A.C.I.T.Circle-40, Kolkata, Kolkata V. Ramautar Prasad Verma, Kolkata

ITA 88/KOL/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5640 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 28-07-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 14-01-2010
• Court: TRIBUNAL
• Department Lawyers: HARIDAS SAHA
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ' / I.T.A NO.2088/KOL/2009 #$ %&/ ASSESSMENT YEAR: 2004-05 SHRI RAMAUTAR PRASAD VERMA VS. DEPUTY COMMISSION ER OF INCOME-TAX, (PAN: ACTPV1239M) CIRCLE-40, KOLKATA (() /APPELLANT ) (*+()/ RESPONDENT ) & ' / I.T.A NO.88/KOL/2010 #$ %&/ ASSESSMENT YEAR: 2004-05 ASSISTANT COMMISSIONER OF INCOME-TAX, VS. SHRI RA MAUTAR PRASAD VERMA CIRCLE-40, KOLKATA (() /APPELLANT ) (*+()/ RESPONDENT ) DATE OF HEARING: 25.03.2014 DATE OF PRONOUNCEMENT: 25.03.2014 FOR THE ASSESSEE: SHRI RAVI TULSIYAN, FCA FOR THE REVENUE : SHRI HARIDAS SAHA, JCIT, SR. D R / ORDER PER SHRI MAHAVIR SINGH, JM : BOTH THESE CROSS APPEALS BY ASSESSEE ARE REVENUE AR E ARISING OUT OF ORDER OF CIT(A)-XII, KOLKATA IN APPEAL NO. 422/XII/CIR-40, KOLKATA DATED 15.09.2009. ASSESSMENT WAS FRAMED BY DCIT, CIRCLE-40, KOLKATA U/S. 143(3) OF THE INCOME- TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2004-05 VIDE HIS ORD ER DATED 29.12.2006. 2. THE ONLY COMMON ISSUE IN THESE CROSS APPEALS IS AS REGARDS TO THE ORDER OF CIT(A) RESTRICTING THE ADDITION AT RS.26,34,011/- AS AGAIN ST THE ADDITION MADE BY AO AT RS.58,25,077/- ON THE GOLD LOAN ACCOUNT ADDED DURING THE RELEVANT ASSESSMENT YEAR 2004-05. 3. BRIEFLY STATED FACTS ARE THAT THE AO DURING THE COU RSE OF ASSESSMENT PROCEEDINGS NOTICED FROM THE CLOSING STOCK THAT IT HAD CLOSING STOCK OF 19283.194 GMS OF GOLD AFTER DEDUCTING GOLD LOAN OF 8090.205 GMS OF FAMILY MEMBERS AND CUSTOMER S GOLD OF 3568.050 GMS. THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE GOLD LOAN TAKE N FROM FAMILY MEMBERS AND RELATIVES. THE 2 ITA NO. 2088/K/2009 & ITA NO. 88/K/2010 SHRI RAMAUTAR PD. VERMA, AY 2004-05 ASSESSEE FILED GOLD LOAN AGREEMENTS FROM I) ASSESSE E HIMSELF, (II) PARWATI DEVI VERMA, WIFE OF THE ASSESSEE, III) ARUN KUMAR VERMA, SON OF THE ASS ESSEE, IV) SRI NARAYAN SINGH, FRIEND V) SURAJ KUMAR SONI, SONS FRIEND, VI) VIJOY KUMAR VERMA, GR ANDSON. THE ASSESSEE ALSO FILED AFFIDAVITS FROM I) SANTOSH KULTIA, W/O SRI SANTOSH KUMAR KULTH IA (DAUGHTER OF THE ASSESSEE) AND II) SHRI NARAYAN SINGH. THE AO MADE ADDITION OF RS.58,25,07 7/- BEING GOLD OF 9940.405 GMS OF GOLD LOAN TAKEN FROM RELATIVES AND FRIENDS BY OBSERVING AS UNDER: THUS IT IS FOUND THAT NONE OF THE ABOVE PERSONS HAS SHOWN LOAN OF GOLD GIVEN TO THE PROPRIETORSHIP CONCERN OF THE ASSESSEE M/S. JAIKRI SHNA JEWELLERS. SMT. SONTOSH KULTHIA HOS NOT FILED COPY OF HER BALANCE SHEET AS ON 31.3. 2004. SO IT COULD NOT BE ASCERTAINED WHETHER SHE ACTUALLY HELD GOLD WHICH HAS BEEN SHOWN TO HAVE BEEN TAKEN AS LOAN BY THE ASSESSEE. THE ASSESSEE HAS NOT FILED ANY EVIDENCE T HAT SRI NARAYAN SINGH IS ASSESSED FO TAX, THEREFORE GENUINENESS OF THE GOLD LOAN TAKEN F ROM SRI SINGH COULD NOT BE VERIFIED. IT IS ALSO SEEN FROM AUDITED ACCOUNT OF THE ASSESSEE F ILED ALONG WITH THE RETURN THAT HAS NOT SHOWN ANY GOLD LOAN NOR HAS THE AUDITOR GIVEN ANY C OMMENTS IN HIS AUDIT REPORT. MOREOVER, THE COPIES OF AGREEMENTS FILED BY THE ASS ESSEE ARE IN THE PLAIN PAPER WHICH COULD NOT BE CONSIDERED AS AUTHENTIC DOCUMENT IN SU PPORT OF HIS CLAIM OF GOLD LOAN. IN VIEW OF THE ABOVE FACTS THAT IN THE CASES WHERE THE ASSESSEE HAS FILED BALANCE SHEET OF LOAN CREDITOR NONE OF THEM HAS SHOWN IN THEIR BALAN CE SHEET AS GOLD LOAN GIVEN TO THE ASSESSEE. THE ASSESSEE FAILED TO OFFER ANY SATISFAC TORY EXPLANATION REGARDING THE GOLD LOANS. THEREFORE, THE NATURE AND SOURCE OF THE GOLD FOUND IN POSSESSION OF THE ASSESSEE REMAINING UNEXPLAINED. THE GOLD SHOWN BY THE ASSESS EE TAKEN ON LOAN IS CONSIDERED TO BE NOTHING BUT THE ASSESSEE S OWN UNDISCLOSED GOLD. THE VALUE OF TOTAL GOLD LOAN TAKEN DURING THE YEAR COMES TO RS. 58,25,077/- (RS. 586/- X 9940.405 GMS INCLUDING GOLD LOAN FROM SMT. SONTOSH KULTHIA) IS ADDED BACK AS UNDISCL OSED INCOME OF THE ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT( A), WHO RESTRICTED THE ADDITION AT RS.26,34,011/- VIDE PARA 4.3 OF HIS APPELLATE ORDER AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT. IT IS STATED THAT THE APPELLANT WORKED OUT THE CLOSING STOCK OF GOLD LOAN S AS UNDER: OPENING STOCK OF GOLD LOAN 5445.505 GMS ADD : GOLD LOAN TAKEN DURING THE YEAR 4494.900. GMS 9940.405 GMS LESS : GOLD LOAN RETURNED DURING THE YEAR 1850.20 0 GMS CLOSING STOCK OF GOLD LOAN AS ON 31.3.2004 8090.2 05 GMS AS SEEN FROM THE RECORD, THE GOLD LOANS ARE SHOWN T O HAVE TAKEN FROM FAMILY MEMBERS (RAM AUTAR PRASAD VERMA), PARWATI DEVI VERMA (WIFE OF APPELLANT), ARUN KUMAR VERMA (SON OF APPELLANT) AND VIJAY KUMAR VERMA (GRA NDSON OF APPELLANT) AND FRIENDS (NARAYAN SINGH AND SURAJ KUMAR SONI). IN SUPPORT OF THE GOLD LOANS THE APPELLANT FURNISHE D GOLD LOAN AGREEMENTS FROM FIVE PARTIES AND AFFIDAVIT FROM TWO PARTIES. THE APPELLA NT ALSO FILED I.T. DETAILS ALONG WITH BALANCE SHEETS. DURING THE APPELLATE PROCEEDINGS, T HE LD. AR OF THE APPELLANT FILED SAME SET OF EVIDENCES. THE A.O AFTER DETAILED EXAMINATIO N OF THE EVIDENCES POINTED OUT DISCREPANCIES AS SEEM FROM THE ASSESSMENT ORDER. TH E MOST GLARING DISCREPANCY NOTICED IS WITH REFERENCE TO BALANCE SHEETS OF GOLD LOAN CR EDITORS PERTAINING TO RAM AUTAR PRASAD VERMA (APPELLANT), PARWATI DEVI, ARUN KUMAR VERMA AND VIJAY KUMAR VERMA. AS RIGHTLY POINTED OUT THERE IS NO MENTION OR INDIC ATION AVAILABLE CONFIRMING THE FACT 3 ITA NO. 2088/K/2009 & ITA NO. 88/K/2010 SHRI RAMAUTAR PD. VERMA, AY 2004-05 THAT THE ABOVE SAID PARTIES ADVANCED GOLD LOANS TO THE APPELLANT. THE EXPLANATION GIVEN BY THE APPELLANT IN RESPECT OF GOLD BOND IS ALSO NOT CONVINCING AND NOT SUPPORTED BY ANY EVIDENCES EXCEPT ACQUISITION OF GOLD BOND. THER E IS NO EVIDENCE AVAILABLE ON RECORD TO SHOW THE CONVERSION OF GOLD BOND (24 CTS.) INTO 22 CTS. (1099.897 GMS) GOLD JEWELLERY. EVEN IN THE BALANCE SHEET, THE SAME IS CONTINUED TO BE SHOWN AS GOLD BOND. IN THE GOLD LOAN AGREEMENT THE YEAR IN WHICH THE ALLEGED GOLD L OAN GIVEN IS NOT MENTIONED. IN THE PARWATI DEVIS BALANCE SHEET, RS. 2,23,391/- IS SHO WN AGAINST JAI KRISHNA JEWELLERS (PROPRIETOR OF CONCERN OF THE APPELLANT). AS PER TH E PURCHASE BILL, 933.120 GMS GOLD BAR WAS PURCHASED ON 8.3.2001 AND ALLEGED TO BE GIVEN A S A LOAN TO THE APPELLANT ON THE SAME DATE AFTER CONVERTING THE SAME INTO 22 CTS GOL D JEWELLERY (1018.030 GMS). IN ARUN KUMAR VERMAS BALANCE SHEET, RS. 12,10,269/- S SHO WN AGAINST JAI KRISHNA JEWELLERS. BUT NO OTHER DETAILS FURNISHED TO SHOW WHETHER THE SAME IS AGAINST LOAN OR GOLD LOAN. NO QUANTITY DETAILS ARE FURNISHED. AS PER GOLD LOAN AG REEMENT, THE GOLD LOAN (2249.681 GMS) IS SHOWN TO HAVE GIVEN ON 12.6.2001 MUCH BEFOR E THE YEAR UNDER CONSIDERATION. IN VIJAY KUMAR VERMAS BALANCE, THERE IS NO MENTION AB OUT GOLD LOAN GIVEN TO THE APPELLANT. THE APPELLANT HAS NOT FURNISHED ANY LEDGER COPIES O F THE CREDITORS (GOLD LOAN) APPEARING IN THE BOOKS OF THE APPELLANT TO SUPPORT THE GOLD L OAN TRANSACTIONS. THE LEDGER ACCOUNTS OF THE APPELLANT APPEARING IN THE BOOKS OF GOLD LOA N CREDITORS HAVE ALSO NOT BEEN FURNISHED. IN RESPECT OF GOLD LOAN TRANSACTIONS WITH SANTOSH K ULTHA AND NARAYAN SINGH, I AGREE WITH THE OBSERVATIONS MADE BY THE A.O IN THE ASSESS MENT ORDER. IN RESPECT OF SURAJ KUMAR SONI, THE APPELLANT HAS NOT FURNISHED ANY DE TAILS. AS SEEN FROM THE FACTS BROUGHT ON RECORD, PARWATI D EVI, ARUN KUMAR VERMA AND VIJAY KUMAR VERMA ARE INCOME TAX ASSESSEES. THE SCRUTINY OF ACCOUNT DETAILS AS SUBMITTED TO THE DEPARTMENT AND RELIED UPON BY THE APPELLANT NO WHERE REVEAL THE FACT OF GOLD LOAN GIVEN TO THE APPELLANT. SANTOSH KULTHIASS ASSESSMEN T DETAILS ARE NOT KNOWN. NARAYAN SINGH IS CLAIMED TO BE AN AGRICULTURIST. TAKEN TOGE THER ALL THE FACTS AND CIRCUMSTANCES EVEN CONSIDERING THE ASPECT OF PREPONDERANCE OF PRO BABILITY THERE IS NO OTHER ALTERNATIVE BUT COME TO CONCLUSION THAT THE APPELLANTS EXPLANA TION IS A MADE-TO-ORDER AND CANNOT BE RELIED UPON. IT CANNOT WHAT I FEEL BE A FACT THA T SEVERAL PERSONS WILL KEEP THEIR VALUABLES DEPOSITED WITH THE APPELLANT WITHOUT ANY GAIN WHATSOEVER AND WITH THE ONLY UNDERSTANDING THAT THE APPELLANT WOULD RETURN THEM AS AND WHEN DEMANDED. IN VIEW OF THE ABOVE, I DECLINE TO INTERFERE WITH T HE A OS OBSERVATION THAT GOLD LOAN AS DISCLOSED WAS APPELLANTS INVESTMENT FROM UNDISCLOS ED SOURCES. HOWEVER, I FEEL THAT THE ADDITION ON THIS ACCOUNT SHOULD BE RESTRICTED TO TH E GOLD LOAN AS DISCLOSED I.E. RS.586X4494.900 GMS = RS.26,34,011/-. THERE IS NO JUSTIFICATION TO ADD THE OPENING STOCK OF 5445.55 GMS IN THE YEAR UNDER CONSIDERATIO N. THE AO IS FREE TO PROCEED AGAINST THE OPENING STOCK IN THE YEAR IT WAS SHOWN AS GOLD LOAN. THE GROUND OF THE APPELLANT IS PARTLY ALLOWED. AGGRIEVED AGAINST THE ORDER OF CIT(A) BOTH REVENUE AS WELL AS ASSESSEE CAME IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. COMING TO THE REVENUES APPEAL THE FACTUAL POSITION IS THAT THE AO MADE ADDITION OF ENTIRE GOLD LOAN FROM RELATIVES AT 8090.205 GMS VALUED AT RS.58 ,25,077/-. THE CIT(A)S FINDING IS THAT OUT OF THIS, THE GOLD LOAN TO THE EXTENT OF 5445.505 GM S PERTAINS TO EARLIER YEARS LOAN AND THERE IS 4 ITA NO. 2088/K/2009 & ITA NO. 88/K/2010 SHRI RAMAUTAR PD. VERMA, AY 2004-05 NO JUSTIFICATION IN ADDING THE OPENING STOCK, WHICH WAS EVENTUALLY THE CLOSING STOCK OF THE EARLIER YEARS. IT MEANS THAT THIS LOAN WAS NOT OBT AINED DURING THE YEAR AND CIT(A) HAS RIGHTLY OBSERVED THAT AO IS FREE TO PROCEED AGAINST THE OPE NING STOCK IN THE YEAR WHEN IT WAS SHOWN AS GOLD LOAN FROM RELATIVES OR FRIENDS AS PER LAW. WH EN A QUERY WAS PUT TO LD. SR. DR HE STATED THAT HE HAS NOTHING TO SAY ON THIS MATTER. WE FIND THAT CIT(A)S FINDING IS QUITE REASONABLE THAT OPENING STOCK EVENTUALLY THAT WAS CLOSING STOCK IN THE LAST YEAR (THE GOLD LOAN RELATIVES AND FRIENDS) CANNOT BE SUBJECT MATTER OF ADDITION IN TH IS YEAR. ACCORDINGLY, THE ISSUE OF REVENUES APPEAL IS DISMISSED. 6. NOW, COMING TO THE ISSUE OF ASSESSEES APPEAL IS REGARDING THE SUSTENANCE OF ADDITION AT RS.26,34,011/- QUA THE GOLD LOAN FROM RELATIVES AT 4494.900 GMS. WE FIND THAT BOTH THE LOWER AUTHORITIES HAVE CONCURRED ON THE FACT THAT IN THE BALANCE SHEET OF GOLD LOAN CREDITORS ONLY GOLD IS DISCLOSED BUT IT IS NOT POINTED OUT TO WHOM IT I S GIVEN. SECONDLY, IN THE FINDINGS OF THE LOWER AUTHORITIES THERE IS NO EVIDENCE FOR CONVERSION OF GOLD FROM 24 CT. TO 22 CT. AND EVEN IN THE GOLD LOAN AGREEMENTS THE YEAR OF ALLEGED GOLD LOAN GIVEN IS NOT MENTIONED BUT THERE ARE SUPPORTING EVIDENCE ALSO THAT THE ACQUISITION OF GOLD BONDS AR E FILED AND PURCHASE BILLS OF PURCHASE OF GOLD BARS AND OTHER GOLD BY THE RESPECTIVE OWNERS ARE AV AILABLE. BUT THESE ARE NOT VERIFIED BY THE LOWER AUTHORITIES AND EVEN THESE ARE NOT CONFRONTED TO THE ASSESSEE. EVEN THE GOLD LOANERS ARE NOT EXAMINED VIS--VIS THE EVIDENCE. IN SUCH SITUA TION, WE FEEL THAT QUA THE GOLD LOANS OF 4494.900 GMS TO THE EXTENT OF RS.26,34,011/- NEEDS RE-EXAMINATION AT THE LEVEL OF THE AO AFRESH. HENCE, WE SET ASIDE THIS TO THE FILE OF TH E AO FOR RE-LOOKING OF THE ISSUE IN ENTIRETY. NEEDLESS TO SAY THAT ASSESSEE IS FREE TO LEAD EVIDE NCE IN SUPPORT OF HIS CLAIM. ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AND THAT OF REVENUE IS DISMISSED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- , ! , (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25TH MARCH, 2014 ./ #01 2 JD.(SR.P.S.) 5 ITA NO. 2088/K/2009 & ITA NO. 88/K/2010 SHRI RAMAUTAR PD. VERMA, AY 2004-05 3 *4 5 4%6- COPY OF THE ORDER FORWARDED TO: 1 . () / APPELLANT SHRI RAMAUTAR PRASAD VERMA, P-187, CIT ROAD, SCH-IV(M, KOLKATA-700 10. 2 *+() / RESPONDENT DCIT/ACIT, CIRCLE-40, KOLKATA. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 4:; *# / DR, KOLKATA BENCHES, KOLKATA +4 */ TRUE COPY, #