SANJAY S JAIN HUF, MUMBAI v. ACIT CEN CIR-8, MUMBAI

ITA 4570/MUM/2009 | 2007-2008
Pronouncement Date: 25-11-2011 | Result: Allowed

Appeal Details

RSA Number 457019914 RSA 2009
Assessee PAN AAEHS3178K
Bench Mumbai
Appeal Number ITA 4570/MUM/2009
Duration Of Justice 2 year(s) 3 month(s) 19 day(s)
Appellant SANJAY S JAIN HUF, MUMBAI
Respondent ACIT CEN CIR-8, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted I
Tribunal Order Date 25-11-2011
Date Of Final Hearing 02-11-2011
Next Hearing Date 02-11-2011
Assessment Year 2007-2008
Appeal Filed On 05-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I MUMBAI BEFORE SHRI B.R. MITTAL (JUDICIAL MEMBER) AND SHRI P.M. JAGTAP (ACCOUNTANT MEMBER) ITA NO.4570/MUM/2009 ASSESSMENT YEAR-2007-08 SHRI SANJAY S. JAIN HUF 195/197 ZAVERI BAZAR SHRI MAHAVIR MARKET MUMBAI-400 002 PAN-AAEHS 3178K VS. THE ACIT CENTRAL CIRLE-8 OLD C.G.O. BLDG. NEW MARINE LINES MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: DR. K. SHIVARAM RESPONDENT BY: SHRI SANJIV DUTT DATE OF HEARING :2.11.2011 DATE OF PRONOUNCEMENT:25.11.2011 O R D E R PER B.R. MITTAL JM : THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT Y EAR 2007-08 AGAINST ORDER OF LD. CIT(A) DT.6.5.2009 ON FOLLOWING GROUND S: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & LA W ON THE SUBJECT THE LD. AO WAS ERRED IN MAKING ADDITION U/S. 69A OF THE I.T. ACT AT RS. 89 74 630/- BEING GOLD JEWELLERY SEIZED FROM THE LOCKER NO. 711 DURING THE COURSE OF SEARCH AND ON THE FACT S & CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUB JECT THE ADDITION BE DELETED. 1.1) THAT THE LD. CIT(A) HAS NOT APPRECIATED THE FACT TH AT THE ASSESSEE HAD DISCHARGED HIS BURDEN OF PROOF AS REQUIRED BY S ECTION 101 AND SECTION 102 OF THE INDIAN EVIDENCE ACT 1872. T HE PROVISIONS OF SEC. 292C OF THE I.T. ACT 1961 WERE ALSO WRONGLY INVOKED WHEN ASSESSEE HAD ALREADY DISCLOSED THAT MASTER GOLD PVT . LTD. WAS THE OWNER OF THE SAID LOCKER NO. 711. ITA NO. 4570/M/09 2 1.2) THAT THE LD. CIT(A) HAS WRONGLY NOT APPRECIATED THE FACTS THAT THE ASSESSEE CANNOT BE MADE LIABLE TO PAY TAX ON DE EMED BASIC ON THE VALUE OF SEIZURE MADE FROM THE IMPUGNED LOCK ER NO. 711 AS THE OWNERSHIP OF THE SEIZED JEWELLERY WAS NOT ON LY ESTABLISHED BUT ALSO EXPLAINED BY THE SAID MASTER GOLD PVT. LTD . 2. THE RELEVANT FACTS GIVING RISE TO THIS APPEAL AR E THAT ASSESSEE IS A HUF BY STATUS AND CARRYING ON BUSINESS OF LEASING OUT L OCKERS ON RENT AS PROPRIETORY CONCERN OF M/S. DALICHAND JUGRAJ SAFE DEPOSIT VAULT . THERE WAS A SURVEY OPERATION U/S. 133A OF THE ACT ON 29 TH DECEMBER 2006 WHICH WAS CONVERTED INTO SEARCH AND SEIZURE ACTION ON THE SAME DATE. IT WAS FOUND THAT CERTAIN LOCKERS WERE OCCUPIED BY UNIDENTIFIED PERSONS. NO KEYS OF SAID LOCKERS WERE AVAILABLE WITH VAULT OWNER. ALL THE LOCKERS WHICH WERE ALLOWED TO OPERATE WITHOUT PROPER WARRANT OF AUTHORIZATION WERE PUT UN DER RESTRAINT U/S. 132(3) OF THE I.T. ACT 1961. 3. DURING THE COURSE OF STATEMENT RECORDED U/SS. 13 2(4) AND 131 ASSESSEE HAD GIVEN NAME OF LOCKER OWNERS BUT ASSES SEE COULD NOT SUBMIT DOCUMENTARY DETAILS SUCH AS PAN CARD ETC. CONSEQU ENTLY ALL SUCH LOCKERS WERE BREAK OPENED IN THE PRESENCE OF VAULT OWNER AN D PANCHAS. THE DETAILS OF CASH & JEWELLERY FOUND AND SEIZED IN VARIOUS LOC KERS IS GIVEN BY AO AT PAGE- 3 OF HIS ORDER WHICH IS AS UNDER: LOCKER NO. ASSETS FOUND AND SEIZED CASH (RS.) JEWELLERY(RS) 519 2 00 000 35 31 930/ - 649 15 50 000 NIL 709 NIL NIL 647 11.50 000 NIL 356 5 10 000 17 74 670 609 NIL 63 01 300/ - 525 NIL 23 15 720/ - 648 NIL 9 46 920/ - ITA NO. 4570/M/09 3 178 1 00 000/ - 1 11 570/ - 494 NIL 14 59 820/ - 710 NIL 45 12 180/ - 575 NIL 8 70 080/ - 711 NIL 89 74 630/ - 200 35 00 000/ - NIL TOTAL 70 10 000/ - 3 07 98 820/ - 4. IT IS RELEVANT TO STATE THAT EXCEPT FOR LOCKER NO . 711 THE CONTENTS OF ALL OTHER LOCKERS FROM WHICH GOLD JEWELLER/CASH SEIZED WERE DISCLOSED AS ADDITIONAL INCOME BY SHRI RAMESH JAIN IN RESPECT OF LOCKER NO. 178 494 519 575 647 649 AND 709 LOCKER NO. 525 BY DILIP JAIN LOCKER N O. 648 BY HIRA SINGH RAJPUT LOCKER NO. 356 BY LALIT JAIN AND LOCKER NO. 710 BY SURESH JAIN. MR. BHARAT JAIN CLAIMED OWNERSHIP OF CONTENTS OF LOCKER NO. 609 AND RUPESH MEHTA CLAIMED OWNERSHIP OF CONTENTS OF LOCKER NO. 2 00. 5. DURING THE COURSE OF ASSESSMENT PROCEEDS DETAIL S ALONGWITH AFFIDAVITS OF VARIOUS LOCKER OWNERS WERE SUBMITTED RELEVANT E XTRACT OF WHICH ARE GIVEN BY AO IN PARA-4.3 OF ASSESSMENT ORDER. WE CONSIDER IT PRUDENT TO REPRODUCE EXTRACT OF SUCH STATEMENT WHICH ARE STATED BY AO AT PARA 4.3 AND SAME IS AS UNDER: Q.3 GIVE DETAILS REGARDING THE FORMALITIES OF OPENING AND OPERATING LOCKER IN DALICHAND JUGRAJ SAFE DEPOSIT V AULT. ANS. A LOCKER OPENING FORM/MEMORANDUM IS SIGNED WIT H THE LESSEE AND THE KEYS ARE HANDED OVER TO HIM. BUT WE GIVE LOCKER TO A PERSON WHOM WE KNOW WELL OR FOR WHOM A GOOD REFERE NCE IS GIVEN. WE HAVE FOUR EMPLOYEES NAMELY-ONE GUARD TWO LOCKE R OPERATING ASSISTANTS AND ONE PERSON MAINTAINING LOCKER OPERAT ION REGISTER. THE LESSEE/ALLOTTE OF A LOCKER OR HIS AUTHORIZED PERSON HAS TO SIGN THE LOCKER OPERATION REGISTER. AND THEN THE LOCKER OPER ATING ASSISTANTS HELP THEM IN OPERATION OF THEIR LOCKERS. HOWEVER O VER A PERIOD OF TIME ALL ARE BECOMING FAMILIAR FACES AND HENCE MAN Y A TIMES WE DO NOT INSIST ESPECIALLY IF THE LOCKER OWNER HIMSELF TURNS UP. Q.4 A SEARCH ACTION ON M/S . DALICHAND JUGRAJ JAIN SAFE DEPOSIT VAULT WAS CONDUCTED ON 29TH DECEMBER 2006 AND A PROHIBITORY ORDER U/S. ITA NO. 4570/M/09 4 132(3 ) OF THE INCOME TAX ACT 1961 WAS PLACED ON CE RTAIN LOCKERS BECAUSE YOU COULD NOT SUBMIT ANY DETAILS OF THE OWN ERSHIP OF THIS LOCKER OR LOCKER OPENING FORMS. OFFER YOUR COMMENTS . ANS. THERE WAS NO SPECIFIC INTENTIONAL REASON FOR NOT FILING THE FORMS INCLUDING LEASE AGREEMENT. HOWEVER SOMETIME S CUSTOMERS COME SUDDENLY ON AUSPICIOUS DAYS WITH A REQUEST TO OPEN THE LOCKERS ON THAT DAY ITSELF. IN SUCH CASES WE ALLOW THEM TO OPEN THE LOCKERS AND PERFORM THE POOJA ON CONDITI ON THAT THE FORMALITIES WILL BE COMPLETED IN THE DAYS TO COME. IN FEW OCCASIONS INADVERTENTLY FORMALITIES REMAINED TO BE COMPLETED. SIR THE LOCKER BUSINESS IS NOT SUBJECT TO ANY SPECIFIC LAWS AND RE GULATIONS AND MOREOVER THERE IS NO LAID DOWN GUIDE LINES AVAILABL E FOR THIS BUSINESS. THIS IS A BUSINESS OF RELATION & TRUST A ND WE HAVE A GOOD REPUTATION AND STANDING IN MARKET. SO WE COULD BREA KEVEN VERY SOON. I CATEGORICALLY STATE THAT NONE OF THE ALLEGED LOCKERS BELONGED TO ME AND I HAVE NOTHING TO DO WITH ITS CONTENTS. Q.5 KINDLY GIVE THE DETAILS OF THE OWNERS OF VARIOUS LO CKERS. ANS.THE DETAILS OF OWNERSHIP OF LOCKERS IS AS UNDE R: LOCKER NO. BELONGING TO 178 494 519 575 647 649 709 RAMESH JAIN & OTHERS 356 LALIT VARECHA JAIN 525 DILIP JAIN 648 HIRA SINGH RAJPUT 710 SURESH JAIN 200 RUPESH MEHTA 711 ASHOK KOTHARI / MASTER HOLD 609 BHARAT JAIN Q.6 HOW DO I BELIEVE THAT ALL THESE MATERIAL FOUND FROM THE ABOVE LOCKERS DOES NOT BELONGS TO YOU? ANS. SIR I AM IN A SMALLTIME BUSINESS OF LEASING OUT LOCKERS ON RENT I DO NOT HAVE WORTH OR CAPACITY TO AMASS SUCH AMOUNT OF GOLD/CASH. I HAVE GONE THROUGH THE SEIZED PAPERS AND I WOULD LI KE TO POINT OUT THAT FROM LOCKER NO. 519 CERTAIN BILLS AND CHEQUE OF BH AGYASHREE JEWELLERS ITA NO. 4570/M/09 5 WERE SEIZED. M/S.BHAGYASHREE JEWELERS IS PROPRIETAR Y CONCERN OF RAMESH JAIN. ALSO THE LOCKER OPERATION REGISTER HAS DETAILS OF ENTRY OF VARIOUS LOCKERS OPERATED. SIR WHY WOULD I MAKE SUCH AN ENTRY FOR MY OWN LOCKERS? I ADMIT THAT ON THE DATE OF SEARCH MY LOCKER FORMS WERE NOT FILLED UP. BUT I HAD SUBMITTED THE LOCKER FORMS FIL LED UP EVEN THREE WEEKS BEFORE THE LOCKERS WERE BREAK OPENED. NONE OF THE LOCKER OWNERS WERE EVEN GIVEN AN OPPORTUNITY TO PRESENT THEIR CASE. YES I AGREE THAT I HAVE NOT FULLY FOLLOW ED KNOW YOUR CUSTOMER NORM. BUT I DO NOT KNOW OF ANY SUM GUIDELI NES. MOST OF LOCKER OWNERS ARE KNOWN TO ME OR HAVE RECOMMENDED T O ME. HENCE I HAD ALLOWED THEM TO OPERATE PENDING THE SUBMISSION OF LOCKER MEMORANDUM/FORMS. Q. 7 THE PROHIBITORY ORDER U/S 132(3) OF THE INCOME TAX ACT 1961 WAS PLACED ON LOCKER NO 711 ON 29.12.08 (CORRECT DATE I S 29.12.2006) BUT THE LOCKER WAS BREAK OPENED ON 07.02.08 (CORRECT DA TE IS 07.02.2007) BECAUSE THE DETAILS OF THE OWNER OF THIS LOCKER WAS NOT SUBMITTED. YOU HAD ENOUGH TIME TO SUBMIT THE DETAILS. BUT YOU STIL L FAILED TO GIVE THE DETAILS OF THE SAME. KINDLY EXPLAIN. ANS. SIR I HAD ALREADY SUBMITTED THE LOCKER FORMS T O THE INVESTIGATION WING. I WAS UNDER THE IMPRESSION THAT THE RESPECTIVE LOCKER OWNERS SHALL BE CALLED TO EXPLAIN THEIR CASE AND ACCOUNT F OR THE CONTENTS. BUT I WAS TAKEN ABACK WHEN THE DEPARTMENT SUDDENLY DECIDE D TO BREAK OPEN THE LOCKERS. I HAD SUBSEQUENTLY SUBMITTED AFFIDAVITS AND I UNDERSTAND THAT THE RESPECTIVE LOCKER OWNERS HAVE ALSO WRITTEN TO THE INVESTIGATION WING/THEIR ASSESSING OFFICERS REGARDIN G THE SEIZURE. IN FACT WE WERE NEVER GIVEN AN OPPORTUNITY TO EVEN EXPLAIN THE CONTENTS OF LOCKERS. Q.8 I AM SHOWING YOU THE STATEMENTS OF RAMESH JAIN DILIP JAIN HIRA SINGH RAJPUT BHARAT JAIN & SURESH JAIN . DO YOU AG REE WITH THE SAME? ANS. YES THEY ALL HAD LOCKERS WITH ME AND NONE OF THE CONTENTS SEIZED FROM THEIR LOCKERS BELONG TO ME. Q.9 KINDLY EXPLAIN AS WHY THE CONTENTS SEIZED FROM LOCKER NO.711 SHOULDNT BE ADDED IN THE HANDS OF SANJAY JAIN HUF PROPRIETOR OF DALICHAND JUGRAJ SAFE DEPOSIT VAULT ? ANS.SIR AS I HAVE ALREADY SAID I AM ONLY A CUSTOD IAN OF LOCKERS AND I AM NOT IN BUSINESS OF JEWELLERY. I DO NOT HAVE FINANCIAL CAPAC ITY TO AMASS SUCH A LARGE QUANTITY OF GOLD. I BARELY MANAGE TO MEET MY EXPENSES AND CANNOT EVEN DREAM OF OWNING SUCH A LAR GE AMOUNT OF ITA NO. 4570/M/09 6 WEALTH. SIR THE GOODS BELONG TO MR. ASHOK KOTHARI. HE WAS INTRODUCED BY MY UNCLE SHREE MEGHRAJ JAIN) HE HAD TAKEN THE LO CKER NO.711 ON RENT ON 22.12.06. I HAD GIVEN HIM. A LOCKER FORM/ME MORANDUM WHICH HE WAS REQUIRED TO SUBMIT SOON.. HE ALSO GAVE THE A DVANCE LOCKER RENTAL FOR ONE SEAR ON THE SAME DATE. BUT LIE SAID THAT HE HAD SOME URGENT WORK AND STATED THAT LIE SHALL SUBMIT THE LO CKER FORM FILLED AND STAMPED LATER. HE ALSO HAD OPERATED THE LOCKER A CO UPLE OF TIMES THEREAFTER TILL 29.12.06 IN PRESENCE OF MY STAFF. Q.1O I AM SHOWING YOU THE DIARIES/PAPERS SEIZED FROM VARI OUS LOCKER DURING THE SEARCH . KINDLY EXPLAIN THE SAME. ANS.SIR NONE OF THESE BELONG TO ME AND HENCE I SHA LL NOT BE IN A POSITION TO EXPLAIN THE SAME. HOWEVER I AM SURE THAT THE SAME MAY BE EXPLAINED BY THE RESPECTIVE LOCKER OWNERS. Q.11 DO YOU WANT TO SAY ANYTHING FURTHER? ANS. SIR I WOULD AGAIN REQUEST YOUR GOODSELF TO TAKE ACCOUNT OF EVIDENCES MY FINANCIAL STATUS MY LIFE STYLE MY P ECUNIARY CAPACITY AND NOT TREAT THE SEIZURE AS MY WEALTH. 6. AO ALSO EXAMINED SHRI ASHOK KOTHARI DIRECTOR OF M/S. MASTERGOLD PVT. LTD. WHO CLAIMED OWNERSHIP OF LOCKER NO. 711. THE E XTRACT OF HIS STATEMENT IS GIVEN BY AO IN PARA 4.5 OF ASSESSMENT ORDER WHICH R EADS AS UNDER: Q.4. DO YOU KNOW SANJAY JAIN ? IF YES HOW DO YOU KNOW AND HOW LONG YOU KNOW HIM? PLEASE ELABORATE ANS. I KNOW SANJAY JAIN WHO IS HAVING PRIVATE SA FE DEPOSIT VAULT (SAFE DEPOSIT LOCKER) AT 31/33-34 RANGWALA BLDG. 3 RD AGIYARI LANE NASTA GALI ZAVERI BAZAR MUMBAI 400003. 1 AM THE SUBSCRIBER TO THE LOCKER NO 71 1 WHERE I USED TO KEEP MY STOCK. Q5. PLEASE TELL ME WHEN HAVE YOU TAKEN THE LOCKER AND IF YOU HAVE FILLED UP THE FORM? ANS. I WAS INTRODUCED TO SANJAY SAMPAT JAM BY MR.MEGHRAJ LAIN (UNCLE OL SANJAY JAM). I HAD TAKEN TH LOCKER NO.71 I ON RENT ON ITA NO. 4570/M/09 7 22.12.06. SANJAY HAD GIVEN ME A LOCKER FORM/MEMORAN DUM WHICH I WAS REQUIRED TO SUBMIT SOON. 1 ALSO GAGE THE ADVANCE LOCKER RENTAL FOR ONE YEAR ON THE SAME DATE. BUT SI NCE I WAS IN A HURRY AND I THOUGHT THAT I WILL SUBMIT THE LOCKER FO RM FILLED AND STAMPED LATER. I ALSO HAD OPERATED THE LOCKER A COUP LE OF TIMES THEREAFTER TILL 29.12.06. BUT DURING THOSE COUPLE O F TIMES I ONLY MET THE EMPLOYEES OF THE SAFE DEPOSIT VAULT AND SA NJAY JAM WAS NOT PRESENT AT THE VAULT. THEREAFTER A SEARCH A CTION WAS MOUNTED AGAINST DALICHAND JUGRAJ SAFE DEPOSIT VAULT ON 29.12.08 (CORRECT DATE IS 29.12.2006)BEFORE I COUL D SUBMIT THE LOCKER FORM TO SANJAY JAIN. Q.6 HOW OFTEN HAVE YOU BEEN OPERATING THIS LOCKER? ANS. I HAD OPERATED THIS LOCKER A COUPLE OF TIMES BEFORE THE SEARCH OPERATION. Q 7. A SEARCH ACTION ON MI/S DALICHAND JUGRAJ JOIN SAFE DEPOSIT VAULT (PROP. M/S SANJAY JAIN HUF) WAS CONDUCTED ON 29 DECEMBER 2006 AND A PROHIBITORY ORDER U/S L32(3 ) OF THE 1NCOME TAX ACT 1961 WAS PLACED ON LOCKER NO 711. WH Y YOU HAVE NOT CLAIMED THAT THIS LOCKER BELONGS TO YOU W HEN THE PROHIBITORY ORDER UP TO 7/02/2007? OFFER COMMENTS. ANS. WHEN THE SEARCH WAS CONDUCTED ON THE SAFE DEPO SIT VAULT I WAS OUT OF TOWN ON NEW YEAR VACATION. AS SOON AS I CAME BACK SANJAY INFORMED OF THE SEARCH ACTION. I HAVE F ILLED UP THE FORM THEREAFTER AND GIVEN TO SANJAY JAM. HE ALSO IN FORMED THAT IN THE STATEMENT RECORDED U/S. 132(4) HE HAS STATE D CATEGORICALLY THAT LOCKER NO 711 BELONGS TO KOTHARI . THE DUPLICATE FORM WAS ALSO FURNISHED TO THE DDIT INVES TIGATION MUMBAI BUT IGNORING THIS FACT THE PROHIBITORY ORD ER WAS OPERATED AND INCOME TAX DEPARTMENT HAS SEIZED THE M ATERIAL WHICH BELONGS TO I.E. SUBSEQUENTLY ON COMING TO KN OW OF THE SEIZURE I HAVE FILED A LETTER ON 06.03.06 WITH THE D GIT (INVESTIGATION) A PETITION FOR RELEASE OF THE SEIZ ED JEWELLERY ALONGWITH THE DETAILS OF THE PARTIES WHOSE GOLD ORN AMENTS WERE LYING IN THE LOCKER. I HAVE ALSO SUBMITTED MY STOCK REGISTER FOR MUMBAI. I HAVE ALSO FILED THE PETITION BEFORE THE CC IT-4 AND THE CIT-6 ON THE SAME DATE. SUBSEQUENTLY I HAD REC EIVED A LETTER FROM THE ITO-6(3)(3) DATED 24.05.07 CALLING FOR DETAILS INCLUDING CONFIRMATIONS OF THE PARTIES WHOSE GOLD ORNAMENTS ARE LYING IN THE LOCKER. ACCORDINGLY I HAVE SUBMITTED THE REPLY DATED - 15.06.O7 ALONG WITH CONFIRMATION OF M/S.J.K .JEWELLERS PVT.LTD. CHENNAI M/S RADHAKISHAN GOLD JEWELLERY P VT. LTD AHMEDABAD AND M/S. FASHION JEWELLERY PVT.LTD SHREE JEWELLERS AND M/S. CHAIN & CHAIN OF MUMBAI. I ALSO FILED THE GOLD RECEIPT VOUCHERS OF THE ABOVE PARTIES. ITA NO. 4570/M/09 8 Q.8 PLEASE EXPLAIN AS WHY YOU FAILED TO APPROACH T HE INVESTIGATION WING BETWEEN 29.12.08 (WHEN LOCKER W AS PLACED UNDER P.O.) AND 07.02. 08 (WHEN LOCKER WAS BREAK O PENED). ANS.I WAS OUT OF THE TOWN ON NEW YEAR EVE WHEN TH E SEARCH ACTION HAPPENED. I WAS SURPRISED TO FIND THAT MY LO CKER WAS PLACED UNDER PROHIBITORY ORDER ON MY RETURN TO MUM BAI. I FILLED THE LOCKER FORM AND REQUESTED TO GIVE MY WHEREABOUT S AND DETAILS TO THE INCOME TAX DEPARTMENT. THEREAFTER S ANJAY ASSURED ME THAT SINCE HE HAS SUBMITTED MY LOCKER FO RM WITH THE DEPARTMENT I NEED NOT WORRY AND SHALL HE CALLED TO SUBMIT THE DETAILS AND EVIDENCES FOR MY CLAIM HOWEVER I WAS N EITHER CALLED NOR GIVEN AN OPPORTUNITY TO SUBMIT MY CASE B EFORE THE INVESTIGATION WING . I WAS AGAIN SHAKEN WHEN THE INVE STIGATION WING HAD BREAK OPENED MY LOCKER AND SEIZED ALL THE CONTENTS THEREOF IN THE NAME OF SANJAY SAMPAT JAIN-HUF. Q.9. HOW DO WE BELIEVE THAT ALL THESE MATERIAL FOU ND FROM THE ABOVE LOCKERS BELONGS TO YOU? ANS: I CAN PROVE THE SAME FROM RECORDS. THE AFFIDAVIT BY S ANJAY JAIN HUF AND MY OWN AFFIDAVIT HAVE ALREADY BEEN FI LED IN THIS REGARD. FURTHER BEFORE YOU ASK ANY OTHER QUESTION I WOULD LIKE TO BRING TO YOUR KIND NOTICE THAT M/S. RADHAKISHAN GOLD JEWELLERY PVT. LTD AHMEDABAD HAS LATER BEEN ALSO C OVERED U/S- L32 AND THE CORRESPONDING ENTRY IS ALSO AVAILABLE I N THEIR BOOKS. SIR I AM A JOB WORKER AND YOUR GOODSELF CAN MAKE A NY ENQUIRIES ABOUT MY FINANCIAL STANDING OR NET WORTH L DID NOT HAVE PECUNIARY CAPACITY TO OWN GOLD STOCK OF 10.5 K ; AT ANY POINT OF MY LIFE. THE STOCK BELONG TO THE OTHER TAX PAYERS WHICH IS VERY MUCH ACCOUNTED IN THEIR BOOKS AND ALSO BEEN ACCEPTED BY THE DEPARTMENT. I HAD REGULAR TRANSACTION WITH T HESE PARTIES FOR LAST MANY YEARS. SIR NEITHER DOES SANJAY JAM H AS FINANCIAL CAPACITY TO HOLD SO MUCH OF GOLD AS HE S INTO SMAL L TIME BUSINESS OF LOCKER HIRING. I CAN PRODUCE ANY SUCH EV IDENCE OR DOCUMENT WHICH YOUR GOODSELF DESIRES TO EXAMINE IN ORDER TO ESTABLISH THE VERACITY OF MY STAND. Q.11 DO YOU WANT TO SAY ANYTHING FURTHER? ANS YES I HAVE PROPERLY VOUCHED FOR THE GOLD STOCK WEIGHING ITA NO. 4570/M/09 9 10 442.41 GMS IN MY STOCK REGISTER AND THE SAME BEL ONGS TO MY REGULAR CUSTOMERS GIVEN TO ME FOR JOB WORK. THE IT O-6(3)(3) HAS ALSO VERIFIED MY STAND BY ISSUING NOTICES U/S-L 33(6) TO THE PARTIES MENTIONED ABOVE. ALL MY PARTIES HAVE REPLIE D IN AFFIRMATIVE ALONG WITH NECESSARY DOCUMENTARY PROOF . I CAN ALSO PRESENT THEM FOR VERIFICATION AND EXAMINATION ON OA TH IF YOUR GOODSELF SO DESIRES 7. AO STATED THAT DETAILS SUBMITTED BY ASSESSEE AND THE STATEMENT OF ASSESSEE AND CLAIMANTS TO VARIOUS LOCKERS RECORDED U/S. 131 WERE EXAMINED. THE AO DURING THE COURSE OF SCRUTINY PROCEEDINGS AC CEPTED OWNERSHIPS AS CLAIMED BY VARIOUS PERSONS MENTIONED HEREIN ABOVE I N PARA-4. HOWEVER AO STATED THAT NO CLINCHING EVIDENCE REGARDING OWNERSH IP OF LOCKER NO. 711 HAS BEEN GIVEN APART FROM VERBAL TESTIMONY. THE DETAIL S ARE ONLY SELF SERVING AND WITHOUT MUCH WEIGHT. HE HAS STATED THAT CASE OF LO CKER NO. 711 IS DIFFERENT FROM THE CASE OF OTHER LOCKERS BECAUSE CONTENTS OF OTHER LOCKERS HAVE ALREADY BEEN DECLARED AS ADDITIONAL INCOME IN THE RETURNS O F RESPECTIVE OWNERS AND TAXED AS SUCH. IN VIEW OF ABOVE AO HAS CONSIDERED THE GOLD JEWELLERY VALUING RS. 89 74 630/- WHICH WAS FOUND FROM LOCKER NO. 711 AS DEEMED INCOME OF ASSESSEE AS PER SEC. 69A OF I.T. ACT AND ADDED TO IN COME OF ASSESSEE. BEING AGGRIEVED ASSESSEE FILED APPEAL BEFORE FIRST APPELL ATE AUTHORITY. 8. ON BEHALF OF ASSESSEE IT WAS CONTENDED THAT AO ACCEPTED OWNERSHIP OF CONTENTS OF 13 LOCKERS I.E. LOCKER NOS. 178 494 5 19 575 647 649 525 356 648 709 710 609 AND 200 BECAUSE RESPECTIVE PARTI ES CLAIMED OWNERSHIP OF SAID LOCKERS AND VALUE OF CASH/GOLD JEWELLERY SEIZE D FROM SAID LOCKERS WERE ADMITTED AS ADDITIONAL INCOME AND TAXES WERE PAID B Y THEIR RESPECTIVE OWNERS. WHEREAS IN RESPECT OF LOCKER NO. 711 WHICH BELONGED TO SHRI ASHOK KOTHARI OF M/S. MASTERGOLD AO CONCLUDED THAT ASSESSEE FAILED TO PRODUCE CLINCHING EVIDENCE REGARDING OWNERSHIP OF SAID LOCKER AND THE REFORE MADE ADDITION OF VALUE OF 10.50 KG OF GOLD JEWELLERY LYING IN SAID L OCKER AND VALUED AT RS. 89 74 630/- U/S. 69A OF I.T. ACT. IT WAS CONTENDED T HAT SHRI ASHOK KOTHARI OF MASTERGOLD APPEARED BEFORE AO AND CLAIMED OWNERSHIP OF LOCKER NO. 711 BUT HIS CLAIM WAS NOT ACCEPTED. IT WAS SUBMITTED THAT ASSESSEE WAS ENGAGED IN THE BUSINESS OF PROVIDING LOCKER AND CONTENTS IN T HE LOCKER ALWAYS BELONGS TO ITA NO. 4570/M/09 10 LESSEES. THEREFORE VALUE OF GOLD JEWELLERY LYING I N LOCKER NO. 711 BE TAXED IN THE HANDS OF LESSEE. 9. ON BEHALF OF ASSESSEE FURTHER SUBMISSION MADE B EFORE LD. CIT(A) ARE MENTIONED IN PARAS 2.2.3 TO 2.2.4 AT PAGES 16 TO 1 8 OF ORDER OF LD. CIT(A) AND THE SAME ARE AS UNDER: LD. COUNSEL FURTHER ARGUED THAT MR. ASHOK KOTHARI HAD KEPT THE SAID 10.5 KG. OF GOLD JEWELLERY IN LOCKER NO. 711 A FTER COMPLETION OF JOB WORK CARRIED OUT BY HIM. IT WAS FURTHER STATED THAT MR. ASHOK KOTHARI HAD TAKEN GOLD BULLION FROM HIS CLIENTS AS PER THE PARTICULARS GIVEN BELOW: SR. NO. NAME OF THE CLIENTS OF MR. ASHOK KOTHARI C/O MASTER GOLD PVT. LTD. WEIGHT OF GOLD BULLION RECEIVED FOR CONVERSION INTO GOLD ORNAMENTS (IN GMS.) 1. SHREE JEWELLERS NO. 47 MAHAKALI BLDG. SHOP NO. 20 1 ST FLOOR PYDHOONIE MUMBAI-400 003 1085.00 2. FASHION JEWELLERY PVT. LTD. 118 KANSARA CHAWAL 1 ST FLOOR SHOP NO. 13 COTTON EXCHANGE OPP. BANK OF INDIA 2182.00 3. RADHA KRISHNA GOLD JEWELLERY (P) LTD. 101 SUNRISE SHOPPING MILL NR. SWAMINARAYAN MANDIR JUDGE BUNGLOW ROAD VASTRAPUR AHMEDABAD-15 2716.910 4. ARVIND R. MISTRY LALBAUGH MUMBAI-12 343.900 5. J.K. JEWELLERS (P) LTD. 216/42 NSC BOX ROAD DHANALAXMI COMPLEX CHENNAI-600 079 2149.00 6. CHAIN & CHAIN 167/171 1 ST FLOOR GAMBHIR BHAWAN NR. BANK OF INDIA SHEIKH MEMON STREET MUMBAI-02 1965.560 IT WAS FURTHER STATED THAT THE SAID M/S. SHREE JEW ELER HAD GIVEN 105 GMS OF PURE GOLD TO M/S. MASTER GOLD PVT. LTD. ON 28-12-2006 FOR MANUFACTURING OF GOLD ORNAMENTS AND JEWELLERY. SIMI LARLY FASHION JEWELLERY PVT. LTD. HAD GIVEN 2182 GMS PURE GOLD TO M/S. MASTER GOLD PVT. LTD. FOR MANUFACTURING OF GOLD ORNAMENTS AND J EWELLERY. RADHA KRISHNA GOLD JEWELLERY PVT. LTD. AHMEDABAD ISSUED GOLD BAR TO THE SAID M/S. MASTER GOLD PVT. LTD. FOR MAKING GOLD ORN AMENTS. SIMILARLY ITA NO. 4570/M/09 11 ARVIND R MISTRY LALBAUGH MUMBAI HAD STATED THAT H E HAD ALSO GIVEN HIS PERSONAL JEWELLERY WEIGHING 343.9 GMS. TO M/S. MASTER GOLD PVT. LTD. ON SOME UNSPECIFIED DATE FOR MANUFACTURING NEW GOLD ORNAMENTS. SIMILARLY IT WAS STATED THAT J.K. JEWEL LERS PVT. LTD. CHENNAI HAD ISSUED GOLD BARS ON 28-12-2006 FO R MANUFACTURING NEW GOLD ORNAMENTS. SIMILARLY CHAIN & CHAIN HAD S TATED THAT THEY HAD GIVEN 1810.690 GMS PURE GOLD FOR MANUFACTURING GOLD JEWELLERY TO M/S. MASTER GOLD PV T. LTD. IT WAS FURTHER CONTENTED BY THE LEARNED COUNSEL THAT ALL T HESE GOLD BULLION WERE DULY INCORPORATED IN THE BOOKS OF ACCOUNTS OF RESPECTIVE CLIENTS OF M/S. MASTER GOLD PVT. LTD. LEARNED COUNSEL HAS A RGUED THAT HIS BUSINESS OF SAFE DEPOSIT VAULT WAS DONE PURELY ON TRUST BASIS AND ONLY WITH KNOWN PARTIES. ANY THIRD PARTY OR ANY ORD INARY CUSTOMERS CANNOT BE ACCEPTED AS CLIENT OF THE APPELLANT. THE CUSTOMERS ARE NOT APPELLANTS GENERAL CLIENTS. 2.2.4 IT WAS FURTHER ARGUED THAT THE APPELLANT CAN NOT BE MADE LIABLE TO PAY TAX ON DEEMED BASIS U/S. 69A OF THE ACT IF SOME JEWELLERY IS FOUND AND SEIZED FROM INSIDE THE LOCKER ALLOTTED TO A THIRD PARTY. IT WAS ARGUED THAT THE OWNERSHIP LOCKERS LIES WITH THE CU STOMERS. LEARNED COUNSEL ALSO VEHEMENTLY OPPOSED TO THE APPLICATION OF PROVISIONS OF SECTION 292C OF THE ACT IN THE CASE OF THE APPELLANT. HE HAD STATED THAT THE APPELLANT WAS A CUSTODIAN OF THE SAID LOCKER NO. 711 AND THEREFORE HE CANNOT BE HELD OWN ER OF THE CONTENTS OF THE SAID LOCKER. HE STATED THAT THE APP ELLANT DID NOT KNOW THE CONTENTS OF THE LOCKER. MERELY BECAUSE THE LOCK ER NO. 711 WAS BROKE OPEN BY THE DEPARTMENT THE APPELLANT CANNOT BE HELD AS THE OWNER OF THE JEWELLERY. HE HAS FURTHER STATED THAT THIRD PARTY EVIDENCE HAS MORE WEIGHTAGE THAN THE BLIND APPLICATION 69A. HE FURTHER RELIED ON THE FOLLOWING CASE LAWS: 1) 87ITR349(SC)CITVS.DAULATRAM RAWETMAL 2) 49 ITR 165 (SC) - KATWA DEVADATION & ORS. VS. CIT (3) 163 TAXMAN 399 (RAJ.) MANGILAL AGARWAL VS. CI T (4) 30 ITR 181 (SC) MEHTA PARIKH & CO. VS. CIT (5) 99 ITD) 625 (LUCKNOW) INDER KUMAR BACHANI (HUF) VS. ITO (6) 117 ITR 261 M.J. CHERIAN VS. CIT (7) 181 ITR 340 345 (CAL.) CIT VS. SURAJMAL NAGA R MULL (8) 164 ITR 144 (ALL) KRIPAL SINGH VS. CIT 10. THE LD. CIT(A) AFTER CONSIDERING AFORESAID CAS E LAWS CITED BY ASSESSEE BEFORE HIM HAS STATED THAT EXPLANATION FURNISHED BY ASSESSEE WERE NOT CONSISTENT AND HIS STATEMENTS ARE VACILLATING. FIRS TLY ASSESSEE STATED IN HIS STATEMENT THAT LOCKER NO. 711 WAS ALLOTTED TO ONE M R. MAYUR KOTHARI. ITA NO. 4570/M/09 12 SUBSEQUENTLY IN HIS LETTER DT. 20.1.2007 ASSESSEE STATED THAT SAID LOCKER NO. 711 IS ALLOTTED TO KOTHARI. THE LD. CIT(A) STATE D THAT IN HIS SUBSEQUENT STATEMENT ASSESSEE STATED THAT SAID LOCKER NO. 711 WAS ALLOTTED TO ONE MR. ASHOK KOTHARI AND FINALLY DURING THE ASSESSMENT PR OCEEDINGS ASSESSEE STATED THAT CONTENTS OF SAID LOCKER NO. 711 BELONGED TO M/ S. MASTER GOLD PVT. LTD. THE LD. CIT(A) HAS STATED THAT SAID MASTER GOLD PVT . LTD. IN TURN SHIFTED THE OWNERSHIP OF SEIZED JEWELLERY TO SIX OTHER CLIENTS LOCATED AT MUMBAI AHMEDABAD AND CHENNAI WHO HAD SUPPLIED NOT THE SEI ZED JEWELLERY BUT RAW MATERIALS IN THE FORM OF PURE GOLD OLD GOLD ORNAME NTS AND GOLD BARS ETC. THE LD. CIT(A) HAS STATED THAT ASSESSEE PRODUCED SHRI A SHOK KOTHARI OF MASTER GOLD PVT. LTD. BEFORE AO DURING THE COURSE OF ASSES SMENT PROCEEDINGS AND HE STATED THAT HE HAD TAKEN LOCKER NO. 711 ON RENT ON 22.1.2006. HE COULD NOT FILL UP THE FORM OF MEMORANDUM OF LEASE AGREEMENT B UT HE OPERATED LOCKER A COUPLE OF TIMES BEFORE 29.12.2006 WHEN SEARCH & SEI ZURE ACTION TOOK PLACE. SHRI ASHOK KOTHARI STATED THAT NEW GOLD ORNAMENTS W EIGHING 10.5 KGS. VALUED AT RS. 89 74 630/- WERE THE PRODUCT OF GOLD/BULLION /PURE GOLD/OLD GOLD ORNAMENTS RECEIVED BY MASTER GOLD PVT. LTD. FROM I TS CLIENTS LOCATED IN MUMBAI AHMEDABAD AND CHENNAI. HOWEVER LD. CIT(A) DID NOT ACCEPT SAID EXPLANATION OF ASSESSEE. WE CONSIDERED IT PRUDENT T O REPRODUCE PARA 2.3.5 AND 2.3.6 OF ORDER OF LD. CIT(A) WHICH READ AS UNDER : FOR DECIDING THE ISSUE AT HAND THE ARGUMENTS TAKEN UP BY THE APPELLANT HAVE TO BE EXAMINED CAREFULLY AND DISPASS IONATELY. WHEREAS FIRSTLY THE APPELLANT HAD STATED ON THE D ATE OF SURVEY AND FIRST DATE OF SEARCH AND SEIZURE THAT THE LOCKER NO . 711 BELONGED TO ONE MR. MAYUR KOTHARI. HE FURTHER ADMITTED THAT NEI THER ANY MEMORANDUM OF LEASE AGREEMENT WAS EXECUTED NOR ANY DOCUMENTARY EVIDENCE WAS AVAILABLE IN THE PREMISES NOR ANY IDENTITY PARTICULARS NOR ANY CREDENTIAL ABOUT MR. M AYUR KOTHARI WAS OBTAINED LIKE PAN IDENTITY CARD VOTER IDENTITY CA RD OF THE SAID MAYUR KOTHARI. SECONDLY HE CHANGED THE NAME OF MR. MAYUR KOTHARI TO MR. KOTHARI ONLY. FOR 39 DAYS I.E. FROM THE DATE OF FIR ST SEARCH & SEIZURE OPERATION ON 29-12-2006 TILL 07-02-2007 HE KEPT ON SAYING THAT LOCKER NO. 711 WAS ALLOTTED TO MR. KOTHARI. THIRDLY DURING THE ASSESSMENT PROCEEDING HE PRODUCED MR. ASHOK KOTHARI WHO STATED BEFORE THE ASSESSING OFFICER THAT THE SAID SEIZED J EWELLERY WEIGHING ITA NO. 4570/M/09 13 10.5 KG. VALUED AT RS. 89 74 630/- WAS OWNED BY M/S . MASTER GOLD PVT. LTD. FOURTHLY THE SAID M/S. MASTER GOLD PVT. LTD. HAD IN TURN TAKEN PURE GOLD / GOLD BULLION BID ORNAMENTS FROM T HEIR CLIENTS NAMELY SHREE JEWELER MUMBAI FASHION JEWELLERY PVT . LTD. MUMBAI RADHA KRISHNA GOLD JEWELLERY PVT. LTD. AHME DABAD ARVIND R MISTRY J.K. JEWELLERS PVT. LTD. CHENNAI AND CHAIN & CHAIN MUMBAI. IT IS INTERESTING TO NOTE THAT MIS. SHREE JEWELER HAD ALLEGEDLY GIVEN 1085 GMS GOLD ON 28-12-06 TO MIS. MASTER GOLD PVT. LTD. FOR MANUFACTURING OF PRESCRIBED GOLD JEWELLERY . FIFTHLY HOW AND WHEN AND IF AT ALL THE SAID PURE GOLD OF 1085 GMS W ERE MANUFACTURED INTO PRESCRIBED NEW JEWELLERY WITHIN A DAY OR LESS THAN 24 HOURS HAS NOT BEEN EXPLAINED. SIXTHLY THE WORKNOTE THE INST RUCTIONS FOR MANUFACTURING PARTICULAR TYPES OF RINGS CHAINS PE NDANTS BANGLES ETC. WERE ALSO NOT PRODUCED BEFORE THE INVESTIGATIO N WING NOR BEFORE THE ASSESSING OFFICER NOR BEFORE THE UNDERSIGNED. S IMILARLY SUCH NOTES AND SPECIFIC INSTRUCTIONS AS TO WHICH KIND OF GOLD JEWELLERY RINGS BANGLES PENDANTS ETC. WERE NEITHER PRODUCED BEFORE THE INVESTIGATION WING NOR BEFORE THE LEARNED ASSESSING OFFICER NOR BEFORE THE UNDERSIGNED. SEVENTHLY HOW AND WHEN THE GOLD / BULLION ARRIVED FROM AHMEDABAD AND CHENNAI WAS ALSO NOT EXP LAINED. NO MATERIAL OR EVIDENCE WAS PLACED BEFORE THE UNDERSIG NED TO PROVE THE TRANSPORTATION OF GOLD / BULLION! GOLD BAR FROM AHM EDABAD AND CHENNAI TO M/S. MASTER GOLD PVT. LTD. EIGHTHLY IT IS INTERESTING THAT THE SAID MR. ASHOK KOTHARI HAD DEPOSED BEFORE THE A SSESSING OFFICER AND HAS ADMITTED THAT HE HAD GONE OUT OF TO WN ON NEW YEAR VACATION DURING THE COURSE OF SEARCH & SEIZURE OPER ATION AND AS SOON AS HE CAME BACK THE APPELLANT INFORMED HIM OF THE SEARCH & SEIZURE ACTION. IF THE SAID MR. ASHOK KOTHARI WAS O UT OF TOWN THEN HOW SUCH GOLD / BULLION / PURE GOLD /WAS RECEIVED B Y HIM ON 28-12- 2006 / 29-12-2006 AND CONVERTED INTO NEW PRESCRIBED JEWELLERY AND THEN KEPT INTO LOCKER NO. 711 IS NOT EXPLAINED. NIN ETHLY DAILY LOCKER OPERATION REGISTER DOES NOT SHOW ANY ENTRY IN THE N AME OF MASTER GOLD PVT. LTD. NOR IN THE NAME OF MR. ASHOK KOTHARI NOR IN THE NAME OF MR. MAYUR KOTHARI ON 28-12-2006 OR ON 29-12-2006 . THERE ARE SEVERAL GAPS AND HOLES IN THE EXPLANATION GIVEN BY THE APPELLANT. HIS EXPLANATIONS ARE NOT BEING SUBSTANTIATED BY MATERIA L EVIDENCE. WHEREAS THE DEPARTMENT FOUND AND SEIZED NEW GOLD O RNAMENTS OF SPECIFIED PARTICULARS AT LOCKER NO.711 THE APPELLA NT IS TRYING TO SHIFT OWNERSHIP. WHETHER NEW GOLD ORNAMENTS BELONGED TO O NE MR. MAYUR KOTHARI WHO HAS NOT BEEN PRODUCED WHOSE PARTICULAR S HAS NOT BEEN FURNISHED BEFORE ANY AUTHORITY TILL DATE IS NOT EX PLAINED. 2.3.6 TILL THE DATE OF THIS APPELLATE ORDER THE AP PELLANT HAS NOT EXPLAINED AS TO WHO WAS MR. MAYUR KOTHARI TO WHOM H E HAD LEASED ITA NO. 4570/M/09 14 LOCKER NO. 711. NEITHER ANY MEMORANDUM OF LEASE AGR EEMENT NOR ANY IDENTITY OF MR. MAYUR KOTHARI NOR ANY PAN CARD NOR ANY DOCUMENTS EXPLAINING THE IDENTITY OF MR. MAYUR KOTH ARI HAVE BEEN PRODUCED. THEREFORE THIS EXPLANATION IS UNSUBSTANT IATED AND HAS TO BE REJECTED. APPELLANTS SECOND EXPLANATION IS THAT THE LOCKER WAS ALLOCATED TO ONE MR. KOTHARI WHOSE IDENTITY CREDEN TIALS WERE NOT FURNISHED TO THE VARIOUS OFFICERS FOR 39 DAYS AS A RESULT OF WHICH THE GOLD ORNAMENTS WERE SEIZED. THE SAID MR. KOTHARI SU BSEQUENTLY TURNS OUT TO BE ONE MR. ASHOK KOTHARI WHO ALSO DEN IES THE OWNERSHIP OF THE SAID NEW GOLD ORNAMENTS IN HIS OWN NAME. IT IS STATED THAT MR. ASHOK KOTHARI HAD KEPT THE JEWELLER Y OF M/S. MASTER GOLD PVT. LTD. IN THE SAID LOCKER NO. 711. WHY AND WHEN THE SAID MASTER GOLD PVT. LTD. HAD GIVEN NEW GOLD ORNAMENTS WEIGHING 10.5 KG TO MR. ASHOK KOTHARI AND WHY THE SAME WERE KEPT IN A SECRETIVE AND INCOGNITO MANNER IN THE LOCKER NO. 711 THAT TOO WITHOUT ENTERING INTO ANY MEMORANDUM OF UNDERSTANDING HAS ALSO NOT B EEN EXPLAINED. MR. ASHOK KOTHARI IN REPLY TO QUESTION N O. 7 OF THE STATEMENT RECORDED U/S. 131 BY LEARNED ASSESSING OF FICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD ADMITTED THAT HE WAS OUT OF TOWN ON NEW YEAR VACATION AND THAT WHEN HE CAME BAC K THE APPELLANT INFORMED HIM OF THE SEARCH & SEIZURE ACTI ON. IF THE SAID EXPLANATION OF MR. ASHOK KOTHARI IS ACCEPTED AS TRU E THEN HOW DID HE ACCEPT THE GOLD BULLION ON 28-12-2006 WHEN HE WA S OUT OF TOWN - REMAINS UNEXPLAINED. FURTHER WHEN MR. ASHOK KOTHAR I WAS OUT OF TOWN HOW AND WHEN THESE GOLD BULLIONS PURE GOLD A ND OLD GOD ORNAMENTS WERE RECEIVED BY HIM AND ALSO MANUFACTURE D BY HIM WITHIN 24 HOURS OF RECEIVING THE SAME ON 28-12-2006 FROM M/S. SHREE JEWELER IS UNEXPLAINABLE. WHEREAS THE SEIZED NEW GOLD JEWELLERY IS BEING ADMITTED TO BE KEPT BY M/S. MAST ER GOLD PVT. LTD. BUT THE SAID COMPANY HAS ALSO NOT OWNED THE SAID JE WELLERY. INSTEAD OF OWNING THE SAME THE SOURCES ARE BEING FURTHER D ISSIPATED TO SIX OTHER CLIENTS SPREAD OVER IN MUMBAI AHMEDABAD AND CHENNAI. ALL THESE EXPLANATIONS ARE BEING FURNISHED AT THE ASSES SMENT STAGE AND POST SEARCH & SEIZURE OPERATION. SUCH EXPLANATION F URNISHED AFTER THE SEARCH & SEIZURE OPERATION LACKS CREDIBIIITY AN D LOSES EVIDENTIARY . VALUE. MOREOVER THE EXPLANATION AFTER EXPLANATION GIVEN BY THE APPELLANT HIS WITNESSES HAVE FALLEN FLAT IN THE SEN SE THAT THEY HAVE NOT BEEN BY CREDIBLE INDEPENDENT MATERIAL EVIDENCES AND THEY DO NOT TEST OF COMMON SENSE AND SIMPLE LOGIC. IT IS NO T THAT ANY AND EXPLANATION GIVEN BY THE APPELLANT HAS TO BE ACCEPT ED AS CREDIBLE EVIDENCE. THE EXPLANATION HAS TO BE SUPPORTED AND C ORROBORATED BY MATERIAL EVIDENCES AND THE SAME HAS TO BE PRIMA FAC IE SATISFACTORY. IN THE PRESENT CASE THE APPELLANT HAS FAILED TO EX PLAIN THE NATURE MODE AND SOURCE OF POSSESSION OF THE SAID 10.5 KG O F NEW GOLD ORNAMENTS FROM ITS BUSINESS PREMISES PARTICULARLY F ROM LOCKER NO. 711. IN SPITE OF THE SUFFICIENT OPPORTUNITIES PROVI DED BY THE INVESTIGATION WING AND ALSO BY THE LEARNED ASSESSIN G OFFICER NO MATERIAL EVIDENCE WAS PRODUCED BY HIM TO SATISFACTORILY EXPLAIN THE NATURE MODE AND SOURCE OF SUCH NEW GOLD JEWELLERY FOUND AND SEIZED FROM THE SAID LOCKER NO. 711 SITUATED IN THE BUSINESS ITA NO. 4570/M/09 15 PREMISES OF THE APPELLANT. IN DECIDING SIMILAR TYPE OF CASES HUMAN PROBABILITY HAVE TO BE TAKEN INTO ACCOUNT AS HELD B Y HONORABLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT 2 14 ITR 801(SC) AND THE DECIDING AUTHORITY HAS TO LOOK INTO THE CIRCUMSTANCES WITHOUT ENTIRELY DEPENDING UPON THE A PPELLANT OR THE STATEMENTS MADE BY THE WITNESSES / PARTIES AS HELD BY HONORABLE SUPREME COURT IN THE CASE OF CIT VS. DURGAPRASAD MO RE 82 ITR 540 (SC). THUS IF WE APPLY THIS TEST OF JUDGMENT PROBAB ILITIES IT IS HIGHLY IMPROBABLE THAT VARIOUS CLIENTS OF M/S. MASTER GOLD PVT. LTD. LOCATED IN MUMBAI AHMEDABAD AND CHENNAI WOULD GIVEN THEIR GOLD TO MASTER GOLD PVT. LTD. WHICH WOULD HAVE IN LESS THAN 24 HOURS OF THEIR ISSUANCE AND KEPT IN THE NO. 711 BY MR. ASHOK KOTHA RI WHILE HE WAS NOT IN THE TOWN AND WHEN HE HAS NOT SIGNED IN THE P RESCRIBED DAILY LOCKER OPERATION REGISTER AND WHEN NO MEMORANDUM OF LOCKER LEASE AGREEMENT WAS SIGNED NOR MADE AVAILABLE IN THE BUSI NESS PREMISES OF THE APPELLANT DURING THE SEARCH SEIZURE OPERATIO N WHICH CONTINUED FOR 39 DAYS. HAVING REGARD TO THE FACTS AND CIRCUMS TANCES THE ACTION OF THE LEARNED ASSESSING OFFICER IN CHARGING THE SA ME TO TAX U/S. 69A READ WITH SEC. 292C OF THE ACT HAS TO BE UPHELD. 11. IN VIEW OF ABOVE LD CIT(A) HAS NOT ACCEPTED VER ACITY OF STATEMENTS OF SHRI ASHOK KOTHARI AND HAS STATED THAT EVIDENCES DO NOT DISCLOSE THE BASIS ON WHICH STATEMENT WERE MADE. 12. THE LD. CIT(A) HAS ALSO STATED THAT CASES CITED ON BEHALF OF ASSESSEE ARE NOT RELEVANT AND DISTINGUISHABLE ON THE FACTS A ND CIRCUMSTANCES OF THE CASE. HENCE LD. CIT(A) REJECTED THE EXPLANATION O F ASSESSEE AND CONFIRMED ACTION OF AO. THEREFORE ASSESSEE IS IN FURTHER AP PEAL BEFORE TRIBUNAL. 13. THE LD. AR REFERRED TO STATEMENTS RECORDED DURI NG COURSE OF SURVEY AND/OR SEARCH AND SEIZURE OPERATION AND ALSO AT THE TIME OF ASSESSMENT PROCEEDINGS. HE REFERRED TO QUESTIONS AND ANSWERS WHICH ARE REPRODUCED BY AO IN ASSESSMENT ORDER AND RELEVANT EXTRACT THEREOF HAS ALSO BEEN MENTIONED HEREIN ABOVE. LD. AR SUBMITTED THAT ASSESSEE STATE D THAT IN RESPECT OF CERTAIN LOCKERS NECESSARY DOCUMENTATION COULD NOT BE COMPLETED BEFORE SOME OF THE LESSEES WERE ALLOWED TO OPERATE LOCKERS . LD. AR REFERRED PAGE-3 OF ASSESSMENT ORDER AND SUBMITTED THAT OUT OF 14 LO CKERS IN RESPECT OF WHICH DOCUMENTATION WERE NOT FOUND AT THE TIME OF MAKING SEARCH AND SEIZURE OPERATION; BUT AO HIMSELF ACCEPTED THAT 13 LOCKERS OUT OF 14 LOCKERS DID NOT ITA NO. 4570/M/09 16 BELONG TO ASSESSEE AND ACCORDINGLY CASH/JEWELLERY F OUND THEREIN WERE CONSIDERED IN THE HANDS OF OTHERS. HE SUBMITTED THA T EVEN IN RESPECT OF LOCKER UNDER CONSIDERATION I.E. LOCKER NO. 711 ASSESSEE S TATED THAT IT WAS GIVEN TO SHRI KOTHARI AND LATER ON GAVE FULL NAME I.E. ASHOK KOTHARI OF MASTER GOLD PVT. LTD. HE SUBMITTED THAT THERE WAS NO CONTRARY STATEM ENT MADE BY ASSESSEE. HE FURTHER SUBMITTED THAT AO EVEN EXAMINED SHRI ASH OK KOTHARI AND REFERRED PARA 4.5 OF ASSESSMENT ORDER. LD. AR SUBMITTED THA T SHRI ASHOK KOTHARI IN HIS STATEMENT MADE ON OATH U/S. 131 CONFIRMED THAT SAID LOCKER NO. 711 HAD BEEN TAKEN BY HIM ON RENT ON 22.12.2006 BUT HE COUL D NOT COMPLETE REQUISITE DOCUMENTATIONS. THE LD. AR REFERRED TO QUESTION NO . 5 AND ANSWER THERETO WHICH ARE STATED BY AO AT PAGE-7 OF ASSESSMENT ORDE R. LD. AR FURTHER SUBMITTED THAT SHRI ASHOK KOTHARI ADMITTED THAT HE OPERATED SAID LOCKER A COUPLE OF TIME FROM 22.12.2006 TO 29.12.2006. HE S UBMITTED THAT SHRI ASHOK KOTHARI ALSO ADMITTED IN HIS STATEMENT RECORDED U/S . 131 THAT JEWELLERY IN THE SAID LOCKER FOUND BELONGED TO HIM AND HE ALSO FURNI SHED CONFIRMATIONS FROM CONCERNED PARTIES FROM WHOM HE RECEIVED SAID JEWELL ERY. LD. AR REFERRED TO PAGE 152 OF PAPER BOOK AND SUBMITTED THAT IT WAS A MEMORANDUM OF LOCKER RENTAL DT. 22.12.2006 WHICH WAS ALSO FILED BEFORE A O THAT SAID LOCKER WAS GIVEN TO MASTER GOLD PVT. LTD. ON RENT AND ITS DIRE CTOR SHRI ASHOK KOTHARI SIGNED IT. LD. AR SUBMITTED THAT AO DID NOT ACCEPT THE LEASE OF SAID LOCKER TO SHRI ASHOK KOTHARI MERELY BECAUSE HE DID NOT ADMIT THAT JEWELLERY FOUND WAS HIS UNDISCLOSED INCOME BUT EXPLAINED THE SAME THAT JEWELLERY FOUND WAS RECEIVED BY HIM FOR THE PURPOSE OF MANUFACTURING OF GOLD ORNAMENTS FOR HIS CLIENTS AND WHEREAS IN RESPECT OF OTHER LOCKERS CO NCERNED PARTIES OFFERED CASH AND JEWELLERY FOUND THEREIN AS UNDISCLOSED INC OME. LD. AR REFERRED PAGES-38 TO 41 OF PAPER BOOK WHICH IS A COPY OF STA TEMENT OF KARTA OF ASSESSEE SHRI SANJAY JAIN WHICH WAS RECORDED U/S. 1 31 OF THE ACT ON 19 TH JANUARY 2007 AND SUBMITTED THAT IT WAS STATED IN R EPLY TO QUESTION NO.7 THAT ASSESSEE WAS MAINTAINING BOOKS OF ACCOUNT IN RESPEC T OF HIS BUSINESS AND ALSO FURNISHED THE SAME FOR VERIFICATION. HE FURTHER SU BMITTED THAT ASSESSEE IN HIS REPLY TO QUESTION NO. 14 STATED INTER-ALIA THAT LOC KER NO. 711 BELONGED TO SHRI KOTHARI. HE ALSO STATED THAT FULL NAMES AND COMPLE TE ADDRESSES OF ALL 17 ITA NO. 4570/M/09 17 LOCKERS INCLUDING LOCKER NO. 711 WOULD BE GIVEN LAT ER ON ALONGWITH LOCKER KEYS. THE LD. AR AGAIN REFERRED TO PAGES 50 TO 52 OF PAPER BOOK WHICH IS A COPY OF STATEMENT RECORDED ON 7.2.2007 OF KARTA OF ASSESSEE. HE SUBMITTED THAT SAID STATEMENT WAS TAKEN U/S. 132(4) OF THE AC T AND ASSESSEE SUBMITTED THAT DETAILS IN RESPECT OF SOME OF THE LOCKERS WERE GIVEN AND ALSO STATED THAT DETAILS IN RESPECT OF BALANCE LOCKERS WOULD BE FURN ISHED AFTER COLLECTING THE SAME. LD. AR SUBMITTED THAT ASSESSEE STATED THAT SA ID LOCKERS FOR WHICH DOCUMENTATION WERE NOT COMPLETED ON THE DATE OF SEA RCH AND SEIZURE DID NOT BELONG TO HIM BUT BELONGED TO CONCERNED PARTIES. L D. AR REFERRED PAGE 192 OF PAPER BOOK AND SUBMITTED THAT M/S. MASTER GOLD P VT. LTD. REQUESTED FOR RELEASE OF JEWELLERY FROM LOCKER NO. 711 AND DEPART MENT VIDE ITS LETTER DT. 15.3.2007 DIRECTED TO GET IN TOUCH WITH ITS AO. LD. AR SUBMITTED THAT DEPARTMENT INITIATED PROCEEDINGS BY ISSUING NOTICE U/S. 153C OF THE ACT AGAINST MASTER GOLD PVT. LTD. BUT LATER ON DROPPED THE SAME AND REFERRED TO PAGE 114 OF PAPER BOOK TO SUBSTANTIATE ITS SUBMISSI ON WHICH IS A COPY OF LETTER DT. 16 TH DECEMBER 2008 ISSUED BY DEPARTMENT FOR DROPPING T HE PROCEEDINGS U/S. 153C OF THE ACT AGAINST MASTER GO LD PVT. LTD. LD. AR FURTHER REFERRED TO PAPER 115 OF PAPER BOOK AND SUBMITTED T HAT NOTICE U/S. 142(1) OF THE ACT DT. 18 TH NOVEMBER 2008 WAS ISSUED TO MASTER GOLD PVT. LTD TO ENQUIRE IN RESPECT OF JEWELLERY SEIZED FROM LOCKER NO. 711. HE SUBMITTED THAT REQUISITE DETAILS WERE FILED BY MASTER GOLD PVT. LT D. ALONGWITH CONFIRMATION LETTERS FROM CONCERNED PARTIES AND DEPARTMENT DID N OT PROCEED AGAINST MASTER GOLD PVT. LTD. THE LD. AR REFERRED TO PAGES 61 TO 63 OF PAPER BOOK WHICH IS A COPY OF LETTER DT. 8.12.2008 AND SUBMITT ED THAT REQUISITE CONFIRMATIONS AND RECEIPTS FROM CONCERNED PARTIES W ERE FILED THAT GOLD/JEWELLERY FOUND FROM LOCKER NO. 711 BELONGED T O RESPECTIVE PARTIES AND THE SAME WAS GIVEN BY THEM TO MASTER GOLD PVT. LTD FOR THE PURPOSE OF MANUFACTURE OF GOLD JEWELLERY AND REFERRED TO PAGES 64 TO 74 AND 112 TO 113 OF PAPER BOOK TO SUPPORT HIS ABOVE CONTENTION. TH E LD. AR SUBMITTED THAT LD. CIT(A) DID NOT CONSIDER SAID EVIDENCES PLACED O N RECORD AND CONFIRMED ADDITION MADE BY AO ON PRESUMPTIONS. HE SUBMITTED THAT ASSESSEE DISCHARGED HIS ONUS AND FILED AN AFFIDAVIT NOT ONLY FROM HIS KARTA BUT ALSO ITA NO. 4570/M/09 18 THEIR CONCERNED PERSON TO WHOM LOCKER WAS LET OUT A ND ALSO CONFIRMATION FROM PARTIES WHO HAD GIVEN GOLD TO SHRI KOTHARI BU T LD. CIT(A) IGNORED ALL EVIDENCES. HE SUBMITTED THAT ADDITION MADE BY AUTH ORITIES BELOW U/S. 69A OF THE ACT OF VALUE OF JEWELLERY FOUND IS NOT JUSTIFIE D WHEN ASSESSEE HAD DISCHARGED HIS ONUS. 14. ON THE OTHER HAND LD. DEPARTMENTAL REPRESENTAT IVE SUPPORTED ORDERS OF AUTHORITIES BELOW. HE SUBMITTED THAT LD. CIT(A) HAS EXAMINED ALL ASPECTS IN DETAIL AND FOUND THAT ASSESSEE HAD GIVEN CONTRAR Y VERSION BEFORE LOWER AUTHORITIES. HE SUBMITTED THAT FIRSTLY ASSESSEE ST ATED THAT LOCKER NO. 711 WAS GIVEN ON HIRE TO ONE MR. MAYUR KOTHARI AND THEREAFT ER STATED NAME AS KOTHARI AND LATER ON SUBSTITUTED AS ASHOK KOTHARI. LD. DR SUBMITTED THAT ON THE DATE OF SURVEY NO DOCUMENTS WERE AVAILABLE WITH ASSESSE E IN RESPECT OF ALLOTMENT OF LOCKERS AND IF ANY EVIDENCE IS FURNISHED LATER O N THEY ARE SELF SERVING DOCUMENTS AND HAVE BEEN RIGHTLY IGNORED BY LD. CIT( A). HE FURTHER SUBMITTED THAT THERE WAS NO EVIDENCE FURNISHED BEFO RE ASSESSING AUTHORITY AND/OR LD. CIT(A) WHICH COULD PROVE THAT SAID JEWEL LERY/GOLD WAS HANDED OVER BY THE PARTIES TO MASTER GOLD PVT. LTD. LD. DR REF ERRED TO PARA 2.3.5 OF ORDER OF LD. CIT(A) AND SUBMITTED THAT LD. CIT(A) AFTER C ONSIDERING THE NOTE WHICH PARTIES HAD GIVEN CLAIM THAT THEY HAD GIVEN GOLD/PU RE GOLD/OLD JEWELLERY TO MASTER GOLD PVT. LTD. FOR REMAKING BUT FOUND THAT SAID EXPLANATIONS WERE NOT SUBSTANTIATED BY MATERIAL EVIDENCE. HE FURTHER SUB MITTED THAT IT WAS HIGHLY IMPROBABLE TO ALLOW TO OPEN THE LOCKER ON 22 ND DECEMBER 2006 WITHOUT TAKING ANY DOCUMENTS FROM HIRER. HE REFERRED TO PA GES 163 TO 183 OF PAPER BOOK AND SUBMITTED THAT MASTER GOLD PVT. LTD FILED APPLICATION FOR RELEASE OF JEWELLERY FROM LOCKER NO. 711 BEFORE ITO -6(3)-3 AN D NOT BEFORE ITO CENTRAL CIRCLE AND THEREFORE THERE WAS NO OCCASION TO EXAMI NE BY CONCERNED AO PAPERS SUBMITTED BY MASTER GOLD PVT. LTD CLAIMING T O HIRE LOCKER THAT GOLD JEWELLERY ETC. FOUND FROM SAID LOCKER BELONGED TO T HE PARTIES AS CLAIMED BY SHRI ASHOK KOTHARI. THE LD. DR SUBMITTED THAT AN A FFIDAVIT FILED BY ASSESSEE HAS NO EVIDENTIARY VALUE. HE FURTHER SUBMITTED THA T PROCEEDINGS INITIATED BY MASTER GOLD PVT. LTD WERE DROPPED AS ADDITION HAD B EEN MADE IN THE HANDS OF ITA NO. 4570/M/09 19 ASSESSEE. LD. DR SUBMITTED THAT STOCK REGISTER FIL ED AFTER SEARCH COULD NOT BE ACCEPTED THAT IT WAS POSSIBLE TO MANIPULATE ENTRIES THEREIN. THE LD. DR FURTHER SUBMITTED THAT DOCUMENTS WHICH WERE FILED B Y MASTER GOLD PVT. LTD PLACED AT PAGES 163 TO 183 OF PAPER BOOK THAT SAID GOLD JEWELLERY FROM LOCKER NO. 711 BELONGED TO OTHER PARTIES CONCERN NAMELY SH REE JWELER FASHION JEWELLERY PVT. LTD. RADHA KRISHNA GOLD JEWELLERY P VT. LTD. ARVIND R. MISTRY J.K. JEWELLERS PVT. LTD. CHAIN & CHAIN IF CONSIDER TO BE EXAMINED MATTER COULD BE RESTORED TO AO FOR HIS CONSIDERATION TO RE DECIDE THE ISSUE AFRESH. 15. THE LD. AR IN REPLY TO SUBMISSION OF LD. DR SU BMITTED THAT ITO-6(3)-3 WAS THE AO OF MASTER GOLD PVT. LTD AND THEREFORE D OCUMENTS WERE FILED BEFORE HIM. HE SUBMITTED THAT CONCERNED AO I.E. IT O CENTRAL CIRCLE EXAMINED SHRI ASHOK KOTHARI DIRECTOR OF MASTER GOLD PVT. LT D. AND THEREFORE SHRI ASHOK KOTHARI HAS FILED AN AFFIDAVIT BEFORE HIM STATING A LL THE FACTS AS ALSO NAME OF PARTIES FROM WHOM HE RECEIVED GOLD TO MANUFACTURE G OLD JEWELLERY/ORNAMENTS AND SAME WERE CONSIDERED BY HIM BUT AO IGNORED EVID ENCES FILED BEFORE HIM AND HAS CONFIRMED ADDITION MADE BY AO ON CONJUCTURE S AND PRESUMPTIONS. HE SUBMITTED THAT ADDITION MADE BY AO SHOULD BE DEL ETED. 16. WE HAVE CAREFULLY CONSIDERED SUBMISSIONS OF LD. REPRESENTATIVES OF PARTIES ORDERS OF AUTHORITIES BELOW AND HAVE PERUS ED RELEVANT PAGES OF PAPER BOOK. WE HAVE ALSO CONSIDERED CASES REFERRED BY LD . CIT(A) IN THE IMPUGNED ORDER. WE OBSERVED THAT ASSESSEE IS CARRYING ON BU SINESS OF LEASING OUT LOCKERS ON RENT AND DURING THE COURSE OF SURVEY IT WAS FOUND THAT CERTAIN LOCKERS WERE OCCUPIED BY UNIDENTIFIED PERSON. THE DETAILS THEREOF ARE GIVEN BY AO AT PAGE-3 OF ASSESSMENT ORDER AND HAVE ALSO M ENTIONED HEREINABOVE AT PARA-3 OF THIS ORDER. WE OBSERVE THAT THERE ARE 14 SUCH LOCKERS FOR WHICH PROPER DOCUMENTS EVIDENCING THAT ASSESSEE HAS GIVEN LOCKERS ON HIRE TO OTHER PERSONS WERE NOT AVAILABLE AT THE TIME OF SURVEY. THE SAID SURVEY WAS CONVERTED INTO SEARCH AND SEIZURE OPERATION. WE OB SERVE THAT STATEMENT OF KARTA OF ASSESSEE SHRI SANJAY S. JAIN WAS RECORDED U/S. 132(4) OF THE ACT. WE ALSO OBSERVE THAT A PROHIBITORY ORDER U/S. 132(3 ) OF I.T. ACT WAS PLACED. ITA NO. 4570/M/09 20 SUBSEQUENTLY SAID LOCKERS WERE OPENED AND DETAILS OF CASH AND JEWELLERY FOUND THEREFROM WERE PREPARED WHICH ARE ALSO MENTIO NED HERE IN THE ABOVE IN PARA-3. WE OBSERVE THAT ASSESSEE FILED DETAILS OF PERSONS STATING TO WHOM LOCKERS WERE HIRED AND OUT OF 14 LOCKERS DEPARTMEN T ACCEPTED AVERMENT THAT 13 LOCKERS WERE HIRED TO OTHER PERSONS. THE CASH A ND JEWELLERY SEIZED FROM THOSE LOCKERS WERE ADDED IN THE RETURNS OF RESPECTI VE PERSONS AS ADDITIONAL INCOME. HOWEVER IN RESPECT OF LOCKER NO. 711 WHIC H IS UNDER CONSIDERATION FROM WHICH JEWELLERY VALUING RS. 89 74 630/- WAS SE IZED STATED TO BE GIVEN ON RENT TO MASTER GOLD PVT. LTD. AND ITS DIRECTOR IS SHRI ASHOK S. KOTHARI. COPY OF MEMORANDUM OF LOCKER RENT DT. 22.12.2006 IS PLA CED AT PAGE 152 TO 155 OF PAPER BOOK. WE OBSERVE THAT SHRI ASHOK KOTHARI DIRECTOR OF MASTER GOLD PVT. LTD. ADMITTED IN HIS STATEMENT RECORDED ON O ATH U/S. 131 OF THE ACT BY AO THAT THIS LOCKER NO. 711 WAS TAKEN ON RENT BY HI M ON 22.12.2006 AND HE WAS OPERATING THIS LOCKER THEREAFTER. HE ALSO ADMI TTED THAT JEWELLERY SEIZED FROM SAID LOCKER WAS KEPT BY HIM. HOWEVER AO DID NOT ACCEPT SAID STATEMENT OF SHRI ASHOK KOTHARI ON THE GROUND THAT PROPER DOCUMENTATION EVIDENCING OF GIVING ON RENT OF THIS LOCKER TO SHRI ASHOK KOTHARI WERE NOT FOUND AT THE TIME OF SURVEY AND/OR SEARCH AND SEIZU RE OPERATION. WE OBSERVE THAT SHRI ASHOK KOTHARI ALSO FILED COPIES OF CONFIR MATION FROM PARTIES CONCERNED THAT SAID PARTIES HAD GIVEN THEIR OWN GOL D/ORNAMENTS TO MASTER GOLD PVT. LTD. FOR REMAKING AND/OR MANUFACTURING. THE DETAILS OF SAID PARTIES ARE MENTIONED BY LD. CIT(A) IN PARA 2.2.3 AT PAGE 1 6 OF IMPUGNED ORDER AND THE SAME HAS ALSO BEEN MENTIONED HEREINABOVE IN PAR A NO.9 OF THIS ORDER. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT WHEN S HRI ASHOK KOTHARI OF MASTER GOLD PVT. LTD. HAS OWNED SAID JEWELLERY FOU ND IN LOCKER NO. 711 AND ALSO OFFERED AN EXPLANATION THAT IT WAS RECEIVED BY HIM FOR REMAKING AND/OR MANUFACTURING FROM PARTIES CONCERNED DETAILS OF WH ICH ARE MENTIONED HEREINABOVE WE ARE OF THE CONSIDERED VIEW THAT ASS ESSEE HAS DISCHARGED HIS ONUS THAT SAID LOCKER DID NOT BELONG TO HIM BUT HI RED OUT TO MASTER GOLD PVT. LTD. AND THEREFORE CONTENTS FOUND THEREIN DID NOT BELONG TO ASSESSEE BUT BELONGED TO MASTER GOLD PVT. LTD. WE ARE OF THE CO NSIDERED VIEW THAT IF DEPARTMENT IS NOT SATISFIED WITH THE EXPLANATION OF FERED BY SHRI ASHOK KOTHARI ITA NO. 4570/M/09 21 AS TO WHETHER HE RECEIVED THIS GOLD/ORNAMENTS FOR R EMAKING OR MANUFACTURING FROM CONCERNED PARTIES DETAILS OF WHICH WERE GIVEN BY SHRI ASHOK KOTHARI TO AO THE DEPARTMENT COULD CONSIDER TO MAKE ADDITION IN THE HAND OF MASTER GOLD PVT. LTD. BUT AS FAR AS ASSESSEE IS CONCERNED ADDITION COULD NOT BE MADE IN HIS HAND. WE OBSERVE THAT MASTER GOLD PVT. LTD. EVEN FURNISHED BOOKS OF ACCOUNT THAT IT RECEIVED SAID GOLD FROM I TS CLIENTS. THAT DEPARTMENT HAS NOT BROUGHT ON RECORD ANY EVIDENCE THAT SAID AV ERMENTS OF MASTER GOLD PVT. LTD. IS NOT FACTUALLY CORRECT. DURING THE CO URSE OF HEARING LD. DR SUBMITTED THAT DOCUMENTS CONFIRMING THAT CONCERNED PARTIES HAD GIVEN THEIR GOLD/OLD ORNAMENTS TO MASTER GOLD PVT. LTD. FOR MA NUFACTURING AND/OR RE- MAKING WERE NOT BEFORE AO. THEREFORE THIS MATTER C OULD BE RESTORED TO AO FOR HIS RECONSIDERATION. WE DO NOT FIND MERIT IN AB OVE CONTENTION OF LD. DR BECAUSE WE OBSERVE THAT SHRI ASHOK KOTHARI FILED AN AFFIDAVIT BEFORE AO COPY OF IT IS PLACED AT PAGES 58 TO 60 OF PAPER BOOK AND SPECIFICALLY STATED NAMES AND ADDRESSES OF CUSTOMERS WHOSE GOLD ORNAMENTS WER E LYING WITH HIM FOR REMAKING/MANUFACTURING AND ALSO STATED THAT SAID GO LD/ORNAMENTS ARE DULY ACCOUNTED FOR IN ITS BOOKS OF ACCOUNTS AND STOCK RE GISTER. WE ALSO OBSERVE FROM PAGES 61 TO 63 OF PAPER BOOK WHICH IS A COPY O F LETTER DT. 8.12.2008 WRITTEN IN RESPONSE TO NOTICE ISSUED U/S. 142(1) OF I.T. ACT TO MASTER GOLD PVT. LTD AND STATED TO THE AO CONCERNED I.E. ASSTT. COM MISSIONER CENTRAL CIRCLE-8 THAT IN LOCKER NO. 711 GOLD WAS LYING OF FOLLOWING PARTIES: SR. NO. NAME & ADDRESS OF PARTY WEIGHT IN GMS. 1. SHREE JEWELLERS NO. 47 MAHAKALI BLDG. SHOP NO. 20 1 ST FLOOR PYDHOONIE MUMBAI-400 003 1085.00 2. FASHION JEWELLERY PVT. LTD. 118 KANSARA CHAWAL 1 ST FLOOR SHOP NO. 13 COTTON EXCHANGE OPP. BANK OF INDIA 2182.00 3. RADHA KRISHNA GOLD JEWELLERY (P) LTD. 101 SUNRISE SHOPPING MILL NR. SWAMINARAYAN MANDIR JUDGE BUNGLOW ROAD VASTRAPUR AHMEDABAD-15 2716.910 4. ARVIND R. MISTRY LALBAUGH MUMBAI-12 343.900 ITA NO. 4570/M/09 22 5. J.K. JEWELLERS (P) LTD. 216/42 NSC BOX ROAD DHANALAXMI COMPLEX CHENNAI-600 079 2149.00 6. CHAIN & CHAIN 167/171 1 ST FLOOR GAMBHIR BHAWAN NR. BANK OF INDIA SHEIKH MEMON STREET MUMBAI-02 1965.560 WE FURTHER OBSERVE THAT ALONGWITH SAID LETTER COPIE S OF STOCK REGISTER COPY OF ISSUE VOUCHERS COPY OF CONFIRMATION OF PARTIES CO PY OF LOCKER RENT RECEIPT AND DETAILS OF PARTY WITH THEIR CST NO. VAT NO. WE RE ALSO FURNISHED TO AO. WE OBSERVE THAT LD. CIT(A) HAS NOT DISPUTED ABOVE F ACTS BUT HAS STATED THAT SAID AFFIDAVIT HAS NOT EVIDENTIARY VALUE AS REQUISI TE DOCUMENTS WERE NOT AVAILABLE INITIALLY WHEN SEARCH AND SEIZURE ACTION WAS TAKEN. DURING THE COURSE OF HEARING LD. DR HAS ALSO NOT CONTROVERTED THAT DOCUMENTS WERE FILED BY ASSESSEE BEFORE AUTHORITIES BELOW AND COPI ES OF WHICH ARE ALSO PLACED IN THE PAPER BOOK AND ALSO REFERRED TO BY LD. DR D URING THE COURSE OF HEARING BUT STATED THAT SAID DOCUMENTS COULD NOT BE CONSIDERED AS SACROSANCT. HOWEVER LD. DR DID NOT DISPUTE GENUINE NESS OF DOCUMENTS AND STATED THAT SAME COULD NOT BE BELIEVED BUT DID NOT GIVEN ANY REASON SAVE AND ACCEPT STATING THAT THOSE DOCUMENTS WERE NOT AVAIL ABLE AT THE TIME OF INITIAL ACTION OF SEARCH AND SEIZURE. THE LD. DR SUBMITTED THAT THERE IS A POSSIBILITY OF MANIPULATING SAID DOCUMENTS BUT NO SUCH CIRCUMST ANTIAL EVIDENCE HAVE BEEN GIVEN TO SUBSTANTIATE THAT THOSE DOCUMENTS FIL ED BY MASTER GOLD PVT. LTD. ARE MANIPULATED DOCUMENTS OR FORGED ONE. WE ARE OF THE CONSIDERED VIEW THAT ASSESSEE HAS GIVEN EXPLANATION IN RESPECT OF JEWELLERY/GOLD ORNAMENTS FOUND IN LOCKER NO. 711. CONSIDERING THE FACTS OF THE CASE WE HOLD THAT EXPLANATION GIVEN BY ASSESSEE COULD NOT BE DIS BELIEVED AND TO MAKE ADDITION IN THE HANDS OF ASSESSEE. ON THE FACTS ON RECORD WE ARE OF CONSIDERED VIEW THAT SAID GOLD ORNAMENTS FOUND IN L OCKER NO. 711 BELONGS TO MASTER GOLD PVT. LTD. AND THEREFORE SAME COULD NOT BE CONSIDERED IN THE HANDS OF ASSESSEE AS UNDISCLOSED INCOME U/S. 69A OF THE ACT. HENCE WE DELETE SAID ADDITION BY ALLOWING GROUND OF APPEAL T AKEN BY ASSESSEE. ITA NO. 4570/M/09 23 18. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON THIS 25 TH DAY OF NOVEMBER 2011 SD/- SD/- ( P.M. JAGTAP) (B.R. MITTAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 25 TH NOVEMBER 2011 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR I.T.A.T MUMBAI