Appeal details
Counselvise Citation
[2016] 121 COUNSELVISE.COM (IT) 3439 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 year(s) 3 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-01-2016
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
E
Next Hearing Date
05-11-2015
Assessment Year
2008-2009
Appeal Filed On
15-10-2010
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI JASON P. BOAZ (AM) AND SHRI RAM LAL NEG I (JM) ITA NO 7126/MUM/2010 ASSESSMENT YEAR: 2008-09 LATE SHRI. SUDESHKUMAR DEVRAJ MEHTA. SHREE MANDEV JEWELLERS, 575/9, MADAN MANSION, SHEIKH MEMON STREET, MUMBAI- 400002. PAN : AFZPM05725M VS. THE ACIT CENTRAL CIRCLE - 10, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. KUNDANMAL J. BAFNA RESPONDENT BY : SMT. MANJUNATHA SWAMY DATE OF HEARING: 06/01/2016 DATE OF PRONOUNCEMENT: 22/01/2016 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE APPELLAN T/ASSESSEE AGAINST ORDER DT. 22/07/2010 PASSED BY THE LD. CIT(APPEALS) -37, MUMBAI, FOR ASST. YEAR 2008-2009. 2. BRIEF FACTS OF THE CASE WHICH NEED NECESSARY ME NTION FOR DISPOSAL OF THIS APPEAL ARE THAT THE APPELLANT IS ENGAGED IN BU LLION TRADING AND TRADING IN GOLD & SILVER JEWELLERY IN THE NAME & ST YLE OF M/S MANDEV JEWELLERS. THERE WAS SEARCH & SEIZURE ACTION U/S 13 2 ON THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WAS CONDUCTED AT THE BUSINESS PREMISES OF SHREE. SUDHESH KUMAR D MEHTA ON 04/03/2 008. DURING THE SEARCH 5990.890 GMS OF GOLD WAS FOUND AGAINST T HE ENTRY OF 4975 2 ITA NO 7126/MUM/2010 ASSESSMENT YEAR: 2008-09 GMS IN STOCK REGISTER. THE EXCESS STOCK OF 1025.890 GMS OF GOLD WAS OFFERED TO TAX BY THE APPELLANT DURING THE COURSE O F SEARCH & SEIZURE AND THE SAME WAS ALSO INCORPORATED IN THE RETURN OF INCOME. 2.1 SIMILARLY, AN AMOUNT OF RS. 12,83,000/- WAS F OUND IN A BAG OF SHRI. NAVIN MODY PRESENT IN THE PREMISES AND AN AMO UNT OF RS. 15,81,650/- WAS FOUND IN BRIEF CASE OF THE APPELLAN T. THE CASH BALANCE OF THE BOOKS OF THE APPELLANT WAS RECORDED AS RS. 1 5,13,696/- THEREFORE, THE UNEXPLAINED EXCESS CASH OF RS. 13,48 ,000/- WAS SEIZED UNDER SECTION 132(1) OF THE ACT. 2.2 THE APPELLANT/ASSESSEE FILED ITS RETURN OF INCO ME FOR THE RELEVANT ASST. YEAR ON 06/10/2008 DECLARING THE TOTAL OF INC OME OF RS. 16,87,140/-. 2.3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT WAS ASKED TO DISCLOSE THE NATURE, MODE AND SOURCE OF PO SSESSION OF THE AFORESAID UNEXPLAINED SUM OF RS. 13,48,000/-. AFTER HEARING THE CONTENTION OF THE ASSESSEE, THE AO CHARGE TO TAX TH E ENTIRE AMOUNT U/S 69A OF THE ACT, AS UNEXPLAINED INCOME OF THE APPELL ANT. THE AO ALSO ADDED OF RS. 25,801/- PAID AS DONATION BY THE ASSES SEE FOR THE REASONS THAT THE SAME WAS NOT INCURRED FOR THE PURPOSE OF B USINESS. 3. AGGRIEVED BY THE IMPUGNED ASSESSMENT ORDER THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). DURING PROCEEDINGS BE FORE THE LD. CIT(A), THE ASSESSEE MODIFIED GROUND NO. 1 OF THE APPEAL IN VIEW OF APPELLANTS LETTER DATED 20/07/2010, RELEVANT PARA OF WHICH REA D AS UNDER:- 3 ITA NO 7126/MUM/2010 ASSESSMENT YEAR: 2008-09 SIR, I REPEAT THAT I AM ACCEPTING THE CASH SEIZED O F RS. 12,83,000/- BY THE DEPARTMENT AS MY INCOME JUST TO AVOID THE LITIGATION, MENTAL HARASSMENT & FOR BUYING PEACE OF MIND AS I AM WIDOW. I ALSO REQUEST YOUR HONOR AND ASSESSING O FFICER NOT TO LEVY PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT , 1961 AS SPECIAL CASE IN VIEW OF ABOVE CIRCUMSTANCES WHICH I S NORMALLY LEVIABLE IN ORDINARY COURSE. 3.1 THE LD. CIT(A) AFTER HEARING THE APPELLANT HE LD THE EXCESS AMOUNT OF RS. 65,000/- (RS. 13,48,000 12,83,000 = 65,000 /-) FOUND DURING SEARCH TO BE AN UNEXPLAINED MONEY WITHIN THE MEANIN G OF SECTION 69A OF THE ACT. REGARDING DISALLOWANCE OF RS. 25,801/-, THE LD. CIT(A) ISSUED DIRECTION TO ASSESSING OFFICER TO REDUCE THE ADDITION OF RS. 11,000/- ON THE GROUND THAT THE ASSESSEE HAS PRODU CED CERTIFICATES U/S 80G IN RESPECT OF DONATIONS GIVEN TO SETH SHREE MOTISHA SADHARMIK BHATI KENDRA. 4. STILL AGGRIEVED, THE APPELLANT IS IN APPEAL BE FORE US AS AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). THE APPELL ANT HAS CHALLENGED THE IMPUGNED ORDER ON FOLLOWING EFFECTIV E GROUNDS:- 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION MADE BY LEARNED ACIT CC-(10), MUMBAI OF RS. 65,000/- (RUPEE S SIXTY FIVE THOUSAND ONLY.) WITHOUT AN JURISDICTION & BASIS. TH E LEARNED ACIT AS WELL AS LEARNED CIT(A), MUMBAI FAILED TO APPRECI ATE/UNDERSTAND THAT APPELLANT HAS ESTABLISHED, BEYOND THE DOUBT, T HAT CASH AMOUNT SEIZED BY THE DEPARTMENT WAS AMOUNT OF HIS S AVINGS & WAS DULY REFLECTED IN PERSONAL BALANCE SHEET & HEN CE, REQUIRED TO BE DELETED. 4 ITA NO 7126/MUM/2010 ASSESSMENT YEAR: 2008-09 2. THE LEARNED CIT(A), MUMBAI ERRED IN CONFIRMING THE ADDITION OF RS. 14,801/-( RS. 25801- RS. 11,000) WITHOUT ANY JU STIFICATION & BASIS. THEY FAILED TO APPRECIATE THAT THE AMOUNT WE RE PETTY SUMS FULL DETAILS OF WHICH ALONG WITH ENCLOSURES WAS FI ELD BEFORE THEM & WAS INCURRED WHOLLY & EXCLUSIVELY FOR BUSINESS PURP OSE ONLY THROUGH OVERSIGHT IT WAS CLAIMED UNDER THE HEAD D ONATION BY MISTAKE, HENCE, IN THE INTEREST OF NATURAL JUSTICE THE ADDITION SHOULD BE DELETED . 4.1. BEFORE US THE LD. AR HAS SUBMITTED THAT THE AS SESSEE AS ALREADY OFFERED TO RS. 12,83,000/-SEIZED DURING THE SUCH OP ERATION TO TAX. AS REGARDS THE EXCESS OF RS. 65,000/- LD. COUNSEL OF T HE ASSESSEE STATED THAT THE AMOUNT WAS KEPT OUT OF PERSONAL SAVINGS OF EARLIER YEARS OF THE ASSESSEE WHICH HAS BEEN REFLECTED IN BOOKS OF A CCOUNTS. THE ASSESSEE HAS FILED THE PERSONAL CAPITAL ACCOUNT AND BALANCE SHEET ALONG WITH THE RETURN OF INCOME. THEREFORE, THE AMO UNT HAS WRONGLY BEEN ADDED TO THE INCOME OF THE ASSESSEE AS UNEXPLA INED INCOME. 4.2. REGARDING DISALLOWANCE OF RS. 25,801/-. THE LD . COUNSEL INVITING OUR ATTENTION TO PAGE 19 OF THE PAPER BOOK, CONTAIN ING THE DETAILS OF DONATION TO M/S MANDEV JEWELERS AND SUBMITTED THAT OF RS. 10,000/- WAS PAID TO JAIN INTERNATIONAL TRADE ORGANIZATION T OWARDS THE SUBSCRIPTION OF PATRON MEMBERS BECAUSE THROUGH SEMI NARS, EXHIBITIONS AND OTHER MEANS THIS ORGANIZATION HELPE D THE MEMBERS IN PROMOTING AND DIVERSIFYING THE BUSINESS ACTIVITIES. OTHER EXPENSES OF RS. 1500+2000+201+1100 AMOUNTING TO RS. 4,801/- ARE SMALL AMOUNTS WHICH WERE SPENT FOR BUSINESS PURPOSE ONLY. 5 ITA NO 7126/MUM/2010 ASSESSMENT YEAR: 2008-09 4.3 THE LD. DR ON THE OTHER HAND RELIED UPON THE CO NCURRENT ORDERS PASSED BY THE ASSESSING OFFICER AND THE LD. CIT(A) SUBMITTED THAT THE APPEAL IS NOT DEVOID OF MERIT AND THE SAME MAY BE DISMISSED. 4.4. WE HAVE HEARD THE RIVAL CONTENTION AND ALSO PE RUSED THE MATERIAL PLACE BEFORE US IN THE LIGHT OF THE CONTENTIONS OF THE PARTIES. 4.5. A BARE READING OF SECTION 69A OF THE ACT MAKES IT CLEAR THAT WHERE THE ASSESSEE IS FOUND IN POSSESSION OF ANY MO NEY WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND HE FAILS TO EX PLAIN ABOUT THE NATURE AND SOURCE OF THE SAME TO THE SATISFACTION O F THE CONCERNED AUTHORITY, THE MONEY MAY BE DEEMED TO BE INCOME OF THE ASSESSEE. THE SECTION READS AS UNDER:- WHETHER IN ANY FINANCIAL YEAR THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY, OR OTHER VALUABLE ARTICLE AND SUCH MONEY, ANY, MAINTAINED BY HIM FOR ANY SOURCE O F INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE N ATURE AND SOURCE OF ACQUISITION OF THE MONEY, BULLIONS, JEWEL LERY OR OTHER VALUABLE ARTICLE, OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, TH E MONEY AND THE VALUE OF THE BULLION, JEWELLERY OR OTHER VALUAB LE ARTICLE MAY BE DEEMED T BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. 4.6. IN THE PRESENT CASE THE ASSESSEE WAS FOUND TO BE THE OWNER OF EXCESS MONEY IN QUESTION WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNT AND THE EXPLANATION OFFERED BY HIM WAS NOT FOUND TO BE SATISFACTORY BY AO AS WELL AS THE LD. CIT(A). AS PO INTED OUT BY THE AO DURING SEARCH ACTION SHRI. NAVIN MODY DISCLOSED THAT HE BEING 6 ITA NO 7126/MUM/2010 ASSESSMENT YEAR: 2008-09 EMPLOYEE OF M/S AARTI JEWELLERS, A PROPRIETARY CONC ERN OF SHRI. MITHALAL G. JAIN GOT THE CASH IN QUESTION FROM SHRI . SUDESH KUMAR MEHTA ON SALE OF 1 KG GOLD BAR. HOWEVER, HE DID NOT PRODUCE ANY DOCUMENT TO SUBSTANTIATE THE ALLEGED DEAL. DURING P OST SEARCH ENQUIRY SHRI. MITHAIAL G. JAIN AND OTHERS CORROBOR ATED THE VERSION OF SHRI. NAVIN MODY. SHRI. MITHALAL G. JAIN ALSO FU RNISHED A COPY OF AFFIDAVIT DATED 12/05/2008, SUBMITTED TO THE DIT(IN V) MUMBAI CONFIRMING TRANSACTION OF GOLD WITH THE ASSESSEE T HROUGH HIS EMPLOYEE SHRI. NAVIN MODY AND BROKER SHRI. BANSILAL MOTILAL BOHRA. HE ALSO FURNISHED THE AFFIDAVITS OF SHRI. NA VIN MODY AND BROKER SHRI. BANSILAL MOTILAL BOHRA IN SUPPORT OF H IS VERSION. THE ASSESSEE WAS GIVEN OPPORTUNITY TO CROSS EXAMINE THE SAID PERSONS, HOWEVER, THE ASSESSEE DID NOT AVAIL THE SAME. THE A SSESSEE VIDE LETTER DATED 09/11/2009 CLAIMED THAT THE AMOUNT IN QUESTION HAD BEEN KEPT OUT OF HIS PERSONAL SAVINGS OF THE EARLI ER YEARS AND THE SAME HAS BEEN REFLECTED IN THE BOOKS OF ACCOUNT. FR OM THE AFORESAID FACTS IT CAN SAFELY BE INFERRED THAT THE MONEY IN QUESTION BELONGED TO THE ASSESSEE PARTICULARLY IN THE LIGHT OF THE FACT THAT THE SAME HAD NOT BEEN RECORDED IN THE BOOKS OF ACCO UNTS AT THE TIME OF SEARCH. UNDER THESE CIRCUMSTANCES, BENEFIT OF ENTRIES MADE SUBSEQUENTLY IN CAPITAL ACCOUNT STATEMENT AS ON 31/ 03/2008 CANNOT BE EXTENDED TO HOLD THAT THE ASSESSEE HAS DI SCHARGED THE BURDEN OF EXPLAINING THE NATURE AND SOURCE OF ACQUI SITION OF MONEY IN QUESTION TO THE SATISFACTION OF THE AUTHORITIES CONCERNED WITHIN THE MEANING OF SECTION 69A OF THE ACT. THEREFORE, I N OUR CONSIDERED OPINION, THE FINDINGS OF THE LD. CIT(A) IS BASED ON THE EVIDENCE ON RECORD AND AS PER THE PROVISIONS OF THE LAW. HENCE , WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD . CIT(A). 7 ITA NO 7126/MUM/2010 ASSESSMENT YEAR: 2008-09 ACCORDINGLY, THE FINDINGS OF THE LD. CIT(A) IS UPHE LD AND THIS GROUND OF THE APPEAL OF THE ASSESSEE IS DISMISSED. 4.7 AS REGARDS THE SECOND GROUNDS OF APPEAL OF THE LD. CIT(A) HAS ALREADY DIRECTED THE AO TO REDUCE THE ADDITION TO T HE EXTENT OF AMOUNT DONATED TO SETH SHREE MOTISHA SADHARMIK BHAK TI KENDRA, MUMBAI, I.E. RS. 11,000/- IN RESPECT OF WHICH THE A SSESSEE HAS PRODUCED COPIES OF CERTIFICATES U/S 80G OF THE ACT. ON THE OTHER HAND EXPLANATION GIVEN BY THE ASSESSEE IN RESPECT O F PAYMENT ALLEGEDLY MADE TO JAIN INTERNATIONAL TRADE ORGANIZA TION AND OTHER DONATIONS IN QUESTION ARE NOT SUPPORTED BY ANY DOCU MENTARY EVIDENCE, THEREFORE, THERE IS NO REASON TO INTERFER E WITH THE FINDINGS OF THE LD. CIT(A). IN OUR CONSIDERED OPINION THE AP PELLANT HAS FAILED TO ESTABLISH THAT THE REMAINING AMOUNT OF RS. 14,8 01/- WAS EITHER SPENT EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR GI VEN AS DONATIONS WITHIN THE MEANING OF 80G AND IS NOT ENTITLED FOR C LAIM DEDUCTION THEREOF. THE LD.CIT HAS, THEREFORE, RIGHTLY CONFIRM ED THE DISALLOWANCE TO THE EXTENT OF RS. 14,801/-. WE, THE REFORE, UPHOLD THE FINDINGS OF THE LD. CIT(A) AND DISMISS THIS GRO UND OF APPEAL OF THE ASSESSEE 5. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JANUARY, 2016 SD/- SD/- ( JASON P. BOAZ ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 22/01/2016 8 ITA NO 7126/MUM/2010 ASSESSMENT YEAR: 2008-09 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. '#$ % , %' , / DR, ITAT, MUMBAI 6. $() * / GUARD FILE. + + + + / BY ORDER, + //TRUE COPY// , ,, ,/ // /+- . +- . +- . +- . (DY./ASSTT. 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