Shri Rajat Mahesjwari, INDORE V. DCIT 2 (1), Indore

ITSSA 191/Ind/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4615 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 12-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: ARPIT GAUR CAS
• Keywords: Gift; Loose papers; Document seized; Documents seized
• Section: 69C; 143(3); 153A; 68

Judgement Text

RAJAT MAHESHWARI IT(SS) NO.191/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER IT(SS) NO.191/IND/2017 ASSESSMENT YEAR 2004-05 REVENUE BY SMT. ASHIMA GUPTA, CIT ASSESSEE BY S/ SHRI ANIL KAMAL GARG & ARPIT GAUR, CAS DATE OF HEARING 04.02 .2019 DATE OF PRONOUNCEMENT 13 .0 2 .2019 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF ASSESSEE PERTAINING TO ASSESSMENT YEAR 2004-05 IS DIRECTED A GAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- I (IN SHORT LD.CIT(A)], INDORE DATED 22.05.2017 WHICH IS ARI SING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(IN SHOR T THE ACT) DATED 26.10.2015 FRAMED BY DCIT-2(1), INDORE. SHRI RAJAT MAHE SHWARI, 2/1 NORTH RAJMOHALLA, INDORE VS. D CIT 2 (1) , INDORE (APPELLANT) (RESPONDENT ) PAN NO.ABTPM7987L RAJAT MAHESHWARI IT(SS) NO.191/IND/2017 2 2. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM SALAR Y AND INTEREST. RETURN OF INCOME FOR ASSESSMENT YEAR 2004-05 FILED ON 04.10.2015 DECLARING INCOME OF RS. 1,54,998/-. A SEARCH WAS C ONDUCTED AT THE RESIDENCE OF THE ASSESSEE ON 18.08.2004 & 19.08.200 4 AND ALONG WITH CASH AND JEWELLERY, VARIOUS OTHER INCRIMINATIN G MATERIALS WERE FOUND AND SEIZED. SUBSEQUENTLY NOTICES U/S 153A & 143(2) OF THE ACT WAS ISSUED. IN COMPLIANCE TO THE NOTICE INCOME TAX RETURN FILED ON 5.2.2005 DECLARING INCOME AT RS.1,54,998/-. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE WAS ASKED TO EXP LAIN VARIOUS SEIZED DOCUMENTS. AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, LD. A.O COMPLETED THE ASSESSMENT MAKING A DDITIONS TOWARDS UNEXPLAINED GIFT OF RS.5,00,000/-, UNEXPLAI NED MARRIAGE GIFTS AT RS.1,25,500/- AND UNEXPLAINED EXPENSES IN MARRIAGE U/S 69C AT RS.12,19,550/- AND ASSESSED TOTAL INCOME AT RS.19,99,548/- AGAINST THESE ADDITIONS ASSESSEE PREFERRED AN APPEA L BEFORE THE LD. CIT(A) AND PARTLY SUCCEEDED. 3. AGGRIEVED ASSESSEE IS IN APPEAL BEFORE THE TRIBU NAL RAISING FOLLOWING GROUNDS OF APPEAL; RAJAT MAHESHWARI IT(SS) NO.191/IND/2017 3 1. THAT THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ADDITION OF RS.5,00,000/- MADE BY TH E AO IN THE APPELLANT INCOME U/S 68 OF THE INCOME TAX ACT, 1961 ON ACCOUN T OF ALLEGED GIFTS. 2. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ADDITION OF RS.12,19,550/- MADE BY T HE AO IN THE APPELLANT INCOME U/S 69C OF THE INCOME TAX ACT, 1961 ON ACCOU NT OF UNEXPLAINED EXPENSES IN MARRIAGE OF THE APPELLANT. 3]. THAT, THE APPELLANT FURTHER CRAVES LEAVE TO ADD , ALTER AND/OR AMEND ANY OF THE FOREGOING GROUNDS OF APPEAL AS AND WHEN CONS IDERED NECESSARY. 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. 5. GROUND NO.1: AS REGARDS GROUND NO.1 RELATING TO ADDITION OF RS. 5,00,000/- U/S 68 OF THE ACT FOR ALLEGED GIFTS, LD. COUNSEL FO R THE ASSESSEE AT THE OUTSET SUBMITTED THAT THE ISSUE RAISED IN THIS GROUND IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE DECISI ON OF THE TRIBUNAL IN SAME GROUP CASE OF ACIT V/S SHRI SUDHIR MAHESHWARI AND OTHERS ITA NO.373/IND/2011 ORDER DATED 6.8.2012 . FROM THE PERUSAL OF THE FINDING OF THE TRIBUNAL IN PARA 4.3. 4 WE FIND THAT SIMILAR TYPE OF ADDITION RELATING TO GIFT WHICH WAS ALSO CLAIMED TO BE OWNED BY THE COMPANY RAJAT GEMS & JEWELLERS PVT. LT D WAS CONFIRMED BY THE TRIBUNAL. RAJAT MAHESHWARI IT(SS) NO.191/IND/2017 4 4.3.4 NOW COMING TO LEGAL SUBMISSION MADE, THE APP ELLANT HAS TAKEN THE STAND THAT SINCE THE GIFTS OF RS.2,00,000/- WERE NO T ACTUALLY TAKEN BY HIM HE CANNOT BE BURDENED WITH THE RESPONSIBILITY OF ES TABLISHING SUCH GIFT TRANSACTIONS. THE CONTENTION OF THE APPELLANT IS A BSOLUTELY DEVOID OF ANY MERIT. THE APPELLANT CANNOT GET HIMSELF ABSOLVED F ROM THE RESPONSIBILITY OF EXPLAINING THE ENTRIES IN HIS OWN BANK ACCOUNT. IF THE APPELLANT CLAIMS THAT THE BANK DEPOSITS WERE NOT RESULT OF GIFTS THA N IT WAS ABSOLUTELY HIS RESPONSIBILITY TO EXPLAIN THE SOURCE OF SUCH DEPOSI TS. THE APPELLANT IS DIRECTOR COMPANY RAJANT GEMS & JEWELLERS PVT. LTD AND THEREFORE THE OWNING OF THE AMOUNT OF GIFT BY THE COMPANY HAS NEI THER MUCH RELEVANCE NOR ANY CREDENCE. SINCE, THE APPELLANT HAS FAILED TO EXPLAIN THE SOURCE OF DEPOSITS IN HIS BANK ACCOUNT, THE ACTION OF THE AO IN MAKING THE ADDITION OF RS.2,00,000/- IS FOUND PERFECTLY IN ORDER. ACCO RDINGLY, THE ADDITION IS MADE BY THE AO IS CONFIRMED AND THIS GROUND OF APPE AL OF THE APPELLANT IS DISMISSED. 6. AFTER EXAMINING THE FACTS OF THE INSTANT CASE WE FIND THAT THE ASSESSEE IS A MEMBER OF SAME GROUP AND THE ALLEGED GIFT OF RS.5,00,000/- HAS ALSO BEEN CLAIMED TO HAVE BEEN RE CEIVED BY THE COMPANY NAMED RAJAT GEMS & JEWELLERS PVT. LTD. WE ARE THEREFORE INCLINED TO SUSTAIN THE ADDITION OF RS.5,00,000/- U /S 68 OF THE ACT FOR THE ALLEGED GIFTS AS THE ASSESSEE FAILED TO EXP LAIN ITS SOURCE AND RAJAT MAHESHWARI IT(SS) NO.191/IND/2017 5 THUS NO INTERFERENCE IS CALLED FOR IN THE FINDING O F LD. CIT(A). GROUND NO.1 OF THE ASSESSEES APPEAL STANDS DISMISS ED. 7. NOW WE TAKE UP THE ISSUE RELATING TO ADDITION OF RS.12,19,550/- U/S 69C OF THE ACT FOR UNEXPLAINED E XPENSES IN MARRIAGE. LD. A.O MADE THIS ADDITION ON THE BASIS OF MARRIAGE INVITATION CARDS OF THE ASSESSEE WHICH WAS HELD ON 16.2.2004. ON THE STRENGTH OF THE SEIZED DOCUMENTS WHICH INCLUDED A LIST OF 1589 INVITEES, LD. A.O ESTIMATED THE EXPENSES AT RS.16,0 0,000/-, WHICH MAY HAVE BEEN INCURRED FOR THESE NUMBER OF GUESTS A ND AFTER GIVING SET OFF FOR THE MARRIAGE EXPENSES SHOWN BY THE ASSE SSEE AT RS.3,80,450/- REMAINING AMOUNT OF RS.12,19,550/- WA S ADDED AND THE SAME WAS CONFIRMED BY LD.CIT(A) ALSO. 8. LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ADDITION IS MERELY ESTIMATED BECAUSE NUMBER OF GUESTS WERE MUCH LESS AND THE LIST WAS A PROPOSED LIST AND NOT A FINAL LIST OF TH E INVITEES WHO ATTENDED THE CEREMONY. ON GOING THROUGH THE SUBMIS SION MADE BY LD. COUNSEL FOR THE ASSESSEE BEFORE THE LOWER AUTHO RITIES AS WELL AS THE LOOSE PAPERS IMPOUNDED DURING THE COURSE OF SEA RCH WE OBSERVE RAJAT MAHESHWARI IT(SS) NO.191/IND/2017 6 THAT AT PAGE 1 TO 57 OF BS-4 AND PAGE 1 TO 97 OF BS -12 LIST OF TENTATIVE INVITEES WERE 1589 PERSONS BUT IN THE VER Y SAME SET OF SEIZED DOCUMENTS AT ITEM 15 OF BS-1 THERE WAS INVOI CE DATED 18.2.2004 FOR PRINTING OF 1000 INVITATION CARD. F URTHER THE PROOF OF PAYMENT TO THE CATERERS WERE ALSO PART OF SEIZED RE CORDS. THE ADDITION MADE BY LD. A.O SEEMS TO BE MERELY ESTIMAT ED BECAUSE OTHER THAN THE LIST OF INVITEES NO OTHER MATERIAL E VIDENCE WAS UNEARTHED BY THE SEARCH TEAM WHICH COULD PROVE THAT 1589 INVITEES ATTENDED THE CEREMONY. THEREFORE IN ABSENCE OF NO OTHER EVIDENCE PLACED BEFORE US BY THE REVENUE AUTHORITIES AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE IT WILL NOT BE JUSTIF IED TO SUSTAIN THE ESTIMATED ADDITION U/S69C OF THE ACT MERELY ON THE BASIS OF LIST OF INVITEES. IN THE RESULT THE ADDITION OF RS.12,19,5 50/- U/S 69C OF THE ACT STANDS DELETED. GROUND NO.2 OF ASSESSEES APPEAL IS ALLOWED. 9. GROUND NO.3 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. RAJAT MAHESHWARI IT(SS) NO.191/IND/2017 7 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 13.02.2019. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 13 FEBRUARY, 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE