Shri Ashokbhai Vijaysinh Barot, Mehsana V. The Dy.CIT., Cent.Circle-1(3), Ahmedabad

ITSSA 281/AHD/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0166 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-07-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 23-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained investment; Principle of natural justice; Source of fund
• Section: 153A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER IT(SS)A NO.281/AHD/2011 A.Y.2001-02 SHRI ASHOKBHAI VIJAYSINH BAROT, AVIRAJ SAHARA TOWNSHIP, RADHANPUR ROAD, HIGHWAY, MEHSANA. PAN: ABAPB 7957N VS THE DCIT, CENTRAL CIRCLE-1(3), AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : ABHARANI SINGH, CIT-D.R., ASSESSEE(S) BY : SHRI S.N. DIVETIA, A.R. / // / DATE OF HEARING : 23/07/2014 / DATE OF PRONOUNCEMENT: 25/07/2014 / O R D E R SHRI MUKUL KUMAR SHRAWAT (JUDICIAL MEMBER) THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF LEARNED CIT(A)-I, AHMEDABAD DATED 27.01.2011. THE G ROUND RAISED BEFORE US IS REPRODUCED BELOW: 1.1 THE ORDER PASSED U/S.250 ON 27.1.2011 FOR A.Y. 2001-02 CIT(A)-I, A'BAD, UPHOLDING THE ORDER U/S.143(3) RWS 153A(1)(B ) DATED 26.12.2008 IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. C1T(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN PASSING THE IMPUGNED ORDER WITHOUT CONSIDERING FULLY AND PR OPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT. 2.1 THE ID. C1T(A) HAS GRIEVOUSLY ERRED IN LAW A ND OR ON FACTS IN UPHOLDING THE ADDITION OF RS.1,00,227 AS UNEXPLAINED INVESTME NT IN JEWELLERY BY THE APPELLANT. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT NOT TO HAVE HELD THAT THE APPELLANT HAD PURCHASED T HE SAID JEWELLERY AND THAT TOO IN THE PREVIOUS YEAR RELEVANT TO A.Y. 2001-02. IT(SS)A NO.281/AHD/2011 ASHOKBHAI VIJAYSINH BAROT VS. DCIT, CENTRAL CIRCLE 1(3), AHMEDABAD. FOR A.Y. 2001-02 - 2 - 2.3 THE ID. CIT(A) HAS FAILED TO APPRECIATE THAT NEITHER THE SAID JEWELLERY WAS PURCHASED BY THE APPELLANT NOR IT WAS PURCHASED IN A.Y.2001-02 NOR WAS IT UNACCOUNTED INVESTMENT BY THE APPELLANT. 2. FACTS IN BRIEF IN RESPECT OF THE ABOVE GROUNDS A S EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) R. W.S. 153A DATED 26.12.2008 WERE THAT A SEARCH U/S.132 WAS CARRIED O N 01.11.2006 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE. PROCEEDINGS U /S.153A WERE INITIATED AND IN RESPONSE ASSESSEE HAS FILED INCOME TAX RETUR N ON 8.10.2008 DECLARING INCOME OF RS.1,10,310/-. THE AO HAS ALSO NOTED THAT IN COMPLIANCE OF NOTICES U/S. 143(2) AND U/S.142(1), T HE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAD ATTENDED AND PRO DUCED BOOKS OF ACCOUNT WHICH WERE TEST CHECKED. AS FAR AS THE ISSU E OF UNEXPLAINED INVESTMENT IN JEWELLERY IS CONCERNED, IT WAS NOTED BY THE AO THAT A PAPER WAS FOUND FROM THE POSSESSION OF THE ASSESSEE FROM HIS RESIDENCE WHICH WAS MENTIONING THE PURCHASE OF GOLD JEWELLERY OF RS .1,00,227/-. IT WAS AN OBSERVATION OF THE AO THAT NO DATE OF PURCHASE W AS MENTIONED ON THE SAID INVOICE. THE EXPLANATION OF THE ASSESSEE WAS T HAT THE JEWELLERY WAS PURCHASED BY HIS WIFE AGAINST SALE OF OLD JEWELLERY OF RS.50,000/- AND BALANCE OF RS.50,000/- WAS INVESTED IN CASH. IT WAS ALSO INFORMED THAT THE SAID INVOICE WAS MORE THAN SIX YEARS OLD. HOWEVER, THE AO WAS NOT CONVINCED AND OPINED THAT THE INVESTMENT WAS NOT SU PPORTED BY ANY DOCUMENTARY EVIDENCE; HENCE HELD AS AN UNACCOUNTED INVESTMENT IN THE JEWELLERY. THE IMPUGNED AMOUNT WAS THEREFORE ASSESS ED BY INVOKING THE PROVISIONS OF SECTION 69 OF IT ACT. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. BEFORE LEARNED CIT(A), IT WAS REITERATED AS UNDE R: (A) FIRSTLY, THE PERUSAL OF THE SEIZED LOOSE PAPER NO.36 ADMITTEDLY SHOWS THAT NO DATE OF ISSUE OF INVOICE HAS BEEN MENTIONED. THE REFORE, IT CANNOT BE SAID IT(SS)A NO.281/AHD/2011 ASHOKBHAI VIJAYSINH BAROT VS. DCIT, CENTRAL CIRCLE 1(3), AHMEDABAD. FOR A.Y. 2001-02 - 3 - THAT THE SAID JEWELLERY WAS PURCHASED DURING THE PR EVIOUS YEAR RELEVANT TO A. Y. 2001-02. IT WILL BE APPRECIATED THAT UNLESS THER E IS NO ANY EVIDENCE TO SHOW THAT THE SAID JEWELLERY WAS PURCHASED DURING THE PR EVIOUS YEAR RELEVANT TO A.Y.2001-02, NO ADDITION COULD BE MADE U/S.69 AS UN ACCOUNTED INVESTMENT IN JEWELLERY FOR A.Y.2001-02. ON THE CONTRARY, THE ACT ION ON PART OF AO TO TAX IT A. Y.2001-02 CLEARLY SHOWS THAT THE SAID PURCHASE W AS MADE IN THE YEAR PRIOR TO SIX YEARS, BECAUSE THE AO WOULD HAVE, OTHERWISE, AO WOULD NOT HAVE MADE ADDITION IN A.Y. 2001-02 WHICH IS THE LAST YEAR WHI CH COULD BE REOPENED FOR MAKING THE ASSESSMENT. IT APPEARS THAT THE AO WOULD HAVE TAX IT IN EVEN MUCH EARLIER YEAR HAD HE THE POWERS TO REOPEN ANY YEAR P RIOR TO A.Y.2001-02. IN OTHER WORDS, AO HAS PERHAPS CHOSEN TO TAX IT IN A. Y.2001-02 IN VIEW OF THE SAME BEING THE ONLY YEAR AVAILABLE. MOREOVER, THE A O HAS ALSO FAILED TO APPRECIATE THAT NO JEWELLERY HAVING DESCRIPTION AS PER THE SAID LOOSE PAPER WAS FOUND DURING THE COURSE OF SEARCH WHICH CLEARLY PROVES THAT NO SUCH JEWELLERY WAS PURCHASED EITHER BY THE APPELLANT OR HIS WIFE. IN SHORT, THE AO COULD NOT HAVE MADE AN ADDITION ON THE BASIS OF A D UMB DOCUMENT AND BY CHOOSING THE YEAR OF PURCHASE. (B) SECONDLY, THE APPELLANT SUBMITS THAT THE AO HAS RELIED UPON THE S TATEMENT OF THE APPELLANT RECORDED DURING THE POST-SEARCH IN VESTIGATION, I.E. ON 9.3.2007. BUT, THE ANSWER TO THE SAME QUESTION NO.2 2, ALSO STATES THAT THE SAID JEWELLERY WAS PURCHASED BY APPELLANT'S WIFE AGAINST OLD JEWELLERY WORTH RS.50,000 AND BALANCE WAS PAID IN CASH. THEREFORE, THE SAID STATEMENT SHOULD HAVE BEEN BELIEVED IN AS A WHOLE, RATHER THAN A PAR T OF IT. IF, THE SAID REPLY IS TAKEN TO ITS LOGICAL END, THE PURCHASE OF SAID JEWE LLERY SHOULD HAVE BEEN CONSIDERED IN THE HANDS OF APPELLANT'S WIFE AND NOT THE APPELLANT. IT IS CUSTOMARY AMONGST THE HINDU LADIES TO ALTER, EXCHAN GE, THE OLD JEWELLERY FOR NEW JEWELLERY. IN THAT VIEW OF THE MATTER, THE AO O UGHT TO HAVE BELIEVED THAT THE OLD JEWELLERY OF RS.50,000/- WAS EXCHANGED. 3.1 HOWEVER, LEARNED CIT(A) WAS NOT CONVINCED AND C ONFIRMED THE ADDITION AS FOLLOWS: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT. THE DOCUMENT IN QUESTION I.E. ANNEXURE A-4, PAGE 36 WAS DISCOVERED FROM THE RESIDENTIAL PREMISES OF THE APPELLANT. THEREFORE, THE ONUS IS ON THE APPELL ANT TO EXPLAIN THE NATURE AND CONTENTS OF THE AFOREMENTIONED DOCUMENTS. THIS DOCUMENT CLEARLY INDICATES THAT THE APPELLANT HAS PAID AFOREMENTIONE D DOCUMENTS. THIS DOCUMENTS CLEARLY INDICATES THAT THE APPELLANT HAS PAID CASH AMOUNT OF RS.50,000/- FOR THE PURCHASE OF THE JEWELLERY. THE DATE OF PURCHASE HAD NOT BEEN MENTIONED ON THE DOCUMENT IN QUESTION. THE APP ELLANTS BALD STATEMENT THAT THESE JEWELLERIES WERE PURCHASED MORE THAN SIX YEARS AGO, COULD NOT BE BELIEVED IN THE ABSENCE OF ANY CORROBORATIVE EVIDEN CES. THE FACT REMAINED THAT APPELLANT HAS ACQUIRED JEWELLERIES WORTH RS.1,00,227/- BY MAKING UNACCOUNTED INVESTMENTS. IT APPEARS FROM THE DOCUME NT IN QUESTION THAT THE APPELLANT HAS PURCHASED TWO KADAS AND ONE SET FOR T HE CONSIDERATION OF RS.1,00,227/- ON WHICH LABOUR CHARGES OF RS.220/- HAVE BEEN PAID. IN THE ABSENCE OF PROPER EXPLANATION FROM THE APPELLANT AS REGARD TO THE SOURCES OF IT(SS)A NO.281/AHD/2011 ASHOKBHAI VIJAYSINH BAROT VS. DCIT, CENTRAL CIRCLE 1(3), AHMEDABAD. FOR A.Y. 2001-02 - 4 - THE PURCHASE OF JEWELLERY OF RS.1,00,227/-, I AM OF THE OPINION THAT THE ADDITION OF RS.1,00,227/- HAS RIGHTLY BEEN MADE BY THE ASSESSING OFFICER U/S.69 OF THE INCOME-TAX ACT. THE ADDITION OF RS,1,00,227/- IS CONFIRMED. 4. WITH THIS BRIEF FACTUAL BACKGROUND, WE HAVE HEAR D BOTH THE SIDES. AT THE OUTSET, IT IS WORTH TO MENTION THAT FOR A.Y. 2001-02 THE ISSUE IS TRIVIAL IN NATURE AND NOT CONNECTED WITH THE OTHER YEARS OF APPEAL; HENCE HEREBY DECIDED INDEPENDENTLY. AT THE OUTSET, WE HAV E BEEN INFORMED THAT THE WIFE OF THE ASSESSEE, NAMELY, SMT. HEMABEN ASHO KBHAI BAROT IS INDEPENDENTLY ASSESSED TO TAX. AN ORDER OF HONBLE ITAT A BENCH AHMEDABAD BEARING IT(SS)A NO.286 TO 292/AHD/2011, A .Y. 2001-02 TO 2007-08 AND OTHER APPEALS HAVE BEEN DECIDED VIDE AN ORDER DATED 30 TH OF MAY, 2014. ON PERUSAL OF THE SAID ORDER OF THE TRIB UNAL, IT IS EVIDENT THAT THE LADY IS HAVING INDEPENDENT RESOURCES OF INCOME. BECAUSE OF THIS REASON, WE FIND SUBSTANCE IN THE SUBMISSION OF THE ASSESSEE THAT THE JEWELLERY WAS PURCHASED BY HIS WIFE. WE HAVE ALSO N OTED THAT IN THE ABSENCE OF ANY DATE MENTIONED ON THE SAID SEIZED PA PER IT IS NOT DEFINITE WHETHER THE INVESTMENT WAS MADE IN THE PREVIOUS YEA R, RELEVANT FOR A.Y. 2001-02. IT IS WORTH TO MENTION THAT THE SEARCH WAS CONDUCTED ON 01.11.2006, THEREFORE, THE DATE OF SEARCH WAS A DAT E ON WHICH THE IMPUGNED INVOICE WAS DETECTED. MOREOVER, FROM THE O RDER OF THE AO, IT IS NOT EVIDENT THAT ON WHAT BASIS THE AO HAS DECIDED T O TAX THE IMPUGNED AMOUNT IN A.Y. 2001-02. FURTHER, IT IS ALSO NOT EVI DENT FROM THE ORDER OF THE AO THAT WHETHER THERE WERE OTHER ITEMS OF JEWEL LERY WHICH WERE FOUND IN POSSESSION OF THE ASSESSEE OR HIS WIFE AND THE JEWELLERY WAS OVER AND ABOVE THE EXEMPTED JEWELLERY AS PRESCRIBED BY C BDT IN A CIRCULAR GRANTING EXEMPTION FROM SEIZURE OF JEWELLERY IF BEL OW THE PRESCRIBED WEIGHT. THEREFORE UNDER THE TOTALITY OF THE FACTS A ND CIRCUMSTANCES OF THE CASE AND THE INVESTMENT BEING NOMINAL AMOUNT, WE HE REBY HOLD THAT THE IT(SS)A NO.281/AHD/2011 ASHOKBHAI VIJAYSINH BAROT VS. DCIT, CENTRAL CIRCLE 1(3), AHMEDABAD. FOR A.Y. 2001-02 - 5 - EXPLANATION OF THE ASSESSEE COULD BE A PLAUSIBLE EX PLANATION; HENCE THE SAME IS ACCEPTED AND THE GROUND IS ALLOWED. 4.1 REST OF THE GROUNDS EITHER GENERAL OR ARGUMENTA TIVE IN NATURE HAVE NOT BEEN ARGUED, THEREFORE, NEEDS NO ADJUDICATION. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (ANIL CHATURVEDI) (MUK UL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 25/07/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD