JAFFERALI K RATTONSEY, MUMBAI v. DCIT CEN CIR 5, MUMBAI

ITA 5854/MUM/2009 | 2007-2008
Pronouncement Date: 28-01-2011 | Result: Allowed

Appeal Details

RSA Number 585419914 RSA 2009
Assessee PAN AABPR3348D
Bench Mumbai
Appeal Number ITA 5854/MUM/2009
Duration Of Justice 1 year(s) 2 month(s) 23 day(s)
Appellant JAFFERALI K RATTONSEY, MUMBAI
Respondent DCIT CEN CIR 5, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted I
Tribunal Order Date 28-01-2011
Date Of Final Hearing 20-10-2010
Next Hearing Date 20-10-2010
Assessment Year 2007-2008
Appeal Filed On 04-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH BEFORE SHRI D.K.AGARWAL JUDICIAL MEMBER & SHRI T.R.SOOD ACCOUNTANT MEMBER I.T.A.NO.5854/MUM/2009 A.Y 2007-08 SHRI JAFFERALI K. RATTONSEY C/O. DIMEXON DIAMONDS LTD. 804 RAHEJA CHAMBERS 213 NARIMAN POINT MUMBAI 400 021. PAN: AABPR 3348 D VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 5 MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SATISH MODY. RESPONDENT BY : SHRI PITAMBAR DAS. O R D E R PER T.R.SOOD AM: IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOW ING GROUNDS: 1. THE LEARNED CIT[APPEALS] ERRED IN CONFIRMING THE FI NDING OF THE ASSESSING OFFICER IN NOT CONSIDERING THE CASH SEIZED OF ` `` ` .4 100 000/- ON 17-7-2006 & 27-7-2006 BEFORE DUE DA TE OF ADVANCE TAX I.E. 15-09-2006 AND NOT ADJUSTING THE S AME AGAINST THE ADVANCE TAX FOR THE YEAR UNDER APPEAL AND ALSO IN LEVYING INTEREST UNDER SECTION 234A 234B AND 234C OF THE I NCOME TAX ACT 1961. 2. THE LEARNED CIT[APPEALS] ERRED IN CONFIRMING THE FI NDING OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF THE VALUE OF JEWELLERY OF ` `` ` .2 358 475 BELONGING TO AND DECLARED BY THE DAUGHTER OF THE APPELLANT VIZ. SMT. SHAHEEN RATTONS EY. 2. GROUND NO.1: AFTER HEARING BOTH THE PARTIES WE F IND THAT INTEREST UNDER SECTIONS 234A 234B AND 234C HAS BEEN DIRECTE D TO BE LEVIED BY THE AO. THIS WAS OBJECTED BY THE ASSESSEE BEFORE TH E CIT[A]. IT WAS MAINLY SUBMITTED BEFORE HIM THAT CASH AMOUNTING TO ` `` ` .41 LAKHS WHICH WAS FOUND DURING THE SEARCH SHOULD HAVE BEEN ADJUST ED AGAINST THE 2 ADVANCE TAX AND RELIANCE WAS PLACED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF SUDHAKAR M. SHETTY VS. CIT 10 DTR (MUM) 170. 3. THE LD. CIT[A] AFTER EXAMINING THE SUBMISSIONS DID NOT ACCEPT THE CLAIM MAINLY FOR THE FOLLOWING REASONS GIVEN AT PAGE-11 OF HIS ORDER: (I) THE APPELLANT HAD NOT REQUESTED THE JURISDICTI ONAL ASSESSING OFFICER TO ADJUSTED THE SEIZED CASH AS ADVANCE TAX DUE OF T HE APPELLANT FOR A.Y 2007-08 (II) THE APPELLANT HAD NOT DETERMINED ITS A DVANCE TAX LIABILITY FOR A.Y 2007-08 AND THE SAME WERE NOT COMMUNICATED TO THE JURISDICTIONAL ASSESSING OFFICER (III) THE APPELLA NT HAD NOT SIGNED ANY ADVANCE TAX CHALLANS AND HAD NOT ADVISED THE ASSESS ING OFFICER TO ADJUST THE SEIZED CASH AGAINST ADVANCE TAX DUES FOR A PARTICULAR DATE I.E. 15 TH SEPTEMBER 15 TH DECEMBER AND 15 TH MARCH OF THE RELEVANT FINANCIAL YEAR 2006-07 RELEVANT TO A.Y 2007-08 (IV) NO WILLIN GNESS NOR CONSENT WAS GIVEN BY THE APPELLANT IN WRITING TO THE LEARNE D ASSESSING OFFICER FOR ADJUSTING THE SEIZED CASH AGAINST HIS ADVANCE T AX DUES. HE ALSO HELD THAT THE DECISION OF SUDHARKAR M. SHET TY [SUPRA] WAS NOT APPLICABLE BECAUSE IN THAT CASE ASSESSEE HAD REQUES TED THE DEPARTMENT TO ADJUST THE SEIZED CASH. 4. BEFORE US LD. COUNSEL OF THE ASSESSEE REFERRED T O THE STATEMENT OF THE ASSESSEE RECORDED U/S.132(4) ON 22-7-2006 C OPY OF WHICH IS PLACED AT PAGES 11 TO 15 OF THE PAPER BOOK. HE PART ICULARLY REFERRED TO PAGES 14 AND 15 AND POINTED OUT THAT IN REPLY TO QU ESTION NO.8 IT WAS SPECIFICALLY SUBMITTED THAT THE CASH FOUND DURING T HE SEARCH SHOULD BE ADJUSTED AGAINST THE TAX LIABILITY. AGAIN IN REPLY TO QUESTION NO.4 IN CONNECTION WITH THE LOOSE PAPERS IT WAS SPECIFICALL Y STATED THAT DETAILS MENTIONED IN THE LOOSE PAPERS WERE IN RESPECT OF BE TTING AND HORSE RACING INCOME FROM APRIL 2006 ONWARDS WHICH MEANS INCOME RELATED TO F.Y 2006-07 OR A.Y 2007-08. THEREFORE THIS AMOUN T SHOULD HAVE 3 BEEN ADJUSTED AGAINST TAX LIABILITY. IN ANY CASE H E ARGUED THAT AS PER SEC.132B THE TAX AUTHORITIES ARE BOUND TO DEAL WITH THE SEIZED ASSET IN THE MANNER PROVIDED IN THIS SECTION WHICH CLEARLY P ROVIDES THAT ASSETS SHOULD BE ADJUSTED AGAINST THE EXISTING LIABILITY U NDER VARIOUS PROVISIONS OF VARIOUS DIRECT TAX ACTS LIKE INCOME T AX ACT AND WEALTH TAX ACT. THEREFORE EVEN IF ASSESSEE HAD NOT MENTIO NED ANYTHING REGARDING ADJUSTMENT EVEN THEN THE DEPARTMENT WAS D UTY BOUND TO ADJUST THE AMOUNT. HE POINTED OUT THAT THE POSITION WAS LITTLE DIFFERENT WHEN SUB-SEC.[5] OF SEC.132 WAS ALSO ON THE STATUTE UNDER WHICH REVENUE WAS BOUND TO RELEASE THE ASSETS FOR WHICH P ROPER EXPLANATION WAS GIVEN AND WAS ENTITLED TO RETAIN THE BALANCE OF ASSETS. BUT SUB- SEC.(5) WAS OMITTED W.E.F. 1-2-2002 AND THEREFORE NOW REVENUE IS BOUND TO ADJUST THE ASSETS AS PROVIDED U/S.132B(1). IN THIS REGARD HE REFERRED TO THE DECISION OF THE ITAT IN THE CASE OF GYANCHAND GUPTA VS. DCIT 80 ITD 584 WHEREIN IT WAS CLEARLY HELD THA T CASH COULD NOT AUTOMATICALLY BE DEEMED AS PAYMENT OF ADVANCE TAX I N VIEW OF SEC.132(5). THIS IS SO BECAUSE THIS DECISION WAS RE NDERED ON JULY 11 2001 I.E. WHEN SEC.132(5) WAS THERE. ULTIMATELY IT WAS HELD THAT ONCE THE CASH WAS ADJUSTED AGAINST THE ADVANCE TAX THEN INTEREST U/S.234B COULD NOT BE LEVIED. SAME VIEW HAS BEEN TAKEN IN TH E CASE OF SUDHAKAR M. SHETTY VS. ACIT [SUPRA]. 5. ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THE ORDER OF THE CIT[A] AND SUBMITTED THAT IN ANSWER TO QUESTION NO. 8 IT WAS NEVER SAID THAT THE AMOUNT SHOULD BE ADJUSTED TOWARDS A.Y 2007 -08. HE FURTHER 4 SUBMITTED THAT INTEREST UNDER SECTIONS 234A 234B A ND 234C IS OF MANDATORY NATURE AND THEREFORE SAME HAS BEEN CORR ECTLY LEVIED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE. BEFORE 1- 4-2002 THERE WAS A PROVISION IN SECTION 132(5) WHIC H HAS BEEN OMITTED W.E.F. 1-4-2002. UNDER THIS PROVISION IF ASSESSEE W AS ABLE TO SUCCESSFULLY EXPLAIN THE SOURCE OF ANY OF THE ASSET S LIKE BULLION CASH ETC. THEN THE REVENUE AFTER EXAMINING THE LIABILIT Y COULD RETAIN THESE ASSETS TOWARDS THE TAX LIABILITY AND RELEASE THE BA LANCE TO THE ASSESSEE AFTER BEING SATISFIED ABOUT THE SOURCE OF INCOME. H OWEVER THIS PROVISION AS NOTED EARLIER IS OMITTED W.E.F. 1-4- 2002. NOW SEC.132B(1) CLEARLY PROVIDES THAT ASSETS SEIZED DUR ING THE SEARCH ARE TO BE DEALT IN THE MANNER LAID DOWN IN THE ACT AND UND ER COLLABORATION.(I) OF SUB-SEC.(1) SUCH ASSETS COULD BE APPLIED TOWARDS THE EXISTING LIABILITY. 7. IN ANY CASE IN THE STATEMENT RECORDED ON 22-7-2 006 U/S.132(4) THE RELEVANT QUESTION NO.8 IS AS UNDER: Q.8 DO YOU HAVE TO SAY ANYTHING ELSE? ANS: ON 11/07/2006 THE CASH OF ` `` ` .11 LAKHS WAS SEIZED WHICH IS THE PART OF MY INCOME DECLARED AS IN REPLY TO QUESTION NO.4 ABOVE. THE TOTAL ` `` ` .41 LAKHS FOUND MAY PLEASE BE ADJUSTED AGAINST THE TAX LIABILITIES ARISING OUT OF MY DISCLOSURE THUS IT IS CLEAR THAT DURING SEARCH ITSELF ASSESSE E HAD VERY CLEARLY STATED THAT CASH OF ` `` ` .41 LAKHS FOUND DURING THE SEARCH SHOULD BE ADJUSTED AGAINST THE TAX LIABILITY. FURTHER IN REP LY TO QUESTION NO.4 IT 5 WAS VERY CLEARLY STATED THAT INCOME HAS BEEN EARNED FROM HORSE RACING ETC. FROM APRIL 2006 ONWARDS. THAT MEANS THE AUTHO RITIES WERE VERY CLEAR THAT ASSESSEE HAS SURRENDERED SOME UNDISCLOSE D INCOME WHICH CONSISTED OF CASH AND FOR OTHER ITEMS ASSESSEE HAS CLEARLY STATED THAT SUCH CASH SHOULD BE ADJUSTED AGAINST TAX LIABILITY. 8. IN THE CASE OF SUDHAKAR M. SHETTY VS. ACIT [SUPR A] IT WAS CLEARLY HELD THAT WHEN ASSESSEE HAS REQUESTED THE D EPARTMENT TO ADJUST THE CASH COULD DURING THE SEARCH THEN INTER EST UNDER SECTIONS 234B AND 234C COULD NOT BE CHARGED TO THAT EXTENT. IN THAT CASE IT WAS HELD AS UNDER: WHATEVER THE AMOUNT HAS BEEN SEIZED BY THE DEPARTM ENT THAT HAS TO BE TREATED AGAINST ANY PENDING DEMAND INCLUDING PEN ALTY AND AGAINST THE DEMAND OF THE BLOCK PERIOD OF WHICH THE ASSESSM ENT HAS TO BE COMPLETED. AS PER THE AMENDED PROVISIONS OF LAW NO W THE AO IS EMPOWERED TO TAKE INTO CONSIDERATION THE SEIZED CAS H AGAINST VARIOUS DEMANDS IN VIEW OF THE INCOME DETECTED DURING THE C OURSE OF SEARCH. AS PER THE AMENDED PROVISIONS OF LAW THERE IS NO R EQUIREMENT TO SEEK ANY REQUEST FROM THE ASSESSEE FOR ADJUSTMENT. HOWEV ER IN THE PRESENT CASE THE ASSESSEE HAS REQUESTED TO ADJUST THE REMA INING CASH SEIZED DURING THE SEARCH AGAINST THE TAX LIABILITY OF THE ASSESSEE. THEREFORE THE DEPARTMENT HAS TO ADJUST THE AMOUNT SEIZED AT THE T IME OF SEARCH TOWARDS THE ADVANCE TAX ETC. FROM THE DATE WHEN TH E AMOUNT WAS SEIZED. IT IS INCORRECT ON THE PART OF THE AO WHO HAS TAKEN INTO CONSIDERATION THE ADJUSTMENT FROM THE DATE OF ASSES SMENT. IT IS A MATTER OF COMMONSENSE THAT ONCE THE AMOUNT IS LYING WITH T HE DEPARTMENT THAT HAS TO BE ADJUSTED; OTHERWISE WHERE IT WILL BE ADJUSTED AND IN WHICH ACCOUNT THE DEPARTMENT WILL KEEP THE AMOUNT. THE SAME HAS TO BE ADJUSTED AGAINST ANY DEMAND RAISED AGAINST THE A SSESSEE OR AGAINST ANY DEMAND WHICH IS PENDING BEFORE THE DATE OF SEAR CH. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES THE AO IS DIRECTED TO ADJUST THE REMAINING CASH SEIZED BY THE DEPARTMENT FROM THE DA TE OF SEIZURE BECAUSE IF ANY AMOUNT IS TO BE ADJUSTED AGAINST ANY LIABILITY THE DATE OF PAYMENT OF THAT LIABILITY SHALL BE THE DATE OF SEIZ URE AND NOT THE DATE OF ADJUSTMENT AND/OR THE DATE OF ORDER. THE AO IS THER EFORE DIRECTED TO MODIFY HIS ORDER ACCORDINGLY. 6 FOLLOWING THE ABOVE ORDER WE ARE OF THE VIEW THAT NO INTEREST UNDER SECTIONS 234A 234B AND 234C TO THE EXTENT OF ` `` ` .41 LAKHS WHICH WAS FOUND AND SEIZED DURING THE SEARCH COULD BE CHARGE D BECAUSE SAME HAS TO BE TREATED AS ADVANCE PAYMENT OF TAX. THEREF ORE WE SET ASIDE THE ORDER OF THE CIT[A] AND DIRECT THE AO NOT TO CH ARGE INTEREST TO THE EXTENT OF ADVANCE PAYMENT OF ` `` ` .41 LAKHS IN THE FORM OF CASH FOUND AND SEIZED AND REQUESTED TO BE ADJUSTED AGAINST TAX LIA BILITY. 9. GROUND NO.2 : AFTER HEARING BOTH THE PARTIES WE FIND THAT A SEARCH WAS CONDUCTED IN THE PREMISES OF THE ASSESSE E ON 11-7-2006. DURING THE SEARCH SOME CASH JEWELLERY WAS FOUND. THE ASSESSEE HAD ALREADY DECLARED SOME JEWELLERY. ULTIMATELY UNACCO UNTED JEWELLERY WHICH WAS VALUED AT ` `` ` .82 11 892/- WAS FOUND. ON 27-07-2006 IN THE STATEMENT RECORDED U/S.132[4] AFTER RECONCILIATION ASSESSEE ADMITTED AND DISCLOSED JEWELLERY WORTH ` `` ` .58 53 714/- ON WHICH EVEN TAX WAS ALSO PAID AND FOR BALANCE OF JEWELLERY FURTHER TIME WAS SOUGHT. IT WAS CLAIMED THAT BALANCE OF JEWELLERY VALUED AT ` `` ` .23 58 475/- BELONGED TO MS. SABIHA (RAYANI) RATTONSEY WHO IS DAUGHTER OF TH E ASSESSEE AND WAS RESIDENT OF BELGIUM AND HAD COME TO INDIA ON TH E OCCASION OF SOME MARRIAGE. IN THE STATEMENT RECORDED ON 27-7-06 IT WAS AGAIN CLAIMED THAT THE JEWELLERY BELONGED TO MS. SHAHEEN RATTONSEY WHO IS ALSO DAUGHTER OF THE ASSESSEE WHO HAD SEPARATED FRO M HER HUSBAND AND WAS STAYING WITH THE ASSESSEE. IN FACT THE JEW ELLERY HAS BEEN DECLARED IN HER NAME AND EVEN TAXES WERE ALSO PAID. DURING THE ASSESSMENT PROCEEDINGS WHEN THE JEWELLERY WAS NOT D ECLARED IN THE 7 RETURN OF THE ASSESSEE AO DID NOT ACCEPT THE EXPLA NATION BY OBSERVING THAT ASSESSEE HAS SHIFTED HIS STAND AGAIN AND AGAIN AND NO PROOF WAS FURNISHED THAT THE JEWELLERY BELONGED TO MS. SHAHEE N RATTONSEY AND ACCORDINGLY THE SUM OF ` `` ` .23 58 475/- WAS ADDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 10. ON APPEAL LD. CIT[A] CONFIRMED THE ADDITION MA INLY BY OBSERVING THAT ASSESSEE HAS SHIFTED HIS STAND AGAIN AND AGAIN. MOREOVER NO EVIDENCE WAS FILED BEFORE THE AO OR HI M THAT THE JEWELLERY BELONGED TO MS. SHAHEEN RATTONSEY. 11. BEFORE US LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ASSESSEES DAUGHTER SABIHA (RAYANI) RATTONSEY WHO IS THE RESID ENT OF BELGIUM HAD COME TO INDIA FOR ATTENDING SOME MARRIAGE AND W AS STAYING WITH THE ASSESSEE AND NATURALLY SHE MUST HAVE BROUGHT SO ME JEWELLERY TO INDIA. THE OTHER DAUGHTER MS. SHAHEEN RATTONSEY HAD SEPARATED FROM HER HUSBAND AND WAS STAYING WITH THE ASSESSEE AND THEREFORE SHE HAD ALSO BROUGHT HER JEWELLERY TO THE ASSESSEES PL ACE. HE POINTED OUT THAT THE TOTAL JEWELLERY AT ASSESSEES PLACE VALUED AT ` `` ` .2.37 CRORES WAS FOUND SOME OF WHICH WAS ALREADY DECLARED. THE ASSE SSEE INITIALLY TOOK SOME TIME TO VERIFY AS HE RECONCILED THE POSITION S O AS TO ASCERTAIN WHICH ITEM OF JEWELLERY BELONGED TO WHOM AND AFTER VERIFICATION HE MADE A STATEMENT ON 27-7-06 AND DECLARED THE JEWELL ERY OF ` `` ` .58 53 745/- OUT OF THE UN-RECONCILED JEWELLERY VAL UED AT ` `` ` .82 11 892/- IN HIS ACCOUNT AND ON WHICH EVEN TAX W AS ALSO PAID ON 27-7-06. THE ASSESSEE TOOK SOME MORE TIME TO RECONC ILE THE BALANCE 8 OF THE JEWELLERY. LATER ON INITIALLY IT WAS CLAIME D THAT THE JEWELLERY BELONGED TO SABIHA (RAYANI) RATTONSEY WHO WAS A NON RESIDENT. THE ASSESSEE FURTHER VERIFIED THE FACT AND FOUND THAT T HE JEWELLERY ACTUALLY BELONGED TO MS. SHAHEEN RATTONSEY AND ACCORDINGLY MADE DECLARATION OF THE BALANCE UNACCOUNTED JEWELLERY VA LUED AT ` `` ` .23 58 475/- IN THE HANDS OF MS. SHAHEEN RATTONSEY. 12. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT HAD ASSESSEE DECLARED IN THE HANDS OF SABIHA (RAYANI) RATTONSEY ASSESSEE WOULD HAVE NOT REQUIRED TO PAY ANY TAXES BECAUSE SABIHA ( RAYANI) RATTONSEY WAS A NON RESIDENT AND IF THE INTENTION WAS TO SAVE TAXES ASSESSEE COULD HAVE EASILY SAVED THE SAME BY EXPLAINING THE JEWELLERY IN HER HANDS. SINCE THERE WAS NO INTENTION TO SAVE THE TAX ES AND WHEN THIS FACT CAME TO THE LIGHT THAT THE JEWELLERY ACTUALLY BELONGED TO THE OTHER DAUGHTER I.E. MS. SHAHEEN RATTONSEY WHO WAS ALREADY ASSESSED IN INDIA THEN THE JEWELLERY WAS DECLARED IN HER HANDS . THEN HE REFERRED TO PAGE 33 OF THE PAPER BOOK WHICH IS A COPY OF TH E RETURN OF MS. SHAHEEN RATTONSEY IN WHICH GROSS TOTAL INCOME HAS BEEN SHOWN AT ` `` ` .31 79 861/- AND TOTAL TAX DUE IS ` `` ` .10 22 648/- WHICH MEANS THE TAXES HAVE BEEN PAID AT THE HIGHEST SLAB. HAD ASSES SEE DECLARED THE JEWELLERY IN HIS OWN HANDS HE WOULD HAVE PAID THE SAME TAXES AT HIGHEST LEVEL OF 30% THEREFORE IT BECOMES CLEAR T HAT THERE WAS NOT INTENTION EVER TO SAVE THE TAXES. EVEN THE WEALTH T AX RETURNS WERE ALSO FILED BY MS. SHAHEEN RATTONSEY COPIES OF WHICH ARE AVAILABLE AT PAGES 63 TO 71 OF THE PAPER BOOK. IN THE LIGHT OF THESE F ACTS IT CANNOT BE SAID 9 THAT IT WAS AN AFTER THOUGHT. HE ALSO POINTED OUT T HAT EVEN AN AFFIDAVIT WAS FILED BY MS. SHAHEEN RATTONSEY BEFORE THE AO CL AIMING OWNERSHIP OF THE JEWELLERY COPY OF WHICH HAS BEEN FILED AT P AGE 19 OF THE PAPER BOOK AND THEREFORE AO AND CIT[A] ARE NOT CORRECT IN SAYING THAT NO PROOF OF OWNERSHIP WAS FILED ON BEHALF OF MS. SHAHE EN RATTONSEY. HE SUBMITTED THAT MS. SHAHEEN RATTONSEY COULD NOT BE E XPECTED TO STAND UP DURING THE SEARCH AND SAY THAT RECORD MY STATEM ENT. ONCE AN AFFIDAVIT IS FILED THE DEPARTMENT SHOULD HAVE RECOR DED HER STATEMENT IF DEPARTMENT WANTED TO ASSESS THIS UNDISCLOSED JEWELL ERY IN THE HANDS OF THE ASSESSEE. 13. ON THE OTHER HAND LD. DR REFERRED TO THE ORDE R OF THE CIT[A] AT PAGES 34 TO 35 AND POINTED OUT THAT ON 22-7-06 ASSE SSEE ASKED TIME OF TWO DAYS TO RECONCILE THE JEWELLERY WITH HIS WEA LTH TAX RETURN AS WELL AS THAT OF FAMILY MEMBERS AND THE AUTHORISED OFFICE R WAS REQUESTED TO PLACE PROHIBITORY ORDER ON SUCH JEWELLERY. LATER ON IT WAS STATED THAT SUCH JEWELLERY BELONGED TO HIS DAUGHTER SABIHA (RAY ANI) RATTONSEY WHO WAS RESIDENT OF BELGIUM. AGAIN ON 27-7-06 ASSES SEE ADMITTED JEWELLERY OF ` `` ` .55 53 417/- AND ALSO STATED THAT JEWELLERY DID NOT BELONG TO SABIHA (RAYANI) RATTONSEY BUT BELONGED TO MS. SH AHEEN RATTONSEY. THIS CLEARLY SHOWS THAT ASSESSEE HAS BEEN CHANGING HIS STAND AND THEREFORE SAME CANNOT BE ACCEPTED. HE SUBMITTED TH AT AS PER PARA 3.4.15 OF THE ORDER OF THE CIT[A] IT IS CLEARLY OB SERVED THAT MS. SHAHEEN RATTONSEY WAS NEITHER PRODUCED BEFORE THE A O NOR BEFORE HIM. FURTHER SHE HAS NEVER CLAIMED THE OWNERSHIP AN D POSSESSION OF 10 THE SAID JEWELLERY AND THEREFORE SAME JEWELLERY C ANNOT BELONGED TO MS. SHAHEEN RATTONSEY. HE ALSO ARGUED THAT IT IS A SETTLED POSITION OF LAW THAT ALL THE ITEMS OF INCOME HAVE TO BE ASSESSE D IN THE CORRECT HANDS AND THEREFORE EVEN IF THERE IS NO LOSS TO T HE REVENUE THE INCOME HAS BEEN CORRECTLY ASSESSED IN THE HANDS OF THE ASSESSEE. 14. IN THE REJOINDER LD. COUNSEL OF THE ASSESSEE S UBMITTED THAT ONCE AN AFFIDAVIT WAS FILED BEFORE THE AO REGARDING OWNERSHIP OF THE JEWELLERY BY MS. SHAHEEN RATTONSEY THEN THE REVENU E AUTHORITIES SHOULD HAVE CALLED HER TO PROVE THAT THE JEWELLERY BELONGED TO HER. MOREOVER MS. SHAHEEN RATTONSEY HAD FILED INCOME TA X AND WEALTH TAX RETURNS WHICH HAVE ALSO BEEN ASSESSED ON PROTECTIVE BASIS. THEREFORE IT IS CLEAR THAT THE EVIDENCE WAS AVAILABLE WITH TH E DEPARTMENT THAT THE JEWELLERY HAD BEEN CLAIMED IN HER HANDS. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE. IT IS CLEAR THAT THE JEWELLERY VALUED AT ABOUT ` `` ` .2.37 CRORES WAS INITIALLY FOUND AND MOST OF THE ITEMS WERE RECONCILED WITH THE WEALTH T AX RETURNS OF THE ASSESSEE AND HIS FAMILY MEMBERS. AS JEWELLERY TO TH E EXTENT OF ` `` ` .82 11 892/- COULD NOT BE RECONCILED AND THEREFORE SOME TIME WAS SOUGHT FROM THE DEPARTMENT. IN THE MEAN TIME IT HA S NOT BEEN DENIED THAT ASSESSEES DAUGHTER SABIHA (RAYANI) RATTONSEY HAD COME FROM BELGIUM TO ATTEND SOME MARRIAGE AND WAS STAYING WIT H THE ASSESSEE. HIS ANOTHER DAUGHTER MS. SHAHEEN RATTONSEY WHO IS S TATED TO HAVE BEEN SEPARATED FROM HER HUSBAND WAS ALSO STAYING W ITH THE ASSESSEE. 11 OBVIOUSLY HER JEWELLERY COULD ALSO BE THERE. NO DOU BT ASSESSEE INITIALLY STATED THAT JEWELLERY BELONGED TO SABIHA (RAYANI) R ATTONSEY I.E. THE DAUGHTER WHO HAD COME FROM BELGIUM BUT WITHIN 2/3 D AYS THIS STAND WAS CHANGED AND JEWELLERY WAS STATED TO BE BELONGIN G TO MS. SHAHEEN RATTONSEY AND SHE FILED HER INCOME TAX AS WELL AS W EALTH TAX RETURNS ACCORDINGLY. IF THE ONLY INTENTION WAS TO SAVE TAXE S ASSESSEE COULD HAVE SAVED WHOLE OF THE TAXES BY DECLARING THE JEWE LLERY IN THE HANDS OF THE SABIHA (RAYANI) RATTONSEY WHO WAS A NON RESI DENT AND MAY BE NO TAX WAS REQUIRED TO BE PAID BY HER. BUT THEN THA T WOULD HAVE CHANGED THE FACTUAL SITUATION AND CREATED THE OTHER PROBLEMS FOR THE ASSESSEE. FINALLY IT WAS STATED THAT THE JEWELLERY BELONGED TO MS. SHAHEEN RATTONSEY AND RETURNS HAVE ALSO BEEN FILED. PERUSAL OF RETURNS SHOW THAT ON INCOME OF ` `` ` .31 79 861/- TOTAL TAX DUE HAS BEEN PAID AT ` `` ` .10 10 861/- WHICH SHOWS THAT PERHAPS TAX WAS PAID AT THE HIGHEST LEVEL OF 30%. EVEN IF ASSESSEE HAD DECLARED JEWELLE RY IN HIS OWN HANDS EVEN THEN TAXES WOULD HAVE BEEN PAID AT 30% ONLY THEREFORE IT IS CLEAR THAT THERE WAS NO INTENTION TO SAVE ANY TAXES OR NOR THE JEWELLERY WAS TAXED IN WRONG HANDS. IN ANY CASE RE VENUE HAS NOT SUFFERED ANY LOSS. WE ALSO FIND NO FORCE IN THE ARG UMENT OF THE LD. DR THAT MS. SHAHEEN RATTONSEY WAS NEVER PRODUCED BEFOR E THE AO OR THE CIT[A]. ONCE HER AFFIDAVIT WAS FILED DURING THE ASS ESSMENT PROCEEDINGS THAT THE BALANCE JEWELLERY BELONGED TO HER AND SHE HAD ALSO FILED HER INCOME TAX AND WEALTH TAX RETURNS THEN OBVIOUSLY IF REVENUE WANTED TO TAKE A DIFFERENT STAND THEN THE AUTHORITIES SHOU LD HAVE CALLED HER 12 AND RECORDED HER STATEMENT. IN THESE CIRCUMSTANCES WE SET ASIDE THE ORDER OF THE LD. CIT[A] AND DELETE THE ADDITION OF ` `` ` .23 58 475/-. 16. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF JANUARY 2011. SD/- SD/- (D.K.AGARWAL) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 28 TH JANUARY 2011. P/-*