ANIL VERMA HUF, MUMBAI V. ITO WD 12(1)(1), MUMBAI

ITA 8094/MUM/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2354 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 02-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Valuation report
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJ ESH KUMAR, AM ./ I.T.A. NO 8094/MUM/2011 ( / ASSESSMENT YEAR: 2008-09) ANIL VERMA HUF C-603, MINAL APARTMENTS, OFF SAKI VIHAR ROAD, ANDHERI (EAST), MUMBAI-400 072. / VS . THE INCOME TAX OFFICER, WARD 12 (1) (1), AAYAKAR BHAVAN, M.K.ROAD MUMBAI 400 020. ./ ./PAN/GIR NO. AAAHA 9110 R ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI NARESH JAIN & SHILPI JAIN / RESPONDENT BY : SHRI SATYA PAL KUMAR / DATE OF HEARING : 04/11/2015 !'# / DATE OF PRONOUNCEMENT : 20/11/2015 $% / O R D E R PER RAJESH KUMAR, A. M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 05/09/2011 OF COMMISSIONER OF INCOME TAX (APPEALS)-23, MUMBAI (HE REINAFTER CALLED AS THE CIT(A)) FOR ASSESSMENT YEAR 2008-09. THE ASSESSEE H AS RAISED THE FOLLOWING GROUNDS OF APPEAL: 2 I.T.A. NO 8094/MUM/2011 (A.Y: 2008-09) ANIL VERMA HUF VS. ITO 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING THE ADDITION OF RS.28,93,750/- ON ACCOUNT OF SALE OF JE WELLERY WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C OMING TO THE CONCLUSION THAT THE DETAILS SUBMITTED FOR SALE OF J EWELLERY BY THE APPELLANT WERE NOT SATISFACTORY. 2 THE COMMON ISSUE RAISED IN THE GROUNDS OF APPEAL OF THE ASSESSEE RELATES TO THE CONFIRMATION OF ADDITION OF RS.28,93,750/- ON ACCOU NT OF SALE OF JEWELLERY AS MADE BY THE AO. 3 THE FACTS IN BRIEF ARE THAT ASSESSEE FILED HIS RE TURN OF INCOME AT RS.1,02,914/- ON 9/01/2009. THE ASSESSEE WAS A PARTNER IN M/S. UN IQUE FINANCE & INVESTMENT . DURING THE YEAR, THE ASSESSEE SOLD JEWELLERY WORTH RS.28,93,750/- AND THE SAME WAS SHOWN AS ADDITION IN THE CAPITAL ACCOUNT. THE LD. A O ADDED THE SALE OF JEWELLERY AS INCOME OF THE ASSESSEE ON THE GROUND THAT THERE WAS MISMATCH IN THE VALUATION REPORT AND THE SALE BILLS, DISCREPANCIES IN THE SALES BIL LS AND ALSO JEWELLERY WAS NOT SHOWN IN THE BALANCE-SHEET OF THE ASSESSEE AS AT 31/03/2 007. 4 THE LD. CIT(A) CONFIRMED THE ADDITION BY HOLDING THAT THE APPELLANT HAD NOT DISCHARGED HIS ONUS OF PROVING ITS OWNERSHIP OR ANY SUCH JEWELLERY HAVING BEEN RECEIVED AS GIFT. AS NO VALUE ADDED TAX RETURNS FIL ED AND NO OTHER EVIDENCE OTHER THAN THE LIST OF DONORS WERE FILED AND ALSO THERE WAS NO PROOFS WHETHER ITEMS OF JEWELLERY HELD BY HUF AND SOLD WERE SAME. 5 THE LD. AR VEHEMENTLY SUBMITTED THAT THE LD.AO HA D MADE THE ADDITION ON THE BASIS OF HIS OBSERVATION AS CONTEND IN PARAGRAPH 4 OF THE ASSESSMENT ORDER WHICH MENTIONED THAT THERE WAS MISMATCH IN THE VALUATION REPORT AND SALE BILLS. THE LD. AR 3 I.T.A. NO 8094/MUM/2011 (A.Y: 2008-09) ANIL VERMA HUF VS. ITO FURTHER SUBMITTED THAT THERE WAS NO MISMATCH IN THE VALUATION REPORT AND SALE BILLS AS OBSERVED BY THE AO IN PARAGRAPH 4 (II) BY CLARIFYI NG THAT THE VALUATION REPORT WAS WRONGLY DATED AS 31/12/2007 WHICH WAS CLARIFIED BY WAY OF AFFIDAVIT OF SHRI JIVANLAL SHAH S/O JASKARAN SHAH AGED 76 HAVING OFFICE AT 16, WALKESHWAR ROAD, GOENKA HOUSE, MUMBAI-400 006 AND ALSO HAVING OFFICE AT BUR TOLLA STREET, KOLKATA -7 STATING THAT THE DATE OF THE VALUATION REPORT SHOULD BE REA D AS 30/09/2007 INSTEAD OF 31/12/2007. COPY OF THE AFFIDAVIT IS PLACED AT PA GE NO. 7 OF THE PAPER BOOK. THE LD. COUNSEL ALSO DREW OUR ATTENTION TO PAGE NOS. 8-29 W HICH COMPRISED OF THE REPLIES FURNISHED IN RESPONSE TO NOTICE U/S133(6) OF THE AC T BY THREE PURCHASERS OF JEWELLERY FURNISHING THE DOCUMENT COMPRISING OF COPY OF ACCOU NT OF ANIL VERMA H.U.F., ACKNOWLEDGMENT OF IT RETURN AND PURCHASES CONFIRMAT ION AND COPY OF BANK STATEMENTS OF THE PURCHASER SAI KRUPA TRADING CO. A T PAGE NO. 8-13 AND LIKEWISE MAULIK DIAMONDS AT PAGE NO.14-18 AND VARDHMAN JEWEL S PAGE NO. 19-24.THE LD. COUNSEL FURTHER POINTED OUT THAT THE JEWELLERY WAS GIFTED TO THE ANIL VERMA AND HIS WIFE LATA VERMA AT THE TIME OF MARRIAGE ON 09/12/19 83 AS STATED IN THE LETTER TO CIT(A) FILED AT PAGE NO.48 & 49 OF THE PAPER BOOK . THE LD. COUNSEL FURTHER SUBMITTED THAT LD. AO HAS NOWHERE DOUBTED THE RECEI PT OF JEWELLERY BY WAY OF GIFTS AT THE TIME OF MARRIAGE AND SIMPLY ADDED THE SALE PROC EEDS OF THE JEWELLERY OF RS.28,93,750/- TO THE INCOME OF THE ASSESSEE BY GIV ING UNCONVINCING REASONS AS CONTAINED IN THE PARAGRAPH 4 OF THE ASSESSMENT ORD ER. THE LD. COUNSEL ALSO SUBMITTED THAT THE JEWELLERY WAS NOT MENTIONED IN THE BALANCE -SHEET DATED 31/03/2007 AS IT WAS NOT CUSTOMARY AND TRADITIONAL TO SHOW THE JEWELLER Y IN THE BALANCE-SHEET. FINALLY HE PRAYED FOR THE DELETION OF ADDITION OF THE ABOVE AM OUNT BY REVERSING THE ORDER OF CIT(A) BY PLACING STRONG RELIANCE ON THE DECISIONS IN THE CASE OF ITO VS. MADHU GOPAL GOEL (IN ITA NO.910/DEL/2012 DATED 14/06/2013) AND SMT. AMITA DEVI SANGANERIA V/S ASST. CIT (IN ITA NO. 52/GAU/2006). THE LD. DR, PER CONTRA , RELIED HEAVILY ON THE ORDERS OF THE AUTHORITIES BELOW. 4 I.T.A. NO 8094/MUM/2011 (A.Y: 2008-09) ANIL VERMA HUF VS. ITO 7 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE C OUNSEL AND THE LD. DEPARTMENTAL REPRESENTATIVES AND PERUSED THE MATERI AL ON RECORD. WE NOTE THAT THE AO HAS ADDED THE SALE RECEIPTS OF THE JEWELLERY IN THE INCOME OF THE ASSESSEE BY STATING THE VARIOUS REASONS SUCH AS DISCREPANCIES I N VALUATION REPORT AND SALES BILLS , DISCREPENCIES IN SALES BILLS, MISMATCHING OF DATES AND NOT SHOWING THE AMOUNT OF GAIN OR LOSS IN THE RETURN OF INCOME AND ALSO THAT THE BALANCE-SHEET AT 31/03/2007 DID NOT CONTAIN ANY DETAILS OF THE SAID JEWELLERY SOLD. THE LD. AO DID NOT DOUBTED OR ENQUIRED ABOUT THE ACQUISITION OF JEWELLERY BY WAY OF GIVING GIFT AT THE TIME OF MARRIAGE OF THE ASSESSEE KARTA AND HIS WIFE IN 1983. WE, HOWEVER, N OTE THAT THE DISCREPANCIES IN VALUATION REPORT AND SALE BILLS WERE CLARIFIED B Y THE REGISTERED VALUER BY FILING AFFIDAVIT WHICH IS ON PAGE NO. 7 OF THE PAPER BOOK STATING THEREON THAT THE DATE OF THE REPORT SHOULD BE READ AS 30/09/2007 INSTEAD OF 31/1 2/2007.IN THE CASE OF ITO V/S MADHU GOPAL GOEL DELHI BENCH E (SUPRA) SIMILAR ISSUE CAME UP FOR CONSIDERATION AND THE SAME WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE FACTS OF THE CASE ARE SQUARELY COVERED BY THE ABOVE DECISION. CONSIDERING THE FACT S OF THE CASE, THE ACQUISITION OF JEWELLERY BY WAY OF GIFT AT THE TIME OF MARRIAGE WH ICH WAS NOT DOUBTED BY AO. BESIDES THE CIT(A) UPHELD THE ADDITION ON THE BASIS THAT THE ASSESSEE DID NOT FILED VALUE ADDED TAX RETURN AND FURNISHED NO PROOF OF OW NERSHIP OF JEWELLERY. IN OUR OPINION, THE ASSESSEE HAS FURNISHED THE DETAILS OF GIFTS RECEIVED AT THE TIME OF MARRIAGE AND ALSO THE VALUATION REPORT OF JEWELLERY IN 1984 AND ALSO ON THE CURRENT DATE. WE, HOWEVER, NOTE THAT THE ASSESSEE HAS SOLD ITS JEWELL ERY TO JEWELERS WHO HAVE CONFIRMED TO HAVE PURCHASED THE SAME BY FILING REPLIES TO THE LETTERS ISSUED BY THE LD AO U/S 133(6) BY FILING THE COPIES OF THE LEDGER ACCOUNT O F ASSESSEE, ACKNOWLEDGED BY FILING RETURN COPIES OF BALANCE-SHEET AND BANK ACCOUNTS TH EREBY PROVING THAT THE SAID TRANSACTIONS HAD TAKEN PLACE ON WHICH THE LD AO HAD NOT BEEN GIVEN ANY OBSERVATIONS OR COMMENTS. UNDER THESE CIRCUMSTANCES, WE ARE OF T HE VIEW THAT THE ADDITION MADE 5 I.T.A. NO 8094/MUM/2011 (A.Y: 2008-09) ANIL VERMA HUF VS. ITO BY THE AO AS CONFIRMED BY CIT(A) CANNOT BE SUSTAINE D AND, THEREFORE, WE DELETE THE ADDITION BY REVERSING THE ORDER OF THE CIT(A). IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED &#'( )*+& , -. / ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 20 TH , 2015 SD/- SD/- (SHAILENDRA K. YADAV) (RAJESH KUMAR) 0) $ / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER ' 1 MUMBAI; 2$ DATED :20.11.2015 ASHWINI GAJAKOSH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 3 ( ) / THE CIT(A) 4. 3 / CIT - CONCERNED 5. 678 ))9* , 9*# , ' 1 / DR, ITAT, MUMBAI 6. 8;+ < / GUARD FILE / BY ORDER, / !'# (DY./ASSTT. REGISTRAR) #$ %, ' 1 / ITAT, MUMBAI