ITO, Ward - 35(4), Kolkata, Kolkata V. Mahendra Kumar Mudit Kumar (HUF), Kolkata

ITA 947/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54545 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 29-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P P SARKAR
• Assessee Lawyers: ARVIND AGARWAL
• Keywords: Unexplained investment
• Section: 143(3); 69B; 147; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE . . , !' # # # # /AND $# , !' ) [BEFORE HONBLE SHRI S. V. MEHROTRA, AM & HONBLE S RI MAHAVIR SINGH, JM] #% #% #% #% / I.T.A NO. 947/KOL/2011 $&' () $&' () $&' () $&' ()/ // / ASSESSMENT YEAR: 2004-05 INCOME-TAX OFFICER, VS. MAHENDRA KR. MUDIT KR. (HUF) WARD-35(4), KOLKATA (+, /APPELLANT ) (-.+,/ RESPONDENT ) FOR THE APPELLANT: SHRI P. P. SARKAR FOR THE RESPONDENT: SHRI ARVIND AGARWAL !/ / ORDER PER MAHAVIR SINGH, JM ( $# $# $# $#, , , , !' !' !' !' ) THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XX, KOLKATA IN APPEAL NO. 251/CIT(A)-XX/WD-35(4)/09-10/KOL VIDE DATED 20.04.2 011. ASSESSMENT WAS FRAMED BY ITO, WARD-35(4), KOLKATA U/S. 143(3) READ WITH SECTION 1 47 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEAR 2004-05 VIDE HIS ORDER DATED 29.12.2009. 2. THE SOLE ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE ADDITION OF RS.35,12,842/- MADE BY ASSESSING OFFICE R U/S. 69 READ WITH 69B OF THE ACT. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1) THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS.35,12,842/- ON THE BASIS OF THE CONSIDERING THE SUBMISSION OF THE ASSESSEE AND WITH OUT TAKING INTO ACCOUNT THE VIEW OF THE A.O. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ORIGINAL RETURN WAS FILED ON 14.5.2004 SHOWING TOTAL INCOME OF RS.77,370/-. SUBSEQUENTLY, ASSESSING OFFICER ON VERIFICATION OF ASSESSEES WEALTH TAX RETURN FOUND THAT THE ASSESSEE DECLARED ITS WEALTH CONSISTS OF SILVER UTE NSILS WORTH RS.8,42,400/- AND JEWELLERY WORTH RS.26,70,442/- TOTALING TO RS.35,12,842/-, WHICH HA D NOT BEEN DECLARED IN BALANCE SHEET AS AT 31.3.2004 RELEVANT TO ASSESSMENT YEAR 2004-05. ACC ORDINGLY, THE CASE WAS REOPENED U/S. 147 OF THE ACT AND THE ENTIRE AMOUNT OF RS.35,12,842/- WAS TREATED BY ASSESSING OFFICER AS 2 ITA 947/K/2011 MAHENDRA KR. MUDIT KR. (HUF).. A.Y .04-05 UNEXPLAINED INVESTMENT AS PER PROVISIONS OF SECTION 69 OF THE ACT AND ADDED BACK THE SAME TO TOTAL INCOME OF THE ASSESSEE BY STATING THAT THE JE WELLERY WAS NOT REFLECTED IN THE BALANCE SHEET THOUGH THE SAME HAS BEEN REGULARLY SHOWN BY THE ASS ESSEE IN ITS WEALTH TAX RETURNS. HE ALSO STATED THAT AS PER PROVISIONS OF SECTION 69 R.W.S 6 9B OF THE ACT, WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS MADE INVESTMENTS OR IF FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OF OTHER VALUABLE ARTICLES AND/OR HAS MADE INVESTMENTS, THE VALUE OF WHICH HAS NOT BEEN DECLARED IN THE BOOKS, THE SAME SHOULD BE TREATED AS UNEXPLAINED IN VESTMENT AND IS TO BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. AG GRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO DELETED THE ADDITION BY OBSERVING AS UN DER: 10. I HAVE PERUSED THE ASSESSMENT ORDER AND THE R EMAND REPORT OF THE A.O. I HAVE ALSO CONSIDERED THE SUBMISSIONS OF THE APPELLANT. I FIN D SUBSTANCE IN THE CONTENTIONS OF THE APPELLANT. IN COURSE OF THE REMAND PROCEEDINGS, TH E A.O. WAS DIRECTED TO VERIFY THE CONTENTIONS OF THE APPELLANT WITH REFERENCE TO RELE VANT RECORDS AND DOCUMENTS. BUT, THE A.O. HAS BROUGHT NO MATERIAL ON RECORD TO CONTROVER T THE CONTENTIONS OF THE APPELLANT. I FIND THAT THE JEWELLERY OF RS.35,12,842/- WAS DECLA RED BY THE APPELLANT IN ITS WEALTH TAX RETURNS FOR THE ASSESSMENT YEARS 2001-02, 2002-03 A ND 2003-04. I ALSO FIND THAT THE APPELLANT HAS SATISFACTORILY EXPLAINED AS TO WHY TH E JEWELLERY IS NOT REFLECTED IN ITS BALANCE SHEET. IN VIEW OF THE ABOVE, THE A.O. WAS NOT JUSTIFIED IN HOLDING THAT THE JEWELLERY REPRESENTS UNEXPLAINED INVESTMENTS IN THE ASSESSMENT YEAR 2004-05. THE ADDITION OF RS.35,12,842/- IS DIRECTED TO BE DELETE D. GROUND NO. 4, 5 AND 6 ARE ALLOWED. BEFORE US, THE LD. COUNSEL SUBMITTED THAT THE JEWEL LERY OF RS.35,12,842/- HAS BEEN DECLARED BY ASSESSEE IN ITS WEALTH TAX RETURN FOR AYS 2001-02, 2002-03 AND 2003-04 AND THE SAME WAS DECLARED UNDER VDIS 1997 AND CREDITED IN THE CAPITA L ACCOUNT FOR FY 1997-98 BUT ENTRY WAS REVERSED IN THE CAPITAL ACCOUNT AND JEWELLERY DOES NOT APPEAR IN THE BALANCE SHEET AS AT 31.3.1998. THE ASSESSEE BEFORE CIT(A) FILED COPY O F CAPITAL ACCOUNT AND BALANCE SHEET FOR THE PERIOD ENDING 31.3.1998, WHICH IS ALSO FILED BEFORE US IN ITS PAPER BOOK AT PAGES 80 AND 81. ANOTHER INTERESTING ASPECT AND FACT IS THAT THESE J EWELLERY WAS DECLARED IN THE WEALTH TAX RETURN FOR AY 1992-93 AND EVEN THIS IS EXIHIBITED IN THE V ALUATION REPORT FILED ALONG WITH THE WEALTH TAX RETURN. IT MEANS THAT THIS JEWELLERY WAS ACQUIR ED MUCH BEFORE THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION AND THIS CANNOT BE UNDISCLOSED INCOME FOR THE RELEVANT ASSESSMENT YEAR. EVEN THIS JEWELLERY IS DECLARED UNDER VDIS AND THIS FACT HAS NOT BEEN DENIED BY REVENUE. HENCE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN H OLDING THE JEWELLERY AS UNDISCLOSED INVESTMENT SOLELY ON THE GROUND THAT THE JEWELLERY WAS NOT REFLECTED IN THE BALANCE SHEET. SINCE BEFORE US, THE LD. DR HAS BROUGHT NO MATERIAL TO RE BUT THE AFORESAID FINDING OF CIT(A), WE DO 3 ITA 947/K/2011 MAHENDRA KR. MUDIT KR. (HUF).. A.Y .04-05 NOT FIND ANY INFIRMITY IN HIS ORDER AND THE SAME IS HEREBY UPHELD. THE APPEAL OF THE REVENUE IS DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 5. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- . . , !' $# $# $# $# , !' (S. V. MEHROTRA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( 0 0 0 0 ) )) ) DATED 13TH SEPTEMBER, 2011 12 $&34 $5 JD.(SR.P.S.) !/ 6 -$$ 7(8- COPY OF THE ORDER FORWARDED TO: 1 . +, / APPELLANT ITO, WARD-35(4), KOLKATA. 2 -.+, / RESPONDENT, MAHENDRA KR. MUDIT KR. (HUF), 5, SYNA GOGUE ST., 2 ND FLOOR, KOLKATA-700 001. 3 . $/& ( )/ THE CIT(A), KOLKATA 4. $/& / CIT, KOLKATA 5 . $> -$& / DR, KOLKATA BENCHES, KOLKATA . -$/ TRUE COPY, !/&?/ BY ORDER, #4 /ASSTT. REGISTRAR .