Hari Babu Shivhare, Gwalior V. ACIT Central-1, Bhopal

ITSSA 174/Ind/2021

AI Insights

The case involves Hari Babu Shivhare, the appellant, contesting additions made to his income for the Assessment Year 2016-17 by the AO, which were upheld by the CIT(A). The additions pertained to unexplained expenditures amounting to Rs. 18,37,124 for a function and Rs. 36,800 for jewellery, which the AO classified as unexplained investments. The Tribunal examined the evidence presented, including a seized document that listed various expenditures but lacked detailed corroborative evidence linking these expenditures to the assessee or the specified financial year. The Tribunal concluded that the additions were not justified based on the available evidence.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122629 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-11-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 27-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Search and seizure; Period of limitation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH: DB: INDORE BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER IT (SS) A No.174/Ind/2021 Assessment Year: 2016-17 Hari Babu Shivhare, 18, Ganpati Vihar, TansenRoad, Gwalior MP 474002 PAN AHIPS2393D vs. The ACIT Central)-1, Bhopal, (MP) 462001 (Appellant) (Respondent) For Assessee : Shri Anil Kamal Garg, CA Shri Arpit Gaur CA Shri Devendra Bansal For Revenue: Shri P.K. Mishra, CIT(DR) Date of Hearing : 17.11.2022 Date of Pronouncement : 10.02.2023 ORDER PER CHANDRA MOHAN GARG, J.M. This appeal has been filed by the Assessee against the order of Ld. CIT(A)-3, Bhopal order dated 26.03.2021 relating to Assessment Year 2016-17. IT (SS) A No.174/Ind/2021 Assessment Year: 2016-17 Page 2 of 10 2. The Ld. CIT(DR) in all fairness, agreed to the contention of Ld. AR that the learned Commissioner of Income Tax (A)-3, Bhopal passed order on 26.03.2021 and assessee filed appeal against the said order on 28.12.2021 by the delay of 181 days and this period is covered by the suo moto order of Hon’ble Supeme Court wherein the time limitation for filing cases/applications/appeals was extended till 15.02.2022. The period of delay falls within the said extended period of limitation. Therefore the appeal is admitted for hearing. 3. The grounds of appeal raised by the assessee read as under: 1. On the facts and circumstances of the case the Ld. CIT(A) has erred in confirming addition of Rs. 1086909/- on account of investment in syndicate business as unexplained investment which is illegal, unjustified and bad-in-law. 2. On the facts and circumstances of the case the Ld. CIT(A) has erred in confirming addition of Rs. 1837124/- on account of expenses in function as unexplained investment is illegal, unjustified and bad-in-law. 3. On the facts and circumstances of the case the Ld. CIT(A) has erred in confirming addition of Rs. 36,800/- on account of jewellery as unexplained investment is illegal, unjustified and bad-in-law. IT (SS) A No.174/Ind/2021 Assessment Year: 2016-17 Page 3 of 10 4. The learned assessee representative (AR) submitted that the assessee does not want to press ground no. 1 therefore the same is dismissed has not pressed. Ground No. 2 5. Apropos ground no. 2 of assessee the learned AR submitted that the AO as well as Ld. CIT(A) has erred in confirming addition of Rs. 18,37,124/- on account of expenses in function as unexplained investment is illegal, unjustified and bad-in-law. Therefore the same kindly be set aside. The Ld. AR further submitted that impugned addition has been made by AO on the basis of one seized paper inventorized at GWS/A-2 page no. 60. Such loose paper scanned at page no. 25 of her Assessment Order. In such loose paper, the details of expenditure incurred mentioned only at Rs. 50,150/- and at the foot note of the same LPS mentioned without mentioning any details of such expenses and date. Therefore addition may kindly be deleted. IT (SS) A No.174/Ind/2021 Assessment Year: 2016-17 Page 4 of 10 6. Replying to the above Ld. CIT(DR) drew our attention towards relevant para 14.4 of assessment order and submitted that did not provide any evidences to support his claim and the total expenses mentioned on the seized document WPS/A-2 clearly reveals that the assessee has incurred expenses of Rs. 18,37,124/- towards some function and the same was rightly treaded by the AO has unexplained expenditure and added the same to the taxable income of the assessee for A.Y. 2016-17. 7. On careful consideration of rival submission we are of the view that during the course of assessment proceedings the AO noted that the incriminating document found and seized clearly revealed that the assessee has incurred an amount of Rs. 18,37,124/- towards some function. The AO show cause the assessee by noticed dated 19.07.2018 and assessee vide his reply dated 30.07.2018 submitted that the paper seized and found was not return by him and it does not carry any signature and other quantitative details, nature of expenses, date of expenses etc. therefore it is a rough paper and don’t have any validity for making addition to the income of the IT (SS) A No.174/Ind/2021 Assessment Year: 2016-17 Page 5 of 10 assessee. From relevant para 4.5 of first appellate order we find that the assessee has changed his stand before the Ld. CIT(A) and took a plea that all the transactions are related to A.Y. 2014-15 and related to griha pravesh function of assessee. However the Ld. CIT(A) recorded a clear finding that the appellant has not filed any evidence in order to explain source expenditure neither before the AO nor before the first appellate authority relating to details of expenditure of Rs. 18,37,124/-. 8. In our considered view the Assessing Office made addition for A.Y. 2016-17 pertaining to FY 2015-16 but in the loose paper GWS6/A-2 page 60 does not reveal any date or period in which such expenditure was incurred. From the said loose paper, as has been scanned by the AO in para 14.1 of assessment order, we further note that there is a total of 50,150 pertaining to water bottles, labour and cylinders etc. but there is no details of total expenditure of Rs. 18,37,124/-. In absence of any details regarding total alleged expenditure of Rs. 18,37,124/- without any other collaborative adverse material or evidence to show that assessee IT (SS) A No.174/Ind/2021 Assessment Year: 2016-17 Page 6 of 10 has in fact incurred expenditure of Rs. 18,37,124/- on some function no addition can be made on basis of such loose paper which is apparently a dumb document without any collaborative evidence. For the sake completeness of this order the said document/seized paper GWS6/A-2 is being reproduced below:- 14.1 During the course of search, various incriminating documents were found and seized. Further, during the course of assessment proceedings, on verifications of seized paper in GWS-6, A-2, page -60, it was found that the assessee has incurred amount of Rs. 18,37,124/- towards some function. The scanned copy of the same is as under:- IT (SS) A No.174/Ind/2021 Assessment Year: 2016-17 Page 7 of 10 9. From the relevant para 14.1 of assessment order we clearly note that the Assessing Officer has reproduced seized paper GWS6/A-2 at page 60 in the assessment order wherein the name of assessee and quantum of total expenditure of Rs. 18,37,124/- is clearly discernable. 10. In view of foregoing and vigilant consideration of alleged loose paper GWS6/A-2 we are not in agreement with the conclusion drawn by the AO and finding recorded by the Ld. CIT(A) that the assessee has incurred amount to Rs. 18,37,124/- towards some function or griha pravesh function. In such a case no addition is called for in the hands of assessee when the only basis that is loose paper does not reveal the details of total expenditure of Rs. 18,37,124/- except amount of Rs. 50,150/- date or month or year or financial period pertaining to such expenditure then the addition made by the A.O. in this record cannot be held has sustainable and therefore, we delete the same. Accordingly, Ground no 2 of assessee is allowed. Ground No. 3 IT (SS) A No.174/Ind/2021 Assessment Year: 2016-17 Page 8 of 10 11. Apropos ground no. 3 the Ld. AR submitted that the Ld. CIT(A) has erred in confirming addition of Rs. 36,800/- on account of investment in jewellery as unexplained investment which is illegal, unjustified and bad-in-law. Therefore the same may kindly be deleted. 12. Replaying to the above the Ld. CIT(DR) placed reliance on the orders of authorities below and submitted that the assessee failed substantiate the jewellery will found and seized during the course of search and seizure operation therefore the Ld. CIT(A) was right in dismissing the ground of assessee on this issue. 13. On careful consideration of rival submission first of all we note that the Assessing Officer in para 12.1 noted that during FY 2011- 12 pertaining to A.Y. 2012-13 the assessee was owing a jewellery (bangles) of Rs. 36,800/- from Arihant Jeweller. Thereafter the Assessing Officer in para 12.3 show cause the assessee regarding said jewellery and the assessee replied that since the document is not an invoice/bill and it is estimation only therefore proposes addition Rs. 36,800/- not to be made to the income of assessee. In IT (SS) A No.174/Ind/2021 Assessment Year: 2016-17 Page 9 of 10 our considered opinion the A.O. himself was not sure as to whether in which assessment year the assessee incurred alleged expenses on purchase of jewellery. Merely because some paper showing estimate of jewellery is found the AO cannot make addition in the hands of assessee without any positive and adverse material against the assessee establishing that the assessee in fact incurred expenditure on purchase of jewellery during FY 2015-16 pertaining to A.Y. 2016-17 and the assessee could not explain the source of expenditure. In the present case we are unable agree with findings recorded by the authorities below in this regard therefore the addition made by the AO and uphold by the Ld. CIT(A) does not have a lacks to stand. Therefore ground no. 3 of assessee is allowed. 14. In the result appeal of assessee is allowed. Order pronounced in the open court on 10.02.2023. Sd/- Sd/- (BHAGIRATH MAL BIYANI) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 10 th February, 2023. IT (SS) A No.174/Ind/2021 Assessment Year: 2016-17 Page 10 of 10 NV/- Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR // By Order // Asstt. Registrar, ITAT, Indore Date 1. Draft dictated on .02.2023 2. Draft placed before the author .02.2023 3. Draft placed before the other Member .02.2023 4. Approved Draft comes to the Sr.PS/PS .02.2023 5. Order uploaded on .02.2023 6. File sent to the Bench Clerk .02.2023 7. Date on which file goes to the Head Clerk. 8. Date on which file goes to the AR 9. Date of dispatch of Order.