Shri Omprakash Birdichand Singhal, Indore V. The ACIT 4(1), Indore

ITA 62/IND/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7188 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 02-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANADI VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Unexplained investment; Retraction
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AHCPS6887N I.T.A.NO. 62/IND/2011 A.Y. : 2008-09 SHRI OM PRAKASH BIRDICHAND SINGHAL, INDORE. ACIT, 4(1), INDORE. VS APPELLANT RESPONDENT APPELLANT BY : SHRI S. S. DESHPANDE, C.A. RESPONDENT BY : SHRI A NADI VERMA, CIT DR DATE OF HEARING : 12 . 12.2011 DATE OF PRONOUNCEMENT : 29 .12.2011 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 31 ST MARCH, 2011, FOR THE ASSESSMENT YEAR 2008-09, IN THE MATTER OF ORDER PASSED U/S 143(3)/153A. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE :- -: 2: - 2 1. THE ORDER PASSED BY THE LD.CIT IS ILLEGAL AND BAD IN LAW AND HENCE BETWEEN SET ASIDE. 2. THE LD. CIT HAS ERRED IN UPHOLDING THE ADDITION OF RS. 12,42,915/- ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN JEWELLERY. 3. IT WAS PROVED BEFORE THE LD. CIT AND ALSO THE LD. ASSESSING OFFICER THAT THE JEWELLERY POSSESSED BY THE FAMILY WAS DECLARED TO THE DEPARTMENT OR WAS MENTIONED IN VARIOUS DOCUMENTS AS SUCH THE ADDITION IS MADE ON HYPOTHETICAL GROUNDS ON SURMISES AND CONJECTURES. 4. THE LD. CIT(A) HAS ERRED IN NOT ACCEPTING THE CONTENTION OF THE ASSESSEE THAT NO JEWELLERY IS SOLD. ALTERNATIVELY, THE LD. CIT OUGHT TO HAVE ACCEPTED THE CONTENTION ABOUT GIVING TELESCOPING BENEFIT FOR THE VALUE OF THE ASSETS DECLARED IN THE STATEMENT RECORDED DURING THE COURSE OF THE SEARCH. 5. THE ADDITION OF RS. 12,42,915/- SUSTAINED BY THE LD. CIT BE DELETED. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. -: 3: - 3 4. THE FACTS OF THE CASE ARE THAT A SEARCH U/S 132 WAS CONDUCTED ON THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE ON 29.01.2008 AND DURING THE SEARCH THE AS SESSEE SURRENDERED RS. 40,08,250/- AS HIS UNDISCLOSED INCO ME FOR THE YEAR 2007-08 [I.E. ASSESSMENT YEAR 2008-09]. TH E BREAK UP OF THE SURRENDER WAS AS UNDER :- INVESTMENT IN PLOT DEVELOPMENT RS. 8,02,165/ - CASH FOUND RS. 50,000/ - ON ACCOUNT OF JEWELLE RY FOUND RS. 6,51,253/ - ON ACCOUNT OF JEWELLERY IN LOCKER RS. 23,50,000/ - ADVANCE FOR PLOT RS. 1,55,000/ - TOTAL RS. 40,08,418/- HOWEVER, AT THE TIME OF FILING OF RETURN, THE ASSES SEE OFFERED FOR ASSESSMENT ONLY RS. 27,65,338/- UNDER THE FOLLO WING HEADS :- INVESTMENT IN PLOT DEVELOPMENT RS. 8,02,000/ - CASH FOUND RS. 50,000/ - ON ACCOUNT OF JEWELLERY FOUND IN THE HOUSE RS. 6,51,253/ - ON ACCOUNT OF JEWELLERY IN THE LOCKER RS. 11,07,085/ - ADVANCE FOR PLOT RS. 1,55,000/ - THE ASSESSING OFFICER MADE ADDITION IN RESPECT OF J EWELLERY FOUND IN LOCKER AS PER THE SURRENDER STATEMENT OF A SSESSEE -: 4: - 4 BY DISREGARDING THE ACTUAL JEWELLERY FOUND IN THE L OCKER WHICH WAS DULY OFFERED BY ASSESSEE IN HIS RETURN. 5. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION AGAINST WHICH THE ASSESSEE IS IN APPEAL BE FORE US. 6. IT WAS ARGUED BY THE LD. AUTHORIZED REPRESENTATIVE THAT DURING THE COURSE OF SEARCH, THE ASSESSEE HAS EXACTLY DECLARED THE JEWELLERY FOUND IN HIS POSSESSION. HOW EVER, IN RESPECT OF JEWELLERY LYING IN THE LOCKER, HE HAS SU RRENDERED ON ESTIMATE BASIS AND WHEN THE LOCKER WAS OPENED SUBSEQUENTLY, IT WAS FOUND THAT THERE WAS JEWELLERY OF RS. 11,07,085/- IN THE LOCKER AND THE DIFFERENCE OF AMO UNT OF JEWELLERY WAS STATED TO HAVE BEEN SOLD DURING THE Y EAR. ACCORDINGLY, IT WAS PLEADED THAT THE ASSESSEE IN TH E RETURN OF INCOME HAS OFFERED JEWELLERY OF RS. 11,07,085/- HAS BEEN ACTUALLY FOUND IN THE LOCKER. ALTERNATIVELY, HE ARG UED THAT SINCE THE JEWELLERY WAS SOLD, THE AMOUNT RECEIVED O N SALE OF JEWELLERY MAY BE TREATED AS FUNDS AVAILABLE WITH TH E ASSESSEE FOR MAKING INVESTMENT IN PLOT ETC., WHICH WAS ALSO DISCLOSED DURING THE COURSE OF SEARCH. 7. ON THE OTHER HAND, THE LD. CIT DR RELIED ON THE ORDER OF LOWER AUTHORITIES AND SUBMITTED THAT ONCE THE -: 5: - 5 ASSESSEE HAS SURRENDERED INCOME DURING COURSE OF SE ARCH, THERE WAS NO VALID REASON FOR RETRACTION FROM THE S AME AND THE LOWER AUTHORITIES WERE JUSTIFIED IN MAKING ADDI TION ON THE BASIS OF SURRENDER MADE DURING THE COURSE OF SE ARCH. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT DURING THE COURSE OF SEARCH STATEMENT OF ASSESSEE WAS RECORDED U/S 132(4), WHER EIN INCOME WAS OFFERED ON ACCOUNT OF VARIOUS HEADS AS N ARRATED ABOVE. IN RESPECT OF JEWELLERY FOUND IN ASSESSEES POSSESSION THE ASSESSEE HAD DECLARED AND SURRENDERED THE EXACT AMOUNT AS WORKED OUT ON VALUATION OF SUCH JEWELLERY . IN RESPECT OF JEWELLERY WHICH WAS NOT IN HIS POSSESSIO N BUT LYING IN LOCKER, ON ESTIMATED BASIS, THE ASSESSEE H AS OFFERED RS. 23,50,000/- ON ACCOUNT OF SUCH JEWELLERY. AFTER THE SEARCH, WHEN THE LOCKER WAS ACTUALLY OPENED, IN THE PRESENCE OF DEPARTMENT, THE JEWELLERY SO FOUND WAS WORTH RS. 11,07,085/-. AT THE TIME OF SUCH OPENING OF LOC KER, THE STATEMENT OF ASSESSEE WAS ALSO RECORDED WHEREIN HE STATED THAT BALANCE OF THE JEWELLERY HAS BEEN SOLD BY THE ASSESSEE. AS THE ACTUAL JEWELLERY FOUND IN THE LOCKER WAS WOR TH RS. 11,07,085/-, THEREFORE, IN THE RETURN OF INCOME FIL ED AFTER -: 6: - 6 SEARCH, INCOME ON ACCOUNT OF JEWELLERY IN LOCKER WA S OFFERED AT RS. 11,07,085/-. THERE IS NO DISPUTE TO THE WELL SETTLED LEGAL PROPOSITION THAT STATEMENT RECORDED U/S 132(4 ) IS REBUTTABLE STATEMENT AND BY BRINGING POSITIVE MATER IAL ON RECORD, THE ASSESSEE CAN RECTIFY THE SAME. IN THE I NSTANT CASE, AT THE TIME OF RECORDING THE STATEMENT AT THE TIME OF SEARCH, THE ASSESSEE WAS NOT KNOWING THE EXACT AMOU NT OF JEWELLERY LYING IN THE LOCKER, THEREFORE, ON ESTIMA TE BASIS, HE HAS DECLARED JEWELLERY OF RS. 23.50 LAKHS. AFTER SE ARCH WHEN THE LOCKER WAS ACTUALLY OPERATED, IT WAS FOUND THAT ONLY JEWELLERY WORTH RS. 11,07,085/- WAS LYING IN THE LO CKER. THEREFORE, IN THE RETURN OF INCOME, THE ASSESSEE HA S OFFERED INCOME OF RS. 11,07,085/- ON ACCOUNT OF JEWELLERY A CTUALLY FOUND IN LOCKER IN PLACE OF ESTIMATED JEWELLERY DEC LARED AT THE TIME OF RECORDING OF STATEMENT DURING SEARCH AT RS. 23.50 LAKHS. SINCE THE ACTUAL JEWELLERY FOUND IN LO CKER WAS RS. 11,07,085/-, THE ASSESSEE HAS CORRECTLY DECLARE D JEWELLERY AT RS. 11,07,085/- IN THE RETURN OF INCOM E. WE DO NOT FIND ANYTHING WRONG ON ASSESSEES PART IN SO FA R AS HE HAD OFFERED INCOME IN THE RETURN AS PER ACTUAL JEWE LLERY FOUND IN LOCKER WHICH WAS OPENED IN THE PRESENCE OF -: 7: - 7 DEPARTMENTAL AUTHORITIES. WE ALSO FOUND THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE EXPLAINED THE POSSESSION OF THE JEWELLERY AS UNDER :- 1140 GMS. (98 TOLAS) DECLARED IN THE WEALTH TAX RETURN OF RAMANAND BIRDICHAND HUF, WHICH CONSISTS OF SHRI OMPRAKASH, SHRI BIRDICHANDJI (FATHER) & SHRI SUMIT(SON) W.T. RETURNS FILED TILL ASSESSMENT YEAR 1984-85 COPY OF COMPUTATION AND ASSESSMENT ORDER OF WEALTH TAX ENCL. ( PAGE NOS. 157 166) 188.63 GMS. GOLD PURCHASED BY SMT. VANDANA SINVHAL DISCLOSED IN HER BALANCE SHEETS ALREADY FILED BEFORE THE SEARCH. 299.45 GMS. GOLD PURCHASED BY SHRI SUMIT SINVHAL DISCLOSED IN HIS BALANCE SHEETS ALREADY FILED BEFORE THE SEARCH. 100.91 GMS. GOLD PURCHASED BY SHRI OMPRAKASH SINVHAL DISCLOSED IN HIS BALANCE SHEETS ALREADY FILED BEFORE THE SEARCH. 1007.00 GMS. GOLD PURCHASED BY SHRI OMPRAKASH SINVHAL DISCLOSED IN HIS BALANCE SHEETS ALREADY FILED BEFORE THE SEARCH. (DISCLOSED IN THE AMOUNT OF RS. 2,42,076/-) 2735.99 GMS. ALREADY DISCLOSED IN VARIOUS RETURNS. 1769.28 GMS. (152 TOLAS) MENTIONED IN THE WILL OF SMT. KASTURI BAI SINVHAL ( MOTHER OF THE ASSESSEE ) DIED ON 7.12.2003, WHICH WAS GIVEN TO SMT. VANDANA SINVHAL & JYOTI SINVHAL. -: 8: - 8 9. THUS, THE JEWELLERY DECLARED BY THE ASSESSEE IN THE RETURN AT RS. 17,58,338/- WAS MORE THAN WHAT THE AS SESSEE WAS ACTUALLY HAVING AND FOR WHICH PROPER DISCLOSURE WAS ALREADY MADE EITHER IN THE RETURN OF INCOME OR THE SAME WAS PROPERLY EXPLAINED. THUS, THE ADDITION SO MADE BY A SSESSING OFFICER DESERVES TO BE DELETED. 10. AS AN ALTERNATE, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT LESS JEWELLERY FOUND IN LOCKER WAS S TATED TO HAVE BEEN SOLD EVEN AT THE TIME OF OPERATION OF THE LOCKER, THEREFORE, FUNDS RECEIVED OUT OF SALE PROCEEDS WERE AVAILABLE WITH THE ASSESSEE FOR MAKING INVESTMENT IN OTHER AS SETS, WHICH WERE ALSO DISCLOSED DURING COURSE OF SEARCH. THE ALTERNATIVE PLEA OF THE ASSESSEE IS ALSO ACCEPTABLE IN SO FAR AS ASSESSEE HAS ALSO MADE A DISCLOSURE OF INVESTMEN T IN PLOT WORTH RS. 8.02 LAKHS, ADVANCE FOR PLOT RS. 1.50 LAK HS AND CASH FOUND AT RS. 50,000/-. 11. THE INCOME CLAN BE DETERMINED ONLY ON ACCOUNT OF THE EVIDENCE FOUND DURING THE COURSE OF THE SEARCH. THE STATEMENT GIVEN BY THE ASSESSEE WAS ON ESTIMATES AN D SUBSEQUENTLY WHEN LESSER QUANTITY WAS FOUND, IT WAS STATED THAT THE BALANCE OF JEWELLERY IS SOLD. ON THE BASIS OF -: 9: - 9 STATEMENT, NO ADDITION CAN BE MADE WITHOUT FINDING ANY ADVERSE EVIDENCE AGAINST THE ASSESSEE. THE RETURN H AS BEEN FILED STATING THE CORRECT INCOME AND THE LD. ASSESS ING OFFICER HAS MADE THE ADDITION ONLY ON THE BASIS OF THE STAT EMENT WITHOUT FINDING ANY SLIGHTEST EVIDENCE ABOUT THE PO SSESSION OF THE JEWELLERY. EVEN IF IT IS ASSUMED THAT THE J EWELLERY IS SOLD, THEN THE AMOUNT OF SALE PROCEEDS WAS AVAILABL E WITH THE ASSESSEE FOR INVESTMENT IN THE PLOT, PLOT DEVEL OPMENT, CASH AND JEWELLERY IN THE HOUSE DECLARED. THAT WOUL D TAKE CARE OF ALL THESE AMOUNTS. THERE CANNOT BE A DOUBLE TAXATION, ONCE AGAINST THE SALE OF THE JEWELLERY AN D SECONDLY THE INVESTMENTS MADE BY THE ASSESSEE. IN VIEW OF TH IS, THE ADDITIONS SO MADE DESERVE TO BE DELETED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 29 TH DECEMBER, 2011. (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 29 TH DECEMBER, 2011. CPU* 2229