Shri Babubhai Kanjibhai Patel, Ahmedabad V. The Income tax Officer,Ward-6(2), Ahmedabad

ITSSA 110/AHD/2010

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7917 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-12-2011
• Assessment Year: misc
• Appeal Filed On: 05-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KORTAR SINGH
• Keywords: Unexplained investment; Gift; Opportunity of being heard; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH BEFORE SHRI G.C.GUPTA, VICE-PRESIDENT (AZ) AND SHRI B.P. JAIN, ACCOUNTANT MEMBER IT(SS)A NO.110/AHD/2010 BLOCK PERIOD FROM 01/04/1995 TO 27/09/2001 BABUBHAI KANJIBHAI PATEL 37, UGANDA PARK SOCIETY, NR. SARTHI ROW HOUSE, MEMNAGAR, AHMEDABAD PAN NO.AGLPP6510B / V/S . INCOME TAX OFFICER, WARD-6(2), AHMEDABAD / APPELLANT .. / RESPONDENT APPELLANT BY NONE RESPONDENT BY SHRI KORTAR SINGH, CIT-DR / DATE OF HEARING 13/12/2011 /DATE OF PRONOUNCEMENT 16/12/2011 ! ! ! ! / / / / ORDER PER B.P. JAIN, ACCOUNTANT MEMBER:- THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XXI, AHMEDABAD DATED 16-12-200 9 FOR THE BLOCK PERIOD 01-04- 1995 TO 27-09-2001. THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL. 1. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN POINTS OF LAW AND ACTS. 2. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APP ELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN CONFIRMING ADDITION OF RS.77,850/-. 2. BRIEF FACTS AS EMANATING FROM ASSESSING OFFICER S ORDER ARE REPRODUCED AS UNDER:- IN THIS CASE SEARCH ACTION U/S.132 OF THE I.T. ACT WAS CARRIED OUT ON 27.09.2001 IN CONNECTION WITH SEARCH CARRIED OUT IN THE CASE OF NIRMA GROUP. DURING THE COURSE OF SEARCH, JEWELLERY WORTH RS.7,5 4,433/- WAS FOUND. THEE IT(SS)A NO.110/AHD/2010 B.P. 1/4/95 TO 27/9/01 BABUBHAI K PATEL V. ITO WD-6(2) ABD PAGE 2 ADDITION OF RS.4,32,388/- WAS MADE BY THE A.O. DURI NG THE BLOCK ASSESSMENT CONSIDERING THE SAME AS UNEXPLAINED INVESTMENT MADE IN ACQUISITION OF JEWELLERY FOUND DURING SEARCH. THE BLOCK ASSESSMENT U/S.158BC OF THE ACT WAS MADE VIDE ORDER DTD. 31.7.2003. IN APPEAL FILED BY THE ASSESSEE, THE CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF RS.2 ,48,476/-. AGGRIEVED BY THE CIT(A)S ORDER, BOTH THE REVENUE AND ASSESSEE FILED APPEAL BEFORE ITAT WHO HAS SET-ASIDE THE MATTER TO THE FILE OF AO. THE REV ENUES AL WAS AGAINST THE RESTRICTION OF ADDITION BY THE CIT(A) IN RESPECT OF UNDISCLOSED JEWELLERY TO RS.2,48,476/-. THE ASSESSEES APPEAL WAS AGAINST AD DITION OF RS.4,32,388/- MADE IN THE ASSESSMENT ORDER FOR 999.740 GMS STARTI NG FROM TOTAL JEWELLERY FOUND FOR 1727.650 WHEREAS, IN FACT, JEWELLERY FOUN D WAS 1333.150 GMS. THE HONBLE ITAT, AHMEDABAD BENCH SMC VIDE ITS CO MBINED ORDER NO. ITA(SS)A NO.117/AHD/2004 AND NO. ITA(SS)A NO.135 & 322/AHD/2004 DATED 18/10/2005 HAS OBSERVED AND DIRECTED VIDE PAR A-10 AS UNDER:- THE ASSESSEES COUNSEL HAS ALSO POINTED OUT THAT D URING THE COURSE OF SEARCH ONLY JEWELLERY WEIGHING 1371 GMS WAS FOUN D WHILE THE AO FOR THE PURPOSE OF CONSIDERING THE UNEXPLAINED JEWELLER Y HAS TAKEN THE JEWELLERY FOUND AT 1727.65 GMS WHICH IS INCORRECT. THIS FACT NEEDS VERIFICATION AT THE END OF AO. AFTER CONSIDERING TH E TOTALITY OF THE FACTS AND THE ARGUMENTS OF BOTH THE SIDES, IN MY OPINION, THIS MATTER NEEDS RE-EXAMINATION. THE FIRST THING THE AO HAS TO VERIF Y IS CORRECT QUANTITY OF THE JEWELLERY FOUND. WHETHER IT IS 1371 GM,SMS OR 1 727.65 GMS. THEREAFTER, HE WILL CONSIDER THE ASSESSEES EXPLANA TION WITH REGARD TO JEWELLERY FOUND AT THE TIME OF SEARCH ON THE BASIS OF ALL THE EVIDENCES PRODUCED BY THE ASSESSEE BEFORE HIM AND NOT MERELY ON THE BASIS OF STATEMENT RECORDED AT THE TIME OF SEARCH. HE WILL A LSO EXAMINE THE ASSESSEES CONTENTION THAT RECEIPT OF ORNAMENTS BY WAY OF GIFT/WILL WAS RECORDED IN THE SEIZED BOOKS OF ACCOUNT. NEEDLESS T O MENTION THAT AO WILL ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE AND THEREAFTER WILL RE-ADJUDICATE THE MATTER IN ACCORDA NCE WITH LAW. ACCORDINGLY, NOTICE U/S.143(2) OF THE ACT ISSUED ON 10/6/2008 HAS BEEN DULY SERVED UPON THE ASSESSEE ON 12.6.2008. THEREAFTER, DUE TO CHANGE OF JURISDICTION OF THE INCUMBENT, FRESH NOTICE U/S.143 (2) OF THE ACT WAS ISSUED ON 29.08.2008 AND SERVED UPON THE ASSESSEE BY SPEED PO ST FIXING HEARING ON 15.09.2008. IN RESPONSE TO THE NOTICE, SHRI HIMANSH U SHAH, C.A AND AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED AND FIELD SUBMISSION ALONG WITH ENCLOSURES. THE CASE HAS BEEN DISCUSSED WITH HIM. REGARDING ADDITION OF ORNAMENTS, THE ASSESSEE VIDE ITS SUBMISSION DATED NIL HAS EXPLAINED AS UNDER:- ADDITION OF JEWELLERY CONFIRMED BY THE CIT(A) 574.510 GMS ADDITION OF JEWELLERY AS PER A.O 1727.650 JEWELLERY AS PER PANCHANAMA (FOUND) 1333.150 394.500 GMS. DIFFERENCE 180.010 IT(SS)A NO.110/AHD/2010 B.P. 1/4/95 TO 27/9/01 BABUBHAI K PATEL V. ITO WD-6(2) ABD PAGE 3 THE CLAIM OF THE ASSESSEE FOR ADDITION OF JEWELLERY HAS BEEN VERIFIED IN LIGHT OF THE DIRECTIONS OF THE HAN. ITAT, AHMEDABAD BY VERIF YING THE ANNEXURES X & J PERTAINING TO JEWELLERY FOUND AND JEWELLERY SEIZ ED RESPECTIVELY. AS PER ANNEXURE-X, THERE ARE TOTAL 33 ITEMS OF JEWELLERY. THE ESTIMATED NET WEIGHT OF THESE 33 ITEMS IS SHOWN AS 1333.150 GMS FOR VALUE O F RS.7,43,553/-. AS PER ANNEXURE-J, TOTAL JEWELLERY SEIZED ARE AS UNDER:- S NO. DESCRIPTION OF THE ARTICLE NO . METAL GROSS WT. ESTIMATED NET WT. VALUE (RS) 1 FULL SET WITH KIMSOR 2 PATLA, 1 HAR, 2 RINQ & 1 GOLD 135.00 135.00 58,390 2 GOLDEN PATLA 2 BIG & 2 SMALL 4 GOLD 88.950 88.950 38,491 3 TOPS 6 & RINQ 1 7 GOLD 50.700 50.700 21,92 7 4 NECKLACE 2 GOLD 120.00 120.00 51,900 TOTAL 394.650 394.650 1,70,688 WHILE CALCULATING THE UNEXPLAINED INVESTMENT IN JEW ELLERY, THE AO IN THE ASSESSMENT ORDER PASSED ON 31.7.2003 HAS TAKEN TOTA L JEWELLERY FOUND (INCLUDING SEIZED) OF 1727.65 GMS. HOWEVER, ON VERI FICATION OF BOTH THE ANNEXURE J & X. IT IS SEEN THAT JEWELLERY SEIZED I. E. ITEMS AT SR. 1 TO 4 OF ANNEXURE-J HAVE BEEN REFLECTED IN THE ANNEXURE-X (J EWELLERY FOUND) AT SR. NO.17, 18, 19, & 20. HENCE THE WEIGHT AND VALUE OF JEWELLERY SEIZED IS ALREADY INCLUDED IN ANNEXURE-X (JEWELLERY FOUND). I N VIEW OF THE ABOVE FACTS, THE JEWELLERY FOUND IS ACTUALLY 1333.150 GMS. (1727 .65 GMS 394.650 GMS). AFTER CONSIDERING THE CLAIM OF THE ASSESSEE, THERE REMAINS DIFFERENCE OF 80 GMS. AS UNEXPLAINED, WHICH IS CONSIDERED AS HIS UNE XPLAINED INVESTMENT. 3. LD. CIT(A) CONFIRMED THE ACTION OF ASSESSING OFF ICER. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF VALID SERVICE OF NOTICE. THEREFORE, WE SHALL BE DECIDING THE MATTER EX PARTE AFTER HEARING THE LD. DR AND MATERIAL AVAILABLE ON RECORD. 5. THE ASSESSING OFFICER IN THE PRESENT CASE EXAMIN ED THE ISSUED IN VIEW OF THE DIRECTIONS OF ITAT AHMEDABAD BENCH VIDE ITS ORDER D ATED 18-10-2005 MENTIONED HEREINABOVE. IT WAS FOUND BY THE AO ON VERIFICATION OF BOTH THE ANNEXURE J & X THAT JEWELLERY SEIZED AT SR NO. 1 TO 4 OF ANNEXURE-J HAV E BEEN REFLECTED IN THE ANNEXURE- X, WHICH IS JEWELLERY FOUND AT SR. NO. 17-20. THERE FORE, THE WEIGHT AND VALUE OF JEWELLERY SEIZED IS ALREADY INCLUDED IN ANNEXURE-X WHICH IS JEWELLERY FOUND AND THEREFORE HE WORKED OUT THE ACTUAL JEWELLERY FOUND AS UNDER:- 1727.650 GMS (-)394.650 GMS 1333.150 GMS IT(SS)A NO.110/AHD/2010 B.P. 1/4/95 TO 27/9/01 BABUBHAI K PATEL V. ITO WD-6(2) ABD PAGE 4 THE ASSESSEE HAD SUBMITTED THE EXPLANATION WHICH HA S NOT BEEN CONSIDERED BY THE ASSESSING OFFICER. FOR WORKING OUT THE DIFFERENCE O F 180GMS OF JEWELLERY AS UNEXPLAINED INVESTMENT NO COGENT REASONS HAVE BEEN PLACED ON RECORD BY THE AO OR BY THE LD. CIT(A). IN THE CIRCUMSTANCES AND FACTS O F THIS CASE, THE AO IS NOT JUSTIFIED IN TREATING THE 180 GMS OF JEWELLERY AS UNEXPLAINED AND ADDITION SO MADE IS DIRECTED TO BE DELETED. ACCORDINGLY, THE ORDER OF LD. CIT(A) IS REVERSED. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ' ! #$% 16 / 12 /2011 ) * + , THIS ORDER PRONOUNCED IN OPEN COURT ON 16/12/ 2011 . SD/- SD/- ( G.C.GUPTA ) ( B.P. JAIN ) (VICE PRESIDENT) (ACCOUNTANT MEMBER) - , DKP* ! ! ! ! ../ ../ ../ ../ 0 / 0 / 0 / 0 / / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. $$.3 4 / CONCERNED CIT 4. 4- / CIT (A) 5. /8+ ...3, .3, - / DR, ITAT, AHMEDABAD 6. +;< =' / GUARD FILE. BY ORDER/ ! , /TRUE COPY/ >/- $? .3, - ,