ITO Ward 13(2)(1), V. Shri Hariprasad S. Mishra,

ITSSA 329/MUM/2004

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8176 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 09-06-2011
• Assessment Year: misc
• Appeal Filed On: 27-05-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M
• Keywords: Business income; Search and seizure; Opportunity of being heard; Source of fund
• Section: 132

Judgement Text

1 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA `IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H BEFORE SHRI N.V. VASUDEVAN, J.M. AND SHRI R.K. PAND A, A.M. IT(SS)A NO. 329/MUM/2004 BLOCK PERIOD 1988-89 TO 1998-99 INCOME TAX OFFICER, WD. 13(2)(1), 4 TH FLOOR, R. NO. 436A, AAYAKAR BHAWAN, M.K. ROAD, MUMBAI 400 020. VS. SHRI HARIPRASAD S. MISHRA, HSM ROAD LINES, 18, LOHA BHAVAN, P.D. MELLO ROAD, MUMBAI 400 009. PAN AFOPM 6835Q APPLICANT RESPONDENT IT(SS)A NO. 396/MUM/2004 BLOCK PERIOD 1988-89 TO 1998-99 SHRI HARIPRASAD S. MISHRA, HSM ROAD LINES, 18, LOHA BHAVAN, P.D. MELLO ROAD, MUMBAI 400 009. PAN AFOPM 6835Q VS. DCIT (INV), CIR. 19, MUMBAI. APPLICANT RESPONDENT IT(SS)A NO. 395/MUM/2004 BLOCK PERIOD 1988-89 TO 1998-99 SHRI ARVIND H. MISHRA, HARIPRASAD BUILDING, TAIKKALWADI, H.N. MARG, SHIVAJI PARK, MUMBAI 400 016. PAN AFOPM 6832K VS. DCIT (INV), CIR. 19, MUMBAI. APPLICANT RESPONDENT ASSESSEE BY SHRI RAJKUMAR SINGH RESPONDENT BY SHRI GOLI SHRINIVAS RA O 2 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA ORDER PER R.K. PANDA A.M. IT(SS)A NO. 329/MUM/2004 FILED BY THE REVENUE AND IT(SS)A NO. 396/MUM/2004 FILED BY THE ASSESSEE ARE CROSS APPEALS AND ARE DIRECTED AGAINST THE ORDER DT. 22.03.2004 OF THE CIT(A)- XVIII, MUMBAI R ELATING TO B.P. 1988-89 TO 1998-99 . IT(SS)A NO. 395/M/04 FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER DATED 23.03.2004 OF THE CIT(A) XVIII, MUMBAI RELATING TO B.P. 1988-89 TO 1998-99. ALL THE ABOVE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. IT(SS)A NO. 329/M/04 (BY REVENUE) & IT(SS)A NO. 39 6/M/04(BY ASSESSEE) IN THE CASE OF HARIPRASAD S. MISHRA. 2. IT(SS)A NO. 396/MUM/04 BY THE ASSESSEE WAS EARLI ER DISMISSED BY THE TRIBUNAL FOR NON-PROSECUTION. SUBSEQUENTLY, THE TR IBUNAL VIDE ITS ORDER DATED 1.8.2008 RECALLED ITS EARLIER ORDER. HENCE THIS IS A RECALLED MATTER. 2.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF MOVEMENT OF CARGO INSIDE THE PORT AREA, LOADING AND UNLOADING OF CONTAINERS AND CARGO AND TRANSPORTATION OF CARGO FROM PORT TO VARIOUS UP COUNTRY LOCATIONS. SOMETIMES THE ASSESSEE HIRES ADDITIONAL VEHICLES OVER AND ABOVE OWN VEHICLES FROM THE MARKET FOR WHICH HIRES CHARGE S ARE PAID. A SEARCH AND SEIZURE ACTION WAS CONDUCTED U/S 132 AT THE RESIDEN TIAL AND BUSINESS PREMISES OF THE ASSESSEE ON 19.11.1997. IN RESPONSE TO NOTI CE U/S 158BC, THE ASSESSEE FILED ITS BLOCK RETURN FOR THE PERIOD 1.4.87 TO 19. 11.97 DECLARING NIL UNDISCLOSED INCOME. THE A.O. DETERMINED THE INCOME FOR THE BLOCK PERIOD AT ` 36,38,970/-. THE MAIN ADDITIONS WERE ON ACCOUNT OF FOLLOWING HEADS:- 1. UNDISCLOSED LONG TERM CAPITAL GAIN ` 2,69,248/- 2. UNDISCLOSED PROFITS FROM BUSINESS ` 12,000/- 3. UNDISCLOSED F.D.R. ` 62,000/- 3 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA 4. UNDISCLOSED JEWELLERY ` 18,72,862/- 5. UNDISCLOSED SILVER ARTICLES ` 40,800/- 6. UNDISCLOSED CASH ` 70,000/- 2.2 THUS, THE A.O. DETERMINED THE TOTAL INCOME AT ` 36,38,970/-. WHILE DOING SO HE DID NOT GIVE ANY CREDIT TO JEWELLERY FOUND FR OM THE RESIDENCE AND BANK LOCKERS. SO FAR AS THE UNDISCLOSED INCOME FROM BUS INESS IS CONCERNED, THE A.O. MADE THE ADDITION BEING THE DIFFERENCE BETWEEN THE INCOME SHOWN IN THE COMPUTER PRINTOUT FOUND AND SEIZED DURING THE COURS E OF SEARCH AND THE RETURN FILED. 2.3 BEING AGGRIEVED BY THE ORDER OF THE A.O., THE A SSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). VARIOUS SUBMISSIONS F ILED BEFORE HIM WERE FORWARDED TO THE A.O. FOR HIS COMMENTS. AFTER OBTAI NING THE REMAND REPORT FROM THE A.O., THE LD. CIT(A) ANALYSED THE FAMILY HISTOR Y OF THE ASSESSEE. HE NOTED THAT THE ASSESSEE AT NO STAGE OF THE PROCEEDINGS PR ODUCED ANY EVIDENCE SHOWING THE ACQUISITION AND POSSESSION OF THE JEWEL LERY OF THE VARIOUS FAMILY MEMBERS AS BEING PROPERLY EXPLAINED. SIMILARLY, THE DEPARTMENT HAS ALSO NOT FOUND ANY EVIDENCE IN THE FORM OF PURCHASE BILLS, M AKING CHARGES BILLS ETC. TO SHOW THAT ANY PART OF THE UNDISCLOSED AND UNDECLARE D INCOME EARNED DURING THE BLOCK PERIOD HAD BEEN UTILIZED FOR ACQUIRING JE WELLERY. HE NOTED THAT SOME OF THE FAMILY MEMBERS OF THE ASSESSEE HAVE THEIR OW N SOURCES OF INCOME AND HAVE REGULARLY BEEN FILING INCOME-TAX RETURNS AND I N SOME CASES HAD ALSO FILED WEALTH TAX RETURNS. THEREFORE, THE VALUE OF THE EN TIRE JEWELLERY COULD NOT HAVE BEEN ASSESSED AS UNDISCLOSED INCOME ONLY IN THE HAN DS OF THE ASSESSEE. THEREFORE, EVALUATION OF THEIR RESPECTIVE HOLDINGS IN THE CONTEXT OF WHETHER THE SAME IS EXPLAINED OR NOT WILL HAVE TO BE CONSIDERED IN THEIR HANDS ALONE. HOWEVER, THE ASSESSEE WILL HAVE TO BE HELD AS LIABL E FOR THEIR UNEXPLAINED POSSESSION. THE LD. CIT(A) WAS CONSTRAINED TO OBSE RVE THAT THE ACTION OF THE A.O. IN MAKING THE ADDITION OF THE ENTIRE AMOUNT OF ` 18,72,862/- REPRESENTING THE VALUE OF THE JEWELLERY OF THE VARIOUS FAMILY ME MBERS IN THE HANDS OF THE ASSESSEE WAS TOTALLY MISCONCEIVED. ACCORDING TO HIM THIS INDICATES THE STRONG 4 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA BIAS AND POSSIBLY PREJUDICIAL APPROACH OF THE A.O. IN SO FAR AS HE HAS NOT GIVEN CREDIT OF EVEN A SINGLE GRAM OF JEWELLERY AS BEING EXPLAINED. THEREFORE, THE SAME IS WHOLLY UN-ACCEPTABLE. 2.4 THE LD. CIT(A), THEREAFTER ANALYSED THE BACKGRO UND AND CREDENTIALS OF THE ASSESSEE AND THE 14 FAMILY MEMBERS, THE DETAILS OF WHICH ARE AS UNDER:- A) SHRI. SHIVBARAN MISHRA. HE IS AGED 84 YEARS AND H AS BEEN FILING INCOME TAX AND WEALTH TAX RETURNS FOR THE PA ST MANY YEARS. HE IS THE APPELLANTS FATHER. HE IS CLAIMED TO BE T HE OWNER OF 79.1 GMS OF GOLD JEWELLERY VALUED AT RS.34,408/- AND ALS O SILVER UTENSILS WEIGHING 4 KGS VALUED AT RS.27,200/-. B) SMT. DHANRAJI S. MISHRA. SHE IS AGED 79 YEARS AND H AS ALSO BEEN FILING INCOME TAX AND WEALTH TAX RETURNS IN THE PAS T. SHE IS THE APPELLANTS MOTHER. SHE IS CLAMED TO BE IN POSSESSI ON OF 458.7 GMS OF JEWELLERY VALUED AT RS.1,99,534/-. C) SHRI. HARIPRASAD S. MISHRA. THE APPELLANT HIMSELF I S AGED 52 YEARS AND IS STATED TO BE FILING INCOME TAX RETURNS FOR T HE LAST 28 YEARS. HE IS CLAIMED TO BE OWNING 79 GMS OF JEWELLERY VALU ED AT RS.34,363/-. D) SMT. SAMLADEVI L. MISHRA. SHE IS STATED TO BE 50 YE ARS OF AGE AND HAS BEEN FILING INCOME TAX AND WEALTH TAX RETURNS I N THE PAST. SHE IS THE WIFE OF THE APPELLANTS BROTHER. SHE IS STAT ED TO OWN 491.20 GMS VALUED AT RS.2,13,671/-. E) SAVARIDEVI H. MISHRA. SHE IS AGED 46 YEARS AND HAS ALSO BEEN FILING INCOME TAX/WEALTH TAX RETURNS IN THE PAST. SHE IS T HE APPELLANTS WIFE AND IT IS CLAIMED THAT SHE OWNS 472.20 GMS OF GOLD JEWELLERY 5 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA VALUED AT RS.2,05,405/- AND ALSO 1 KG OF SILVER UTE NSILS OF VALUE RS.6,800/-. F) SHRI. TRIBHUVAN L. MISHRA. HE IS AGED 28 YEARS AND HAS BEEN FILING INCOME-TAX/WEALTH TAX RETURNS FOR THE LEAST 7 YEARS . HE IS THE SON OF HE APPELLANTS BROTHER. HE IS STATED TO OWN 71.7 5 GMS OF GOLD JEWELLERY VALUED AT RS.31,210/-, WHICH HE HAD RECEI VED AT THE TIME OF HIS MARRIAGE FROM HIS RELATIVES AND FATHER-IN-LA W. G) SMT. SUSHILA T. MISHRA. SHE IS THE WIFE OF TRIBHOVA N MISHRA AND IS STATED TO BE 24 YEARS OF AGE. SHE IS SAID TO BE GIV ING TUITIONS AND HAS DONE HER B.ED. SHE IS STATED TO BE OWNING 429.7 GMS OF GOLD JEWELLERY, WHICH IT IS SAID WAS GIVEN TO HER AT THE TIME OF HER MARRIAGE. H) SHRI. ARVIND H. MISHRA. HE IS THE SON OF THE APPELL ANT. HE IS AGED 26 YEARS AND HAS BEEN FILING INCOME-TAX RETURNS FOR THE LAST 7 YEARS. HE IS THE OWNER OF GOLD ORNAMENTS WEIGHING 1 03.4 GMS WHICH HE HAD RECEIVED AT THE TIME OF HIS MARRIAGE F ROM HIS RELATIVES AND FATHER-IN-LAW. I) SMT. NITU A. MISHRA. SHE IS AGED 24 YEARS. SHE IS T HE WIFE OF SHRI ARVIND MISHRA. DAUTHER-IN-LAW OF THE APPELLANT. CL AIMED TO BE FILING INCOME-TAX RETURNS FOR THE LAST 3 YEARS. SHE IS CLAIMED TO BE THE OWNER OF 491.35 GMS OF JEWELLERY VALUED AT RS. 2,31,315/-. J) MISS. SARITA L. MISHRA. DAUGHTER OF THE BROTHER OF THE APPELLANT. AGED 25 YEARS. CLAIMED TO BE OWNER OF 233.3 GMS VAL UED AT RS.1,15,484/-. 6 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA K) MISS. SUNITA L. MISHRA. SHE IS AGED 21 YEARS. UNMAR IED DAUGHTER OF THE APPELLANTS BROTHER. CLAIMED TO BE OWNING JE WELLERY WEIGHING 253.7 GMS VALUED AT RS.1,23,206/-. L) MISS. SANGITA H. MISHRA. UNMARRIED DAUGHTER OF THE APPELLANT. SHE IS AGED 23 YEARS. CLAIMED TO BE OWNING JEWELLERY WE IGHING 223.65 GMS VALUED AT RS.96,987/-. M) MISS. ANITA H. MISHRA. SHE IS AGED 21 YEARS. CLAIME D TO BE FILING INCOME-TAX RETURNS FOR THE LAST 3 YEARS. STATED TO BE THE OWNER OF GOLD ORNAMENTS WEIGHING 218.25 GMS VALUED AT RS.95, 806/-. N) MASTER AKSHAY A. MISHRA. HE IS AGED 4 YEARS AND THE ONLY GRAND SON OF THE APPELLANT. STATED TO BE THE OWNER OF 90. 9 GMS VALUED AT RS.39,541/-, RECEIVED BY HIS PARENTS AT THE TIME OF HIS BIRTH FROM HIS MATERNAL GRANDFATHER AND OTHER RELATIVES. O) SMT. REKHA SHUKLA. MARRIED DAUGHTER OF THE APPELLAN T. STATED TO BELONG TO A WELL TO DO FAMILY. OWNER OF 505.35 GMS VALUED AT RS.2,20,040/-. THIS ENTIRE LOT OF JEWELLERY WAS KEP T SEPARATELY IN A BANK LOCKER. 2.4 CONSIDERING THE ABOVE AND RELYING ON THE CBDT I NSTRUCTION DTD. 11.5.94, THE LD. CIT(A) ALLOWED CREDIT OF 1369.25 GRAMS OF G OLD AS BEING EXPLAINED IN THE HANDS OF THE FOLLOWING PERSONS:- SR. NO. NAME OF THE PERSON 1 SHRI SHIV BARAN MISHRA 79.10 GRAMS 2 SMT. DHANRAJI S. MISHRA 254.00 GRAMS 3 SHRI HARIPRASAD MISHRA 79.00 GRAMS 4 SMT. SHAMLA L. MISHRA 266.00 GRAMS 5 SMT. SAVARI DEVI MISHRA 266.00 GRAMS 7 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA 6 SHRI TRIBUVAN L. MISHRA 71.75 GRAMS 7 SMT. SUCHITRA T. MISHRA NIL 8 SHRI ARVIND H. MISHRA 103.00 GRAMS 9 SMT. NITA A. MISHRA 250.00 GRAMS 10 MISS SARITA L. MISHRA NIL 11 MISS SUNITA L. MISHRA NIL 12 MISS SANGEETA H. MISHRA NIL 13 MISS ANITA H. MISHRA NIL 14 MASTER AKSHAY A. MISHRA NIL 15 SMT. REKKHA NIL TOTAL : 1369.25 GRAMS 2.5 THE BALANCE AMOUNT OF GOLD WAS HELD TO BE UNEXP LAINED IN THE HANDS OF THE ASSESSEE AS BEING HIS UNDISCLOSED INCOME. SO F AR AS THE SILVER UTENSILS WEIGHING 4 KGS. AND SILVER OF 1 KG. BELONGING TO SM T. SAVARI DEVI MISHRA ARE CONCERNED, HE HELD THE SAME AS EXPLAINED. 2.6 SO FAR AS THE ADDITION ON ACCOUNT OF UNDISCLOSE D BUSINESS INCOME DETERMINED BY THE A.O., BEING THE DIFFERENCE BETWEE N COMPUTERIZED PROFIT AND LOSS ACCOUNT AND THE RETURN OF INCOME IS CONCERNED, HE REJECTED THE SUBMISSIONS OF THE ASSESSEE THAT THE PROVISIONS OF SECTION 44AE SHOULD BE APPLICABLE. HE, THEREFORE CONFIRMED THE ADDITION O F ` 2,71,249/- FOR A.Y. 1996- 97 AND ` 4,62,653/- FOR A.Y. 1997-98. SO FAR AS THE ADDITIO N OF ` 4,40,158/- FOR A.Y. 1998-99 IS CONCERNED, HE NOTED THAT THE COMPUT ER SHEETS IN RESPECT OF THESE PERIOD WAS FOUND ON THE DATE OF SEARCH AND TH EREFORE IT CANNOT BE SAID THAT THE CORRECT POSITION WOULD NOT HAVE BEEN REFLE CTED IN THE BALANCE SHEET AS THE SAME WERE STILL OPEN. SINCE THE ASSESSEE HAS DU LY ACCOUNTED FOR ALL THESE ENTRIES WHILE FILING HIS RETURN OF INCOME FOR A.Y. 1998-99, HE DELETED THE ADDITION OF ` 4,40,158/-. HE HOWEVER SUSTAINED THE ADDITION OF ` 70,000/- BEING UNEXPLAINED CASH. SO FAR AS THE ADDITION OF ` 2,34,000/- MADE BY THE A.O. BEING 50% OF PETTY CASH RECEIPTS OF ` 4,68,000/- IS CONCERNED, HE DELETED THE ADDITION HOLDING THAT THERE IS NO BASIS FOR SUC H ADDITION. IN ABSENCE OF ANY CORROBORATIVE EVIDENCE BY THE DEPARTMENT TO SHOW TH AT THE LONG TERM CAPITAL 8 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA GAIN OF ` 34,248/- HAS BEEN RECEIVED BY THE ASSESSEE IN RESP ECT OF PROPERTY AT DAHISAR VILLAGE WHICH CONTINUES TO BE REFLECTED IN THE ASSESSEES BALANCE SHEET AND SINCE THE SAME WAS NOT TRANSFERRED, HE DELETED THE SAME. AGGRIEVED BY SUCH PART RELIEF BY THE LD. CIT(A), BOTH THE ASSESS EE AND THE REVENUE ARE IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS OF APPE AL:- GROUNDS OF APPEAL BY REVENUE: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-XVIII MUMBAI ERRED IN ALLOWING RELIEF TO THE ASSESSEE ON ACCOUNT OF UNEXPLAINED JEWELLERY FOUND DURING SEARC H TO THE TUNE OF 1369.25 GMS HELD AS EXPLAINED OUT OF TOTAL JEWELLER Y ADDITION OF 4202.50 GMS. THE RELIEF GRANTED IS NOT BASED ON AN Y SOUND EVIDENCE OR REASONING BUT BASED ON ASSUMPTIONS AND PRESUMPTI ONS. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT NONE OF THE ME MBERS MENTIONED BY THE CIT(A) EXCEPT THE ASSESSEE AND HIS FAMILY RE SIDED AT THE RESIDENCE WHERE FROM SUCH ACQUISITION OF JEWELLERY WERE FOUND HENCE, THE A.O. HAS RIGHTLY HELD THE SAME BELONGING TO THE ASSESSEE ACQUIRED THROUGH UNEXPLAINED SOURCES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) MUMBAI ERRED IN DELETING THE ADDITION ON ACC OUNT OF UNDISCLOSED PROFIT FROM BUSINESS IN CARGO MOVEMENT FOR A.Y. 1998-99 ASSESED AT ` 4,40,158/- BASED ON EVIDENCE OF COMPUTER SHEET FOU ND DURING SEARCH PROCEEDINGS PARTICULARLY WHEN SIMILAR ADDITIONS FOR OTHER YEAR WERE SUSTAINED BY THE CIT(A). 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED PETTY CASH RECEIPTS WHICH ADDITION WAS MADE BASED ON EVID ENCE OF CASH RECEIPT FOUND DURING THE SEARCH. GROUNDS OF APPEAL BY ASSESSEE: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN GIVING PART RELIEF OUT OF ADDITION OF ` 18,72,862/- MADE ON ACCOUNT OF UNDISCLOSED JEWELLERY AS UNDISCLOSED INC OME. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN GIVING PART RELIEF OUT OF ADDITION OF ` 40,8000/- MADE ON ACCOUNT OF SILVER ARTICLES AS UNDISCLOSED INCOME. 9 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING ADDITION ON ACCOUNT OF UNDISCLOSED PROFI T FROM BUSINESS OF ` 2,71,249/- FOR A.Y. 1996-97. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING ADDITION OF ON ACCOUNT OF UNDISCLOSED PROFIT OF ` 4,62,653/- FOR A.Y. 1997-98. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING ADDITION OF ` 70,000/- ON ACCOUNT OF UNEXPLAINED CASH. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN NOT GIVING RELIEF ON ADDITION ON ACCOUNT OF UNDISC LOSED FDR BELONGING TO MINOR & FAMILY MEMBERS OF ` 62,000/-. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ORDER IN SILE NT ON THIS ADDITION. 3. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF A.O. AND CIT(A) AND THE PAPER BOOK FI LED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECI SIONS CITED BEFORE US. SO FAR AS THE PART RELIEF GIVEN BY THE LD. CIT(A) ON ACCOU NT OF ADDITION OF JEWELLERY IS CONCERNED, WE FIND THE SAME IS IN ORDER. ADMITTEDLY , THE A.O. HAS TREATED THE ENTIRE JEWELLERY FOUND FROM THE RESIDENCE AND BANK LOCKER AS UNEXPLAINED JEWELLERY IN THE HANDS OF THE ASSESSEE. WHILE DOING SO, HE HAS IGNORED THE STATUS OF THE FAMILY, THE NUMBER OF FAMILY MEMBERS , INCOME-TAX AND WEALTH TAX RETURNS FILED BY VARIOUS FAMILY MEMBERS ETC.WE FIND THE LD. CIT(A) AFTER CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, AFTER GOING THROUGH THE INCOME- TAX AND WEALTH TAX RETURNS FILED BY DIFFERENT FAMIL Y MEMBERS AND KEEPING IN MIND THE CBDT INSTRUCTION DTD. 11 TH MAY, 1994 HAD ALLOWED RELIEF TO THE EXTENT OF 1369.25 GMS OF JEWELLERY, WHICH IN OUR OPINION, IS JUST AND PROPER. NEITHER THE LD. COUNSEL FOR THE ASSESSEE NOR THE LD. D.R. C OULD CONTROVERT THE FINDINGS GIVEN BY THE LD. CIT(A). IN ABSENCE OF ANY MATERIAL BY EITHER SIDE TO TAKE A DIFFERENT VIEW OTHER THAN THAT TAKEN BY THE LD. CIT (A), WE FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, THE RELIEF GRANTED BY HIM ON A CCOUNT OF GOLD JEWELLERY IS 10 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA UPHELD. THE GROUNDS RAISED BY THE ASSESSEE AND THE REVENUE ON THIS ACCOUNT ARE DISMISSED. 3.1 SO FAR AS THE OTHER ADDITIONS ARE CONCERNED, WE FIND MERIT IN THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE THAT ONCE THE BUSI NESS INCOME SUSTAINED BY THE CIT(A) IS ACCEPTED, THE PROFIT SO GENERATED SHA LL BE AVAILABLE TO EXPLAIN THE OTHER ADDITIONS. WE, THEREFORE, DEEM IT PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE A.O. FOR TELESCOPING OF THE SAME. THE A.O. SHAL L GIVE CREDIT FOR THE VALUE OF BALANCE JEWELLERY, ADDITION ON ACCOUNT OF FIXED DEP OSIT AND CASH FOUND FROM THE RESIDENCE OF THE ASSESSEE FROM SUCH BUSINESS INCOME WHICH HAS BEEN SUSTAINED BY THE LD. CIT(A) AND WHICH ACCORDING TO US IS JUSTIFIED. THE A.O. SHALL DECIDE THE ISSUE AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS RAISED BY THE ASSESSEE ARE AC CORDINGLY PARTLY ALLOWED FOR STATISTICAL PURPOSES. 3.2 SO FAR AS GROUND NO. 2 BY THE REVENUE IS CONCER NED, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). ADMITTEDL Y, THE COMPUTER SHEET WAS FOUND ON THE DATE OF SEARCH I.E. 27.11.97. THEREFOR E IT CANNOT BE SAID THAT THE CORRECT POSITION WOULD NOT HAVE BEEN REFLECTED IN T HE BOOKS OF ACCOUNT SINCE THE DUE DATE OF FILING THE RETURN WAS NOT OVER. FURTHER , THE LD. CIT(A) HAS ALSO GIVEN A FINDING THAT THE ASSESSEE HAS DULY ACCOUNTED FOR ALL THESE ENTRIES FOUND IN THE COMPUTER SHEET WHILE FILING HIS RETURN OF INCOME FO R A.Y. 1998-99. IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE AGAI NST THIS FINDING OF THE LD. CIT(A), THE GROUND RAISED BY THE REVENUE IS DISMISS ED. IT(SS)A 395/MUM/04 (BY ASSESSEE) 4. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE: 11 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XV III HAS ERRED IN CONFIRMING ADDITION OF ` 1,50,000/- AS UNDISCLOSED INCOME BY WAY OF FIXED DEPOSIT AS MADE BY LEARNED A SSESSING OFFICER IN HIS ASSESSMENT ORDER. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XV III HAS ERRED IN CONFIRMING THE ADDITION OF ` 8,01,569/- FOR A.Y. 1996-97 AS MADE BY LEARNED ASSESSING OFFICER IN HIS ASSESSM ENT ORDER. 3. THE LEARNED ASSESSING OFFICER ERRED IN THE LEVYING INTEREST U/S 158 BFA (2) OF INCOME TAX ACT, 1961. 4. THE LEARNED ASSESSING OFFICER ERRED IN THE INITIATI NG PENALTY PROCEEDINGS U/S 271(1)(B) OF THE INCOME TAX ACT, 19 61. 4.1 THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT ONCE THE BUSINESS INCOME ADDED BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) IS ACCEPTED, THEN THE ADDITION ON ACCOUNT OF FIXED DEPOSITS TO T HE TUNE OF ` 1,50,000/- STANDS EXPLAINED. THE BALANCE AMOUNT WHICH IS AVAI LABLE TO THE ASSESSEE SHOULD BE ALLOWED TO EXPLAIN THE GOLD JEWELLERY ETC . FOUND AT THE PREMISES OF THE ASSESSEE AND HIS FATHER DURING THE COURSE OF SEARCH . THEREFORE, THIS ISSUE MAY ALSO BE RESTORED TO THE FILE OF THE A.O. WITH A DIR ECTION FOR TELESCOPING. 4.2 AFTER HEARING BOTH THE SIDES, WE FIND MERIT IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT UNEXPLAINED PROFIT DE TERMINED BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) IS AVAILABLE TO THE ASS ESSEE TO EXPLAIN THE GOLD JEWELLERY ETC. FOUND FROM VARIOUS FAMILY MEMBERS DU RING THE COURSE OF SEARCH. SIMILAR ISSUE HAS BEEN DECIDED IN THE CASE OF THE F ATHER OF THE ASSESSEE AND THE MATTER IS BEING RESTORED TO THE FILE OF A.O. FOR TE LESCOPING. WE, THEREFORE, RESTORE THE GROUNDS RAISED BY THE ASSESSEE TO THE F ILE OF A.O. WITH A DIRECTION FOR TELESCOPING OF THE INCOME. THE GROUNDS RAISED BY T HE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 12 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA 5. IN THE RESULT, IT(SS)A NO. 329/M/2004 IS DISMISS ED AND IT(SS)A NO. 395/M/2004 AND IT(SS)A NO. 395/M/2004 ARE PARTLY AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 17.6.2011. SD/- SD/- (N.V. VASUDEVAN) (R.K. PANDA) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI, DATED 17 TH JUNE, 2011. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED, MUMBAI 4. THE CIT- CONCERNED, MUMBAI 5. THE DR BENCH, H 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 13 IT(SS)A 329/M/04,IT(SS)A 395 & 396/M/04 SH. HARIPRASAD S. MISHRA, SH. ARVIND H. MISHRA DATE INITIALS 1 DRAFT DICTATED ON 9.6.11 SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 14.6.11 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 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