The ACIT, Central Circle-3,, Surat v. Shri Arvindbhai Ramanbhai Shah, Surat

ITA 964/AHD/2008 | 2005-2006
Pronouncement Date: 28-05-2010 | Result: Dismissed

Appeal Details

RSA Number 96420514 RSA 2008
Assessee PAN AEQPS5723Q
Bench Ahmedabad
Appeal Number ITA 964/AHD/2008
Duration Of Justice 2 year(s) 2 month(s) 14 day(s)
Appellant The ACIT, Central Circle-3,, Surat
Respondent Shri Arvindbhai Ramanbhai Shah, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 28-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 28-05-2010
Date Of Final Hearing 21-05-2010
Next Hearing Date 21-05-2010
Assessment Year 2005-2006
Appeal Filed On 14-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD CAMP AT SURAT (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HONBLE SH RI D.C. AGRAWAL A.M.) I.T.A. NO. 964/AHD./2008 ASSESSMENT YEAR : 2005-2006 ASSISTANT COMMISSIONER OF INCOME TAX -VS.- SHRI ARVINDBHAI RAMANLAL SHAH SURAT CENTRAL CIRCLE-3 SURAT (PAN : AEQPS 5723 Q ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SIDDHARTHA MU KHERJEE CIT D.R. RESPONDENT BY : SHRI K.K. SHAH O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 01.01.2008 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-II AHMEDABAD D ELETING THE ADDITION OF RS.9 24 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED INVESTMENT IN JEWELLERY FOUND AT THE TIME OF SEARCH FOR THE ASSESSMENT YEAR 2005-06. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S AN INDIVIDUAL. A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT 1961 WAS CARRIED OUT AT THE RESIDENCE OF THE ASSESSEE AT 3B POOJAN APARTMENT TRIBHUVAN COMPLEX GHOD-DOD ROAD SURAT ON 22.12.2004. DURING THE COURSE OF SEARCH CERTAIN DOCUMENTS LOCKER KEY WERE FOUND AN D SEIZED. THE LOCKER NO. 1391 WITH ICICI BANK ATHWALINES SURAT STOOD IN THE NAME OF FAMILY MEMBERS OF THE ASSESSEE WHICH WAS OPERATED ON 5.1.2005 AND THE ORNAMENTS BELONGING TO THE FAMILY MEMBERS OF THE ASSESSEE WERE FOUND AND SEALED ON THE DATE OF SEARCH. THE ASSESS ING OFFICER FRAMED THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT ON 29.11.2006 WHEREIN HE MADE THE ADDITION IN RESPECT OF EXCESS JEWELLERY WORKED OUT AT 1400 GRAMS. THE ASSE SSING OFFICER VALUED THE SAID JEWELLERY @ RS.660/- PER GRAM AND MADE THE ADDITION OF RS.9 24 000/-. THE REASONING GIVEN BY THE ASSESSING OFFICER FOR MAKING THE SAID ADDITION IS CONTAINED I N PARA 7 7.1 & 7.2 OF THE ASSESSMENT ORDER WHICH IS RE-PRODUCED HEREIN BELOW :- 2 ITA NO. 964/AHD/2008 7. JEWELLERY :- DURING THE COURSE OF SEARCH JEWELLERY WAS FOUND AT THE RESIDENCE OF THE ASSESSEE AND LOCKED NO. 1391 WITH ICICI BANK. THE TOTAL JEWELLER Y FOUND DURING THE COURSE OF SEARCH IS AS BELOW :- SR. NO. PLACE WEIGHT CARRATS VALUE (RS.) 1. RESIDENCE 769.8 GRAMS 16.58 CTS. 9 36 085/- 2. LOCKER 1627.5 GRAMS 10 74 150/- 7.1. THE ASSESSEE WAS ASKED TO EXPLAIN THE JEWELLER Y FOUND. THE ASSESEE SUBMITTED THE EXPLANATION THAT 1745 GRAMS OF JEWELLERY AND 3.4 CT S. OF DIAMONDS ARE SHOWN IN THE WEALTH-TAX RETURNS OF EARLIER YEARS AND A DISCLOSUR E OF 997.3 GRAMS OF JEWELLERY CONTAINING 24.6 CTS. OF DIAMOND WERE DISCLOSED IN V DIS. THE ASSESSEES REPRESENTATIVE ATTENDED BUT COULD NOT SUBMIT ANY EVIDENCE REGARDIN G THE JEWELLERY SHOWN IN WEALTH-TAX RETURNS IN EARLIER YEARS. THE ASSESSEE ONLY FURNISH ED THE DISCLOSURE MADE UNDER VDIS. CONSIDERING THE DOCUMENTS DISCLOSED IN VDIS THE EX CESS JEWELLERY WITH THE ASSESSEE IS WORKED OUT BELOW :- TOTAL QUANTITY OF JEWELLERY FOUND : 2397.3 GRAMS LESS : SHOWN IN VDIS ` : 997.3 GRAMS ____________ EXCESS JEWELLERY : 1400.0 GRAMS _____________ 7.2. THE VALUATION AS ON THE DATE OF SEARCH HAS BEE N MADE @ RS.660/- PER GRAM. HENCE THE TOTAL VALUE OF EXCESS JEWELLERY COMES TO RS.9 24 000/- (1400 X 660). THEREFORE THE EXCESS JEWELLERY VALUED AT RS.9 24 000/- IS TRE ATED AS INVESTMENT OF THE ASSESSEE OUT OF HIS UNDISCLOSED SOURCES OF INCOME AND BROUGHT TO TA X. PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I.T. ACT ARE INITIATED ON THIS POINT. 3. ON APPEAL BEFORE THE LD. CIT(A) THE ASSESSEE MA DE THE FOLLOWING SUBMISSIONS :- 1.1. THE LEARNED DCIT ERRED IN MAKING ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY OF RS.9 24 000/- AS PER PARA 7.2 OF T HE ORDER THOUGH FOR EVIDENCES REGARDING GIFT WERE FILED. 1.2. THE APPELLANT STRONGLY URGES THAT THE POSITION OF ORNAMENTS FOUND / SEIZED AS PER INVENTORY AND THE EXPLANATION THEREON WAS FI LED WITH REFERENCE TO THE LETTER DATED 17.10.2005 AS UNDER :- 3 ITA NO. 964/AHD/2008 ORNAMENTS FOUND VALUE SEIZED AT RESIDENCE 769.800 GRAMS 9 36 085 AT RESIDENCE DIAMOND 16.58 CTR. AT LOCKER NO. 1391 WITH ICICI BANK 1627.500 GRAMS 10 74 150 2397.300 GRAMS 20 10 235 THE NORMAL HOLDING AS WELL AS ORNAMENTS DISCLOSED IS AS UNDER :- NAME NORMAL HOLDING (AS PER WT RETURN GRAMS CARAT ORNAMENTS DISCLOSED IN VDIS GRAMS CARAT TOTAL ARVINDBHAI R. SHAH (INDIVIDUAL) 555 0.45 555 555.000 ARVINDBHAI R. SHAH (HUF) 500 997.300 24.60 1497.300 SUREKHABEN A. SHAH (WIFE) 690 2.95 690.000 690.000 1745 3.40 997.300 24.60 2742.300 THE ORNAMENTS FOUND DURING THE SEARCH IS PART OF HO LDING AS ABOVE. THE NORMAL HOLDING OF ORNAMENTS WAS ACQUIRED ON MARRIAGE AND SUCH AUSPICI OUS OCCASIONS. KINDLY NOTE THAT THE ORNAMENTS FOUND FOR 2397.300 GRAMS AS AGAINST 2742. 000 GRAMS SHOWN AS PER WT AND VDIS AND THEREFORE THERE IS NO EXCESS HOLDING THEREOF. SIMILARLY THE DIAMOND ORNAMENTS OF 16.58 CARAT WERE FOUND AS AGAINST 28 CARATS DECLARED AS A BOVE. THE COPY OF VALUATION REPORT OF ORNAMENTS AND VDIS FORMS ARE PART OF SEIZED RECORDS :. 4. BEFORE THE LD. CIT(A) THE ASSESSEE STATED THAT THE ABOVE SAID POSITION OF ORNAMENTS WERE FOUND IN THE SEIZED RECORDS. AS PER THE SEIZED RECO RDS IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE LD. CIT(A) THAT SMT. SUREKHABEN SHAH WAS HOLDING 69 0 GRAMS (230 + 460) AS ON 31.3.93 (VALUATION REPORT AS PER THE LOOSE PAPER NO. 11 TO 20 OF BS-3) AND 555 GRAMS WAS HELD BY ARVINDBHAI SHAH AS ON 31.3.93 (VALUATION REPORT AS PER THE LOOSE PAPER NO. 11 TO 20 OF BS-3). THE HOLDING OF HUF WAS TAKEN ON THE BASE OF VDIS WH ICH IS ALSO PART OF SEIZED RECORDS. THE ASSESSEE STRONGLY URGES THAT THE HOLDING OF ORNAMEN TS AS PER THE VALUATION REPORT OF 1993 WHICH WAS FOUND IN THE SEARCH PROCEEDINGS OUGHT TO BE ACC EPTED. THE ASSESSEE STRONGLY URGES THAT THE WEALTH TAX RETURN FOR AY 1992-93 AT MUMBAI WHEREIN ORNAMENTS OF RS.2 08 350/- WERE SHOWN FOR WHICH NO CREDIT IS GIVEN. THE ASSESSEE URGES TH AT THE WEALTH TAX RECORDS OF ARVIND R. SHAH FOR 4 ITA NO. 964/AHD/2008 1992-93 WAS NOT AVAILABLE AT THE TIME OF ASSESSMENT AND THEREFORE THE SAME COULD NOT BE FILED. THE ASSESSEE HOWEVER URGES THAT THIS IS PART OF A SSESSMENT RECORDED AND IT WAS EXPLAINED THAT THIS WAS SHOWN IN THE WEALTH TAX RETURN AND THERE FORE WITH VERIFICATION OF WT RECORDS REFUSAL OF CREDIT OF SUCH ORNAMENTS IS NOT JUSTIFIED. FURTH ER THE ASSESSEE URGES BEFORE THE LD. CIT(A) THAT IN THE CASE OF A LADY THE NORMAL HOLDING AS PER THE CBDT INSTRUCTION NO. 1916 DATED 11.5.94 IS GIVEN FOR 500 GRAMS. THE ASSESSEE FURTH ER URGES THAT THERE WAS SEARCH PROCEEDINGS AS IS RESIDENT ON 19.1.94 WHEREIN ORNAMENTS OF 1729.50 0 GRAMS VALUED AT RS.7 00 182/- WERE COVERED AGAINST UNDISCLOSED INCOME OF RS.9 00 000/- IN THE AY 1994-95 (COPY OF ORDER IS FILED). THE ASSESSEE STRONGLY URGES THAT THIS ALSO PART OF HIS ASSESSMENT RECORDS AND WITHOUT VERIFICATION OF SUCH ASSESSMENT RECORDS REFUSAL OF CREDIT OF TH E ORNAMENTS CLAIMED IS UNJUSTIFIED. 5. AFTER CONSIDERING THE ABOVE SUBMISSIONS THE LD. CIT(A) DELETED THE ADDITION OF RS.9 24 000/- MADE BY THE ASSESSING OFFICER FOR THE DETAILED REASONS GIVEN IN PARA 8 WHICH IS RE- PRODUCED HEREUNDER :- 8. I HAVE CONSIDERED THE CONTENTS OF THE ORDER AND THE SUB MISSIONS OF AR OF THE APPELLANT. EVEN THOUGH THE WEALTH TAX RETURN OF THE APPELLANT COULD NOT BE FILED AT THE TIME OF ASSESSMENT THERE IS SEIZED RE CORDS SHOWING HOLDING OF ORNAMENTS AS PER THE VALUATION REPORT IN 1993. SECO NDLY THE APPELLANT IS ENTITLED TO GET CREDIT OF NORMAL HOLDING OF ORNAMENTS BY THE FAMILY MEMBERS. IN VIEW OF THE CBDT INSTRUCTION NO. 1916 DATED 11.05.1994 THE DIA MOND ORNAMENTS WHICH HAS HIGHER VALUE IS FULLY COVE RED BY VDIS FOR WHICH TH E DOCUMENTS WERE FILED AT THE TIME OF ASSESSMENT. THE APPELLANT HAS ALREADY DISCL OSED GOLD ORNAMENTS OF 1729.500 GRAMS VALUED AT RS.7 00 182/- IN HIS OWN C ASE IN THE AY 1994-95. THOUGH THIS ORDER WAS NOT FILED THE SAME IS PART O F APPELLANTS OWN RECORDS WHICH IS NOT CONSIDERED. IN VIEW OF THE ABOVE THE ADDITI ON OF RS.9 24 000/- IS HEREBY DELETED. 6. AGGRIEVED BY THE ORDER OF LD. CIT(A) THE REVENU E IS IN APPEAL BEFORE THE TRIBUNAL. 7. AT THE TIME OF HEARING BEFORE US ON BEHALF OF R EVENUE SHRI SIDDHARTHA AGARWAL CIT D.R. APPEARED AND RELIED ON THE REASONING GIVEN BY THE AO IN THE ASSESSMENT ORDER. THE LD. D.R. 5 ITA NO. 964/AHD/2008 CONTENDED THAT THE ADDITION WAS RIGHTLY MADE AND TH E LD. CIT(A) DELETED THE ADDITION WITHOUT APPRECIATING THE FACTS NARRATED BY THE A.O. BEFORE THE AO THE ASSESSEE NEVER STATED THAT JEWELLERY BELONGS TO THE ENTIRE FAMILY. 8. AS AGAINST THIS SHRI K.K. SHAH LD. COUNSEL APP EARING ON BEHALF OF THE ASSESEE SUBMITTED THAT THE LOCKER NO. 1391 WITH ICICI BANK WAS CONTAI NING THE JEWELLERY OF THE ENTIRE FAMILY MEMBERS COMPRISING OF ASSESSEE HIS HUF AND HIS WIF E. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT WEALTH TAX RETURN OF THE ASSESSEE T HOUGH COULD NOT BE FILED AT THE TIME OF ASSESSMENT BUT THE SEIZED RECORD SHOWS HOLDING OF ORNAMENTS AS PER VALUATION REPORT IN 1993. HE SUBMITTED THAT THE VIEW TAKEN BY THE LD. CIT(A) BE UPHELD BECAUSE HE HAS CORRECTLY APPRECIATED THE FACTS AND AFTER CONSIDERING THE CBDT INSTRUCTIO N NO. 1916 DATED 11.5.94 DELETED THE ADDITION. 9. AFTER HEARING BOTH THE SIDES WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. BEFORE US THE LD. D.R. IS NOT DISPUTING THE FACT THAT SEIZED RECORD SHOWING HOLDING OF ORNAMENTS AS PER THE VALUATION REPORT IN 1993. APAR T FROM THIS THE LD. CIT(A) HAS ALLOWED THE CREDIT OF NORMAL HOLDING OF ORNAMENTS BY THE FAMILY MEMBER KEEPING IN VIEW THE CBDT INSTRUCTION NO. 1916 DATED 11.05.1994. IT IS ALSO A N IMPORTANT FACT ON RECORD THAT THE ASSESSEE HAS DISCLOSED GOLD ORNAMENTS OF 1729.500 GRAMS VALUED A T RS.7 00 182/- IN HIS OWN CASE IN THE ASSESSMENT YEAR 1994-95. IN SUPPORT OF THIS THE LD . COUNSEL OF THE ASSESEE HAS PLACED A COPY OF THE ASSESSMENT ORDER UNDER SECTION 143(3) DATED 28. 03.1995 WHEREIN IN PARA 2 THE ASSESSING OFFICER OBSERVED AS UNDER :- 2. DURING THE YEAR THERE WAS SEARCH AT THE RESIDE NCE ON 19.01.1994. ORNAMENTS OF 1729.5 GRAMS VALUED AT RS.7 00 182/- A ND CASH OF RS.15 000/- WERE FOUND. COVER THE UNEXPLAINED JEWELLERY CASH ETC. THE STATEMENT U/S. 132(4) ON 2.2.94 DURING THE SEARCH PROCEEDINGS THE ASSESSEE MADE A DISCLOSURE OF RS.9 00 000/-. THE DISCLOSED INCOME IS STATED TO BE INVESTED IN CASH ORNAMENTS SUNDRY RECEIVABLES ETC. THE DISCLOSURE MADE OF RS. 9 00 000/- IS SHOWN IN THE STATEMENT OF INCOME UNDER THE HEAD OF DALALI INCOME AND TAXES ARE ALSO PAID. 6 ITA NO. 964/AHD/2008 9.1. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE REASONING GIVEN BY THE LD. CIT(A) IN HIS IMPUGNED ORDER WE A RE CONVINCED THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS.9 24 000/- MADE BY THE A .O. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A). 10. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 28.05.2010 . SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 / 05 /2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHMEDABAD LAHA/SR.P.S.