M/s. Maya Jewellers, Ahmedabad V. The ACIT.,Circle-7, Ahmedabad

ITSSA 783/AHD/2010

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1422 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-12-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 11-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIBHA BHALLA
• Keywords: Unexplained investment; Business income; Search and seizure; Loose papers; Corroborative evidences
• Section: 153A; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ IT(SS)A.NO.653, 654, 783 AND 784/AHD/2010 / ASSTT.YEAR: 1999-2000, 2000-01, 2001-02 & 2002-03 M/S.MAYA JEWELLERS C/O. SHRI DEVENDRA CHATURVEDI 13, NIRANT PARK SOCIETY, PART-I THALTEJ, AHMEDABAD. PAN : AAQFM 1739 M VS ACIT, CIR.7 AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI ASEEM THAKKAR REVENUE BY : SMT. VIBHA BHALLA, CIT - DR / DATE OF HEARING : 17/12/2015 / DATE OF PRONOUNCEMENT: 13/01/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT FOUR APPEALS ARE DIRECTED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE ORDERS OF THE LD.CIT(A)-XVI, AHMEDABAD DATED 18.5.2010 PASSED FOR THE ASSTT.YEAR 1999-2000 & 2000-2001 AND ORDER DATED 29.9.2010 PASSED FOR THE ASSTT.YEARS 2001-02 AND 2002-03. SINCE CO MMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, THEREFORE, WE HEARD THEM TOGE THER AND DEEM IT APPROPRIATE TO DISPOSE OF BY THIS COMMON ORDER. IT(SS)A NO.653/AHD/2010 (4 APPEALS) 2 2. BEFORE ADVERTING TO THE GROUND OF APPEAL IN EACH ASSESSMENT YEAR, WE DEEM IT APPROPRIATE TO MAKE REFERENCE TO THE BRIEF FACTS RELEVANT FOR THE DISPOSAL OF THESE APPEALS. A SEARCH AND SEIZURE OP ERATION UNDER SECTION 132 OF THE INCOME TAX ACT HAD TAKEN PLACE IN THE CASE O F SMT.ANITA D. CHATURVEDI AND SHRI DEVENDRA CHATURVEDI ON 17.10.2003 AT BUNGA LOW NO.11/13, NIRANT PARK SOCIETY, THALTEJ, AHMEDABAD. SHRI DEVENDRA CH ATURVEDI IS A PARTNER IN THE ASSESSEE I.E. M/S. MAYA JEWELLERS. DURING THE COURSE OF SEARCH, PROHIBITORY ORDERS WERE PUT AT THE BANK LOCKER COMP RISED AT KARNATAKA BANK LTD. THE PO ORDER FROM KARNATAKA BANK LTD. LOCKER N O.59 OF KBL WAS REVOKED ON 31.10.2003. THE LOOSE PAPERS, AS ANNEXU RE A/1, SEIZED FROM THE LOCKER. STATEMENTS OF SMT. ANITA CHATURVEDI AND SH RI DEVENDRA CHATURVEDI WERE RECORDED ON 31.10.2003. THEY DISCLOSED THAT T HESE PAPERS RELATED TO M/S.MAYA JEWELLERS. ON THE BASIS OF THESE PAPERS, NOTICES UNDER SECTION 153C R.W.S. 153A WERE ISSUED UPON THE ASSESSEE ON 24.5.2 007. ACCORDING TO THE AO, NOTICES HAVE NOT BEEN RESPONDED PROPERLY, AND H ENCE, HE PASSED ASSESSMENT ORDER IN THE ASSTT.YEAR 1998-99 ON 28.12 .2007 UNDER SECTION 153C R.W.S 153A AND 154 OF THE INCOME TAX ACT. THE LD.AO HARBOURED A BELIEF THAT THE ASSESSEE-FIRM HAS CARRIED OUT BUSIN ESS DURING THE YEAR AND FAILED TO DISCLOSE THE INCOME FROM THE BUSINESS. H E, ACCORDINGLY, MADE AN ESTIMATED ADDITION OF RS.75,000/- IN THE ASSTT.YEAR 1998-99. IN THE ASSTT.YEAR 2000-01, THE LD.AO HAD ESTIMATES SUCH IN COME AT RS.80,000/-. IN THE ASSTT.YEAR 2001-02, THE LD.AO HAD MADE ADDIT ION OF RS.50,000/- ON ACCOUNT OF ESTIMATED INCOME OUT OF UNEXPLAINED I NVESTMENT BUSINESS. HE FURTHER MADE ADDITION OF RS.60,905/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN MONEY LENDING BUSINESS AND ADDITION OF RS.76,701/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN STOCK OF GOLD. IT(SS)A NO.653/AHD/2010 (4 APPEALS) 3 3. IN THE ASSTT.YEAR 2002-03, THE LD.AO HAS MADE TH REE ADDITIONS I.E. (A) RS.50,000/- ON ACCOUNT OF ESTIMATED BUSINESS INCOME , AND (B) RS.2,01,320/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN MONEY LENDI NG BUSINESS AND (C) RS.66,595/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN STOCK OF GOLD. IN THIS WAY, THE LD.AO HAS DETERMINED THE TAXABLE INCOME AT RS.3,11,915/-. THE LD.COUNSEL FOR THE ASSESSEE, AT THE VERY OUTSET, SU BMITTED THAT THE APPEALS FOR THE ASSTT.YEARS 1998-99 AND 2003-04 HAD COME UP FOR HEARING BEFORE THE TRIBUNAL. THE TRIBUNAL HAS DECIDED THESE APPEALS I .E. IT(SS)A.NO.486 AND 487/AHD/2010 VIDE ORDER DATED 23.11.2012 AND DELETE D THE ADDITION. HE PLACED ON RECORD COPY OF THE TRIBUNALS ORDER. 4. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORD ERS OF THE REVENUE AUTHORITIES. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. THE LD.CIT(A) HAS DISMISSED THE APPEALS OF THE ASSESSEE FOR THE ASSTT.YEARS 1999-2000 AND 2000-01 SIMPLY BY PUTTING RELIANCE UPON HIS ORDER PASSED IN THE ASSTT.YEAR 1998-99. THE FINDING OF THE LD.CIT(A) IN THIS CONNECTION READ AS UNDER: SHRI ASEEM THAKKAR, CA ATTENDED AND FILED WRITTEN SUBMISSIONS. SIMILAR APPEALS HAVE BEEN DECIDED BY ME FOR A Y 199 8-99 VIDE ORDER NO CIT(A)-XVI/AC.CIR-7/590/07-08 ON THE IDENTICAL I SSUES. THE APPEALS WERE DISMISSED BY ME IN THOSE YEARS VIDE MY APPELLATE ORDER DATED 16-3-2009. IN THE SUBMISSION THE AUTHORISED R EPRESENTATIVE HAS MENTIONED THAT THE INCRIMINATING DOCUMENTS, IF ANY, COULD BE RELATED TO THE SEARCH PERIOD I.E. A Y 2004-05 AND THE PRESUMPT ION OF THE ASSESSING OFFICER THAT THE INCOME PERTAINS TO A Y 9 9-2000 AND 2000-01 IS NOT CORRECT. THIS SUBMISSION OF THE APPELLANT IS NOT CORRECT AS HELD BY ME IN THE APPELLATE ORDER DATED 16-3-2010 FOR A Y 1 998-99 & DATED 5- 3-2010 FOR A Y 2003-04. SINCE THIS ISSUE HAS ALREAD Y BEEN DECIDED IN IT(SS)A NO.653/AHD/2010 (4 APPEALS) 4 THE THESE YEARS ON THE IDENTICAL FACTS AND AS THE A PPELLANT HAS NOT FILED ANY RETURN OF INCOME FOR THESE TWO ASSESSMENT YEARS ALSO, THE ESTIMATION OF INCOME AT RS. 75,000 AND RS. 80,000 B Y THE ASSESSING OFFICER FOR A Y 1999-2000 AND 2000-01 IS REASONABLE . 6. THIS ORDER OF THE CIT(A) WAS NOT APPROVED BY THE TRIBUNAL. THE FINDING OF THE TRIBUNAL IN THE ASSTT.YEAR 1998-99 A ND 2003-2004 READ AS UNDER: 5. WITH THIS BRIEF BACKGROUND, WE HAVE HEARD BOTH THE SIDES. AS FAR AS THE LEGAL ISSUE RAISED AGAINST THE ORDER PASSED U/S .153C IS CONCERNED, WE ARE NOT CONVINCED WITH THE ARGUMENT OF LD.AR MR. ASEEM THAKKAR.. BECAUSE THE AO IN QUESTION HAS RECEIVED THE COMMUNICATION CONSEQUENCE UPON A SEARCH, WHEREIN CE RTAIN LOOSE- PAPERS WERE RECOVERED WHICH WERE RELATED TO THIS AS SESSEE. WE THEREFORE UPHOLD THE ACTION OF THE AO AND THE VIEW TAKEN BY LD.CIT(A) IN THIS REGARD IS HEREBY AFFIRMED. 6. AS FAR AS THE MERITS OF THE IMPUGNED ADDITIONS A RE CONCERNED, WE HAVE NOTED THAT THE AO HAS NOT DESCRIBED THE NATURE OF THE INCRIMINATING MATERIAL WHICH WAS PASSED ON TO HIM. AN ASSESSMENT OF UNDISCLOSED INCOME COULD HAVE BEEN MADE ON THE BASI S OF THE INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SUCH PROCEEDINGS. EVEN WHILE FRAMING THE ASSESSMENT U/S. 153C, IT WAS EXPECTED FROM THE AO TO MAKE OUT A CASE AGAINST THE ASSESSEE ON THE BASIS OF SOME MATERIAL OR DOCUMENT, HOWEVER, IN THE PRESENT CASE THIS ASPECT IS ALTOGETHER ABSENT. MERELY AN ESTIMATION H AS BEEN MADE FOR BOTH THE YEARS UNDER APPEAL, BUT THAT ESTIMATION HA S NO SUPPORTING EVIDENCE. MOREOVER, BEFORE US, A COMPILATION HAS BE EN FILED AND IT WAS EXPLAINED THAT THE SEIZED LOOSE-PAPERS, PHOTOCOPIES ANNEXED FROM PAGES 8 TO 20 OF THE COMPILATION, WERE NOTHING BUT THE WEIGHT-SLIPS AND SOME DESCRIPTION OF THE JEWELLERY. THE AO HAS NOT M ADE OUT A CASE THAT THE IMPUGNED LOOSE-PAPERS REPRESENTED THE UNDISCLOS ED ASSETS OF THE ASSESSEE. IN THE ABSENCE OF ANY CONVINCING REASON F OR THE IMPUGNED ESTIMATION, WE HEREBY REVERSE THE VIEW OF THE AO AN D DIRECT TO DELETE THE ADDITION FOR BOTH THE YEARS. BEFORE WE PART WIT H, IT IS WORTH TO MENTION, THAT THE BENCH HAS ENQUIRED ABOUT THE PEND ENCY OF ANY APPEAL IN RESPECT OF ANY OF THE IN BETWEEN YEARS BEFORE TH IS TRIBUNAL. LD.AR HAS STATED AT BAR THAT ONLY THESE TWO YEARS WERE IN VOLVED AND REST OF IT(SS)A NO.653/AHD/2010 (4 APPEALS) 5 THE YEARS WERE NOT SUBJECTED TO TAX. IN THE RESULT, WE HEREBY DIRECT TO DELETE THE ADDITION(S) FOR BOTH THE YEARS. AS A RES ULT, GROUND NOS.1 & 2 ARE DISMISSED AND GROUND NO.3 IS ALLOWED AND REST O F THE GROUNDS ARE CONSEQUENTIAL IN NATURE. 7. THUS, AS FAR AS THE ISSUE IN THE ASSTT.YEAR 1999 -2000 AND 2000-01 IS CONCERNED, IT IS CLEARLY COVERED BY THE ORDER OF TH E TRIBUNAL IN THE ASSTT.YEAR 1998-99. APART FROM THE ABOVE, THE ASSESSEE HAS PL ACED ON RECORD COPIES OF THE ALLEGED SEIZED MATERIALS. THE SHORT QUESTION B EFORE US WHETHER THE ASSESSEE HAS CARRIED OUT ANY BUSINESS IN PURCHASE A ND SALE OF JEWELLERY OR MONEY LENDING DURING THIS YEAR. THE STAND OF THE A SSESSEE IS THAT IT HAS NOT CARRIED OUT ANY BUSINESS. THE AO, ON THE BASIS OF ANNEXURE A/1 FOUND FROM THE LOCKER, HABOURED A BELIEF THAT THESE DOCUMENTS DO INDICATE CARRYING OF BUSINESS AND THE ASSESSEE FAILED TO SHOW THE INCOME . WE HAVE PERUSED THESE DOCUMENTS WHICH ARE AVAILABLE AT PAGE NOS.10 AND 11 OF THE PAPER BOOK. A PERUSAL OF THE PAGE NO.10 OF THE PAPER BOOK WOULD I NDICATE THAT THESE PAPERS CONTAINED THE DETAILS RECORDED ON 8.12.2001. IT TA LKS OF TWO BOXES. THE BOX NO.1 CONTAINS 250 GRAMS I.E. 21.43 TOLAS . THE RATE OF GOLD HAS BEEN MENTIONED AS 4325, TOTAL VALUE WORKED OUT AT RS.92,684/- PLUS LABOUR. SIMILAR WORKING IS GIVEN WITH REGARD TO BOX NO.3. THESE PAPERS NOWHER E INDICATE THAT THE ASSESSEE HAS TAKEN CERTAIN JEWELLERY FOR MANUFACTUR E OR FOR SALE PURPOSE. THEY MIGHT BE FOR THE PURPOSE OF IDENTIFYING THE JW ELLERY IN BOX PUT IN THE LOCKER. ON PAGE NO.11 CERTAIN NOTING ARE THERE, WH ICH ALSO DEMONSTRATE WEIGHT, RATE AND LABOUR. THERE IS ONE MORE PAGE AN NEXED IN THE PAPER BOOK FOR THE ASSTT.YEAR 2002-03, WHEREIN CERTAIN DETAILS AS ON 3.3.2001 REGARDING GOLD, JEWELLERY HAS BEEN NOTICED. FROM PERUSAL OF THESE DOCUMENTS, IT NOWHERE SUGGESTS THAT THE ASSESSEE HAS CARRIED OUT ANY BUSINESS ACTIVITY IN AN ORGANIZED MANNER. THESE ARE THE PAGES WHICH MIGHT HAVE BEEN PUT FOR IDENTIFICATION OF THE JEWELLERY CONTAINED IN THE BO XES OR TO KEEP A TRACK OF A IT(SS)A NO.653/AHD/2010 (4 APPEALS) 6 PARTICULAR AMOUNT. DUE TO THIS REASONS, THE TRIBU NAL IN THE ASSTT.YEAR 1998- 99 AND 2003-04 HAS OBSERVED THAT NO EVIDENCE WAS CO LLECTED BY THE REVENUE FOR ESTIMATING THE INCOME IN THE HANDS OF THE ASSES SEE. THEREFORE, IN OUR OPINION, ADDITIONS IN ALL THESE FOUR YEARS ARE NOT SUSTAINABLE. 8. BEFORE WE PART FROM THIS ORDER, IT CAME TO OUR N OTICE THAT THE TRIBUNAL HAS MADE AN OBSERVATION IN ITS ORDER DATED 23.11.20 12 WITH REGARD TO THE FACT THAT DURING THE COURSE OF HEARING OF THE APPEALS FO R THE ASSTT.YEAR 1998-99 AND 2003-04, THE LD. COUNSEL FOR THE ASSESSEE HAS S TATED AT THE BAR THAT ONLY TWO YEARS WERE INVOLVED AND REST OF THE YEARS WERE NOT SUBJECT TO APPEAL. THIS STATEMENT OF THE LD.COUNSEL FOR THE ASSESSEE WAS FO UND TO BE INCORRECT BY THE TRIBUNAL AND THE REGISTRY IS DIRECTED TO ISSUE SHOW CAUSE NOTICE VIDE ORDER SHEET DATED 23.9.2013. THE ASSESSEE HAS FILED MISC . APPLICATION IN THE ORDER OF THE TRIBUNAL FOR THE ASSTT.YEAR 1998-99 AND 2003 -04. THESE APPLICATIONS ARE STATED TO BE PENDING FOR ADJUDICATION. THE LD .COUNSEL FOR THE ASSESSEE HAS BEEN SEEKING ADJOURNMENT IN THESE APPEALS ON THE GR OUND THAT THE MA BEARING NO.172/AHD/2013 AND 173/AHD/2013 ARE PENDING FOR AD JUDICATION. WE DID NOT ADJOURN THE MATTER ON ACCOUNT OF SMALLNESS OF I SSUE INVOLVED IN THESE APPEALS, AND THEY ARE LINGERING FOR MORE THAN FIVE- HALF-YEARS WITHOUT ANY SUBSTANTIAL REASONS. EVEN IF THE OBSERVATION OF TH E TRIBUNAL RECORDED IN THE LAST PARAGRAPH OF THE ORDER PASSED IN THE ASSTT.YEA R 1998-99 IS BEING EXPUNGED ON THE APPLICATIONS OF THE ASSESSEE, THEN, ALSO THESE OBSERVATIONS OR THE STAND OF THE LD. COUNSEL FOR THE ASSESSEE THAT HE HAS NOT MISREPRESENTED, WOULD NOT AFFECT THE ADJUDICATION OF THE ISSUES ON MERIT. DUE TO THIS REASON, WE HAVE HEARD THESE APPEALS AND DISPOSED OF BY THIS ORDER. OUR OBSERVATIONS WOULD NOT CAUSE ANY PREJUDICE TO THE OUTCOME OF THE APPLICATIONS FILED BY THE ASSESSEE IN THE ASSTT.YEAR 1998-99 AND 2003-2004. IN VIEW OF THE ABOVE IT(SS)A NO.653/AHD/2010 (4 APPEALS) 7 DISCUSSIONS, ALL THESE APPEALS ARE ALLOWED AND THE ADDITIONS CONFIRMED BY THE LD.CIT(A) ARE DELETED. 9. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED. ORDER PRONOUNCED IN THE COURT ON 13 TH JANUARY, 2016 AT AHMEDABAD. SD/- SD/- ( MANISH BORAD ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER