Shri Ketan I.Shah, Vapi V. The Dy.CIT.,Cent.Circle-3, Surat

ITSSA 610/AHD/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9499 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-10-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 19-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Income from undisclosed sources
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTAN T MEMBER SHRI KETAN I SHAH, AJIT NAGAR, DAMAN ROAD, CHALA, VAPI-396191 PAN: AEQPS 7075 B (APPELLANT) VS DCIT, CENTRAL CIRCLE-3 SURAT (RESPONDENT) REVENUE BY: SRI O.P. VAISHNAV, CIT-D.R . ASSESSEE BY: SRI HARDIK VORA, A.R. DATE OF HEARING : 28-10-2013 DATE OF PRONOUNCEMENT : 29-11-20 13 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THESE ARE ASSESSEES APPEALS AGAINST THE ORDER OF LD. CIT(A)-II AHMEDABD DATED 19-10-2012. IT(SS)A NO. 610 &611/AHD/2012 ASSESSMENT YEAR 2006-07 & 2010-11 I.T(SS).A NO 610 & 611/AHD/2012 A.Y. 2006-07 & 2010-11 PAGE NO SRI KETAN I SHAH VS. DCIT 2 2. SINCE BOTH THE APPEALS BELONG TO SAME ASSESSEE, THEY ARE BEING DISPOSED OFF BY A CONSOLIDATED ORDER. FIRSTLY WE WILL TAKE UP IT(SS)A NO. 610/AHD/2012 3. THE ONLY EFFECTIVE GROUND TAKEN BY ASSESSEE READ S AS UNDER:- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LD. CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS. 7,00,000/- AS UNEXPLAINED INVESTMENT. 4. BRIEF FACTS OF THE CASE ARE THAT AO DURING THE A SSESSMENT PROCEEDINGS OBSERVED THAT DURING THE COURSE OF SEARCH EVIDENCE OF UNEXPLAINED EXPENSES INCURRED FOR CONSTRUCTION/RENOVATION OF THE HOUSE O F ASSESSEE WERE FOUND ON PAGE 1-56 OF ANNEXURE B.S./1 WHICH WAS SEIZED FROM THE HOUSE OF THE ASSESSEE. DURING THE POST SEARCH SUBMISSION ASSESS EE ADMITTED UNEXPLAINED EXPENSES TO THE TUNE OF RS. 7 LACS BEING INCURRED B Y HIM FOR CONSTRUCTION/RENOVATION OF THE HOUSE. HE HOWEVER C LAIMED THAT SOURCE OF THE THIS UNEXPLAINED EXPENSES WAS OUT OF THE UNACCOUNTE D INCOME OFFERED FOR TAXATION BY HIS BROTHER SRI YASIN I SHAH AND HE REQ UESTED TO ALLOW BENEFIT OF TELESCOPING. THIS REQUEST FOR TELESCOPING OF UNACC OUNTED INCOME OFFERED FOR TAXATION BY HIS BROTHER YASIN I SHAH AGAINST UNEXPL AINED EXPENDITURE RELATING TO CONSTRUCTION / RENOVATION OF THE HOUSE BELONGING TO THE ASSESSEE WAS NOT ACCEPTED BY AO ON THE GROUND THAT UNACCOUNT ED INCOME WAS GENERATED IN THE HANDS OF SRI YASIN I SHAH WHEREAS APPLICATION OF UNACCOUNTED INCOME GENERATED WAS CLAIMED IN THE HAN DS OF KETAN I SHAH WITHOUT ANY CORROBORATIVE EVIDENCE. 5. BEFORE LD. CIT(A) ASSESSEES SUBMISSION WAS AS U NDER:- I.T(SS).A NO 610 & 611/AHD/2012 A.Y. 2006-07 & 2010-11 PAGE NO SRI KETAN I SHAH VS. DCIT 3 2.2 DURING APPELLATE PROCEEDINGS, THE LD. AR APPEA RING FOR THE APPELLANT REITERATED THE SAME SUBMISSION FILED DURI NG THE ASSESSMENT PROCEEDINGS THAT THE APPELLANT HAS CARRIED OUT CONS TRUCTION / RENOVATION OF THE HOUSE BY UTILIZING RS. 7 LACS OUT OF UNDISCLOSED INCOME DISCLOSED BY SHRI YATIN I SHAH, THE BROTHER OF THE APPELLANT. HE FURTHER SUBMITTED THAT ALL THE MEMBERS OF SHRI I NDRAVADAN G SHAH FAMILY ARE STAYING TOGETHER, BUSINESS IS CARRIED ON BY THE FAMILY MEMBERS JOINTLY, AND ALL EXPENSES, DAY TO DAY AS WE LL AS MAJOR EXPENSES ARE INCURRED OUT OF COMMON POOL. HE FILED A COPY OF LETTER DT. 3-11-2009 WRITTEN BY SHRI INDRAVADAN G SHAH FOR AND ON BEHALF OF INDRAVADAN G SHAH GROUP AND FAMILY MEMBERS. IN THE SAID LETTER, REGARDING UNACCOUNTED INCOME IN THE HANDS OF YATIN I SHAH, THE FOLLOWING FACTS ARE MENTIONED IN PARAS NO. 1 AND 2 OF THE SAID LETTER AND IN PARA-4 T REGARDING UNACCOUNTED INVESTMENT IN THE HOUSE OF S HRI KETAN I SHAH AMOUNTING TO RS, 7 LACS IS MENTIONED. THE RELEVANT PARAS ARE REPRODUCED FOR THE SAKE OF CLARITY, AS UNDER:- 'REGARDING B.R. 3/B-2 PAGE NO. 24 IS TENTATIVE BALA NCE SHEET OF M/S AJIT PHARMA FOIL PROP. YATIN I SHAH WHERE IN TWO NA MES ARE REFLECTED, I NAVRANGBEN RS. TEN LACS AND 2. MANISH RS. TWO LACS WHICH ARE NOT EXPLAINED AND THEREFORE WE DECLARE TH E SAID AMOUNT OF RS. 12 LACS AS INCOME FOR THE F. Y. 2005-06. NAVRANG BEN RS. 1000000.00 MANISH RS. 2000000.00 TOTAL RS. 12000000.00 2. REGARDING BR 3/B-2 PAGE NO. & THIS CONTAINS DETA ILS OF CASH TRANSACTION, NET EFFECT THEREOF AMOUNTS TO RS. 4195 00.00. THE SUM OF RS. FOUR LACS NINETEEN THOUSAND FIVE HUNDRED DECLAR ED AS AN INCOME OF M/S AJIT PHARMA FOIL PROP. YATIN I SHAH FOR THE F.Y. 2006-07. 4. REGARDING BS-1 PAGE 1 TO 56. THIS FILE CONTAINS SOME PAPERS REGARDING MEASUREMENTS, CHALLANS, ESTIMATES AND PAY MENT VOUCHERS OF HOUSE FOR MR KETAN I SHAH. THE TOTAL OF THE INVE STMENTS MADE IN THE HOUSE WORKS OUT TO AROUND RS. 7000000.00M THE F.Y, 2005-06 AND 2006-07.' I.T(SS).A NO 610 & 611/AHD/2012 A.Y. 2006-07 & 2010-11 PAGE NO SRI KETAN I SHAH VS. DCIT 4 THE LD. AR ALSO FILED COPY OF LETTER ADDRESSED TO T HE DC1T, C.C.-3, SURAT FILED ON 26-12-2011 IN RESPONSE TO THE SHOW C AUSE NOTICE REGARDING UNEXPLAINED EXPENDITURE INCURRED FOR CONSTRUCTION/RENOVATION OF THE HOUSE BY THE ASSESSE E. IN THE SAID LETTER, IT WAS CLAIMED THAT SHRI YATIN I SHAH WHO I S THE BROTHER OF THE ASSESSEE, AND IN THE RETURN FILED U/S. 153A, HE HAD DISCLOSED INCOME OF RS. 16,19,500 [RS. 12 LACS IN A.Y, 2006-07 AND RS. 4,19,500 IN A.Y. 2007-08]. THE UNACCOUNTED EXPENDITURE ON CONSTRUCTI ON / RENOVATION OF THE HOUSE OF THE ASSESSEE WAS PUT OF INCOME DISC LOSED BY SHRI YATIN I SHAH IN THE RETURN OF INCOME FILED U/S. 153A OF T HE ACT. ON THE BASIS OF THIS SUBMISSION, THE LD. AR REQUESTED TO ALLOW T ELESCOPING OF EXPENSES AGAINST INCOME DECLARED BY SHRI YATIN I. S HAH TO DELETE THE ADDITION OF RS . 7 LACS MADE ON ACCOUNT OF UNACCOUNTED EXPENDITURE, INCURRED ON CONSTRUCTION / RENOVATION OF THE HOUSE OF THE ASSESSEE. HOWEVER LD. CIT(A) DID NOT ACCEPT THE ABOVE SUBMISS ION OF THE ASSESSEE IN THE ABSENCE OF ANY EVIDENCE TO CORROBORATE THEM. 6. BEFORE US ALSO RELIANCE WAS PLACED ON THE SAME S UBMISSION AS WAS BEFORE LD. CIT(A) AND WITHOUT ADDUCING ANY EVIDENCE IN SUPPORT OF THIS SUBMISSION, THEREFORE, WE FEEL NO NEED TO INTERFER E WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS HEREBY UPHELD, RELEVANT PORTION OF WHICH READS AS UNDER:- 2.2 1 HAVE CONSIDERED THE BASIS OF THE ADDITION MA DE BY THE ASSESSING OFFICER AND CAREFULLY PERUSED AND CONSIDE RED THE SUBMISSIONS MADE BY THE LD. AR AND ALSO BY SHRI IND RAVADAN G SHAH BEFORE THE ADIT, INVESTIGATION, VALSAD, THROUGH LET TER DT. 3-11-2009. FROM THE PLAIN READING OF THE FACTS AND THE CONTENT S OF THE VARIOUS LETTERS, IT IS AN UNDISPUTED FACT THAT THE APPELLAN T HAS MADE UNEXPLAINED AND UNACCOUNTED INVESTMENT DURING THE F .Y. 2005-06 RELEVANT TO A.Y . 2006-07 OF RS. 7 LACS IN CONSTRUCTION / RENOVATION OF THE HOUSE OWNED BY HIM IN HIS INDIVIDUAL CAPACITY. THIS IS ON THE BASIS OF THE PAYMENT VOUCHERS AND DETAILS OF EXPENDITURE RECORDED IN PAPERS SEIZED IN PAGE NO. 1 TO 56 OF B.S.-L. THE APPELLANT HAS CLAIMED TELESCOPING OF THIS INVESTMENT AGAINST UNDISCLOSED INCOME OF RS. 12 LACS ADMITTED BY SHRI YATIN I SHAH, BROTHER OF THE ASSESSEE WHO HAS I.T(SS).A NO 610 & 611/AHD/2012 A.Y. 2006-07 & 2010-11 PAGE NO SRI KETAN I SHAH VS. DCIT 5 OFFERED THIS INCOME OF RS. 12 LACS IN A.Y. 2006-07 UNDER THE HEAD OF UNEXPLAINED LOAN. IN THE LETTER DT 3-11-2009, SHRI INDRAVADAN G SHAH WROTE TO ADIT, [INVN.J, VALSAD THAT IN THE BALANCE SHEET OF M/S AJIT PHARMA FOIL, PROPRIETOR YATIN I SHAH, SEIZED IN PAG E 24 OF ANNEXURE BR-3/B-2 LOANS IN THE NAMES OF TWO PERSONS ARE REFL ECTED - 1. NAVRANGBEN RS. 10 LACS AND 2, SHRI MANISH - RS. 2 L ACS. THIS AMOUNT IS ADMITTED AS UNEXPLAINED LOAN AND OFFERED AS INCO ME IN A.Y. 2006- 07. THE SAME UNEXPLAINED LOAN OF RS. 12 LACS WERE O FFERED IN RETURN OF INCOME BY SHRI YATIN I SHAH IN A.Y 2006-07 WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. IT IS APPARENT F ROM THE DETAILS AS MENTIONED ABOVE THAT UNACCOUNTED LOAN OF RS. 12 LAC S WAS PART OF BALANCE SHEET OF M/S AJIT PHARMA FOIL, PROPRIETOR Y ATIN I SHAH AND UNLESS THE ASSESSEE PROVE THAT AMOUNT OF LOAN OF RS . 12 LACS WAS WITHDRAWN IN CASH FROM THE BANK ACCOUNT OF M/S AJIT PHARMA FOIL OR FROM THE BOOKS OF ACCOUNT OF THAT CONCERN, AND SHOW THE UTILIZATION OF UNACCOUNTED CASH IN THE INVESTMENT OF HOUSE OF SHRI KETAN I SHAH, THE APPELLANT, THE BENEFIT OF TELESCOPING AGAINST THE U NDISCLOSED INCOME CANNOT BE ALLOWED. THE APPELLANT OR SHRI YATIN I SH AH OR SHRI INDRAVADAN I SHAH NOWHERE HAVE CLAIMED BEFORE THE A DIT. [INVESTIGATION] OR BEFORE THE ASSESSING OFFICER OR DURING THE APPELLATE PROCEEDINGS THAT THE LOAN AMOUNT WAS WITHDRAWN FROM THE BOOKS OF M/S AJIT PHARMA FOIL AND WERE UTILIZED IN CONSTRUCT ION / RENOVATION OF THE HOUSE. SIMILARLY, UNACCOUNTED INCOME OF RS, 4,1 9,500 ADMITTED AND DECLARED BY SHRI YATIN I SHAH AS INCOME OF M/S AJIT PHARMA FOIL ON THE BASIS OF DETAILS OF TRANSACTIONS CONTAINED O N PAGE NO. 8 OF ANNEXURE B-2 FOR F.Y 2006-07 RELEVANT TO A.Y. 2007- 08 ALSO CANNOT BE ACCEPTED AS UTILIZED IN CONSTRUCTION / RENOVATION O F THE HOUSE BECAUSE CONSTRUCTION / RENOVATION OF THE HOUSE WAS CARRIED OUT IN F.Y 2005-06 RELEVANT TO A,Y. 2006-07. SHRI YATIN I SHAH ALSO CL AIMED IN THE CASE OF SMT DINABEN HARM SHAH THAT RS. 4,16,900 WERE UTILIZ ED IN PURCHASE OF GOLD ORNAMENTS FOUND AND SEIZED FROM THE POSSESS ION OF SMT DINABEN HARIN SHAH. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS CLEAR THAT THE APPELLANT HAS FAILED TO EXPLAIN T HE SOURCE OF ADMITTED UNACCOUNTED EXPENDITURE IN CONSTRUCTION / RENOVATIO N OF HOUSE TO THE TUNE OF RS. 7 LACS AND HE HAS ALSO FAILED TO CO-REL ATE THE INCOME ADMITTED BY SHRI YATIN I SHAH FOR RS. 12 LACS ON AC COUNT OF UNEXPLAINED LOAN IN THE CASE OF M/S AJIT PHARMA FOI L, WITHDRAWAL OF THE LOAN AMOUNT AND THE UTILIZATION THEREOF FOR CON STRUCTION / RENOVATION OF HOUSE. UNDER THESE CIRCUMSTANCES, BEN EFIT OF TELESCOPING OF UNEXPLAINED EXPENDITURE CANNOT BE AL LOWED TOWARDS THE I.T(SS).A NO 610 & 611/AHD/2012 A.Y. 2006-07 & 2010-11 PAGE NO SRI KETAN I SHAH VS. DCIT 6 INCOME OF RS. 12 LACS DECLARED BY SHRI YATIN I SHAH ON ACCOUNT OF UNEXPLAINED LOAN SHOWN IN THE BALANCE SHEET OF M/S AJIT PHARMA FOIL IN A.Y. 2006-07. IT IS THEREFORE HELD THAT THE ASSE SSING OFFICER WAS JUSTIFIED IN MAKING ADDITION OF ADMITTED UNACCOUNTE D AND UNEXPLAINED EXPENDITURE TO THE TUNE OF RS. 7 LACS INCURRED BY H IM FOR CONSTRUCTION / RENOVATION OF THE HOUSE AND THE ADDITION MADE BY TH E ASSESSING OFFICER, ACCORDINGLY IS CONFIRMED. 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. NOW COMING TO ITA NO. 611/AHD/2012 8. THE ONLY GROUND TAKEN BY ASSESSEE READS AS UNDER :- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS ON THE SUBJECT, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS. 1,95,000/- AS CASH FOUND FROM THE BANK LOCKER IN TH E JOINT NAME OF THE APPELLANT AND HIS WIFE. 9. BRIEF FACTS OF THE CASE ARE THAT DURING ASSESSME NT PROCEEDINGS AO OBSERVED THAT CASH OF RS. 1.95 LACS WAS FOUND FROM THE LOCKER OF ASSESSEE OUT OF WHICH RS. 1 LAC WAS SEIZED. THE ASSESSEES EXPL ANATION WAS THAT CASH WAS BELONGING TO HIS WIFE WHICH WAS RECEIVED BY HER ON THE DEATH OF HIS WIFES MOTHER. THE AO HOWEVER CONCLUDED THAT ASSESSEE DID NOT DISCHARGE THE ONUS OF PROVING THE SOURCE OF CASH AND ONLY FILED A GENERAL REPLY AND HE THEREFORE ADDED THE UNACCOUNTED CASH OF RS. 1.95 LA CS TO THE TOTAL INCOME OF THE ASSESSEE. 10. BEFORE LD. CIT(A) THE SUBMISSION OF THE ASSESSE E WAS THAT CASH OF 1.95 LAC FOUND FROM THE BANK LOCKER OF SBPP CO-OPER ATIVE BANK LIMITED IN THE JOINT NAME OF ASSESSEE AND HIS WIFE SMT. MAYURI BEN K. SHAH. DURING THE SEARCH IN THE STATEMENT RECORDED U/S. 132(4), THE ASSESSEE HAS CONFIRMED I.T(SS).A NO 610 & 611/AHD/2012 A.Y. 2006-07 & 2010-11 PAGE NO SRI KETAN I SHAH VS. DCIT 7 THAT CASH FOUND IN THE LOCKER WAS RECEIVED BY HIS W IFE ABOUT 3-4 YEARS BACK UPON DEATH OF HER MOTHER SMT. SNEHALBEN S SHAH. DU RING THE ASSESSMENT PROCEEDINGS ALSO THESE FACTS WERE EXPLAINED TO THE AO AND CASH BELONGING TO THE WIFE OF THE ASSESSEE FOUND FROM THE BANK LOCKER HELD BY THE ASSESSEE IN THE JOINT NAME SHOULD NOT BE REGARDED AS THE INCOME OF THE ASSESSEE. CERTIFICATE FROM THE BANK THAT LOCKER NO. 565 WAS I N THE JOINT NAME OF THE ASSESSEE WAS ALSO FILED BEFORE LD. CIT(A). HOWEVER LD. CIT(A) DID NOT ACCEPT THE EXPLANATION OFFERED BY ASSESSEE. IN THE ABSENCE OF ANY EVIDENCE TO CORROBORATE THIS SUBMISSION THAT CASH WAS RECEIV ED BY ASSESSEES WIFE AT HER MOTHER DEATH. BEFORE US ALSO NO EVIDENCE IN TH IS RESPECT HAS BEEN FILED AND THEREFORE WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS HEREBY UPHELD, RELEVANT PORT ION OF WHICH READS AS UNDER:- 2.3 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AND THE BASIS OF ADDITION MADE BY THE ASSESSING OFFICER. TH E LD. AR AND THE APPELLANT HAVE NOT FILED ANY EVIDENCE OF RECEIVING CASH BY THE WIFE OF APPELLANT ON DEATH OF HER MOTHER, THE EVIDENCE COUL D HAVE BEEN IN THE FORM OF GIFT DEED OR WILL OR ANY CONFIRMATION FROM HER BROTHERS. HE HAS ALSO NOT SUBMITTED THE DATE OF DEATH OF APPELLANT'S WIFE'S MOTHER. THE LD. AR OR THE APPELLANT HAS ALSO NOT FILED ANY DETAILS WHETHER SMT. SNEHALBEN S SHAH, MOTHER OF APPELLANT'S WIFE WAS EVEN ASSESSE D TO I.T. OR W.T. AND WHETHER ANY RETURN OF INCOME TAX OR WEALTH TAX WAS EVER FILED. NO DETAILS OF ANY BANK ACCOUNT OR CASH BALANCE WITH SN EHALBEN S SHAH WAS FILED TO SUBSTANTIATE THE CLAIM OF CASH RECEIVED FR OM THE MOTHER OF APPELLANT'S WIFE. THIS CASH WAS NOT UTILIZED FOR TH E LAST 4-5 YEARS, ALSO CANNOT BE ACCEPTED. THE DATE OF OPERATION OF BANK L OCKER WAS ALSO NOT FURNISHED. IN THE ABSENCE OF ANY KIND OF CORROBORAT IVE EVIDENCE TO PROVE THAT CASH FOUND FROM LOCKER WAS RECEIVED AT THE TIM E OF THE DEATH OF THE MOTHER OF APPELLANT'S WIFE, THE EXPLANATION AND THE CLAIM OF THE APPELLANT THAT CASH WAS RECEIVED BY HIS WIFE AT THE TIME OF D EATH OF HER MOTHER AND KEPT IDLE IN BANK LOCKER FOR 3 TO 5 YEARS, CANNOT B E ACCEPTED. SO THE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 1.95 LACS ON ACCOUNT OF I.T(SS).A NO 610 & 611/AHD/2012 A.Y. 2006-07 & 2010-11 PAGE NO SRI KETAN I SHAH VS. DCIT 8 UNEXPLAINED CASH FOUND IS CONFIRMED AND THE GROUND OF APPEAL IS DISMISSED. 11. IN THE RESULT BOTH THE APPEALS FILED BY THE ASS ESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 29/11/2013 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,