF SEARCH, WEALTH TAX RETURNS FILE D BY THE ASSESSEE AND HER HUSBAND MR. BIJAY KUMAR MANDHANI WERE VERIFIED WITH THE JEWELLERY FOUND, AND IT WAS NOTICED THAT THE ASSESSEE HAS NOT DISCLOSED 1199 GRAMS OF G OLD VALUED AT RS.23,14,842 AND DIAMOND JEWELLERY TO THE TUNE OF RS.9,76,333 TO THE DEPARTMENT. DURING THE ASSESS MENT PROCEEDINGS, THE ASSESSEE WAS THEREFORE ASKED TO EX PLAIN WHY UNDISCLOSED PORTION OF THE GOLD AND DIAMOND JEWELLERY CANNOT BE ASSESSED IN HER HANDS AS UNEXPL AINED INVESTMENT. THE ASSESSEE, IN HER REPLY TO THE SHOW CAUSE NOTICE, HAS STATED THAT THE GOLD JEWELLERY FOUND ON THE DAY OF SEARCH BELONGED TO HER, HER HUSBAND AND HER FAMI LY MEMBERS TOGETHER. AS REGARDS THE DIAMOND JEWELLERY VALUED AT RS.9,05,067, SHE STATED THAT SHE HAD PURC HASED 5 ITA.NOS.606 & 607/HYD/2015 SMT. ANJU DEVI MANDHANI, VIZIANAGARAM. THE SAME JUST BEFORE THE SEARCH FROM M/S. HIRACHAND JEMS P. LTD., AND THAT THE PAYMENT TO THE CONCERNED PARTY WAS MADE BY RTGS BY M/S. MAHESWARI BROHTERS O N HER BEHALF AND RELEVANT BILLS WERE SUBMITTED TO THE CONCERNED DDIT (INV.) AT THE TIME OF LIFTING THE P. O. SHE FURTHER CLAIMED THAT THE TOTAL JEWELLERY DECLARED B Y HER FAMILY IN THE WEALTH TAX RETURNS OF ALL THE FAMILY MEMBERS WAS 12092.65 GRAMS INCLUDING GOLD JEWELLERY DECLARE D BY HER HUSBAND IN THE WEALTH TAX RETURN FILED FOR THE A.Y. 2009-2010, WHEREAS THE GOLD JEWELLERY AS PER PANCHANAMA WAS ONLY 8496.55 GRAMS. THUS, ACCORDING TO HER, THE JEWELLERY BELONGING TO FAMILY MEMBERS GOT MIXED AND ALSO GOT EXCHANGED OVER A PERIOD OF TIME AND WO ULD BE AVAILABLE WITH DIFFERENT MEMBERS AT DIFFERENT PO INT OF TIME. SHE, THEREFORE, SUBMITTED THAT SINCE THE GOLD DECLARED BY THE FAMILY WAS MORE THAN THE GOLD FOUND AS PER THE PANCHANAMA, NO ADDITION NEEDS TO BE MADE. T HE A.O. HOWEVER, HELD THAT THE ASSESSEES CLAIM THAT T HE GOLD JEWELLERY BELONGS TO THE ASSESSEE AS WELL AS OTHER FAMILY MEMBERS IS NOT ACCEPTABLE. HE FURTHER EXAMINED THE GOLD AND JEWELLERY DECLARED BY THE ASSESSEE AS WELL AS H ER HUSBAND AND FOUND THAT THE GOLD JEWELLERY FOUND WAS MORE THAN THE JEWELLERY DECLARED BY THEM AND HELD T HAT AS PER THE WEALTH TAX RETURNS ALSO, THE TOTAL ADMITTED DIAMOND JEWELLERY WAS RS.19,41,667. THEREAFTER, HE PROCEEDED TO REJECT THE ASSESSEES CLAIM AND ASSESS ED THE DIFFERENCE IN THE VALUE I.E., RS.32,91,175 AS UNEXP LAINED INVESTMENT IN GOLD AND DIAMOND JEWELLERY. 6 ITA.NOS.606 & 607/HYD/2015 SMT. ANJU DEVI MANDHANI, VIZIANAGARAM. 5.1. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) REITERATING THE SUBMISSIONS MADE BEFORE THE A.O. TH E LD. CIT(A) HOWEVER, WHO CONFIRMED THE ADDITION ON ACCOU NT OF EXCESS OF GOLD JEWELLERY FOUND I.E., RS.23,86,108 A ND GRANTED RELIEF OF RS.9,05,067 ON ACCOUNT OF DIAMOND JEWELLERY. AGAINST THE CONFIRMATION OF THE ADDITION OF RS.23,86,108, THE ASSESSEE IS IN APPEAL BEFORE US. 6. LD. COUNSEL FOR THE ASSESSEE, REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW WHILE THE LD. D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BE LOW. 7. ON PERUSAL OF THE MATERIAL ON RECORD, WE FIND THAT THE LD. CIT(A) HAS NOT ACCEPTED ASSESSEES CON TENTION THAT THE GOLD JEWELLERY FOUND AND SEIZED DURING THE COURSE OF SEARCH DID NOT TALLY WITH THE JEWELLERY DECLARED BY FAMILY MEMBERS IN THEIR WEALTH TAX RETURNS BECAUSE NO RETURN OF WEALTH WAS FILED IN THE CAPACITY OF HUF. SHE HAS FURTHER TAKEN INTO CONSIDERATION THE FACT THAT NEIT HER AT THE TIME OF SEARCH NOR POST SEARCH, ANY STATEMENT W AS GIVEN THAT THE JEWELLERY FOUND BELONGS TO SOMEONE E LSE. THE LD. CIT(A) HAS ALSO TAKEN INTO CONSIDERATION TH E FACT THAT ALL THE MEMBERS OF THE FAMILY ARE STAYING AT D IFFERENT HOUSES AND ARE SUBJECT TO WEALTH TAX AND INCOME TAX IN THEIR INDIVIDUAL STATUS AND EACH PIECE OF JEWELLERY IS ITEMIZED, VALUED AND RETURN OF WEALTH IS ALSO FILED BY THE INDIVIDUALS CONCERNED. EVEN BEFORE US, THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THAT THE JEWELLERY ON AC COUNT OF 7 ITA.NOS.606 & 607/HYD/2015 SMT. ANJU DEVI MANDHANI, VIZIANAGARAM. WHICH THE ADDITION HAS BEEN MADE BELONGS TO ANY OTH ER MEMBER OF THE ASSESSEES FAMILY WITH ANY EVIDENCE. IN VIEW OF THE SAME, WE DO NOT SEE ANY REASON TO INTER FERE WITH THE ORDER OF THE LD. CIT(A) AND ASSESSEES APP EAL IS ACCORDINGLY DISMISSED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE A.Y. 2011-2012 IS DISMISSED. 9. TO SUM-UP, ASSESSEES APPEAL FOR THE A.Y. 2010-2011 IS ALLOWED FOR STATISTICAL PURPOSES AND F OR THE A.Y. 2011-12 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.2 015 SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 30 TH NOVEMBER, 2015 VBP/- COPY TO 1. SMT. ANJU DEVI MANDHANI, VIZIANAGARAM. C/O. VENUGOPAL & CHENOY, CHARTERED ACCOUNTANTS, 4- 1-889/16/2, TILAK ROAD, HYDERABAD 500 001. 2. THE DCIT, CENTRAL CIRCLE - 1(3), HYDERABAD. 3. CIT(A) - XI, HYDERABAD. 4. CIT (CENTRAL), HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD 6. GUARD FILE