Shri Shreyas I.Sheth, Dahod V. The ACIT.,Cent.Circle-1, Baroda

ITSSA 56/AHD/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8044 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 30-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 14-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: P M MEHTA
• Keywords: Unexplained expenditure; Additional evidence; Corroborative evidences
• Section: 69C; 32; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI G. D. AGARWAL, VP AND SHRI BHAVNESH SA INI, JM) IT(SS)A NO.56 AND ITA NO.2587/AHD/2009 A. Y.: 2005-06 AND 2007-08 SHRI SHREYAS I. SHETH, C/O. NAVJIVAN ROLLER FLOUR & PULSE MILLS PVT. LTD., KUMBHARWADA, OPP. MARKET YARD, DAHOD. VS THE A. C. I. T. CENTRAL CIRCLE -1, AAYAKAR BHAVAN, RACE COURSE ROAD, BARODA PA NO. AJHPS 7186 B (APPELLANT) (RESPONDENT) APPELLANT BY SHRI P. M. MEHTA, AR RESPONDENT BY SHRI S. K. GUPTA, CIT DR DATE OF HEARING: 30-09-2011 DATE OF PRONOUNCEMENT: 14 -10-2011 O R D E R PER BHAVNESH SAINI: BOTH THE APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF THE LEARNED CIT(A)-IV, AHMEDABAD DATED 10-07-2009 FOR THE ASSE SSMENT YEARS 2005-06 AND 2007-08. IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 2 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL AVAILABLE ON RECORD. IT(SS)A NO.56/AHD/2009(A. Y. 2005-06) 3. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT PRE SS GROUND NO.2 OF THE APPEAL OF THE ASSESSEE. THE SAME IS ACC ORDINGLY DISMISSED. 4. ON GROUND NO.1 OF THE APPEAL, THE ASSESSEE CH ALLENGED THE ORDER OF THE LEARNED CIT(A) IN CONFIRMING THE ADDIT ION OF RS.7,85,000/- FOR UNEXPLAINED EXPENSES. BRIEFLY, THE FACTS OF THI S GROUND ARE THAT THE ASSESSEE CHALLENGED THE ADDITION OF RS.7,85,000/- M ADE BY THE AO U/S 69C OF THE IT ACT (CORRECT AMOUNT IS RS.7,83,00 0/-). THE AO HAS OBSERVED THAT PAGE 47 OF THE ANNEXURE A/1 WAS SEIZE D FROM THE RESIDENCE OF SHRI INDRAVADAN G. SETH WHEREIN EXPEND ITURE REGARDING FOREIGN TRAVEL OF RS.7,83,000/- WAS MENTIONED AND I T WAS ADMITTED AS UNACCOUNTED EXPENDITURE IN THE STATEMENT RECORDED U /S 132(4) OF THE IT ACT. ACCORDINGLY, ADDITION WAS MADE BECAUSE THE ASSESSEE FAILED TO SHOW RELEVANT ENTRIES IN THE BOOKS OF ACCOUNT. I T WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT IN THE INCOME TAX PR OCEEDINGS, THE ASSESSEE WAS UNDER TRAUMATIC STATE OF MIND AND ADMI SSION WAS MADE BY THE ASSESSEE. THE STATEMENTS GIVEN WERE UND ER TENSION, ANXIETY, NERVOUSNESS AND WITHOUT ACTUAL VERIFICATIO N OF THE REQUIRED BOOKS OF ACCOUNTS. IT WAS FURTHER ARGUED THAT ON FU RTHER VERIFICATION IT WAS FOUND THAT ENTIRE PAYMENT RELATING TO FOREIGN T RAVEL EXPENDITURE WAS THROUGH ACCOUNT PAYEE CHEQUES THROUGH KNOWN SOU RCE AND WAS IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 3 DULY DEBITED IN THE BOOKS OF ACCOUNTS AND SUCH FACT S WERE ALSO EXPLAINED TO THE AO VIDE SUBMISSION DATED 07-11-200 8, IN THE CASE OF SHRI I. G. SETH ALONG WITH STATEMENT. ON THE BASIS OF THE SAME IT WAS SUBMITTED THAT NO ADDITION U/S 69 C OF THE IT ACT C AN BE MADE. IT WAS FURTHER ARGUED THAT MERELY ON THE STATEMENT OF THE ASSESSEE; IN THE ABSENCE OF OTHER CORROBORATIVE EVIDENCES NO ADDITIO N COULD BE MADE. IT WAS FURTHER ALTERNATIVELY ARGUED THAT EVEN OTHER WISE OUT OF TOTAL EXPENDITURE OF RS.7,83,000/-, EXPENDITURE OF RS.6,8 3,000/- PERTAINED TO ASSESSMENT YEAR 2005-06 AND RS.1,00,000 PERTAINE D TO THE ASSESSMENT YEAR 2003-04. HENCE, NO ADDITION COULD B E MADE. THE LEARNED CIT(A) ON CONSIDERATION OF THE SUBMISSION O F THE ASSESSEE AS WELL AS GOING THROUGH THE RECORDS CONFIRMED THE ADD ITION ON THE GROUND THAT THE ASSESSEE HAD ADMITTED THE SAME AS U NACCOUNTED EXPENDITURE AND COULD NOT EXPLAIN THE SAME DURING T HE ASSESSMENT PROCEEDINGS. ADDITION WAS ACCORDINGLY CONFIRMED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED TO PB-1 WHICH IS THE REPLY FILED BEFORE THE LEARNED CIT(A) DATED 20-04-2009 EXPLAINING THE ABOVE ISSUE. PB-14 IS THE COPY OF TH E SEIZED PAPERS. PB-16 IS BANK CERTIFICATE CONFIRMING THE EXPENDITUR E MADE THROUGH DRAFTS, PB-17 IS LEDGER ACCOUNT OF SHRI SHREYASKUMA R INDRAVADAN SHETH IN THE CASE OF NAVJIVAN ROLLER FLOUR & PULSE MILLS PVT. LTD., DAHOD SHOWING THREE PAYMENTS OF THE MATTER IN ISSUE . PB-19 AND 20 ARE THE LETTERS FILED BEFORE THE AO DATED 07-11-200 8 ALONG WITH ANNEXURE TO EXPLAIN THE ABOVE ISSUE. HE HAS, THEREF ORE, SUBMITTED IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 4 THAT THE ASSESSEE EXPLAINED THE ABOVE ISSUE AND ADD ITION WAS MADE MERELY ON ADMISSION OF THE ASSESSEE WHICH IS NOT JU STIFIED IN LAW. 6. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESS EE ADMITTED UNACCOUNTED EXPENDITURE IN HIS STATEMENT U/S 132(4) OF THE IT ACT; THEREFORE, ADDITION IS RIGHTLY MADE. FURTHER, THE A SSESSEE HAS NOT EXPLAINED THE ABOVE ISSUE BEFORE THE AO AND THE LEA RNED CIT(A). NO DOCUMENTS AS ARE REFERRED TO IN THE PAPER BOOK WERE FILED BEFORE THE AUTHORITIES BELOW. THEREFORE, THE APPEAL OF THE ASS ESSEE MAY BE DISMISSED OR IN THE ALTERNATIVE THE MATTER MAY BE R ESTORED TO THE FILE OF THE AO FOR VERIFICATION OF THE DOCUMENTS WHICH A RE ADDITIONAL EVIDENCES IN NATURE. 7. THE LEARNED COUNSEL FOR THE ASSESSEE IN THE REJO INDER SUBMITTED THAT SOME DOCUMENTS WERE FILED BEFORE THE AO AS WELL AS BEFORE THE LEARNED CIT(A) IN THE FORM OF ANNEXURE T O THE REPLY FILED BEFORE THEM. THEREFORE, THERE IS NO NEED TO REMAND THE MATTER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL ON RECORD. THE AO NOTED THAT THE SEIZED PAPERS DISCLO SED THE ASSESSEE HAS INCURRED UNACCOUNTED EXPENDITURE. THE ASSESSEE CLAIMED BEFORE THE AO THAT SUCH FOREIGN TRAVEL EXPENSES WERE ACCOU NTED FOR BUT ACCORDING TO THE AO THE ASSESSEE FAILED TO SHOW REL EVANT ENTRIES IN THE BOOKS OF ACCOUNTS. THE ASSESSEE PLEADED BEFORE THE LEARNED CIT(A) THAT HE WAS UNDER TRAUMATIC STATE OF MIND AT THE TIME OF SEARCH AND ADMISSION WAS MADE ACCORDINGLY BECAUSE S UCH STATEMENT WAS GIVEN UNDER TENSION, ANXIETY AND NERV OUSNESS WITHOUT IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 5 ACTUAL VERIFICATION OF THE BOOKS OF ACCOUNTS. HOWEV ER, SUBSEQUENTLY ON VERIFICATION OF THE BOOKS OF ACCOUNTS IT WAS FOU ND THAT EXPENSES WERE INCURRED THROUGH ACCOUNT PAYEE CHEQUES WHICH W ERE FROM KNOWN SOURCES. IT WAS ALSO EXPLAINED THAT REPLY WAS FILED BEFORE THE AO ON 07-11-2008 COPY OF WHICH IS FILED AT PAGE 19 OF THE PAPER BOOK. IT CONTAINS ANNEXURE TO THIS REPLY IN WHICH T HE ASSESSEE EXPLAINED THAT THESE EXPENSES WERE INCURRED THROUGH KUONI TRAVELS BY DRAFTS AND PERTAINED TO ASSESSMENT YEAR 2004-05 AND REFLECTED IN BOOKS OF ACCOUNTS. THE EXPLANATION FILED BEFORE THE LEARNED CIT(A) IS PB-1 DATED 20-04-2009 IN WHICH THE ASSESSEE EXPLAIN ED THE SAME FACTS BEFORE THE LEARNED CIT(A). THE PART OF SUBMIS SION NOTED BY THE LEARNED CIT(A) IN THE APPELLATE ORDER ARE SAME AS H AVE BEEN EXPLAINED BY THE ASSESSEE IN THE SUBMISSION FILED B EFORE THE LEARNED CIT(A) PB-1. THE WORDS USED IN THE APPELLATE ORDER IN THE SUBMISSION OF THE ASSESSEE ARE SAME WHICH ARE USED BY THE ASSE SSEE IN PB-1 I.E. SUBMISSION FILED BEFORE THE LEARNED CIT(A). WE , THEREFORE, FIND THAT THE ASSESSEE MADE WRITTEN SUBMISSION BEFORE TH E LEARNED CIT(A), HOWEVER, THE REMAINING PORTION OF THE REPLY AT PB-7 IS NOT TAKEN INTO CONSIDERATION BY THE LEARNED CIT(A) WHIC H IS THE TABLE TO SHOW THAT PAYMENTS WERE MADE THROUGH DRAFTS ON 22-0 3-2003, 18-04-2003 AND 18-04-2003 IN A SUM OF RS.1,00,000/- , RS.5,21,452/- AND RS.1,62,098/- THROUGH BANK OF BARODA. THE TOTAL OF THE SAME COMES TO RS.7,83,550/- WHICH MATCH WITH THE SEIZED PAPER (PB-14). THE ASSESSEE IN THIS REPLY ALSO FILED ANNEXURE WHIC H ARE COPIES OF THE SEIZED MATERIALS, STATEMENT RECORDED U/S 132(4) OF THE IT ACT, COPY OF BANK CERTIFICATE OF BANK OF BARODA, LEDGER ACCOUNTS OF M/S. NAVJIVAN ROLLER FLOUR & PULSE MILLS PVT. LTD. THESE DOCUMENT S FILED ALONG WITH IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 6 THE REPLY BEFORE THE LEARNED CIT(A) CLEARLY SHOW TH AT THESE EXPENSES WERE INCURRED BY THE ASSESSEE THROUGH DRAFTS WHICH ARE RECORDED IN THE NAMES OF THE ASSESSEE IN THE BOOKS OF NAVJIVAN ROLLER FLOUR & PULSE MILLS PVT. LTD. WHICH IS CONNECTED WITH THE ASSESSEE. THE ASSESSEE ALSO CLAIMED BEFORE THE LEARNED CIT(A) IN THE ALTERNATE CONTENTION THAT PAYMENT OF RS.6,83,000/- PERTAINS T O THE ASSESSMENT YEAR 2004-05 WHICH MATCH WITH THE REPLY OF THE ASSE SSEE FOR PAYMENT MADE ON 18-04-2003. ACCORDING TO THE SUBMISSION BEF ORE THE LEARNED CIT(A), RS.1,00,000/- PERTAINS TO ASSESSMENT YEAR 2 003-04 WHICH MATCH WITH THE REPLY OF THE ASSESSEE FOR PAYMENT OF RS.1,00,000/- MADE THROUGH DRAFT ON 22-03-2003. IT, THEREFORE, AP PEARS THAT PROPER REPLY SUPPORTED BY DOCUMENTS WERE FILED BEFORE THE LEARNED CIT(A) WHICH HAVE NOT BEEN TAKEN INTO CONSIDERATION BY THE LEARNED CIT(A). THEREFORE, CONTENTION OF THE LEARNED DR IS LIABLE T O BE REJECTED THAT THE DOCUMENTS FILED IN THE PAPER BOOK WERE NOT FILE D BEFORE THE AUTHORITIES BELOW. IT APPEARS FROM THE FINDING OF T HE LEARNED CIT(A) THAT HE HAS CONFIRMED THE ADDITION MERELY ON THE BA SIS OF ADMISSION MADE BY THE ASSESSEE U/S 132(4) OF THE IT ACT. THE HONBLE SUPREME COURT IN THE CASE OF PULLANGODE RUBBER PRODUCE CO. LTD. VS STATE OF KERALA, 91/SC/18 HELD THAT ASSESSEE SHOULD BE GIVEN OPPORTUNITY TO SHOW THAT ADMISSION IS INCORRECT OR DOES NOT SHOW CORRECT STATE OF FACTS. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KRISHAN LAL SHIV CHAND RAI VS CIT, 88 ITR 293 HELD THAT IT IS ESTABLISHED PRINCIPLE OF LAW THAT PARTY IS ENTITLED TO SHOW AND PROVE THAT ADMISSION MADE BY H IM WAS IN FACT NOT CORRECT AND TRUE. THE HONBLE CHATTISGADH HIGH COURT IN THE CASE OF CIT VS HUKUMCHAND JAIN, 337 ITR 238 HELD THAT IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 7 ADDITION COULD BE MADE ON ADMISSION OF THE ASSESSE E FOR FAILURE TO PROVE THAT CONFESSION WAS A RESULT OF IN TIMIDATION OR WHEN IT WAS MADE AS A RESULT OF MISTAKEN BELIEF OF LAW OR FACTS. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , IT IS CLEAR THAT THE ASSESSEE EXPLAINED THE UNACCOUNTED EXPENDITURE THROUGH THE ENTRIES MADE IN THE BOOKS OF ACCOUNTS WHICH WERE MA DE THROUGH DRAFTS AND ENTRIES WERE RECORDED IN THE BOOKS OF AC COUNTS, THEREFORE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN IGNORING TH E REPLY FILED BY THE ASSESSEE BEFORE HIM AT THE APPELLATE STAGE. THE ASS ESSEE HAS BEEN ABLE TO PROVE THAT ADMISSION OF UNACCOUNTED EXPENDI TURE WAS MADE ON A MISTAKE OF FACTS AND LAW. THEREFORE, WE DO NOT FIND ANY JUSTIFICATION EVEN TO REMAND THE MATTER TO THE FILE OF THE AO. CONSIDERING THE ABOVE DISCUSSIONS WE ARE OF THE VIE W THAT ASSESSEE EXPLAINED THE UNACCOUNTED EXPENDITURE, THEREFORE, A DDITION IS CLEARLY UNJUSTIFIED. IN THE CASE OF THE ASSESSEE ADMISSION OF UNACCOUNTED EXPENDITURE WAS MADE ON MISTAKE OF FACTS AS EXPLAIN ED ABOVE. THEREFORE, ADDITION SHOULD HAVE BEEN DELETED BY THE LEARNED CIT(A). IN VIEW OF THE ABOVE DISCUSSIONS WE SET ASIDE THE O RDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.7,8 3,000/- 9. IN THE RESULT, GROUND NO.1 OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 10. NO OTHER POINT IS ARGUED OR PRESSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT (SS) A NO.56/AHE/2009 IS PARTLY ALLOWED. IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 8 ITA NO.2587/AHD/2009: A.Y. 2007-08 12. THE ASSESSEE ON GROUND NO.1 OF THE APPEAL, CHAL LENGED THE ADDITION OF RS.7,15,000/- FOR CASH FOUND BUT NOT EX PLAINED. ON THIS GROUND, IT WAS FOUND FROM THE LOCKER NO.17/A THAT I T CONTAINED RS.7,15,000/-. THE AO IN PARA 4 OF THE ASSESSMENT O RDER HAS STATED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSEE HAS NOT SUBMITTED EXPLANATION TO THE LEVEL OF SATISFACT ION AND HENCE ADDITION OF RS.7,15,000/- WAS MADE. THE ASSESSEE S UBMITTED BEFORE THE LEARNED CIT(A) THAT AT THE TIME OF SEARCH U/S 1 32 (4) OF THE IT ACT, STATEMENT OF THE ASSESSEE WAS RECORDED WHEREIN IT W AS CATEGORICALLY STATED THAT THE AFORESAID CASH BALANCE IS SAVINGS O F HIS FAMILY MEMBERS AND APPROXIMATELY RS.4,10,000/- PERTAINED T O HIS GRANDMOTHER. IT W AS SUBMITTED THAT FROM THE VERY FIRST DAY IT HAS BEEN VERY CATEGORICALLY STATED THAT THE ENTIRE CASH FOUND DURING THE COURSE OF SEARCH BELONGS TO THE FAMILY MEMBERS OF T HE ASSESSEE AND SUCH STATEMENT WAS NOT DISPUTED. THE ASSESSEE SUBMI TTED THAT THE BREAK UP OF THE AFORESAID CASH FOUND DURING THE COU RSE OF SEARCH ALONG WITH NAMES OF FAMILY MEMBERS TO WHOM IT BELON GS AND CASH BALANCE REFLECTED IN THE BOOKS OF ACCOUNTS WHICH WA S FOUND IN THE LOCKER WAS DULY REFLECTED IN THE BOOKS OF ACCOUNTS. THE LEARNED CIT(A) ON GOING THROUGH THE RECORDS AND SUBMISSION OF THE ASSESSEE NOTED THAT THOUGHT THE ASSESSEE REFERRED TO THE STA TEMENT RECORDED U/S 132(4) OF THE IT ACT BUT SUCH STATEMENT IS NOT SUFFICIENT TO PROVE THE EXPLANATION OF THE ASSESSEE. THE LEARNED CIT(A) NOTED THAT THE STATEMENT RECORDED IN THE CASE OF THE ASSESSEE AT T HE TIME OF OPENING OF THE LOCKER WHEREIN THE ASSESSEE HAS STAT ED THAT OUT OF IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 9 RS.7,15,000/- OF CASH FOUND, APPROXIMATELY RS.4,10, 000/- BELONGS TO HIS GRANDMOTHER SMT. HASUMATIBEN G. SHETH WHO HAS D IED ON 24-01-2005 AND DISTRIBUTION OF SUCH CASH AMONGST TH E FAMILY MEMBERS WAS PENDING AS ON THE DATE OF THE SEARCH. T HE LEARNED CIT(A) HOWEVER, NOTED THAT THE ASSESSEE HAS HOWEVER , COULD NOT PRODUCE ANY SUPPORTING EVIDENCE IN RESPECT OF HIS C LAIM AT THE TIME OF SEARCH/POST SEARCH ENQUIRIES AND DURING THE COURSE OF ASSESSMENT AS WELL. THEREFORE, ADDITION WAS CONFIRMED. 13. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND R EFERRED TO THE STATEMENT OF THE ASSESSEE (PB-93) IN WHICH THE ASSE SSEE IN EXPLANATION TO THE CASH FOUND EXPLAINED THAT THE SU M PERTAINED TO HIS FAMILY MEMBERS AND OUT OF THE SAME RS.4,10,000/- BE LONGED TO HIS GRANDMOTHER WHO HAD EXPIRED IN JANUARY, 2005 AND TH E AMOUNT WAS YET TO BE DISTRIBUTED AMONGST THE FAMILY MEMBERS. T HE ASSESSEE ALSO AGREED TO PRODUCE THE EVIDENCE LATER ON. THE LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE BEGINNING THE ASS ESSEE MADE A CLAIM THAT THE CASH BELONGED TO HIS GRANDMOTHER AND OTHER FAMILY MEMBERS AND FILED DETAILED WRITTEN SUBMISSION BEFOR E THE LEARNED CIT(A) DATED 20-04-2009 WHICH WAS SUPPORTED BY BALA NCE SHEET AND ANNEXURE COPIES OF WHICH ARE FILED IN THE PAPER BOO K TO SHOW THAT THE CASH BELONGED TO THE FAMILY MEMBERS. HE HAS REFERRE D TO REPLY (PB-4) AND THE ANNEXURE FILED IN THE PAPER BOOK FROM PAGES 82 TO 101 AND SUBMITTED THAT IT WAS, THEREFORE EXPLAINED BEFORE T HE LEARNED CIT(A) THAT AVAILABILITY OF THE CASH IN THE BALANCE SHEET OF HIS GRANDMOTHER AND FAMILY MEMBERS WAS DULY REFLECTED IN THE BOOKS OF ACCOUNTS JUST IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 10 PRIOR TO THE SEARCH, THEREFORE, CASH STOOD EXPLAINE D. HE HAS ALSO FILED COPIES OF THE INCOME TAX RETURN OF HIS GRANDMOTHER TO SHOW THAT SHE WAS HAVING SUFFICIENT FUNDS WHICH WAS KEPT AFTER HE R DEATH IN THE LOCKER FOR DISTRIBUTION IN THE FAMILY. HE HAS SUBM ITTED THAT INITIAL STATEMENT OF THE ASSESSEE WAS SUPPLEMENTED BY THE B ALANCE SHEETS OF THE FAMILY MEMBERS, BUT THE LEARNED CIT(A) DID N OT ACCEPT THE SAME AND CONFIRMED THE ADDITION WITHOUT ANY BASIS. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT ADDITI ON WAS MADE MERELY ON THE BASIS OF THE STATEMENT WHICH WAS NOT BASED ON FACTS. 14. ON THE OTHER HAND, THE LEARNED DR RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THERE IS NO SI GNATURE IN THE BALANCE SHEET NOW FILED IN THE PAPER BOOK. NO EVIDE NCE WAS FILED AT THE TIME OF SEARCH AND EVEN AT THE ASSESSMENT STAGE TO EXPLAIN THE CASH FOUND DURING THE COURSE OF SEARCH. EVEN, NO EV IDENCE WAS FILED BEFORE THE LEARNED CIT(A) TO EXPLAIN THE CASH. THER EFORE, ADDITION WAS RIGHTLY MADE IN THE MATTER ON THE BASIS OF CASH FOUND DURING THE COURSE OF SEARCH FROM THE LOCKER SUPPORTED BY THE S TATEMENT OF THE ASSESSEE. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE A SSESSEE IN THE INITIAL STATEMENT IN EXPLANATION TO CASH FOUND DURI NG THE COURSE OF SEARCH OF THE LOCKER EXPLAINED THAT THE CASH PERTAI NED TO HIS FAMILY MEMBERS OUT OF WHICH RS.4,10,000/- BELONGED TO HIS GRANDMOTHER HASUMATIBEN G. SHETH WHO HAD EXPIRED ON 24-01-2005 AND THE ASSESSEE AGREED TO PRODUCE EVIDENCE IN THIS REGARD LATER ON. THE REPLY OF THE ASSESSEE BEFORE THE LEARNED CIT(A) DAT ED 20-04-2009 IS IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 11 NOT DISPUTED DURING THE COURSE OF ARGUMENT (PB-1). THE ASSESSEE IN THIS STATEMENT EXPLAINED THAT THE BALANCE SHEET OF HIS GRANDMOTHER AS ON 31-03-2005 HAS A CASH IN HAND OF RS.4,10,625/- ( PB-82). IT WAS SUPPORTED BY ANNEXURE BEFORE THE LEARNED CIT(A) AND COPIES OF THE RETURN OF INCOME OF GRANDMOTHER OF THE ASSESSEE ARE FILED TO SHOW THAT HER RETURNED INCOME IN ASSESSMENT YEAR 2003-04 WAS RS.14,90,000/-, IN ASSESSMENT YEAR 2004-05, HER INC OME WAS RS.9,01,000/- AND IN ASSESSMENT YEAR 2005-06 HER IN COME WAS DECLARED AT RS.3,51,000/-. COPIES OF ACKNOWLEDGEMEN TS OF FILING OF RETURNS ARE PLACED ON RECORDS WHICH SUPPORT THE CON TENTION OF THE ASSESSEE THAT HIS GRANDMOTHER POSSESSED CASH AT THE TIME OF HER DEATH WHICH IS REFLECTED IN HER BALANCE SHEET AS ON 31-03-2005. THE SAME IS ALSO SUPPORTED BY INITIAL STATEMENT OF THE ASSESSEE IN WHICH THE ASSESSEE EXPLAINED THAT RS.4,10,000/- WAS OF HI S GRANDMOTHER WHICH WAS TO BE DISTRIBUTED IN THE FAMILY. SIMILARL Y FOR BALANCE AMOUNT OF RS.3,04,375/-, IT WAS SUBMITTED BEFORE THE LEARN ED CIT(A) THAT THE AMOUNT BELONGED TO THE FAMILY MEMBERS. THE EXPLANAT ION OF THE SAME IS GIVEN AS UNDER: (1) SHRI INDRAVADAN G. SHETH RS. 8,007/- (PB-8 5 (2) SMT. KALPANABEN I. SHETH RS. 18,976/- (PB-8 6) (3) SHRI INDRAVADAN S. SHETH RS. 24,830/- (PB-8 8) (4) SMT. HEMABEN S. SHETH RS. 1,140/- (PB-87) (5) SHRI SIRISHKUMAR G. SHETH RS.1,43,632/- (PB- 101) (6) SMT. NAYANBEN S. SHETH RS. 85,877/- (PB-83 ) IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 12 (7) SHRI SANDIPPHAI S. SHETH RS. 54,000/- (PB-8 4) THE ABOVE PAGE NUMBERS REFERRED IN THE PAPER BOOK F ROM PB 82 TO PB-101 ARE THE BALANCE SHEETS OF RESPECTIVE FAMILY MEMBERS AS ON 31-03-2006. IT WOULD, THEREFORE, SHOW THAT THE FAMI LY MEMBERS OF THE ASSESSEE WERE HAVING SUFFICIENT CASH BALANCE IN THE IR HANDS ON THE DATE OF SEARCH. THE LEARNED CIT(A) WAS APPRAISED OF ALL THESE DOCUMENTS TO SHOW THAT CASH BALANCES ARE REFLECTED IN THEIR BOOKS OF ACCOUNTS BUT IT APPEARS THAT THE REPLY OF THE ASSES SEE ALONG WITH ANNEXURE AND DOCUMENTS HAVE NOT BEEN TAKEN INTO CON SIDERATION BY THE LEARNED CIT(A) IN PROPER PERSPECTIVE. THE ASSES SEE HAS GIVEN CERTIFICATE IN THE PAPER BOOK THAT SAME PAPERS WERE FILED BEFORE THE AO AND THE LEARNED CIT(A) WHICH HAVE NOT BEEN REBUT TED THROUGH ANY EVIDENCE ON RECORD. WE HAVE ALREADY NOTED ABOVE SEV ERAL DECISIONS TO EFFECT THAT IF THE ASSESSEE IS ABLE TO PROVE THA T ADMISSION WAS MADE UNDER MISTAKE OF FACT OR LAW, THEN NO ADDITION CAN BE MADE ON MERE ADMISSION BY THE ASSESSEE. IN THIS CASE ALSO T HE ASSESSEE ON THE BASIS OF THE MATERIAL ON RECORD HAS BEEN ABLE T O EXPLAIN THE AVAILABILITY OF THE CASH ON THE DATE OF SEARCH; THE REFORE, ADDITION WAS CLEARLY UNJUSTIFIED IN THE MATTER. THE ADDITION IS, THEREFORE, LIABLE TO BE DELETED. WE ACCORDINGLY, SET ASIDE THE ORDERS OF T HE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.7,15,000/-. IN THE RE SULT, GROUND NO.1 OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 16. ON GROUND NO.2 OF THE APPEAL, THE ASSESSEE CHAL LENGED THE ADDITION OF RS.12,736/- IN RESPECT OF EXCESS GOLD J EWELLERY FOUND OVER THE GOLD JEWELLERY DECLARED IN THE BOOKS AND WEALT H TAX RETURN. THE AO MADE ADDITION OF RS.90,000/- BECAUSE THE ASSESSE E HAS NOT IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 13 SUBMITTED ANY DETAILS RELATING TO JEWELLERY WEIGHIN G 112.50 GRAMS WORTH RS.90,000/- FOUND FROM THE LOCKER NO.60/A OF DAHOD URBAN CO-OPERATIVE BANK LTD. ADDITION WAS ACCORDINGLY MAD E. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED THAT ENTIR E JEWELLERY RECONCILIATION WAS FILED BEFORE THE AO, THEREFORE, THERE WAS NO JUSTIFICATION TO MAKE THE ADDITION. IT WAS SUBMITTE D THAT TOTAL GOLD JEWELLERY FOUND DURING THE COURSE OF SEARCH WAS LES S THAN WHAT IS RECORDED IN THE BOOKS OF ACCOUNTS/WEALTH TAX RETURN . IT WAS ALTERNATIVELY SUBMITTED THAT THE ASSESSEE HAS MADE DISCLOSURE UNDER VDIS FOR 141.65 GRAMS OF GOLD AND DUE TAXES HAVE BE EN PAID; THEREFORE, SUCH BENEFITS SHOULD HAVE BEEN GIVEN WHI CH IS ALSO DECLARED IN THE WEALTH TAX RETURN. THE LEARNED CIT( A) NOTED THAT THE ASSESSEE HAS NOT SUBMITTED THE DETAILS REGARDING 11 2.50 GRAMS OF JEWELLERY BEFORE THE AO. WHATEVER DETAIL WAS SUBMIT TED WAS ACCEPTED BY THE AO. IT WAS THE OBLIGATION OF THE AS SESSEE TO RECONCILE THE GOLD JEWELLERY. HOWEVER, ON GOING THROUGH THE D ETAILS DECLARED UNDER VDIS AND WEALTH TAX RETURN, THE LEARNED CIT(A ) FOUND THAT THE ASSESSEE HAS DECLARED 141.65 GRAMS GOLD JEWELLERY A ND SUCH DISCLOSURE WHICH IS CONSIDERED FOR WEALTH TAX RETUR N IN ASSESSMENT YEAR 2007-08, THEREFORE, THE AO WAS DIRECTED TO GIV E BENEFIT OF THE SAME AND ADDITION OF 23.350 GRAMS GOLD JEWELLERY WO RTH RS.12,736/- WAS CONFIRMED. 17. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPO N THE ORDER OF THE AO AND REFERRED TO REPLY (PB-3). ON THE OTHER H AND, THE LEARNED DR RELIED UPON THE ORDERS OF THE LEARNED CIT(A). IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 14 18. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE AR E OF THE VIEW NO INTERFERENCE IS CALLED FOR IN THE MATTER. AT PB-3, THE ASSESSEE FILED DETAILED REPLY BEFORE THE LEARNED CIT(A) IN WHICH T HE ASSESSEE EXPLAINED THAT DURING THE COURSE OF SEARCH NOT ONLY 112.500 GRAMS OF GOLD WAS FOUND IN THE LOCKER BUT 52.500 GRAMS WAS A LSO FOUND FROM THE RESIDENTIAL PREMISES. THUS, TOTAL WOULD BE 165 GRAMS. THE ASSESSEE CLAIMED IN THE REPLY BENEFIT OF 141.65 GRA MS WHICH WERE DISCLOSED IN WEALTH TAX RETURN AND UNDER VDIS. THE LEARNED CIT(A) GRANTED BENEFIT OF THE SAME. THE ASSESSEE ACCORDING LY SUBMITTED BEFORE THE LEARNED CIT(A)IN THIS REPLY (PB-3) THAT ADDITION SHOULD BE MADE ONLY FOR 23.350 GRAMS WHICH SUBMISSION WAS ACC EPTED BY THE LEARNED CIT(A) IN THE APPELLATE ORDER AND PART ADDI TION IS CONFIRMED. IT WOULD, THEREFORE, SHOW THAT THE ASSESSEE AGREED FOR ADDITION OF 23.50 GRAMS OF GOLD JEWELLERY BEFORE THE LEARNED CIT(A) I N HIS REPLY AND NO FURTHER EXPLANATION IS GIVEN TO EXPLAIN THE PART OF THIS ADDITION. EVEN, DURING THE COURSE OF ARGUMENTS BEFORE US, NO FURTHE R ARGUMENTS HAVE BEEN ADVANCED TO EXPLAIN PART OF THIS ADDITION. ACC ORDINGLY, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSE SSEE. GROUND NO.2 OF THE APPEAL OF THE ASSESSEE IS ACCORDINGLY DISMIS SED. 19. NO OTHER POINT IS ARGUED OR PRESSED. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO .2587/AHD/2009 IS PARTLY ALLOWED. IT (SS) A NO. 56/AHD/2009 AND ITA NO. 2587/AHD/2009 SHRI SHREYAS I. SHETH VS THE ACIT, CENT. CIRCLE-1, BARODA 15 21. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD