Late Shri. P. Yogesh Achar, Mangalore V. ACIT, Mangalore

ITA 670/BANG/2010

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5476 (ITAT-BANGALORE)
• Duration Of Justice: 6 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 24-01-2017
• Assessment Year: 1993-1994
• Appeal Filed On: 14-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH AT MANGALORE BEFORE SHRI INTURI RAMA RAO, ACCOUNTA N T MEMBER AND SHRI SUDHANS H U SRIVASTAVA, JUDIC I AL MEMBER ITA NO . 670 /BANG/201 0 (ASS ESSMENT Y EAR: 199 3 - 94 ) SHRI SHASHIKAL PALKE, SANDEEP PALKE & SHAMAITA PALKE L/H OF LATE P.YOGESH ACHAR, PARTNER, M/S.CANARA JEWELLERS HAMPANAKATTA, MANGALORE - 575001. PAN:ABWPA 0390 A VS. ... APPELLANT ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), MANGALORE. ... RESPONDENT APPELLANT BY : MRS.SHEETAL BORKAR, ADVOCATE. RESPONDENT : SHRI JOSEPH RODRIGE, ACIT(DR) DATE OF HEARING : 03/02/2017 DATE OF PRONOUNCEMENT : 02 /0 5 /2017 O R D E R PER INTURI RAMA RAO, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE CIT(A), MANGALORE, DATED 17/03/2010 FOR THE ASSESSMENT YEAR 1993 - 94. ITA NO.670/BANG/2010 PAGE 2 OF 6 2. THE ONLY GROUND THAT SURVIVES FOR CONSIDERATION IN THIS APPEAL RELATES TO CONFIRMATION OF AD DITION U/S 69A [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT. 3. BRIEF FACTS LEADING TO THE ABOVE ADDITION ARE AS FOLLOWS: DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS U/S 132 OF THE ACT, ON 11/07/1992, THE RESIDENTIAL PREMISES OF THE ASSESSEE WER E ALSO SEARCHED. DURING THE COURSE OF SUCH PROCEEDINGS, INVESTIGATION WING OF THE DEPARTMENT FOUND GOLD JEWELLERY OF 4615 GMS. OF GOLD AND 19.7 GMS. OF DIAMONDS AND THE SAME WERE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE AS HE IS THE HEAD OF THE FAMILY. THE FACTUAL BACKGROUND OF THE ISSUE IS SET OUT BY THE AO VIDE PARA.5 OF THE ASSESSMENT ORDER WHICH READS AS UNDER: ITA NO.670/BANG/2010 PAGE 3 OF 6 ITA NO.670/BANG/2010 PAGE 4 OF 6 IN RESPONSE TO SHOW CAUSE NOTICE ISSUED BY THE AO, IT WAS SUBMITTED THAT THE ASSESSEE VIDE HIS WRITTEN SUBMISSIONS DAED 3/11/200 9 THAT THE QUANTITY OF GOLD AND DIAMONDS DECLARED IN WEALTH - TAX RETURN OF SANDEEP PALKE WAS NOT CONSIDERED. ONCE THAT IS CONSIDERED, THERE WOULD BE NOT BE ANY EXCESS. THE ASSESSEE WAS NOT SUCCESSFUL EVEN BEFORE THE CIT(A). BEING AGGRIEVED, THE ASSESSEE IS BEFORE US IN THE PRESENT APPEAL. 4. IT IS UNDISPUTED FACT THAT THE ASSESSEE WAS STAYING ALONG WITH HIS OTHER BROTHERS IN A COMMON FAMILY RESIDENCE. ALL OF THEM ITA NO.670/BANG/2010 PAGE 5 OF 6 ARE CARRYING ON THE BUSINESS OF JEWELLERY AND ALSO PARTNERS OF M/S.CANARA JEWELLERS. THERE IS NO DISPUTE ABOUT QUANTIFICATION OF THE JEWELLERY FOUND AT THE TIME OF SEARCH AND SEIZURE OPERATIONS. THE INVESTIGATION WING OF THE DEPARTMENT ESTIMATED EXCESS JEWELLERY AFTER DEDUCTING QUANTITY OF JEWELLERY DECLARED IN THE RESPECTIVE HANDS OF THE FAMILY M EMBERS. THE ONLY DISPUTE IS WITH REGARD TO SET OFF OF OR GRANTING CREDIT FOR QUANTITY OF GOLD PURPORTED TO BE BELONGING TO ONE MR.SANDEEP PALKE WHO IS ALSO UNDISPUTEDLY THE BROTHER OF THE APPELLANT. THE CONTENTION OF THE APPELLANT, THAT THE QUANTITY OF J EWELLERY OF SANDEEP PALKE IN HIS WEALTH - TAX RETURN SHOULD BE REDUCED FROM THE QUANTITY OF UNDISCLOSED JEWELLERY, WAS NOT ACCEPTED BY THE LOWER AUTHORITIES BY HOLDING THAT SANDEEP PALKE WAS NOT PRESENT IN THE HOUSE AT THE TIME OF SEARCH AND SEIZURE OPERATIO N. ACCORDING TO OUR CONSIDERED OPINION, MERELY BECAUSE HE WAS NOT PRESENT AT THE TIME OF SEARCH AND SEIZURE, CREDIT FOR THE AMOUNT OF JEWELLERY DECLARED IN WEALTH - TAX RETURN CANNOT BE DENIED, ESPECIALLY IN VIEW OF THE FACT THAT WEALTH - TAX RETURN WAS FILED WELL BEFORE THE DATE OF SEARCH AND SEIZURE OPERATIONS. THEREFORE, WE DIRECT THE AO TO GIVE CREDIT FOR THE QUANTUM OF GOLD AND JEWELLERY OR DIAMONDS DECLARED BY SANDEEP PALKE IN HIS WEALTH - TAX RETURN. IF THERE IS ANY BALANCE OF JEWELLERY, SAME SHOULD BE DISTRIBUTED AMONG ALL THE FAMILY MEMBERS AS LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE OF CIT VS. REKHA BAI (CIVIL APPEAL NO.1749 OF 2007 DATED 21/03/2017 WHEREIN THE HON BLE SUPREME COURT HELD AS UNDER: ITA NO.670/BANG/2010 PAGE 6 OF 6 SO FAR AS THE INCOME DIVIDEND AMO NG THE FAMILY MEMBERS OF THE RESPONDENT - ASSESSEE IS CONCERNED, WE FIND THAT ALL OF THEM WERE CARRYING ON SAME BUSINESS FROM THE SAME PREMISES. THEREFORE, IT IS BUT NATURAL THAT IF ANY CONCEALED INCOME HAS BEEN FOUND AT THE TIME OF SEARCH AND SURVEY, IT HA S TO BE DISTRIBUTED AMONG ALL THE FAMILY MEMBERS WHO WERE CARRYING ON BUSINESS . WITH THE ABOVE DIRECTION, WE REMIT THE MATTER BACK TO THE FILE OF THE AO TO MODIFY THE ASSESSMENT IN ACCORDANCE WITH THE ABOVE DIRECTION. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 N D M A Y , 201 7 S D / - S D / - (SUDHANSHU SRIVASTAVA) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: BENGALURU. DATE: 0 2 /0 5 /2017 SRINIVASULU, SR. PS COPY TO: 1) APPELLANT 2) RESPONDENT 3) CIT(A) 4) CIT, 5) DR ITAT, BANGALORE, 6) GUARD FILE ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE