JAGDISH MEGHWAL, MUMBAI V. ACIT CEN CIR 33, MUMBAI

ITA 8336/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92933 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 26-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 09-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BIRLA
• Assessee Lawyers: R G TRALSHAWALA
• Keywords: Unexplained expenditure; Search and seizure
• Section: 6

Judgement Text

, J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI , . . , , . . , BEFORE SHRI I.P. BANSAL , J M AND SHRI B.R. BASKARAN , A M . / ITA NO S . 8336,8337 & 8338 / MUM/ 201 1 ( / ASSESSMENT YEAR S : 200 6 - 0 7, 2007 - 08, 2008 - 09 ) M/S. JAGDISH MEGHWAL , UNIT NO.2, CAMA INDUSTRIAL ESTATE, SUN MILLS COMPOUND, LOWER PAREL, MUMBAI 400 0 13 .. / APPELLANT V/S ACIT CC - 3 3 , GR. FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AIGPM2239K APPELLANT BY : SHRI R.G. TRALSHAWALA REVENUE BY : SHRI PAVAN KUMAR BIRLA (DR) / DATE OF HEARING 1 7 .0 6 .201 5 / DATE OF ORDER 17 .0 6 .2015 / ORDER . . , / PER B.R. BASKARAN , A .M. THE ASSESSEE HAS FILED THESE THREE APPEALS CHALLENGING THE ORDERS PASSED BY LD CIT(A) - 36, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEARS 2006 - 07 TO 2008 - 09. SINCE THE ISSUES URGED IN THESE APPEALS ARE IDENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. JAGDISH MEGHWAL 2 2. THE ASSESSEE HAS RAISED MANY GROUNDS IN ALL THE THREE YEARS. AT THE TIME OF HEARING, THE LD A.R PRESSED ONLY GROUND NO.4 & 5 AND HENCE THE REMAINING GROUNDS ARE DISMISSED AS NOT PRESSED IN ALL THE THREE YEARS. THE GROUND NOS. 4 & 5 RELATE TO THE ADDI TION OF RS.7.00 LAKHS EACH MADE IN ALL THE THREE YEARS. 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE HEREIN IS AN EMPLOYEE OF M/S AURO GOLD JEWELLERY (P) LTD AND IS ALSO RUNNING A PROPRIETARY BUSINESS CONCERN BY NAME M/S MANAV JEWELLE RY, WHEREIN HE HAS CLAIMED TO BE CARRYING ON THE BUSINESS OF TRADING IN GOLD JEWELLERY. THE REVENUE CARRIED OUT SEARCH AND SEIZURE OPERATIONS IN THE HANDS OF M/S AURO GOLD JEWELLERY (P) LTD ON 24 - 09 - 2008. DURING THE COURSE OF SEARCH, IT WAS NOTICED THAT THE PROPRIETARY CONCERN OF THE ASSESSEE REFERRED ABOVE IS A BOGUS CONCERN CREATED BY M/S AURO GOLD JEWELLERY (P) LTD IN ORDER TO SHOW HIGHER TURNOVER THROUGH CIRCULAR TRANSACTIONS. THE AO TOOK THE VIEW THAT THE ASSESSEE WOULD HAVE GOT COMPENSATION/REMUNER ATION FROM M/S AURO GOLD JEWELLERY (P) LTD IN CONNECTION WITH MAINTAINING A PROPRIETARY CONCERN AND ACCORDINGLY ESTIMATED THE AMOUNT OF COMPENSATION/REMUNERATION AT RS.7.00 LAKHS PER YEAR. THE SAID AMOUNT WAS ASSESSED AS INCOME OF THE ASSESSEE IN ALL THE THREE YEARS UNDER CONSIDERATION. THE DEPARTMENT NOTICED THAT M/S AUTO GOLD JEWELLERY (P) LTD WAS CARRYING ON CIRCULAR SALES THROUGH THREE MORE CONCERNS RUN IN THE NAME OF OTHER EMPLOYEES. IT APPEARS IDENTICAL ADDITIONS WERE ALSO MADE IN THEIR HANDS. COR RESPONDING ADDITION OF RS.28.00 LAKHS (RS.7.00 LAKHS X 4 CONCERNS) WAS ALSO MADE IN THE HANDS OF M/A AURO GOLD JEWELLERY (P) LTD TOWARDS UNEXPLAINED EXPENDITURE IN EACH OF THE YEARS UNDER CONSIDERATION. 4. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) NOTICED THAT THE ADDITION MADE TOWARDS UNEXPLAINED EXPENDITURE IN THE HANDS OF M/S AURO GOLD JEWELLERY (P) LTD HAS BEEN CONFIRMED BY THE LD CIT(A) - 41, MUMBAI, VIDE HIS ORDER DATED SEPTEMBER 5, 2011 PASSED IN CIT(A) - 41/DCCC - 33/IT - 654 TO 658/10 - 11. ACCORDIN GLY, THE LD CIT(A) TOOK THE VIEW THAT THE FACT OF CONFIRMATION OF ADDITION IN THE HANDS OF M/S AURO GOLD JEWELLERY (P) LTD WOULD PROVE THAT THE ASSESSEE HAS RECEIVED COMPENSATION/REMUNERATION OF RS.7.00 LAKHS IN EACH OF THE YEARS UNDER CONSIDERATION. ACCO RDINGLY HE UPHELD THE ORDER OF THE AO IN ALL THE THREE YEARS ON THIS ADDITION. JAGDISH MEGHWAL 3 5. THE LD COUNSEL SUBMITTED THAT M/S AURO GOLD JEWELLERY (P) LTD HAD FILED APPEALS BEFORE THE ITAT AND THE TRIBUNAL, VIDE ITS ORDER DATED 13 - 02 - 2015, PASSED IN ITA NOS. 7256 TO 7260/M/2011 HAS DELETED THE ADDITION OF UNEXPLAINED EXPENDITURE MADE IN THE HANDS OF M/S AURO GOLD JEWELLERY (P) LTD. THE LD A.R INVITED OUR ATTENTION TO PAGE 135 - 136 OF THE PAPER BOOK, WHEREIN THE COPY OF ORDER PASSED BY THE TRIBUNAL IS PLACED. ACCO RDINGLY HE SUBMITTED THAT THE CORRESPONDING ASSESSMENT MADE IN THE HANDS OF THE ASSESSEE ON ESTIMATED BASIS, THAT TOO IN THE PROCEEDINGS COMPLETED U/S 153C OF THE ACT, IS LIABLE TO BE DELETED. 6. THE LD D.R DID NOT CONTROVERT THE FACTUAL ASPECTS PR ESENTED BY LD A.R. 7. WE NOTICE THAT THE TRIBUNAL HAS DELETED THE ADDITION TOWARDS UNEXPLAINED EXPENDITURE MADE IN THE HANDS OF M/S AUTO GOLD JEWELLERY (P) LTD WITH THE OBSERVATION THAT THERE IS NO EVIDENCE THAT THE ABOVE SAID CONCERN HAS INCURRED SUCH EXPENDITURE TO CREATE THE ENTRIES WARRANTING ADHOC ADDITIONS OF RS.28.00 LAKHS EACH. FURTHER, THE TRIBUNAL NOTICED THAT THE PROFIT DECLARED IN THE PROPRIETARY CONCERNS OF THE EMPLOYEES HAVE BEEN ASSESSED IN THE HANDS OF THE ABOVE SAID CONCERN. ACCORDING LY, THE TRIBUNAL UPHELD THE ASSESSMENT OF PROFITS IN THE HANDS OF THE ABOVE SAID CONCERN AND DELETED THE ADHOC ADDITION OF RS.28.00 LAKHS. 8. WE HAVE EARLIER NOTICED THAT THE ASSESSING OFFICER HAS ASSESSED A SUM OF RS.7.00 LAKHS IN EACH OF THE YEAR UNDER CONSIDERATION ONLY ON PRESUMPTIONS THAT TOO ON ESTIMATED BASIS. THE LD CIT(A) HAS CONFIRMED THE ADDITION ONLY ON THE REASONING THAT THE CORRESPONDING ADDITION MADE IN THE HANDS OF M/S AURO GOLD JEWELLERY (P) LTD HAS BEEN CONFIRMED BY THE FIRST APPEL LATE AUTHORITY. WE NOTICED THAT THE CORRESPONDING ADDITION MADE IN THE HANDS OF M/S AURO GOLD JEWELLERY (P) LTD HAS SINCE BEEN DELETED BY THE CO - ORDINATE BENCH OF TRIBUNAL. AS OBSERVED BY THE CO - ORDINATE BENCH, THE REVENUE HAS NOT BROUGHT ON RECORD ANY MA TERIAL TO SUBSTANTIATE THE VIEW ENTERTAINED BY THE ASSESSING OFFICER IN RESPECT OF THIS ADDITION. UNDER THESE SET OF FACTS, WE DO NOT FIND ANY MERIT IN THE ASSESSMENT OF RS.7.00 LAKHS IN EACH OF THE YEARS UNDER CONSIDERATION. ACCORDINGLY, WE SET ASIDE TH E ORDER OF LD CIT(A) ON THIS ISSUE PASSED IN EACH OF THE JAGDISH MEGHWAL 4 YEARS UNDER CONSIDERATION AND DIRECT THE AO TO DELETE THE SAME IN ALL THE YEARS UNDER CONSIDERATION. 9. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT O N 17TH DAY OF JUNE, 2015. SD SD SD/ - . . I.P.BANSAL JUDICIAL MEMBER SD SD/ - . . B.R. BASKARAN ACCOUNTANT MEMBER MUMBAI, DATED : 17 . 06 .2015 PATEL / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER TRUE COPY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI