Sri.T.K. Salim, Perumbavoor v. The DCIT, Ernakulam

ITA 214/COCH/2016 | 2005-2006
Pronouncement Date: 25-10-2016 | Result: Allowed

Appeal Details

RSA Number 21421914 RSA 2016
Assessee PAN AFAPS5790L
Bench Cochin
Appeal Number ITA 214/COCH/2016
Duration Of Justice 5 month(s) 21 day(s)
Appellant Sri.T.K. Salim, Perumbavoor
Respondent The DCIT, Ernakulam
Appeal Type Income Tax Appeal
Pronouncement Date 25-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 28-09-2016
Date Of Final Hearing 28-09-2016
Next Hearing Date 28-09-2016
Assessment Year 2005-2006
Appeal Filed On 04-05-2016
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL : COCHIN BENCH : COCHIN BEFORE SHRI B.P. JAIN HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K. HONBLE JUDICIAL MEMBER SA NO. 34/COCH/2016 (ARISING OUT OF IT A NO. 214/COCH/2016) (A.Y. 2005 - 06) AND IT A NO. 214 / COCH /201 6 (A.Y. 200 5 - 0 6 ) SHRI T.K. SALIM VS DCIT C/O. M/S. T.M. SREEDHARAN & ASSOCIATES CENTRAL CIRCLE - 1 ADVOCATES ERNAKULAM. 2 ND FLOOR KALYAN CHAMBERS CHITTOR ROAD NEAR SOUTH JN. KOCHI 682 016. PAN NO. AFAPS5790L (APPELLANT) (RESPONDENT) DATE OF HEARING : 28 /0 9 /2016 DATE OF PRONOUNCEMENT : 2 5 /10/2016. ASSESSEE BY : SHRI T.M. SREEDHARAN SR. ADV. DEPARTMENT BY : S HRI A. DHANRAJ SR. D.R. PER B.P. JAIN A.M. : 1. THE ABOVE APPEAL RELATES TO THE ASSESSMENT YEAR 2005 - 06 AND IS FILED AGAINST THE ORDER OF THE CIT(A) - IV/13 - 14 DATED 22.02.2016. THE APPEAL WAS DISMISSED AND THE ADDITION MADE BY THE ASSESSING OFFICER BY HIS ORDER DATED 14.03.2013 WAS CONFIRMED. THE DISPUTE IN THE FIRST APPEAL BEFORE THE CIT(A) IS AGAINST THE ADDITION OF RS. 83 LAKHS BY INVOKING SEC. 69. THE FACTS 2 LEADING TO THE ABOVE ASSESSMENT AS REVEALED FROM THE ORDER OF THE CIT(A) ARE AS UNDER : - (I) THE ORIGINAL ASSESSMENT WAS COMPLETED VIDE ORDER U/S 143(3) R.W.S. 153A ON 23.12.2009 ON A TOTAL INCOME OF RS. 35 22 200/ - . ORIGINAL RETURN WAS FILED BY THE ASSESSEE DECLARING AN INCOME OF RS. 9 68 720/ - ON 31.10.2005. (II) IN RESPONSE TO THE NOTICE U/S 153A RETURN WAS FILED ON 14.07.2009 DECLARING THE SAM E INCOME THAT WAS SHOWN IN THE ORIGINAL RETURN. (III) IN THE COURSE OF THE SEARCH ASSESSMENT PROCEEDINGS THE ASSESSEE FURNISHED THE STATEMENT OF NE T WEALTH DECLARING THE GOLD ORNAMENTS OF WIFE AND CHILDREN AS UNDER: - RS. 60 00 000/ - IN THE NAME OF NEBEE SA BEEVI SALIM WIFE RS. 16 00 000/ - FOR NATASHA SALIM DAUGHTER. RS. 7 00 000/ - FOR NIKHITA. SALIM DAUGHTER. (IV) IT WAS FOUND THAT THE ASSESSEE HAD DISCLOSED ORNAMENTS ONLY TO THE EXTENT OF 120 GRAMS IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E . 2004 - 05. IN THE STATEMENT OF WEALTH AS ON 31.03.2005 THE ORNAMENTS WORTH RS. 83 LAKHS HAS BEEN SHOWN IN THE NAME OF WIFE AND DAUGHTERS. THE ASSESSING OFFICER FAILED TO MAKE ANY COMPARISON TO CONSIDER THE SOURCE AND INVESTMENTS. NOTICING THIS LAPSE ON THE PART OF THE ASSESSING OFFICER THE ADMINISTRATIVE COMMISSIONER VIDE ORDER DATED 19.03.2012 U/S 263 DIRECTED THE ASSESSING OFFICER TO EXAMINE THE ISSUE PROPERLY AS REGARDS THE PURCHASE OF ORNAMENTS AND SOURCE OF INVESTMENT. EVEN THOUGH THE ORDER U/S 263 WAS 3 APPEALED AGAINST BEFORE THE HONBLE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH THE ORDER U/S 263 WAS UPHELD. (V) IN THE MEANWHILE THE ASSESSING OFFICER PASSED ORDER U/S 143(3) ON 14.03.2013 HOLDING THAT THE PURCHASE OF GOLD ORNAMENTS TO THE EXTEN T OF RS. 83 LAKHS WAS UNEXPLAINED INVESTMENT ASSESSABLE U/S 69 OF THE ACT. 2. AFTER CONSIDERING THE NOTE SUBMITTED BY THE COUNSEL FOR THE ASSESSEE THE CIT(A) UPHELD THE ADDITION AGAINST WHICH THE PRESENT APPEAL IS FILED. 3. THE APPELLANT FI L E D PAPER BOOK IN THE APPEAL ALONG WITH A NOTE DATED 28.07.2016 AND COPIES OF DOCUMENTS FORMING PART OF THE RECORD OF ASSESSMENT WHICH ARE REFERRED TO IN THE ORDER OF THE CIT(A). THE PAPER BOOK CONTAINED PAGES 1 TO 82. THE LEARNED SENIOR COUNSEL SHRI T.M. SREEDHAR AN WHO APPEARED FOR THE ASSESSEE REFERRED TO THE NOTE SUBMITTED WITH REFERENCE TO THE ORIGINAL ASSESSMENT COMPLETED ON 28.12.2009. THE FOLLOWING ARE THE SEQUENCE OF EVENTS AS PER THE NOTE SUBMITTED AT THE TIME OF HEARING : - THE ASSESSEE FIL E D FIRST RETURN OF INCOME FOR 2005 - 06 ON 31.10.2005 WITHIN THE TIME LIMIT. THERE WAS A SEARCH U/S 132 ON 09.08.2007. BLOCK ASSESSMENT U/S 153A R.W.S. 143(3) COMPLETED BY ORDER DATED 28.12.2009 FOR 2003 - 04 TO 2007 - 08 ASSESSMENTS. THE TOTAL ASSESSABLE INCOME WAS DETERMINED AT RS. 35 22 200/ - VIDE ORDER DATED 28.12.2009 FOR THE ASSESSMENT YEAR 2005 - 06. THE SEARCH ASSESSMENT WAS TAKEN IN APPEAL AND BEFORE THE HONBLE ITAT COCHIN BENCH. 4 DISPUTED ADDITIONS WERE SET ASIDE FOR RE - CONSIDERATION TO THE ASSESSING OF FICER. THE SET ASIDE ASSESSMENT FOR 2005 - 06 WAS ALSO COMPLETED BY SUSTAINING THE ORIGINAL ADDITIONS AND THE ASSESSMENT THUS ACQUIRED FINALITY VIDE ORDER DATED 30.03.2016. ALONGWITH THE ORIGINAL RETURN FURNISHED ON 31.10.2005 THE ASSESSEE H A D FURNISHED AUDITED REPORT U/S 44AB DATED 30.10.2005 WITH ALL SUPPORTING DOCUMENTS. THE ASSESSMENT HAD BECOME FINAL LONG BEFORE THE DATE OF SEARCH. THE RETURN OF INCOME WAS ALSO ACCEPTED AS PER ORIGINAL ASSESSMENT. THE ONLY GROUND ON WHICH ADMINISTRATIVE COMMISSION ER PASSED ORDER U/S 263 IS THE STATEMENT OF TOTAL WEALTH AS ON 31.03.2005. THE ASSESSEE PLEADED BEFORE THE ASSESSING OFFICER THAT THE NET WEALTH STATEMENT REFERRED TO BY THE ADMINISTRATIVE COMMISSIONER ON 09.09.2009 DID NOT SHOW ANY VARIATION BETWEEN TH E VALUE/QUANTITY OF GOLD ORNAMENTS AS ON 31.03.2004 AND 31.03.2005 WHICH CONTINUED TO BE 120 GRAMS. 4. A COPY OF THE NET WEALTH STATEMENT WHICH WAS PRODUCED BEFORE THE ASSESSING OFFICER ON 09.09.2009 IS ALSO PRODUCED. A PERUSAL OF THE ABOVE NET WEALTH STATEMENT WOULD SHOW THAT THE GOLD ORNAMENTS DECLARED WAS 120 GRAM S AS ON 31.03.2005. THERE IS NO VARIATION. THE NET WEALTH STATEMENT FOR THE ASSESSMENT YEAR 2003 - 04 AND 2004 - 05 ALSO REVEALED THE SAME WEIGHT OF ORNAMENTS AT 120 GRAMS. A PERUSAL OF THE DOC UMENTS SUPPLIED TO THE ASSESSEE BY THE ASSESSING OFFICER ON 12.10.2012 OF THE NET WEALTH FORMING PART OF THE LE T TER DATED 09.12.2009 WOULD SHOW THAT THE WEIGHT OF THE ORNAMENTS DECLARED IS 120 GRAMS. 5. PAGE NO. 3 OF THE NOTE IS THE LETTER ISSUED BY THE ASSESSING OFFICER SUPPLYING A COPY OF THE TOTAL WEALTH STATEMENT DATED 09.09.2009. THE STATEMENT OF WEALTH FOR 2005 - 06 IS 120 GRAMS. 5 6. IT IS FURTHER STATED THAT IN THE FIRST ASSESSMENT ORDER DATED 28.12.2009 THE ENTIRE SEIZED MATERIALS WERE CON SIDERED. IT IS EMPHASIZED IN THE NOTE THAT THE ASSESSEE CATEGORICALLY EXPLAINED BEFORE THE ADMINISTRATIVE COMMISSIONER IN REPLY TO THE NOTICE U/S 263 THAT THE GOLD ORNAMENTS POSSESSED BY THE ASSESSEE WAS ONLY 120 GRAMS WHICH IS THE QUANTITY OF ORNAMENTS DECLARED FROM 2003 - 04 ONWARDS UPTO 2007 - 08 WHICH ARE THE ASSESSMENT INVOLVED IN SEC. 153A PROCEEDINGS. IT WAS ALSO STATED THAT THE ASSESSEE HAS NEVER DECLARED THE VALUE OF GOLD ORNAMENTS AS RS. 83 LAKHS AT TH E TIME OF SEARCH IN THE STATEMENT RECORDED U/S 132(4). THERE WAS NO SEIZURE OF GOLD ORNAMENTS AS IN FACT NO SUCH GOLD ORNAMENTS WORTH RS. 83 LAKHS WAS POSSESSED BY THE ASSESSEE AT ANY TIME. ON THE OTHER HAND THE QUANTITY OF GOLD ORNAMENTS WAS ONLY 120 G RAMS WHICH WAS SUBMITTED BEFORE THE ADMINISTRATIVE COMMISSIONER. 7. IN THE ORDER U/S 263 THE ADMINISTRATIVE COMMISSION E R SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO REDO TH E SAME AFTER EXAMINING THE ISSUE PROPERLY AND AFTER MA KING SUCH ENQUIRIES AS MAY NECESSARY. 8. A PERUSAL OF THE ORDER DATED 14.03.2013 PASSED BY THE ASSESSING OFFICER PURSUANT TO THE ORDER U/S 263 WOULD SHOW THAT THE ASSESSING OFFICER DID NOT CONDUCT ANY ENQUIRY AND DIRECTED BY THE CIT(A). THE ASSESSING OFF ICER MERELY REFERRED TO THE ASSESSMENT ORDER DATED 18.02.2003 AND THE INCORRECT MANUSCRIPT UNSIGNED STATEMENT WHICH THE ASSESSING OFFICER HIMSELF ADMITS AS AN INVALID STATEMENT AND CAME TO ERRONEOUS CONCLUSIONS. THE ASSESSEE FURNISHED CORRECTED WEALTH STAT EMENT DECLARING THE QUANTITY OF GOLD ORNAMENTS AS 120 GRAMS. HOWEVER THE ASSESSING OFFICER OBSERVED 6 THAT SINCE THE LEARNED CIT ADMINISTRATI V E BY ORDER U/S 263 IS ALREADY DEALT WITH THIS ARGUMENT THERE IS NOTHING NEW IN THE PLEADING OF THE ASSESSEE AS REGARDS THE QUANTITY OF GOLD ORNAMENTS HELD BY HIM. FINALLY THE ASSESSING OFFICER HELD THAT THE AMOUNT OF RS. 83 LAKHS IS ADDED BACK IN HIS TOTAL INCOME AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. THE LEARNED SR. COUNSEL ALSO REFERRED TO T HE HAND WRITTEN WEALTH STATEMENT AND THE ORNAMENTS HELD BY THE ASSES S EES WIFE VALUED AT RS. 60 00 000/ - DAUGHTER NATASHA SALIM RS. 16 00 000/ - AND DAUGHTER NIKITHA SALIM 0 7 00 000/ - . THE ASSESSEES W IFE IS AGED ABOUT 38 YEARS. THE FIRST DAUGHTER IS AGED 17 YEARS AND THE SECOND DAUGHTER IS 13 YEARS. MOST OF THE GOLD ORNAMENTS WERE OBTAINED BY HER AT THE TIME OF MARRIAGE MORE THAN 17 YEARS BACK. THE ASSESSING OFFICER DID NOT CONDUCT ANY ENQUIRY AS REGA RDS ACQUISITION OF ORNAMENTS BY SMT. NABEESA BEEVI BUT PRESUMED THAT THE GOLD ORNAMENTS WERE PURCHASED DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2005 - 06 AND MECHANICALLY ADDED THE VALUE AS INVESTMENT. THIS IS HIGHLY ARBITRARY. THE SENIOR C OUNSEL ALSO RE FE RRED TO THE GROUNDS 4 TO 7 OF THE MEMORANDUM OF APPEAL AND SUBMITTED THAT THERE ARE ABSOLUTELY NO MATERIALS AVAILABLE BEFORE THE ASSESSING OFFICER TO MAKE ESTIMATED ADDITION OF RS. 83 LAKHS IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND THAT THE ENTIRE ADDITION IS WHOLLY MISCONCEIVED AND LIABLE TO BE SET ASIDE. 9. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND THE DOCUMENTS REFERRED TO BY THE SENIOR COUNSEL AND THE SUBMISSIONS MADE AT THE TIME OF HEARING. WE HAVE ALSO HEARD THE SR. D.R. THE SR. D.R. RELIED ON THE UNSIGNED HAND WRITTEN STATEMENT OF NET WEALTH AND SUBMITTED THAT THE ABOVE STATEMENT IS THE DOCUMENTS RELIED ON BY THE ADMINISTRATIVE COMMISSIONER IN HIS ORDER U/S 263. THE ASSESSING OFFICER HAS RELIED ON THE ABOVE DOCUMENT AND ESTIMATED UNDISCLOSED INCOME OF RS.83 LAKHS AS UNEXPLAINED 7 INVESTMENT IN THE ACQUISITION OF GOLD. ACCORDINGLY TO HIM THE ADDITION SHOULD SUSTAINED. 10. AFTER HAVING CONSIDERED THE RIVAL CONTENTIONS WE ARE INCLINED TO HOLD THAT THE ADDITION OF RS. 83 LAKHS AS UNDISCLOSED INVESTMENT IN THE GOLD ORNAMENTS IS LIABLE TO BE SET ASIDE. WE FIND TH A T THE ASSESSING OFFICER H A S FAIL E D TO BRING ON RECORD ANY MATERIAL OR EVIDENCE TO SHOW THAT THE ASSESSEE PURCHASED GOLD ORNAMENTS VALUED AT RS. 83 LAKHS DURING T HE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR. THERE IS NO MATERIAL WHATSOEVER AVAILABLE BEFORE THE ASSESSING OFFICER TO COME TO SUCH A CONCLUSION. THE UNSIGNED STATEMENT OF NET WEALTH WAS CORRECTED BY THE ASSESSEE IMMEDIATELY ON BEING POINTED OUT ON 0 9.09.2009 ITSELF AS EVIDENCED BY COPY PRODUCED IN THE PAPER BOOK. THIS IS ALSO AUTHENTICATED BY THE ASSESSING OFFICER . IN SPITE OF THE CORRECT WEALTH STATEMENT FILED BY THE APPELLANT THE ASSESSING OFFICER HAS RELIED ON THE UNSIGNED STATEMENT MERELY FOR THE REASON THAT THE ADMINISTRATIVE COMMISSIOENR SET ASIDE THE ASSESSMENT. THE ASSESSING OFFICER ALSO DID NOT CONDUCT ANY ENQUIRY AS DIRECTED BY THE ADMINISTRATIVE COMMISSIONER. NO SUCH ENQUIRY IS SEEN TO HAV E BEEN MADE BY THE ASSESSING OFFICER. ON THE WHOLE WE ARE OF THE VIEW THAT THERE ARE NO CONVINCING REASONS SUPPORTED BY EVIDENCE TO UPHOLD THE ADDITION OF RS. 83 LAKHS AS INVESTMENT IN GOLD ORNAMENTS. THE ADDITION THEREFORE IS LIABLE TO BE SET ASIDE. AC CORDINGLY WE ALLOW THE APPEAL OF THE ASSESSEE BY SETTING ASIDE THE ADDITION OF RS. 83 LAKHS AS UNDISCLOSED INCOME U/S 69 OF THE ACT. 1 1. I N THE RESULT THE APPEAL IN ITA NO. 214/COCH/2016 IS ALLOWED 8 STAY PETITION NO. 34/COCH/2016 12. THE ASSESSEE H AS ALSO FILED THE STAY PETITION IN THE SAID APPEAL. SINCE THE BENCH HAS PROCEEDED TO HEAR THE APPEAL AND AS AGREED BY BOTH THE PARTIES STAY WAS NOT PRESSED AND THE SAME BECOMES INFRUCTUOUS AND ACCORDINGLY DISMISSED. 13. IN THE RESULT APPEAL OF THE ASSES SEE IN ITA NO. 214/COCH/2016 IS ALLOWED AND STAY PETITION NO 34/COCH/2016 IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 2 5 /10/2016. S D / - S D / - (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC O UNTANT MEMBER DATED : 2 5 /10/2016 A/N COPY TO : - 1 - APPELLANT 2 - RESPONDENT 3 - CIT(A) 4 - CIT 5 - D/R ITAT COCHIN. ASSISTANT REGISTRAR