Appeal details
Counselvise Citation
[2017] 130 COUNSELVISE.COM (IT) 6285 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
06-01-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
14-12-2016
Assessment Year
2011-2012
Appeal Filed On
10-05-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 672/HYD/2016 ASSESSMENT YEAR: 2011-12 P. RAMA DEVI, HYDERABAD. PAN ACSPP 8838K VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 1(1), HYDERABAD. (ASSESSEE) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SHRI A. SITARAMA RAO DATE OF HEARING : 14-12-2016 DATE OF PRONOUNCEMENT : 06-01-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A) - 11, HYDERABAD, DATED 18/01/2016 FOR AY 2011-12. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE HEREIN IS AN INDIVIDUAL DERIVING INCOME FROM RUNNING EDUCATIONAL INSTITUTIONS. FOR THE ASSESSMENT YEAR 2011-12, SHE FILED THE RETURN O F INCOME ON 22.5.2013 ADMITTING AN INCOME OF RS.1,43,50,040/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 153A ON A TOTAL INCOME OF RS.1,52,67,615/-. WHILE DOING SO, THE ASS ESSING OFFICER MADE AN ADDITION OF RS. 9,17,575/-. ACCORDING TO TH E ASSESSING OFFICER, DURING THE COURSE OF SEARCH AND SEIZURE OP ERATIONS, GOLD JEWELLERY OF THE VALUE OF RS. 44,21,500/- WAS FOUND . THE ASSESSEE DURING THE COURSE OF SEARCH ACCEPTED AN ADDITIONAL AMOUNT OF RS.25 LAKHS. HOWEVER, AT THE TIME OF FILING THE RETURN OF INCOME ONLY AN AMOUNT OF RS.15,83,425/- WAS OFFERED. WITH REGARD T O THE BALANCE OF THE AMOUNT, THE ASSESSEE SUBMITTED THAT 340 GRAMS O F GOLD JEWELLERY 2 ITA NO. 672/H/16 P. RAMA DEVI. WAS PURCHASED AT MADRAS AND THE PAYMENT WAS MADE TH ROUGH CHEQUE. THE ASSESSEE SUBMITTED THAT SUCH AMOUNT WAS NOT CONSIDERED AT THE TIME OF SEARCH WHILE RECORDING TH E DEPOSITION FROM THE ASSESSEE. THEREFORE, THE ASSESSEE PLEADED THAT THE AMOUNT OF RS.9,16,575/- (MENTIONED AS RS.9,17,575/- BY THE AS SESSING OFFICER) BE REDUCED FROM THE AMOUNT OF RS.25 LAKHS. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION AND ADDED RS .9,17,575/- TO THE INCOME ADMITTED. HE ACCORDINGLY, DETERMINED THE TOT AL INCOME AT RS.1,52,67,615/-. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A). 4. DURING THE COURSE OF APPEAL PROCEEDINGS, THE AUT HORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE S EIZED MATERIAL SHOW THAT THE ASSESSEE ACQUIRED GOLD JEWELLERY OF T HE VALUE OF RS.9,16,575/- DURING MAY, 2011 I.E., PRIOR TO THE D ATE OF SEARCH AND PAID THE AMOUNT THROUGH CHEQUE NO.119491 DT.7-5-201 1 THROUGH AXIS BANK A/C NO.3212 FOR PURCHASE OF JEWELLERY FROM MAH ARAJASREE RAJENDRA JEWELLERS, CHENNAI. IN SUPPORT OF HIS CONT ENTION, THE LD.AR ALSO FURNISHED A COPY OF BANK A/C STATEMENT FOR THE PERIOD 1-4-2011 TO 4- 2-2012. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT THE ADMISSION OF UNDISCLOSED INCOME I N THE FORM OF UNEXPLAINED INVESTMENT IN JEWELLERY AMOUNTING TO RS .25 IAKHS WAS IN A.Y. 2011-12 RELATING TO FINANCIAL YEAR ENDING 31.3 .2011, AND NOT A.Y. 2012-13 RELEVANT TO FINANCIAL YEAR ENDED 31.3.2012. THIS DISCLOSURE MADE BY THE ASSESSEE IS WITH REGARD TO HER UNDERSTA NDING OF THE FACTS FOR THE RELEVANT PERIOD. HE OBSERVED THAT THE ASSES SING OFFICER HAD NO OCCASION TO DISPUTE THE YEAR OF ASSESSABILITY AND T HE UNDISCLOSED INVESTMENT IN JEWELLERY WAS ASSESSED IN THE A.Y. 20 11-12, AS OFFERED. THE ONLY DISPUTE WAS REGARDING THE EVIDENTIARY SUPP ORT FOR THE ASSESSEE'S CLAIM THAT GOLD JEWELLERY VALUED AT RS.9 ,16,575/- WAS PURCHASED DURING MAY, 2011. HAVING BEEN ABLE TO IDE NTIFY THE 3 ITA NO. 672/H/16 P. RAMA DEVI. PAYMENT FOR THE PURCHASE FROM OUT OF HER ACCOUNTED SOURCES, THE ASSESSEE CONTENDS THAT THIS OF ITEM OF JEWELLERY CA NNOT BE SEEN AS AN UNACCOUNTED INVESTMENT. HE OBSERVED THAT THE DIFFER ENCE BETWEEN THE AMOUNT ORIGINALLY DISCLOSED AND AMOUNT NOW OFFERED IN THE RETURN OF INCOME, THEREFORE, SHOULD NOT BE SEEN AS AN UNFOUND ED AND OPPORTUNISTIC RETRACTION BECAUSE THIS REDUCTION IS ON ACCOUNT OF AN ERRONEOUS ASSUMPTION OF FACT, WHICH IS NOW CORRECTE D. ON A CAREFUL CONSIDERATION OF THE MATTER, HOWEVER, IT IS SEEN TH AT THE STATED PURCHASE CAN BE INFERRED AS BEING MADE AROUND 07.5. 2011 BEING THE DATE WHEN THE ASSESSEE'S BANK ACCOUNT WAS DEBITED. THIS WOULD BE AVAILABLE FOR CONSIDERATION ONLY IN THE LATER ASSES SMENT YEAR A.Y. 2012-13. EVEN IF THE CHEQUE PAYMENT IS CONSIDERED T O BE ADEQUATE EVIDENCE OF THE PURCHASE IN THE ABSENCE OF THE RELE VANT PURCHASE BILL, THE FACT REMAINS THAT AN ACCOUNTED PURCHASE MADE AF TER 31.03.2011 CANNOT BE GIVEN CREDIT IN THE COMPUTATION OF UNDISC LOSED INVESTMENT AS ON 31.3.2011. 5.1 THE CIT(A) OBSERVED THAT THE LD. AR OF THE ASSE SSEE SEEKS TO CONTEND THAT THE PURCHASE OF RS. 9,16,575/- MADE DU RING MAY, 2011 SHOULD HAVE BEEN EXCLUDED FROM THE AGGREGATE VALUE OF JEWELLERY FOUND (RS.44,21,500/-) HAVING REGARD TO PURCHASE DE TAILS NOW AVAILABLE. IT HAS TO BE NOTICED IN THIS CONTEXT THA T WHAT IS BEING PUT FORWARD AS PROOF OF PURCHASE IS AN ENTRY IN THE BAN K ACCOUNT SHOWING A PAYMENT AGAINST THE TRANSACTION DETAILS RECORDED AS 'MAHARAJ SREE RAJENDRA JEWELLERS'. THERE IS NO BILL OR ANY EVIDE NCE REGARDING ITS PHYSICAL DESCRIPTION. IT IS, THEREFORE, NOT POSSIBL E TO GIVE ANY FINDING ON WHETHER THE PAYMENT IS IN RESPECT OF AN ITEM OF JEWELLERY WHICH FINDS PLACE IN THE INVENTORY MADE ON 3.8.2011. IN S O FAR AS THE PAYMENT TO THE JEWELLER CANNOT BE CORRELATED WITH A NY ITEM OF JEWELLERY FOUND IN THE SEARCH, THERE CAN BE NO PRES UMPTION THAT THE PAYMENT IS IN RESPECT OF AN ITEM WHICH HAS BEEN FOU ND AND INVENTORISED IN THE COURSE OF THE SEARCH. THIS CORR ELATION IS ESSENTIAL BECAUSE THE DETERMINATION OF UNDISCLOSED INVESTMENT IN JEWELLERY IS FOUND ON AN ANALYSIS OF ITEMS FOUND DURING THE SEAR CH. 4 ITA NO. 672/H/16 P. RAMA DEVI. 5.2 IN VIEW OF THE ABOVE OBSERVATIONS, THE CIT(A) HELD THAT THE ABOVE REFERRED CHEQUE PAYMENT THEREFORE, NEITHER SU PPORTS AN EXCLUSION OF THE IMPUGNED AMOUNT FROM THE ADMITTED UNDISCLOSED INVESTMENT OF RS.25 LAKHS FOR A.Y. 2011-12, NOR FRO M RS.44,21,500/- WHICH IN ANY CASE IS ONLY AN AGGREGATE VALUE OF JEW ELLERY FOUND, INCLUSIVE OF ACCOUNTED ITEMS. HE THEREFORE CONFIRME D THE ACTION OF THE AO IN MAKING THE ADDITION OF RS. 9,17,575/-. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) IS ERRONEOUS TO THE EXTENT IT IS PREJUDIC IAL TO THE ASSESSEE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE OF RS.9,17,575/- WITHO UT CONSIDERING THE FACT THAT THE ASSESSEE PURCHASED GO LD JEWELLERY OF THE VALUE OF RS.9,17,575/- BEFORE THE DATE OF SE ARCH AND PAID SALE CONSIDERATION THROUGH CHEQUE. 7. THE LD. AR SUBMITTED THAT THE GOLD JEWELLERY FOU ND DURING THE SEARCH TO THE EXTENT OF RS. 44.22 LAKHS. OUT OF THE SAID JEWELLERY, THE ASSESSEE HAD AGREED TO DISCLOSE RS. 25 LAKHS AS ADD ITIONAL INVESTMENT IN THE JEWELLERY. LATER, IT WAS FOUND TH AT THE ASSESSEE HAD PURCHASED GOLD WORTH RS. 9,17,575/- FROM THE JEWELL ER FOR WHICH THE PAYMENT WAS MADE THROUGH CHEQUE ON 07/05/2011. HE S UBMITTED THAT THE SAME JEWELLERY WAS ALSO INCLUDED IN THE JEWELLE RY FOUND DURING THE SEARCH AND THERE WAS NO OTHER JEWELLERY IN THE POS SESSION OF THE ASSESSEE. HE, THEREFORE, SUBMITTED THAT THE ASSESSE E HAD EXCLUDED THE ABOVE JEWELLERY FROM THE UNDISCLOSED INVESTMENT OF RS. 25 LAKHS AND DECLARED THE BALANCE AS UNDISCLOSED INVESTMENT. THE AR BROUGHT TO OUR NOTICE THE BANK STATEMENT, WHICH IS PART OF PAPER BOOK. 8. LD. DR SUBMITTED THAT THE ASSESSEE HAS SUBMITTED ONLY THE BANK STATEMENT AND BOOK ENTRY WITHOUT SUBMITTING AN Y COPY OF BILLS TO SUPPORT THE CLAIM. HE FURTHER SUBMITTED THAT THE DA TE OF PAYMENT IS 5 ITA NO. 672/H/16 P. RAMA DEVI. 07/05/2011, WHICH FELL IN THE AY 2012-13 WHEREAS TH E ISSUE IS RELATING TO AY 2011-12. HE SUBMITTED THAT THIS IS NOTHING BU T RETRACTION OF DECLARATION MADE DURING THE SEARCH. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS AND PERUSED THE RECORD. AT THE OUTSET, IT MAY BE NOTICED THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPARTING EDUCATION THRO UGH COACHING AND ADMITTED SUBSTANTIAL INCOME PURSUANT TO SEARCH AND SEIZURE OPERATIONS CONDUCTED AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 03.08.2011. IN FACT, GOLD JEWELLERY AND SILVER ARTI CLES OF THE VALUE OF RS.44,21,500 WERE FOUND DURING THE COURSE OF SEARCH AND THE ASSESSEE DID NOT FURNISH DETAILED DESCRIPTION OF AN Y OF THE GOLD JEWELLERY. HAVING AGREED TO OFFER RS.25 LAKHS AS UN EXPLAINED INVESTMENT, IN THE FORM OF PURCHASE OF JEWELLERY, N O FURTHER INVESTIGATION WAS MADE ON THAT ASPECT. A STATEMENT WAS RECORDED FROM THE ASSESSEE UNDER SECTION 132(4) OF THE ACT O N 19.09.2011 I.E., AFTER MORE THAN ONE MONTH, RECKONED FROM THE DATE O F SEARCH. THE ASSESSEE COULD NOT FULLY EXPLAIN THE SOURCE FOR THE INVESTMENT IN GOLD AND, THEREFORE, AGREED TO OFFER A SUM OF RS.25 LAKH S TOWARDS UNEXPLAINED INVESTMENT FOR THE A.Y. 2011-2012. HOWE VER WHILE FILING THE RETURN OF INCOME, IN RESPONSE TO THE NOTICE UND ER SECTION 153A OF THE ACT, THE ASSESSEE ADMITTED AN AMOUNT OF RS.15,8 3,425 ONLY, AS AGAINST THE ADMISSION OF RS.25 LAKHS, ON THE GROUND THAT GOLD JEWELLERY OF 340 GRAMS WORTH RS.9,17,575 WAS PURCHA SED ON 16.05.2011 WHICH DATE FALLS IN THE PREVIOUS YEAR RE LEVANT TO THE A.Y. 2012-2013 AND CLAIMS THAT THE SAME CANNOT BE TAKEN INTO CONSIDERATION FOR THE A.Y. 2011-2012. 9.1 IF 34 TOLAS OF GOLD IS PURCHASED, IN THE FORM O F JEWELLERY, ORDINARILY LADIES HAVE THE PASSION OF GETTING THE G OLD CRAFTED IN THEIR CHOICEST MANNER WHICH WILL HAVE IMPRINTED IN THEIR MIND AS TO WHICH JEWELLERY OF WHICH MEASURE, IN WHICH MANNER AND AT WHICH SHOP IT WAS PURCHASED ON A SPECIFIED DATE. IF THE JEWELLERY IS PURCHASED ON 16.05.2011 (JUST 03 MONTHS PRIOR TO SEARCH) IT CANN OT BE SAID THAT 6 ITA NO. 672/H/16 P. RAMA DEVI. ASSESSEE COULD HAVE FORGOTTEN THAT SHE HAS PURCHASE D SUCH JEWELLERY. EVEN IF THERE IS ANY PRESSURE IN THE MIND OF THE AS SESSEE ON THE DATE OF SEARCH, WHEN THE STATEMENT WAS RECORDED AFTER ON E AND HALF MONTH I.E., ON 19.09.2011, THE ASSESSEE COULD HAVE INFORM ED THE A.O. ABOUT THE FACTUM OF PURCHASE OF A SPECIFIED JEWELLERY BUT NO SUCH STATEMENT WAS GIVEN; RATHER THE ASSESSEE OFFERED TO TAX A SUM OF RS.25 LAKHS. 9.2 EVEN IF IT IS ASSUMED THAT THE ASSESSEE WAS UND ER PRESSURE DURING THE COURSE OF SEARCH PROCEEDINGS AND THEREAF TER, ATLEAST WITHIN A SHORT SPAN THEREAFTER THE ASSESSEE COULD HAVE BRO UGHT ALL THE DETAILS BEFORE THE A.O. INDICATING THE NATURE OF GO LD PURCHASED, DESCRIPTION THEREOF, SO THAT THE A.O. COULD HAVE CO MPARED THE JEWELLERY SEIZED - AND MENTIONED IN THE PANCHANAMA - WITH THE JEWELLERY WHICH IS SAID TO HAVE BEEN PURCHASED IN T HE MONTH OF MAY, 2011. NEITHER BEFORE THE A.O. NOR BEFORE THE COMMIS SIONER THE ASSESSEE CHOSE TO GIVE THE DESCRIPTION. 9.3 EVEN BEFORE US THE ASSESSEE MERELY REFERS TO BA NK STATEMENT INDICATING THAT A SUM OF RS.9,16,575 WAS ENCASHED B Y MAHARAJ SHREE RAJENDRA JEWELLERS. NEITHER THE ASSESSEE COULD FURN ISH THE BILL NOR COULD FURNISH THE DETAILED ADDRESS OF MAHARAJ SHREE RAJENDRA JEWELLERS. ATLEAST BY THE TIME THE RETURN WAS FILED THE ASSESSEE COULD HAVE FURNISHED ALL THOSE DETAILS TO ENABLE THE A.O. TO CROSS-VERIFY THE SAME. 9.4 IN THIS BACKDROP, MERELY BECAUSE THE ASSESSEE P LACES BEFORE THE A.O. AND CIT(A) A BANK ACCOUNT COPY, INDICATING THE PAYMENT TO MAHARAJ SHREE RAJENDRA JEWELLERS, IT WOULD NOT INDI CATE THAT IT WAS ONLY TOWARDS PURCHASE OF GOLD JEWELLERY. THERE MAY BE SOME OTHER TRANSACTION WITH THE SAID JEWELLER OTHER THAN PURCH ASE OF JEWELLERY; AT ANY RATE IT IS FOR THE ASSESSEE TO PROVE THAT THE J EWELLERY OF A SPECIFIED DESCRIPTION WAS PURCHASED AND ORDINARILY FOR SUCH HUGE AMOUNTS THERE SHOULD BE A BILL INDICATING THE NATUR E OF JEWELLERY PURCHASED WITH THE HALLMARK STAMP ETC., NOWHERE THE ASSESSEE HAD STATED THAT THE JEWELLERY SEIZED WAS WITH HALLMARK STAMPING AND 7 ITA NO. 672/H/16 P. RAMA DEVI. GUARANTEED BY SELLER IN THE FORM OF INVOICE OR BILL . THEREFORE, WE ARE OF THE OPINION THAT THE INITIAL ONUS PLACED UPON TH E ASSESSEE IS NOT FULLY DISCHARGED. 9.5 HOWEVER IT CANNOT BE DENIED THAT A SPECIFIED SU M WAS PAID BY THE ASSESSEE TO JEWELLER, AS RECORDED IN THE AXIS B ANK ACCOUNT COPY. IT IS TO BE SEEN AS TO WHAT WAS THE RATE PREVAILING ON THAT DATE AND WHETHER THE AMOUNT PAID IS SUFFICIENT TO COVER 340 GRAMS OF JEWELLERY OF SPECIFIED KARATAGE. UNLESS THE DESCRIPTION IS AV AILABLE OR GIVEN BY THE ASSESSEE TO THE A.O. IT MAY BE DIFFICULT, EVEN FOR THE A.O, TO CROSS-VERIFY THE SAME. 9.6 IN THE INTEREST OF SUBSTANTIAL JUSTICE, THE ASS ESSEE HAS TO FURNISH ALL THE DETAILS BEFORE THE A.O. TO PROVE ITS POINT. 9.7 WE HEREBY GIVE ONE MORE OPPORTUNITY TO THE ASSE SSEE TO SUBMIT THE DETAILS TO THE A.O. TO SUBSTANTIATE THE CLAIM T HAT THE JEWELLERY PURCHASED IN THE MONTH OF MAY 2011 ARE INCLUDED IN THE JEWELLERY FOUND DURING THE SEARCH. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 6 TH JANUARY, 2017. SD/- SD/- (D. MANMOHAN) (S. RIFAUR RAHM AN) VICE PRESIDENT A CCOUNTANT MEMBER HYDERABAD, DATED: 6 TH JANUARY, 2017 KV 8 ITA NO. 672/H/16 P. RAMA DEVI. COPY TO:- 1) P. RAMA DEVI, C/O SRI. S RAMA RAO, ADVOCATE, FL AT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAY AT NAGAR, HYDERABAD 500 029. 2) DCIT, CENTRAL CIRCLE 1(1), POSNETT BHAVAN, RAM KOTI, HYD. 3) CIT(A) 11, HYDERABAD. 4) PR. CIT (CENTRAL) 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 5) GUARD FILE
