DCIT CEN CIR-1, THANE v. DEVKINANDAN B. KHANDELWAL, MUMBAI

ITA 7146/MUM/2008 | 2005-2006
Pronouncement Date: 18-02-2010 | Result: Dismissed

Appeal Details

RSA Number 714619914 RSA 2008
Assessee PAN ABCPK9152G
Bench Mumbai
Appeal Number ITA 7146/MUM/2008
Duration Of Justice 1 year(s) 2 month(s) 1 day(s)
Appellant DCIT CEN CIR-1, THANE
Respondent DEVKINANDAN B. KHANDELWAL, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 18-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 18-02-2010
Date Of Final Hearing 11-02-2010
Next Hearing Date 11-02-2010
Assessment Year 2005-2006
Appeal Filed On 17-12-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI A.L. GEHLOT A.M. AND SMT. P. MADHAVI DEVI J.M. ITA NO. 7146/M/2008 ASSESSMENT YEAR: 2005-06 DY. COMMISSIONER OF INCOME-TAX APPELLANT CENTRAL CIRCLE-1 THANE PAWAR INDL. ESTATE EDULJI ROAD CHARAI THANE 400 601 VS. SHRI DEVKINANDAN B. KHADELWAL RESPONDENT FLAT NO. 1/38/39 GEETA CHS CHARAI THANE (W) 400 602 (PAN ABCPK9152G) APPELLANT BY : MR. C.P. PATHAK RESPONDENT BY : MR. SUBODH L. RATNAPARKHI ORDER PER A.L. GEHLOT A.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-I THANE PASSED ON 27.08.2008 FOR THE ASSES SMENT YEAR 2005- 06 WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL:- 1. THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADD ITION OF RS. 10 63 000/- ON ACCOUNT OF UNEXPLAINED CASH. 2. THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE ADDITION HAS BEEN MADE ONLY BECAUSE ASSESSEE FAILED TO SATISFACTORILY EXPLAIN THE SOURCE OF CASH LYING IN BANK LOCKER WHICH WAS NOT OPERATED FOR PREVIOUS 6 MONTHS OF DAT E OF SEARCH. 3. THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADD ITION OF RS. 4 20 940/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY. 4. THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE ADDITION OF RS. 4 20 940/- ON ACCOUNT OF UNEXPLAINE D INVESTMENT IN JEWELLERY WAS MADE ONLY BECAUSE ASSESSEE FAILED TO SATISFACTORILY EXPLAIN ITS SOURCE. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A SEARC H ACTION U/S 132 OF THE ACT WAS CARRIED ON ON 9 TH SEPTEMBER 2004. DURING THE COURSE OF ITA NO. 7146/M/08 DEVKINANDAN B. KHANDELWAL 2 SEARCH ACTION CASH AMOUNTING TO RS. 13 60 850/- WA S FOUND FROM THE ASSESSEES RESIDENCE AND IN THE BANK LOCKERS. THE A O MADE THE ADDITION OF RS. 10 63 000/- OBSERVING THAT THE ASSE SSEE HAD FAILED TO EXPLAIN THE SOURCE OF THE CASH. DURING THE COURSE O F SEARCH JEWELLWERY WEIGHING 841.880 GRAMS VALUED AT RS. 4 20 940/- WAS FOUND AND SEIZED. THE AO MADE THE ADDITION OF RS. 4 20 940/- BY TAKING THE SAME AS UNACCOUNTED AND UNEXPLAINED INVE STMENT. 3. THE CIT(A) AFTER A DETAILED DISCUSSION IN RESPEC T OF ADDITION OF RS. 10 63 000/- ON ACCOUNT OF UNEXPLAINED CASH DEL ETED THE SAID ADDITION BY OBSERVING AS UNDER:- 5.1 THE GROUND OF APPEAL NO. 1 RELATES TO THE ADDIT ION OF RS. 10 63 000/- ON ACCOUNT OF UNEXPLAINED CASH FOUND DU RING THE COURSE OF SEARCH. ON PERUSAL OF THE FACTS OF THE CA SE I FIND THAT THE APPELLANT HAD STATED DURING THE COURSE OF SEARC H THAT THE CASH FOUND FROM THE BUSINESS PREMISES AND FROM THE VARIOUS BANK LOCKERS BELONGED TO THE DIFFERENT FIRMS OF TH E APPELLANTS FAMILY. THIS HAS BEEN CLEARLY STATED IN THE STATEM ENT RECORDED DURING THE COURSE OF SEARCH AND IT HAS ALSO BEEN CL EARLY INDICATED IN THE INVENTORY OF THE CASH PREPARED AT THE TIME O F OPERATION OF THE VARIOUS BANK LOCKERS. THE APPELLANT HAD SUBMITT ED THE DETAILS OF CASH BALANCE AVAILABLE IN THE BOOKS OF ACCOUNTS OF THE VARIOUS FIRMS BEFORE THE DDIT (INV.) AND ALSO BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE APPELLANT HAS STATED THAT THE CASH BALANCE OF THE FIRMS WERE AS UNDER:- AMOUNT (RS.) 1 M/S DHAVALIKA STEELS & PIPES 5 28 675/- 2 M/S MAHADEO CONSTRUCTION PVT. LTD. 5 35 125/- 3 M/S MAHARASHTRA STEEL SALES 32 550/- 4 M/S MAHADEO CONSTRUCTIONS 1 892/- 5 M/S COSMOS REAL ESTATE 818/- 6 M/S MANASVI SUSHEEL KHANDELWAL 2 60 500/- 7 MANISH DEVKINANDAN KHANDELWAL 1 290/- TOTAL RS. 13 60 850/- THE AO HAS NOT EXAMINED THE BOOKS OF ACCOUNTS ESPE CIALLY THE CASH BOOKS OF THESE CONCERNS TO FIND OUT WHETHER T HE CASH BALANCE SHOWN BY THE APPELLANT IN CASE OF DIFFERENT FIRMS WERE CORRECT OR NOT. THESE FIRMS MUST HAVE FILED THEIR IT RETURNS FOR THE RESPECTIVE PERIOD AND THE ASSESSMENTS MUST HAVE BEE N COMPLETED BY THE SAME AO AS ALL THE CASES MUST HAVE BEEN CEN TRALIZED WITH HIM. IF THE CASH BALANCE SHOWN IN THESE FIRMS ARE C ORRECT THERE WAS NO REASON TO REJECT THE CLAIM OF THE APPELLANT IN THIS REGARD ITA NO. 7146/M/08 DEVKINANDAN B. KHANDELWAL 3 UNLESS AND UNTIL IT WAS PROVED BY THE AO THAT THE CASH BALANCE SHOWN IN CASE OF THESE FIRMS WERE INCORRECT. FURTHE R THE AO HAS SUMMARILY REJECTED THE EXPLANATION OF THE APPELLANT ON THE BASIS OF LAST DATE OF OPERATION OF THE BANK LOCKER WITHOU T LINKING THE DATE WITH THE AVAILABILITY OF THE CASH BALANCE WITH VARIOUS FIRMS OF THE APPELLANTS FAMILY. NO DETAILS HAVE BEEN GIV EN BY THE AO TO ESTABLISH THAT THE CASH BELONGING TO VARIOUS FIRMS WAS NOT KEPT IN THE BANK LOCKERS AND WAS ALSO NOT AVAILABLE IN THE RESIDENTIAL PREMISES OF THE APPELLANT. IN VIEW OF THESE FACTS AND ALSO IN VIEW OF THE FACT THAT THE CASH BOOKS OF VARIOUS FIRMS HA VE NOT BEEN SHOWN AS INCORRECT BY THE AO IT IS LEGALLY NOT POS SIBLE TO SUSTAIN THE ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPLAIN ED CASH FOUND DURING THE COURSE OF SEARCH. IN VIEW OF THIS THE ADDITION MADE OF RS. 10 63 000/- IS HEREBY DELETED. THIS GRO UND OF APPEAL IS ALLOWED. 3.1 THE CIT(A) ALSO DELETED THE ADDITION OF RS. 4 2 0 940/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY BY O BSERVING AS UNDER:- 5.2 THE SECOND GROUND OF APPEAL RELATES TO THE ADDI TION OF RS. 4 20 940/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE JEWELLERY. THE JEWELLERY WEIGHING 841.880 GMS VALUED AT RS. 4 20 940/- WAS FOUND AND SEIZED FROM THE LOCKER NO. B-11 WITH THE JALGAON JANATA SAHAKARI BANK LD. THE APPELLANT CLAIMED THAT THE JEWELLERY BELONGED TO HIMSELF AND HIS WIFE LATE SMT . KAMALADEVI KHANDELWAL. THE APPELLANT SUBMITTED DETAILED EXPLAN ATION IN RESPECT OF THE JEWELLERY FOUND AND SEIZED ALONG WIT H THE PHOTOGRAPHS OF THE JEWELLERY AND THE CERTIFICATE OF VDIS DECLARATION. THE AO REJECTED THE EXPLANATION OF THE APPELLANT WITHOUT ASSIGNING ANY REASONS FOR REJECTION. ON EXA MINATION OF THE FACTS OF THE CASE AND CONSIDERING THE EXPLANATI ON OF THE APPELLANT IN LIGHT OF THE DECISION OF HONBLE ITAT MUMBAI IN THE CASE OF YAKUB NOOR MOHD MEMON VS. DCIT CIRCLE 2(2) & 2(3) THANE IN ITA (SS) NO. 566/MUM/2002 THE INVESTMENT OF THE APPELLANT AND HIS WIFE IN JEWELLERY IS HELD AS EXPL AINED AS THE SAME HAS ALREADY BEEN DECLARED UNDER THE VDIS. IN V IEW OF THESE FACTS THE ADDITION MADE OF RS. 4 20 940/- IS HEREB Y DELETED. THIS GROUND OF APPEAL IS ALLOWED. 4. THE LEARNED DR HAS RELIED UPON THE ORDER OF THE AO WHEREAS THE LEARNED AR HAS RELIED UPON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ASSESSEE HAS EXPLAINED THE CASH FOUND AT THE TI ME OF SEARCH AND THE RECONCILIATION OF CASH FOUND SUBMITTED WHICH H AS BEEN REPRODUCED BY THE CIT(A) IN HIS ORDER. THE LEARNED AR DREW OUR ATTENTION TO PAGES 7 & 8 OF ASSESSEES PAPER BOOK W HERE A LETTER DATED ITA NO. 7146/M/08 DEVKINANDAN B. KHANDELWAL 4 21 ST SEPTEMBER 2006 ADDRESSED TO AO HAS BEEN PLACED WH EREIN IT WAS SUBMITTED THAT CASH BELONGS TO VARIOUS PARTIES WHO WERE ASSESSED TO TAX. THE LEARNED AR WHILE REFERRING TO PAGES 9 & 10 OF THE ASSESSEES PAPER BOOK SUBMITTED THAT WHEREIN THE ASSESSEE HAS EXPLAINED THE COMPLETE DETAILS OF THE JEWELLERY FOUND DURING THE COURSE OF SEARCH. THE LEARNED AR HAS SUBMITTED THAT THE AO HAS NOT AP PRECIATED THE FACTS OF THE CASE WHEREAS THE CIT(A) HAS APPRECIATE D THE FACTS AND AFTER EXAMINATION OF THE MATERIAL SUBMITTED BEFORE THE AO & CIT(A) HAS DELETED THE ADDITIONS. 5. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THE ASSESSEE HAS F URNISHED COMPLETE DETAILS OF THE CASH FOUND WHICH BELONGS TO VARIOUS PARTIES OF WHICH A GIST HAS GIVEN BY THE ASSESSEE TO THE CIT(A). THE C IT(A) HAD REPRODUCED THE SAID LIST IN HIS ORDER WHICH HAS BE EN REPRODUCED BY US AS ABOVE. THERE IS NO CONTRARY MATERIAL ON RECOR D NOR THE SAME HAS BEEN POINTED OUT BY THE LEARNED DR AGAINST THE FIND ING OF CIT(A). SIMILARLY JEWELLERY WEIGHING 841.880 HAS ALSO BEEN EXPLAINED BY THE ASSESSEE DURING THE COURSE OF SEARCH THAT THE JEWEL LERY BELONGED TO HIMSELF AND HIS WIFE LATE SMT. KAMALADEVI KHANDELWA L. THE ASSESSEE HAS FURNISHED COMPLETE DETAILS INCLUDING PHOTOGRAPH S OF THE JEWELLERY AND CERTIFICATES OF VDIS DECLARATION ETC. THE CIT(A ) HAS DELETED THE ADDITIONS AFTER CONSIDERING ALL THESE MATERIAL. WE THEREFORE UPHOLD THE ORDER OF THE CIT(A) ON THESE ISSUES AND THE GRO UNDS RAISED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED ON THIS 18 TH DAY OF FEBRUARY 2010 SD/- SD/- (P. MADHAVI DEVI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 18 TH FEBRUARY 2010 ITA NO. 7146/M/08 DEVKINANDAN B. KHANDELWAL 5 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE D BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI. KV S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 11.02.10 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 17.02.10 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER