Harakh Chand Bhawanjee Shah, Kolkata V. A.C.I.T CC - XXV,kolkata, Kolkata

ITA 768/KOL/2013

• Counselvise Citation: 76823514 RSA 2013
• Duration Of Justice: 2 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 10-04-2013
• Court: TRIBUNAL
• Department Lawyers: D LAHIRIJCIT LD
• Assessee Lawyers: NITIN JOGMAYA FCA L D
• Keywords: Unexplained investment; Valuation report
• Section: 132; 143(3)

Judgement Text

ITA NO. 768/KOL/2013-C-AM HARKH CHAND BHAWANJEE SHAH 1 IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, K OLKATA BEFORE : SHRI MAHAVIR SINGH,JUDICIAL MEMBER, AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 768/KOL/2013 A.Y 2010-11 HARKH CHAND BHAWANJEE SHAH VS. A.C.I.T, CENTRAL CIRCLE-XXV, KOL PAN: ASTPS 6006M (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI NITIN JOGMAYA, FCA, L D.AR FOR THE RESPONDENT : SHRI D.LAH IRI, JCIT, LD.SR.DR DATE OF HEARING: 26-11 -2015 DATE OF PRONOUNCEMENT: 4 -12-2 015 ORDER SHRI M.BALAGANESH, AM : THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE ORDE R PASSED BY THE LEARNED CIT(A), CENTRAL-III, KOLKATA IN APPEAL NO. 112/CC-X XV/CIT(A)C-III/11-12/KOL FOR THE ASST YEAR 2010-11 DATED 18-01-2013 AGAINST THE ORDER OF ASSESSMENT PASSED BY THE LEARNED AO U/S. 143(3) OF THE INCOME TAX ACT, 1 961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER AN ADDITION OF RS. 2,69,400/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN 12 KGS OF SILVER ARTICLES COULD BE MADE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THERE W AS A SEARCH ACTION U/S 132 OF THE ACT CONDUCTED IN THIS CASE ON 23.7.2009 AND DURING THE COURSE OF SEARCH, INTER ALIA, 15 GS OF SILVER WERE FOUND. THE ASSESSEE IN HIS SECTION 132(4) STATEMENT DEPOSED THAT SILVER ARTICLES WERE UNDISCLOSED. HOWEVER, DURING THE AS SESSMENT PROCEEDINGS, THE ASSESSEE ITA NO. 768/KOL/2013-C-AM HARKH CHAND BHAWANJEE SHAH 2 CONTENDED THAT OUT OF 15 KGS OF SILVER, 12 KGS OF S ILVER BELONGS TO HIS FATHER SRI BHAWANJEE RAVJI SHAH AND THE SAME WERE DULY REFLECT ED IN ITEM NO. 2 OF THE VALUATION REPORT AS ON 31.3.97 AND THE SAID SILVER UTENSILS O F 12 KGS WERE ALSO SUBJECTED TO DISCLOSURE IN THE WEALTH TAX RETURN OF HIS FATHER F OR ASST YEAR 1992-93. ACCORDINGLY, THE ASSESSEE CLAIMED THAT 12 KGS BELONGED TO HIS FA THER AND 3 KGS BELONGS TO HIS WIFE SMT. RATAN HARAK CHAND SHAH. IN RESPECT OF 3 KGS OF SILVER, THE SAME WERE ADDED IN THE HANDS OF THE WIFE OF THE ASSESSEE. THE ASSESSE E PLEADED THAT HE WAS NOT IN PROPER FRAME OF MIND ON THE DATE OF SEARCH AND HAD ERRONEO USLY DEPOSED U/S 132(4) THAT 12 KGS OF SILVER ARTICLES REMAINED UNDISCLOSED BY HIM. IT WAS FURTHER PLEADED BEFORE THE LEARNED AO THAT AFTER VERIFICATION OF OLD RECORDS A ND OLD WEALTH TAX RETURNS OF HIS FATHER, HE FOUND THAT THE SAID 12 KGS OF SILVER ART ICLES WERE DULY DISCLOSED IN THE INCOME TAX RETURN FOR THE ASST YEAR 1992-93 BY HIS FATHER AND EACH AND EVERY ITEM WAS ALSO MATCHED WITH THE ITEMS FOUND DURING SEARCH. IT WAS ALSO PLEADED THAT THE SAID SILVER ARTICLES OF 12 KGS CONTINUED TO BE DISCLOSED IN THE WEALTH TAX RETURN OF ASSESSEES FATHER FOR THE ASST YEAR 2010-11. THE LEARNED AO NOT BEING SATISFIED WITH THE REPLY GIVEN BY THE ASSESSEE WITH RESPECT TO 12 KGS AND MO RE SO HAD DEPOSED U/S 132(4) ON THE DATE OF SEARCH THAT THEY ARE UNDISCLOSED, SOUGH T TO ADD THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE AMOUNTING TO RS. 2,69,400/-. ON FIRST APPEAL, THE LEARNED CITA FOUND THAT THE WEALTH TAX RETURN OF ASSESSEES FATHER FOR THE ASST YEAR 2010-11 WAS NOT PRODUCED BY THE ASSESSEE AND ACCORDINGLY UP HELD THE ADDITION MADE BY THE LEARNED AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL B EFORE US ON THE FOLLOWING GROUND:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE ADDITION OF RS.2,69,400/- MADE TO THE TOTAL INCOME ON ACCOUNT OF ALLEGED UNDISCLOSED INVESTMENT IN 12 KGS OF SILVER ARTICLES. 2.2. THE LEARNED AR REITERATED THE SUBMISSIONS MAD E BY HIM BEFORE THE LOWER AUTHORITIES AND REFERRED TO THE RELEVANT PAGES OF T HE PAPER BOOK FILED BY HIM IN SUPPORT OF HIS CONTENTIONS. IN RESPONSE TO THIS, THE LEARN ED SENIOR DR STATED THAT THIS CASE IS TO BE ARGUED BY THE LEARNED CIT DR WHO COULD NOT BE PR ESENT TODAY AND HENCE PLEADED ITA NO. 768/KOL/2013-C-AM HARKH CHAND BHAWANJEE SHAH 3 FOR ADJOURNMENT. WE FIND THAT THE LEARNED CIT DR H AD FILED ADJOURNMENT FOR MOST OF THE CASES AND ACCORDINGLY THE ADJOURNMENT REQUEST I S REJECTED AND THE CASE IS PROCEEDED HEREWITH. 2.3. WE HAVE HEARD THE LEARNED AR AND PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESSEE . THE FACTS STATED HEREINABOVE REMAIN UNDISPUTED AND HENCE THEY ARE NOT REITERATED FOR TH E SAKE OF BREVITY. WE FIND THAT THE ASSESSEES FATHER SRI BHAWANJEE RAVJI SHAH HAD DULY DISCLOSED THE ENTIRE 12 KGS OF SILVER ARTICLES IN HIS WEALTH TAX RETURNS FILED AND IS ALSO PART OF THE VALUATION REPORT OBTAINED FROM THE GOVERNMENT VALUER AS ON 31.3.1997 . THE ASSESSMENT YEAR UNDER APPEAL IS ASST YEAR 2010-11. HENCE WE HOLD THAT TH E SILVER ARTICLES OF 12 KGS STOOD CLEARLY EXPLAINED AND WE HOLD THAT THE SILVER ARTIC LES OF 12 KGS FOUND DURING THE COURSE OF SEARCH IN THE PREMISES OF THE ASSESSEE BELONGS T O ASSESSEES FATHER WHICH IS FURTHER STRENGTHENED BY FATHER FILING WEALTH TAX RETURNS FO R THE ASST YEAR 1992-93. HENCE THE ADDITION MADE IN THE SUM OF RS. 2,69,400/- IS DIREC TED TO BE DELETED. ACCORDINGLY, THE GROUND NO. 1 RAISED BY THE ASSESSEE IS ALLOWED. 3. THE LAST GROUND TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER AN ADDITION OF RS. 30,261/- ON ACCOUNT OF UNEXPLAINED INVESTMENT OF 2 1 GRAMS IN GOLD JEWELLERY COULD BE MADE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3.1. THE BRIEF FACTS OF THIS ISSUE IS THAT DURING THE COURSE OF SEARCH ON 23.7.2009, JEWELLERY WORTH RS. 22,30,413/- WAS FOUND . THE AS SESSEE IN HIS STATEMENT U/S 132(4) STATED THAT THE JEWELLERY BELONGED TO HIS MOTHER AN D THE SAME WAS DULY DISCLOSED TO THE DEPARTMENT BY HER IN HER WEALTH TAX RETURN FOR THE ASST YEAR 1993-94. THE LEARNED AO DID NOT DRAW ANY ADVERSE INFERENCE TO THE EXTENT OF WEIGHT OF GOLD JEWELLERY THAT WAS DISCLOSED IN THE WEALTH TAX RETURNS OF MOTHER O F ASSESSEE. THE LEARNED AO HOWEVER FOUND THAT 21 GRAMS OF GOLD JEWELLERY REMAI N UNEXPLAINED AND MADE AN ITA NO. 768/KOL/2013-C-AM HARKH CHAND BHAWANJEE SHAH 4 ADDITION OF RS. 30,261/- AS UNEXPLAINED INCOME OF T HE ASSESSEE. ON FIRST APPEAL, THE ASSESSEE PLEADED THE SAME ARGUMENTS THAT WERE ADVAN CED BEFORE THE LEARNED AO AND ALSO FURNISHED THE VALUATION REPORT FROM THE REGIST ERED VALUER (GOVERNMENT APPROVED VALUER) AS ON 30.6.1982 AND AS ON 31.3.1997 OF ASSE SSEES MOTHER SMT PUSHPA BHAWANJEE SHAH WHEREIN THE ENTIRE GOLD JEWELLERY WE RE REFLECTED AND BASED ON WHICH WEALTH TAX RETURNS WERE FILED BY THE MOTHER OF THE ASSESSEE. THE ASSESSEE ALSO EXPLAINED THAT HIS MOTHER EXPIRED ON 4.3.1999 AND H ER JEWELLERY REMAINED IN HIS PREMISES ON THE DATE OF SEARCH. THE ASSESSEE ALSO PLACED ON RECORD THE FOLLOWING VALUATION REPORTS OF JEWELLERY VALUED BY THE GOVERN MENT APPROVED VALUER IN SUPPORT OF HIS CONTENTIONS:- A) SRI BHAWANJEE RAVJI SHAHS (FATHER OF ASSESSEE) VALUATION REPORT DATED 17.8.1982 BEING THE VALUE AS ON 31.3.1982. B) SMT.PUSHPA BHAWANJEE SHAHS (MOTHER OF ASSESSEE) VALUATION REPORT DATED 9.8.1982 BEING THE VALUE AS ON 30.6.1982. C) SMT. RATAN HARAKCHAND (WIFE OF ASSESSEE) VALUATI ON REPORT DATED 5.12.1974 BEING THE VALUE AS ON 30.3.1974 . THE LEARNED CITA FELT THAT THE LEARNED AO HAD GONE THROUGH ALL THE EVIDENCES SUBMITTED BY THE ASSESSEE AND FOUND THAT THE 21 GRA MS OF GOLD JEWELLERY COULD NOT BE MATCHED ITEM WISE WITH THE LIST SUBMITTED BY THE AS SESSEE AND ACCORDINGLY HELD THAT THE ADDITION MADE THEREON IS IN ORDER. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE ADDITION OF RS.30,261/- MADE TO THE TOTAL INCOME ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN 21 GRAMS OF GOLD JEWELLERY. ITA NO. 768/KOL/2013-C-AM HARKH CHAND BHAWANJEE SHAH 5 3.2. THE LEARNED AR ARGUED THAT TOTAL JEWELLERY FO UND DURING THE COURSE OF SEARCH WAS MUCH LESS THAN THE JEWELLERY ALREADY DISCLOSED BY THE FAMILY MEMBERS OF THE ASSESSEE AND HENCE NO ADDITION COULD BE MADE TOWARD S UNEXPLAINED JEWELLERY IN HIS HANDS. MOROEVER, HE ARGUED THAT HOW THE LEARNED A O HAD ARRIVED AT THE DEFICIT OF 21 GRAMS IS NOT KNOWN AND IS CLEARLY NOT DISCERNIBLE F ROM THE ASSESSMENT ORDER AND HENCE ON THAT COUNT ALSO, THE ADDITION DESERVES TO BE DEL ETED. 3.3. WE HAVE HEARD THE LEARNED AR AND THE MATERIAL S AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESSEE. THE FACTS ST ATED HEREINABOVE REMAIN UNDISPUTED AND HENCE ARE NOT REITERATED HEREIN FOR THE SAKE OF BREVITY. WE FIND THAT THE TOTAL JEWELLERY DISCLOSED IN WEALTH TAX RETURNS OF THE FA MILY MEMBERS IS APPROXIMATELY 2259 GRAMS AND WHEREAS THE TOTAL QUANTITY FOUND AT THE T IME OF SEARCH IS ONLY 1338 GRAMS. WE FIND THAT THE ADDITION IS MADE ONLY ON THE PREMI SE THAT ITEM WISE MATCHING OF JEWELLERY COULD NOT BE DONE AT THE TIME OF SEARCH A ND THEREAFTER. IN THIS REGARD WE HOLD THAT JEWELLERY BEING A FASHION INDUSTRY , IT IS PRA CTICALLY DIFFICULT TO RECONCILE EACH AND EVERY PIECE OF GOLD ITEM WISE WITH THE WEALTH TAX R ETURNS AND IN ANY CASE IT IS NOT CLEAR FROM THE ASSESSMENT ORDER HOW THE DEFICIT GOLD OF 2 1 GRAMS WERE ARRIVED AT BY THE LEARNED AO . IN THESE CIRCUMSTANCES, WE HAVE NO HE SITATION IN DELETING THE ADDITION MADE IN THE SUM OF RS. 30,261/- IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, THE GROUND NO. 2 RAISED BY THE ASSESSEE IS ALLOWED. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 4.12.2015 SD/- ( MAHAVIR SINGH, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE 4 /12/2015 ITA NO. 768/KOL/2013-C-AM HARKH CHAND BHAWANJEE SHAH 6 1. . THE APPELLANT: SRI HARAKH CHAND BHAWANJEE SHAH 12 STEPHEN HOUSE, 4 BBD (EAST), DALHOUSIE SQ., KOL-1. 2 THE RESPONDENT-THE ASSTT. COMMISSIONER OF INCOME T AX, CENTRAL CIRCLE-XXV, 110 SHANTI PALLY, EM BYEPASS, AAYKAR BHAWAN POORVA, KOL-107. 3 / THE CIT, 4.THE CIT(A) 5 . DR, KOLKATA BENCH 6 . GUARD FILE . TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP/SPS COPY OF THE ORDER FORWARDED TO:-