Mir Anwaruddin, Hyderabad, Hyderabad V. DCIT, Central Circle-2, Hyderabad, Hyderabad

MA 116/HYD/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4315 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 04-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Keywords: Unexplained investment; Search and seizure; Salary income
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER M.A.NO.116/HYD/2015 ARISING OUT OF ITA.NO.850/HYD/2012 - ASSESSMENT YEAR 2008-2009 MR. MIR ANWARUDDIN HYDERABAD. PAN ADYPM1437C VS. THE DCIT, CENTRAL CIRCLE - 2 HYDERABAD. (APPL IC ANT) (RESPONDENT) FOR ASSESSEE : MR. MOHD. AFZAL FOR REVENUE : MR. B. KURMI NAIDU DATE OF HEARING : 04 .03.2016 DATE OF PRONOUNCEMENT : 13 .05.2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS M.A. IS FILED BY THE ASSESSEE UNDER SECTION 254(2) OF THE I.T. ACT, 1961 FOR RECTIFICAT ION OF THE ALLEGED MISTAKES IN THE ORDER OF THE TRIBUNAL DATED 24.01.2013. 2. IN THE M.A. IT IS STATED BY THE ASSESSEE THAT T HE ASSESSEE WAS THE DIRECTOR OF M/S. HYDERABAD HOUSE P VT. LTD., AND HAS FILED HIS RETURN OF INCOME DECLARING INCOME FROM SALARY, INCOME FROM HOUSE PROPERTY, AND INCOME FROM BUSINESS I.E., SALE OF LUKHMIES AND OTHER ITEM S AT HYDERABAD RACE CLUB. THERE WAS A SEARCH AND SEIZURE OPERATION IN THE CASE OF M/S. HYDERABAD HOUSE PVT. LTD., 2 MA.NO.116/H/2015 IN ITA.NO.850/H/2012 MR. MIR ANWARUDDIN, HYDERABAD. AND ALSO THE ASSESSEE, DURING THE COURSE OF WHICH, GOLD ORNAMENTS WEIGHING 4084.850 GRAMS WERE FOUND AT THE RESIDENCE OF THE ASSESSEE. OUT OF THIS, THE ASSESSE ES EXPLANATION TO THE EXTENT OF 1550 GRAMS OF JEWELLER Y WAS ACCEPTED BY THE SEARCH PARTY AND THE BALANCE JEWELL ERY OF 2534.85 GRAMS VALUED AT RS.24,84,153 WAS CONSIDERED AS UNEXPLAINED AND SEIZED. THE ASSESSEE FILED AN AFFID AVIT EXPLAINING THE SOURCE FOR INVESTMENT IN THE JEWELLE RY WORTH RS.24,84,153 ALONG WITH THE STATEMENT OF AFFA IRS, CASH FLOW STATEMENT AND BALANCE SHEET IN SUPPORT OF THE SAME. THE A.O. HOWEVER, REJECTED THE SAME HOLDING I T TO BE AN AFTERTHOUGHT AND HELD THAT THE AMOUNT OF RS.24,84,153 IS UNEXPLAINED INVESTMENT AND BROUGHT IT TO TAX UNDER SECTION 69 OF THE I.T. ACT. IN ADDITION T O THE ABOVE, FOR ALL THE ASSESSMENT YEARS, AN ESTIMATED A DDITION WAS MADE BY ESTIMATING THE TURNOVER AND ALSO ESTIMA TING RATE OF PROFIT ON SALE OF LUKHMIES. THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE CIT(A) WHO ESTIMATED THE TURNO VER AND ALSO THE NET PROFIT ON SALE OF LUKHMIES @ 12.5% AND HAS ARRIVED AT A SUM OF RS.30,37,500 AS THE NET PRO FIT FOR ALL THE ASSESSMENT YEARS PUT TOGETHER. IN RESPECT O F INVESTMENT IN JEWELLERY, THE CIT(A) ACCEPTED THE AS SESSEES CONTENTION THAT THIS ESTIMATED INCOME FROM SALE OF LUKHMIES SHOULD BE CONSIDERED AS A SOURCE FOR INVES TMENT IN JEWELLERY. THE CIT(A) HOWEVER, REDUCED THE AMOUN T OF RS.10 LAKHS AS DRAWINGS TOWARDS PERSONAL NEEDS AND ACCEPTED THE BALANCE AMOUNT OF RS.20,37,500 AS AVAI LABLE AND EXPLAINED INVESTMENT IN JEWELLERY. HE, THEREAFT ER, CONFIRMED ONLY A SUM OF RS.4,46,652 AS UNEXPLAINED 3 MA.NO.116/H/2015 IN ITA.NO.850/H/2012 MR. MIR ANWARUDDIN, HYDERABAD. INVESTMENT UNDER SECTION 69 OF THE I.T. ACT, 1961. AGGRIEVED BY THE ORDER OF THE CIT(A), BOTH ASSESSEE AS WELL AS THE REVENUE CAME IN APPEAL BEFORE THE ITAT. 3. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, THE ASSESSEE HOWEVER, DID NOT PRESS ITS GROUNDS IN RESP ECT OF THE CONFIRMATION OF THE ADDITION OF RS.4,46,652 AND IN RESPECT OF THE DEPARTMENTS APPEAL WITH REGARD TO R ELIEF OF RS.20,37,500 BY TELESCOPING THE ADDITION ON ACCOUNT OF BUSINESS OF LUKHMIES AMOUNTING TO RS.20,37,500, THE TRIBUNAL ALLOWED THE REVENUES APPEAL. IT IS THE GR IEVANCE OF THE ASSESSEE THAT THE TRIBUNAL WITHOUT GOING INT O THE FACT THAT THE INCOME ESTIMATED FROM THE SALE OF LUK HMIES WAS AVAILABLE FOR INVESTMENT IN JEWELLERY AND WAS T HUS, ALLOWED FOR TELESCOPING BY THE CIT(A) AND FURTHER T HAT THIS FINDING OF THE CIT(A) HAS NOT BEEN SET ASIDE BY ITA T HAS SET ASIDE THE ORDER OF THE CIT(A). THUS, ACCORDING TO HIM, SETTING ASIDE THE ORDER OF THE CIT(A), IS A MISTAKE APPARENT FROM RECORD, WHICH NEEDS TO BE CORRECTED UNDER SECT ION 254(2) OF THE I.T. ACT, 1961. 4. THE LD. D.R, HOWEVER, SUPPORTED THE ORDERS OF THE ITAT AND SUBMITTED THAT THERE WAS NO MISTAKE APPARENT FROM RECORD WHICH NEEDS RECTIFICATION. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE REVENUE WAS IN APPEAL BEFORE THIS TRIBUNAL AGAINST THE TELESCOPING OF THE ESTIMATED INCOME FROM SALE OF LUKHMIES AGAINST THE UNEXPLAINED INVESTMENT IN JEWELLERY. THE ASSESSEE W AS IN 4 MA.NO.116/H/2015 IN ITA.NO.850/H/2012 MR. MIR ANWARUDDIN, HYDERABAD. APPEAL AGAINST THE CONFIRMATION OF PART OF THE ADDI TION BY THE CIT(A) ON ACCOUNT OF ESTIMATED INCOME FROM SALE OF LUKHMIES. SINCE THE ASSESSEE HAS NOT PRESSED THE GR OUND AGAINST THE CONFIRMATION OF THE PART OF THE ADDITIO N MADE BY THE CIT(A) ON ACCOUNT OF INCOME FROM SALE OF LUK HMIES, THE ORDER OF THE CIT(A) ESTIMATING THE INCOME FROM SALE OF LUKHMIES OF RS.30,37,500 REMAINS INTACT AND IS NOT DISTURBED. 5.1. IN THE REVENUES APPEAL, THE GROUND WAS AGAINST THE ORDER OF THE CIT(A) IN RESTRICTING THE ADDITION MADE TOWARDS UNEXPLAINED INVESTMENT ON ACCOUNT OF JEWELLERY FOUND AND SEIZED FROM RS.24,84,153 TO RS.4,46,652 BY TELESCOPING THE INCOME EARNED FROM LUKHMIES EVEN THOUGH NO NEXUS HAS BEEN PROVED BY TH E ASSESSEE BETWEEN THE UNACCOUNTED SALES OF LUKHMIES AND UNACCOUNTED INVESTMENT IN JEWELLERY. THE TRIBUNAL AT PARA-26 HAS OBSERVED THAT THE ASSESSEE HAS NOT FURN ISHED EVIDENCE REGARDING SOURCE OF INVESTMENT IN UNACCOUN TED JEWELLERY AND FURTHER IN PARA-25 OBSERVED THAT THE ADDITION MADE ON ACCOUNT OF DISCREPANCY IN THE INVESTMENT IN JEWELLERY HAS BEEN REDUCED OR DELETED BY THE CIT(A). THUS OBSERVING, IT WAS HELD THAT IN THE ABSENCE OF EVIDENCE OF SOURCE OF ACQUISITION OF ASS ETS, THE ORDER OF THE CIT(A) IN RESTRICTING THE ADDITION IS SET ASIDE. FROM THESE OBSERVATIONS, IT IS CLEAR THAT THE TRIBU NAL HAS APPLIED ITS MIND TO THE FACTS OF THE CASE BEFORE SE TTING ASIDE THE ORDER OF THE CIT(A) IN TELESCOPING THE IN COME FROM SALE OF LUKHMIES AGAINST THE ADDITION TOWARDS 5 MA.NO.116/H/2015 IN ITA.NO.850/H/2012 MR. MIR ANWARUDDIN, HYDERABAD. UNEXPLAINED INVESTMENT IN JEWELLERY. IN VIEW OF THE SAME, WE ARE NOT CONVINCED THAT THERE IS ANY MISTAKE APPA RENT FROM RECORD WHICH CAN BE RECTIFIED UNDER SECTION 25 4(2) OF THE ACT. ACCORDINGLY, THE M.A. OF THE ASSESSEE IS DISMISSED. 6. IN THE RESULT, M.A. OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.05.2016. SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 13 TH MAY, 2016 VBP/- COPY TO : 1. MR. MIR ANWARUDDIN, HYDERABAD. C/O. MOHD. AFZAL, ADVOCATE, 11-5-465, # 402, SHERSONS RESIDENCY, CRIMINAL COURT ROAD, RED HILLS , HYDERABAD 500 004. 2. THE DCIT, CENTRAL CIRCLE - 2, HYDERABAD. 3. CIT(A) - I, HYDERABAD. 4. CIT (CENTRAL) , HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE