RAMONA VADHERA ( GARWARE), MUMBAI V. DCIT CEN CIR 36, MUMBAI

ITSSA 56/MUM/2008

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 8943 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 15-07-2010
• Assessment Year: misc
• Appeal Filed On: 13-05-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Assessee Lawyers: R H AKALI
• Keywords: Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI PRAMOD KUMAR (AM) AND SMT ASHA VIJAYARAGHAVAN (JM) IT(SS) NO. 56/MUM/2008 BLOCK ASSESSMENT 1.4.1990 TO 7.11.2000 MRS. RAMONA VADHERA (GARWARE), AMBASSADOR HOTE, CHURCHGATE, MUMBAI-400 020 PAN-AEOPV6320L THE DCIT, CENT. CIR.36, AAYAKAR BHAVAN, MUMBAI-400 020 (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI R.H. AKALI RESPONDENT BY: SHRI JITENDRA YADAV O R D E R PER SMT. ASHA VIJAYARAGHAVAN (JM) THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD.CIT(A)-VIII, MUMBAI DATED 24.3.2008 FOR THE BLOCK PERIOD 1.4.1990 TO 7.11.2000. 2. THE ASSESSEE IS ONE OF THE MEMBERS OF NARANG FAM ILY AND IS THE DAUGHTER OF MR. RAMA NARANG. AT THE TIME OF SEARCH , THE ASSESSEE WAS IN DELHI AT 64 SUNDER NAGAR . THE STATEMENT WAS RE CORDED U/S. 132(4) ON 7.11.2000 BY THE DIRECTOR OF I.T. NEW DELHI. TH E ASSESSEE FILED HER RETURN OF INCOME FOR THE BLOCK PERIOD DECLARING NIL INCOME. THE ASSESSMENT ORDER WAS PASSED ON 8.5.2006 DETERMINING THE UNDISCLOSED INCOME OF THE ASSESSEE AT RS. 48,84,550 /-. IT(SS) 56/M/08 2 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). 4. WITH RESPECT TO GROUND NO. 1, THE ADDITION OF R S. 41,41,989/- TOWARDS THE JEWELLERY FOUND AT DELHI ON PROTECTIVE BASIS WAS DELETED BY THE LD. CIT(A). 5. WITH RESPECT TO OTHER TWO GROUNDS RAISED BEFORE THE LD. CIT(A) AGAINST THE ADDITION OF RS. 6,00,000/- ON FOREIGN T RAVEL EXPENSES AND ADDITION OF RS. 1,42,560/- ON ACCOUNT OF FOREIGN CU RRENCY FOUND IN THE POSSESSION OF THE ASSESSEE AT THE TIME OF SEARCH, THE LD. CIT(A) HELD AS FOLLOWS: THE APPELLATE PROCEEDINGS, THE APPELLANT HAS NOT F ILED ANY SUBMISSION ON MERIT EXPLAINING THE DETAILS OF FOREI GN TRAVEL UNDERTAKEN BY HER IN THE BLOCK PERIOD AND SOURCES O F THESE EXPENSES. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND PERUSED THE FACTS ON RECORD. AT THE TIME OF SE ARCH, THE APPELLANT HAS STATED THAT SHRI RAMA NARANG MEETS HE R FOREIGN TRAVEL EXPENSES. SHRI RAMA NARANG, DURING THE COURSE OF ASSESSMENT PROCEEDING IN HIS CASE, HAS NO T STATED THAT HE MET THE FOREIGN TRAVEL EXPENSES OF THE APPE LLANT. THUS THE APPELLANT HAS NOT BEEN ABLE TO FURNISH ANY SATISFACTORY EXPLANATION REGARDING THE SOURCES OF H ER FOREIGN TRAVEL EXPENSES. SINCE APPELLANT HAS NOT EXPLAINED THE SOURCES OF HER FOREIGN TRAVEL EXPENSES AND SOURCES OF FOREIGN CURRENCY FOUND FROM HER POSSESSION AT THE TIME OF S EARCH, THE AO HAS RIGHTLY TREATED THE SAME AS UNDISCLOSED INCOME OF THE APPELLANT. THESE ADDITIONS MADE BY THE AO A RE UPHELD. THESE GROUNDS OF APPEALS ARE NOT ALLOWED. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE AS SESSEE PREFERRED AN APPEAL BEFORE US AND RAISED THE FOLLOWING GROUND S: IT(SS) 56/M/08 3 1. ON THE FACTS AND IN LAW AND IN THE CIRCUMSTANCE S AND FOR THE GROUNDS TAKEN IN THE APPEAL OF MR. RAMA NARANG THE IMPUGNED ASSESSMENT IS AB-INITIO, VOID, ILLEGAL AND BAD IN LAW. 2. A) THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITI ON OF RS. 6,00,000/- FOR ESTIMATED FOREIGN TRAVEL EXPENSE S OF THE APPELLANT. B) THE APPELLANT SUBMITS THAT NO MATERIAL WAS FOUND DURING THE SEARCH TO MAKE AN ADDITION MERELY ON ESTIMATES WHICH IS NOT PERMITTED IN MAKING BLOCK ASSESSMENT. . C) THE APPELLANT SUBMITS THAT THE IMPUGNED ADDITION WHICH WAS ORIGINALLY MADE ON PROTECTION BASIS IS NOW CONFIRMED ON SUBSTANTIVE BASIS, IS ERRONEOUS BOTH ON FACTS AND IN LAW. 3. THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 1,42,560/- FOR FOREIGN CURRENCY FOUND DURING SEARCH AND NOT SEIZED AT DELHI, THE SAID FOREIGN CURRENCY WAS ACQU IRED BY THE APPELLANT FROM HER LATE HUSBAND MR. JAIDEEP GAR WARE DURING HIS LIFE TIME. 4. THE LD. CIT(A) ERRED IN NOT DELETING THE LEVY O F INTEREST U/S. 158BFA(1). THE APPELLANT DENIES HER LIABILITY FOR LEVY OF INTEREST AND SUBMITS THAT THE CONDITIONS FOR LEVY O F INTEREST DID NOT EXIST, AND SHE COULD FILE THE RETURN OF BLO CK PERIOD ONLY ON 27.8.2004. 7. WE FIND THAT THERE HAS BEEN NO MATERIAL FOUND DU RING THE SEARCH FOR MAKING AN ADDITION OF RS. 6,00,000/- TOWARDS FO REIGN TRAVEL EXPENSES. WE ARE OF THE OPINION THAT THE AO HAS WR ONGLY CONFIRMED THE ADDITION ON AN ESTIMATED BASIS AS IT IS A SETTL ED PROPOSITION OF LAW THAT WHILE MAKING A BLOCK ASSESSMENT THE ADDITION M ERELY ON AN ESTIMATED BASIS IS NOT PERMITTED. THE LD. CIT(A) H AS ALSO ERRED IN CONFIRMING THE ORDER OF THE AO AND THEREFORE WE DEL ETE THE ADDITION AND THE GROUND RAISED BY THE ASSESSEE ON THIS ISSUE IS ALLOWED. IT(SS) 56/M/08 4 8. WITH RESPECT TO THE FOREIGN CURRENCY FOUND IN TH E POSSESSION AT THE TIME OF SEARCH, THE LD. COUNSEL FOR THE ASSESSE E SHRI R.H. AKALI POINTED OUT AN AFFIDAVIT FILED AT PAGE 2 OF THE PAP ER BOOK WHICH READS AS UNDER: DURING THE SAID SEARCH INTER ALIA CASH OF RS. 2,97 0/- WAS FOUND WITH ME, AND MY STATEMENT ON OATH WAS RECORDE D ON 7.11.2000 BY THE DDIT (INV.) UNIT-VI, NEW DELHI. T HE DENOMINATION OF THE CASH OF RS. 2,970/- ARE GIVEN I N ANNEX. C-2 FORMING PART OF THE PANCHNAMA DT. 7.11.2000, A COPY WHEREOF IS ANNEXED HERETO AS ANNEXURE-A. SIMULTANE OUSLY, A SEARCH WAS ALSO CONDUCTED ON 7.11.2000 ON MR. RAM ESH NARANG AT 64 SUNDER NAGAR, NEW DELHI AND CERTAIN AM OUNT OF CASH WAS FOUND ON HIM. THE DETAILS OF THE CASH FOUND WITH MR. RAMESH NARANG ARE GIVEN IN ANNEXURE C-1 TO THE PANCHNAMA DT. 7.11.2000, A COPY WHEREOF IS ANNEXED HERETO AS ANNEXURE-B. THE CASE OF RS. 2,970/- WAS RETURNED TO ME. IT WILL BE SEEN FROM THIS THAT THE WAY THE DDIT HAS WRITTEN RS. IS A LITTLE PECULIAR AND LOOK S LIKE THE $ SIGN IN BOTGH THE ANNEXURES C-1 AND C-2 TO THE PANC HNAMA DT. 7.11.2000. HOWEVER THERE CAN BE NO DOUBT THAT WHAT WAS FOUND ON ME WAS RS. 2,970/- AND THE SAME AMOUNT HAS BEEN RETURNED TO ME AND I HAVE CLEARLY ACKNOWLE DGED THE SAME IN MY STATEMENT AS PER ANNEXURE-A ABOVE. HOWEVER, IN MY IT ASSESSMENT IN THE ORDER DT. 8.5.2 006 IN THE BLOCK ASSESSMENT AN ADDITION OF RS. 1,42,752/- IS MADE BY THE AO BY TAKING RS. 2,970/- AS $ 2,970 @ RS. 48 PER $. MY AUTHORIZED REPRESENTATIVE, MR. J.G. VERMA, C.A. SOUGHT MY CLARIFICATION IN RESPECT OF THE SAID ADDITION OF RS. 42,560/- IN MY I.T. ASSESSMENT, WHICH I COULD NOW C LARIFY, AS I HAD BEEN RESIDING AT DELHI. I HEREBY CLARIFY AND STATE THAT THE CASH FOUND ON ME DURING THE SEARCH ON 7.11 .2000 AT NEW DELHI AMOUNTED TO RS. 2,970/- ONLY AND NO FO REIGN EXCHANGE WAS FOUND. 9. ON PERUSING THE ABOVE AFFIDAVIT, WE DEEM IT FIT TO SET ASIDE THIS ISSUE TO THE FILE OF THE AO TO RE-EXAMINE AND DECID E AFRESH AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. IT(SS) 56/M/08 5 10. GROUND NO. 4 IS CONSEQUENTIAL AND SHALL BE DECI DED BY THE AO IN ACCORDANCE WITH LAW. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF SEPTEMBER, 2010. SD/- SD/- PRAMOD KUMAR ASHA VIJAYARAGHAVAN (ACCOUNTANT MEMBER) (JUDICIA L MEMBER) MUMBAI, DATED 30 TH SEPTEMBER, 2010. RJ COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CENTRAL - I CONCERNED 5. THE DR D BENCH TRUE COPY BY ORDER ASST. REGISTRAR, I.T.A.T, MUMBAI