LALIT MOOLCHAND JAIN, THANE V. ITO WD 1(4), THANE

ITA 6396/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0528 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 17-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUBHODH RATNAPARKHI
• Section: 143(3); 133A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI G.S.PANNU, AM AND SHRI RAVISH SOOD , JM . . , ITA NO.6396/MUM/2014 ( / ASSE SSMENT YEAR : 2 00 7 - 08 ) LALIT MOOLCHAND JAIN, PROP. M/S LABDHI ORNAMENTS, KULDEEPAK CO - OP .HSG, SOCIETY, STATION ROAD, THANE (W), PIN - 400601, / VS. INCOME TAX OFFICER, WARD 1(4), 6 TH FLOOR, ASHAR IT PARK, ROAD NO.16Z, WAGLE INDUSTRIAL ESTATE , THANE (W) - 400604 .: PAN : AA PPJ1667F / ASSESSEE BY SHRI SUBHODH RATNAPARKHI / REVENUE BY SHRI DURGA DUTT / DATE OF HEARING : 23 .5.2017 / DATE OF PRONOUNCEMENT : 23 .5. 2017 / O R D E R PER G.S.PANNU , ACCOUNTANT MEMBER : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - II, THANE, DATED 21.7.2014 , PERTAINING TO THE A SSESSMENT YEAR 2007 - 08 WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 24.12.2009 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT) . 2 ITA NO.6396/MUM/2014 2. IN THIS APPEAL, THE ONLY ISSUE RAISED IS WITH RESPECT T O THE ADDITION OF RS.9,05,450/ - MADE BY THE AO UNDER SECTION 69B OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT ) ON ACCOUNT OF UNEXPLAINED EXCESS STOCK OF JEWELRY. 3. IN BRIEF THE RELEVANT FACTS ARE THAT THE ASSESSEE INDIVIDUAL IS RUNNING JEWELRY BUSINESS IN HIS PROPR IETARY CONCERN M/S LABDHI ORNAMENTS IN JODHPUR. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION A SURVEY ACTION UNDER SEC T ION 133A OF THE ACT WAS CARRIED OUT IN THE ASSESSEES BUSINESS PREMISES AT JODHPUR. IN THE COURSE OF S URVEY PROCEEDINGS, IT WAS FOUND THAT THERE WAS A DIFFEREN CE OF RS.20,14,647/ - BETWEEN THE VALUE OF ACTUAL STOCK OF JEWE LLERY FOUND ON PHYSICAL VERIFICATION VIS - - VIS THE STOCK POSI TION AS PER THE ACCOUNT BOOKS. IN THE COURSE OF ASSESSMENT PROCEEDINGS , T HE ASSESSEE WAS ASKED TO RECONCILE THE SAID DIFFERENCE. THE EXPLANATION FILED BY THE ASSESSEE WAS NOT FULLY ACCEPTED BY THE AO AND HE CONCLUDED THAT AMOUNT OF RS.17, 00, 667/ - REPRESENTED INVESTMENT MADE IN UNEXPLAINED STOCK OF JEWE LLERY FOUND DURING THE CO UR S E OF SURVEY. ACCORDINGLY, HE MADE AN ADDITION OF RS.17, 00, 667/ - TO THE RETURNED INCOME U/S 69B OF THE ACT. 4. IN APPEAL BEFORE THE CIT(A), ASSESSEE CANVASSED THAT IN THE COURSE OF THE STATEMENT RECORDED DURING THE SURVEY ACTION, ASSESSEE HAD EXPLAIN ED THAT THE DIFFERENCE WAS ON ACCOUNT OF THE PERSONAL JEWE LLERY OF THE FAMILY MEMBERS KEPT IN THE BUSINESS PREMISES WHICH WAS NOT TO BE CONSIDERED WHILE COMPARING WITH 3 ITA NO.6396/MUM/2014 THE STOCK AS PER ACCOUNT BOOKS. THE CIT(A) NOTED THAT THE AO HAD MADE ADDITION OF RS.17 , 00, 667/ - IN RELATION TO 1868.865 GMS UNEXPLAINED STOCK OF JEWE LLERY . ONE OF THE POINT EXPLAINED BY THE ASSESSEE WAS THAT JEWE LLERY 251.000 GRAMS AND 588.800 GRAMS WAS RECEIVED FROM HIS FATHER AND MOTHER RESPECTIVELY WHICH SHOULD BE REDUCED FROM THE DI FFERENCE. THE CIT(A) ACCEPTED THE SAID POSITION AND ACCORDINGLY , SCALED DOWN THE ADDITION TO RS.9 , 05 , 450/ - . AGAINST SUCH SUSTENANCE OF ADDITION BY THE CIT(A), ASSESSEE IS IN APPEAL BEFORE US. 5. BEFORE US, ONLY PLEA OF THE ASSESSEE W A S THAT DURING THE SU RVEY ITSELF ASSESSEE HAD POINTED OUT THAT PERSONAL JEWE LLERY OF HIS WIFE, 500.00 GRAMS, HIS DAUGHTERS - 32 5 .00 GRAMS AND SELF 170.00 GRAMS WAS A PART OF THE PHYSICAL STOCK WHICH WAS NOT TO BE CONSIDERED AS PART OF THE STOCK REFLECTED BY THE ACCOUNTS BOOKS . THE LD. REPRESENTATIVE POINTED OUT THAT ASSESSEES EXPLANATION WITH REGARD TO THE AFORESAID THREE ITEMS HAVE BEEN UNJUSTLY REJECTED. IT HAS BEEN ASSERTED BEFORE US THAT SINCE THE SAID EXPLAN ATION WAS GIVEN AT THE FIRST INSTANCE, THE SAME WAS BONAFIDE. OUR ATTENTION HAS BEEN DRAWN TO THE STA TE MEN T RECORDED AT THE TIME OF SURVEY WHEREIN THE AFORESAID EXPLANATION HAS BEEN GIVEN. IT WAS THEREFORE CONTENDED THAT THE ADDITION DESERVE S TO BE REDUCED. 6 . ON THE OTHER HAND, THE LD.DR APPEARED FOR THE REVENUE P OINTED OUT THAT T HE PERSONAL JEWE LLERY COULD NOT HAVE BEEN KEPT IN THE BUSINESS PREMISES AND THAT IF AT ALL THERE IS ANY PERSON AL JEWELL ER Y , IT WAS TO BE FOUND IN THE RESIDENTIAL 4 ITA NO.6396/MUM/2014 PREMISES AND THEREFORE ACCORDING TO THE LD.DR THE LD.CIT(A) HAS CORRECTLY UPH ELD THE ADDITION. 7 . WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. BEFORE US, A LIMITED POINT HAS BEEN ARGUED WHICH IS BASED ON THE EXPLANATION GIVEN AT THE TIME OF SURVEY. ON BEING QUESTIONED WITH REGARD TO THE DIFFERENCE BETWEEN THE PHYSICAL AND BO OK STOCK, THE ASSESSEE EXPLAINED AT THE TIME OF SURVEY THAT PHYSICAL STOCK INCLUDED PERSONAL JEWELLERY BELONG ING TO SELF, WIFE AND TWO DAUGHTERS. WE FIND FROM A PERUSAL OF THE STATEMENT THAT THE ASSESSEE WAS NOT PUT TO ANY FURTHER QUESTIONING ON THIS ASPE CT. IN THIS BACKGROUND, THE BURDEN IS ON THE AO TO CONTROVERT THE SAID STATEMENT OF THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS. ON THE CONTRARY, THE AO AND THEREAFTER THE CIT (A) HAVE REJECTED THE EXPLANATION OF THE ASSESSEE WITHOUT ESTABLISHING AN Y INFIRMITY IN THE SAME. IN FACT, PART OF THE EXPLANATION HAS BEEN ACCEPTED BY CIT(A) IN SO FAR AS IT RELATED TO THE CLAIM OF THE PERSONAL JEWELLERY RECEIVED FROM FATHER AND MOTHER OF THE ASSESSEE. BE THAT AS IT MAY, IN OUR VIEW, THE CLAIM OF THE ASSESSEE HAS BEEN MERELY BRUSHED ASIDE WITHOUT ANY JUSTIFICATION AND THE SAME DESERVES TO BE ACCEPTED. WE HOLD SO . A S A CONSEQUEN CE , WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO RECOMPUTE THE ADDITION ON THIS AC COUNT AFTER TAKING INTO ACCOUNT THE ASS ESSEES CLAIM FOR EXCLUSION OF PERSONAL JEWELL ER Y BELONGING TO SELF - 170 GRAMS, WIFE - 500 GRAMS AND HIS DAUGHTERS 325.500 GR AM S. THUS, ON THIS ASPECT THE ASSESSEE SUCCEEDS. 5 ITA NO.6396/MUM/2014 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ABOVE DECISION WAS PRON OUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING ON 23 RD MAY, 2017. S D SD ( RAVISH SOOD) ( G.S.PANNU ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 23 . 5 .2017 SR.PS:SRL: / COPY OF THE ORDER FO RWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, T RUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI