ACIT, Meerut v. Shri Ajay Kumar Gupta, Meerut

ITSSA 39/DEL/2009 | misc
Pronouncement Date: 12-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 3920116 RSA 2009
Assessee PAN AFJPG1827R
Bench Delhi
Appeal Number ITSSA 39/DEL/2009
Duration Of Justice 10 month(s) 29 day(s)
Appellant ACIT, Meerut
Respondent Shri Ajay Kumar Gupta, Meerut
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 12-03-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 12-03-2010
Date Of Final Hearing 11-02-2010
Next Hearing Date 11-02-2010
Assessment Year misc
Appeal Filed On 13-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : A NEW DELHI) BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER IT(SS)A NO.39/DEL./2009 (BLOCK PERIOD : 01.04.1989 TO 27.03.2000) ACIT CEN. CIRCLE VS. SHRI AJAY KUMAR GUPTA MEERUT. R/O 237 WEST END ROAD NEW DELHI. (PAN/GIR NO.AFJPG1827R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.D. MITTAL CA REVENUE BY : SHRI ASHOK PANDEY CIT(DR) ORDER PER A.K. GARODIA AM THIS IS A REVENUES APPEAL DIRECTED AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) MEERUT DATED 20.1.2010 FOR BL OCK PERIOD FROM 1.4.1989 TO 27.3.2000. GROUND NO.1 OF THE APPEAL READ AS UNDER : 1 THAT THE LD.CIT(A) MEERUT HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.51 432/- MADE BY THE AO ON ACCOUNT O F UNDISCLOSED JEWELRY. 1(I) THAT THE LD.CIT(A) MEERUT HAS IGNORED THE FCT THAT THE ASSESSEE HAD NOT DISCLOSED THIS JEWELRY IN THE VDIS 1979 OR IN HIS RETURNS OF INCOME. 2. BRIEF FACTS ARE THAT IN COURSE OF SEARCH JEWELR Y OF RS.7.44 LAKH WAS FOUND FROM RESIDENCE OF THE ASSESSEE AND OF RS.13.55 LAKH WAS FOUND IN THE LOCKER OF THE ASSESSEE OUT OF WHICH JEWELRY OF RS.8.87 LAKHS WAS SEIZED. IT IS NOTED BY THE AO ON PAGE 4 OF THE ASSESSMENT ORDER THAT IN THE BLOCK ASSESSMENT OF SM T. ANITA GUPTA WIFE OF THE PRESENT ASSESSEE IT WAS HELD THAT JEWELRY WEIGHING 100.5 G MS. OF THE VALUE OF RS.51 432/- WAS OF SHRI AJAY KUMAR GUPTA I.E. THE PRESENT ASSESSEE. IT IS FURTHER NOTED BY THE AO THAT THIS ASSESSEE I.E. AJAY KUMAR GUPTA HAS DECLARED JEWELRY WEIGHING 276 GMS. OF THE VALUE OF RS.57 960/- IN VDIS 1997. IT IS FURTHER NOTED BY THE AO THAT THE JEWELRY WEIGHING 100.5 GMS. OF THE VALUE OF RS.51 432/- WAS NEITHER DECLAR ED IN THE WEALTH TAX RETURN NOR WAS IT(SS)A NO.39/DEL./2009 (BLOCK PERIOD : 1.4.89 TO 27.3.2000) 2 DECLARED IN THE VDIS 1997. ON QUERY IT WAS SUBMI TTED BY THE ASSESSEE BEFORE THE AO THAT THIS JEWELRY OF 100.5 GMS. BELONGS TO THIS ASS ESSEE WHICH INCLUDES KARA - TWO OF (81.8) GMS. AND BRACELET ONE (18.7 GMS.). IT WAS ALSO SUBMITTED THAT WEALTH OF THE ASSESSEE DOES NOT EXCEED THE TAXABLE LIMIT AND HENC E NO WEALTH TAX RETURN WAS FILED BY THIS ASSESSEE AT ANY POINT OF TIME DURING LAST 10 Y EARS. IT WAS ALSO SUBMITTED THAT THIS JEWELRY OF 100.5 GMS. WAS ACQUIRED BY THE ASSESSEE LONG BACK AT THE TIME OF HIS MARRIAGE IN 1973. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND HE MADE ADDITION FOR THE SAME. BEING AGGRIEVED THE ASSESSEE CARRIED TH E MATTER IN APPEAL BEFORE THE CIT(A) WHO HAS DELETED THIS ADDITION AND NOW THE REVENUE I S IN APPEAL BEFORE US. 3. IT WAS SUBMITTED BY THE LD.DR OF THE REVENUE THA T CIT(A) WAS NOT CORRECT IN ACCEPTING THE CLAIM OF THE ASSESSEE THAT JEWELERY O F 100.5 GMS. WAS RECEIVED BY THE ASSESSEE AT THE TIME HIS MARRIAGE. IT IS ALSO SUBM ITTED THAT THE ORDER OF THE CIT(A) SHOULD BE REVERSED AND THAT OF THE AO SHOULD BE RESTORED. LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A). IT IS ALSO SUBMITTED THAT THE ASSESSEE WAS MARRIED IN THE YEAR 1973 AND THIS JEWELRY OF 100.5 GMS. WAS GOT VALUED BY TH E ASSESSEE AS PER VALUATION REPORT DATED 5.4.1994 AS APPEARING ON PAGE 1 OF THE PAPER BOOK. IT IS ALSO SUBMITTED THAT SINCE THE TAXABLE WEALTH OF THE ASSESSEE WAS BELOW EXEMPT ION LIMIT NO WEALTH TAX RETURN WAS FILED BY THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT AS PER AFFIDAVIT OF THE ASSES SEE APPEARING ON PAGE 2 OF THE PAPER BOOK THE ASSESSEE WAS MARRIED WITH MRS.ANITA GUPTA ON 23.2.73. THE CLAIM OF THE ASSESSEE IS THAT ON THE OCCASION OF MARRIAGE HE HA S RECEIVED JEWELERY OF 100.5 GMS. ALTHOUGH THE ASSESSEE IS NOT ABLE TO PRODUCE ANY EV IDENCE IN SUPPORT OF THIS CLAIM BUT CONSIDERING THE QUANTUM OF THIS CLAIM REGARDING REC EIVING JEWELRY OF 100.5 GMS. AT THE TIME OF MARRIAGE WE FEEL THAT THE SAME SHOULD BE A CCEPTED EVEN IF ASSESSEE IS NOT ABLE TO PRODUCE ANY EVIDENCE BECAUSE THE QUANTUM IS VERY SM ALL AND THE YEAR OF MARRIAGE IS AS EARLY AS 1973 WHEREAS THE SEARCH WAS CARRIED OUT IN THE YEAR 2000. THE VALUATION REPORT OF THE REGISTERED VALUER DATED 5.4.1994 IS APPEARIN G ON PAGE 1 OF THE PAPER BOOK DEPICTING THE VALUE OF JEWELRY AS ON 31.3.1994 AT RS.35 927/- THE DESCRIPTION OF JEWELRY FOUND IN COURSE OF SEARCH IS TALLYING WITH THE DETAILS APPEA RING IN THIS VALUATION REPORT DATED IT(SS)A NO.39/DEL./2009 (BLOCK PERIOD : 1.4.89 TO 27.3.2000) 3 5.4.1994. REGARDING THIS CONTENTION OF THE AO THAT THIS JEWELERY WAS NEITHER DISCLOSED IN THE WEALTH TAX RETURN NOR IN VDIS 1997 WE FIND TH AT IT IS NOT THE CASE OF THE AO THAT ANY WEALTH-TAX RETURN WAS FILED BY THE ASSESSEE AND THI S JEWELRY WAS NOT INCLUDED BY THE ASSESSEE IN THE TAXABLE WEALTH DECLARED IN WEALTH T AX RETURN FILED BY THE ASSESSEE. HENCE THIS OBJECTION OF THE AO IS NOT VALID AND CONSIDERI NG THE SMALLNESS OF THE AMOUNT OF CLAIM REGARDING GIFT AT THE TIME OF MARRIAGE WE FEEL THA T NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). WE THEREFORE UPHOLD THE SAM E. THIS GROUND OF THE REVENUE IS REJECTED. 5. GROUND NO.2 OF THE APPEAL READS AS UNDER: 2.THAT THE LD.CIT(A) MEERUT HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.558870/- MADE BY THE AO ON ACCOU NT OF PAPERS FOUND FROM THE RESIDENT OF THE ASSESSEE DURING THE SEARCH ON T GROUND THAT THE ASSESSEE HAD DISOWNED THESE PAPERS AND THAT THESE D O NOT BELONG TO HIM. 2.(I) THAT IN DOING SO THE LD.CIT(A) HAS OVERLOOKED THE PROVISIONS U/S 132(4A) OF THE I.T. ACT 1961 REGARDING THE PRESUMP TIONS ABOUT THE MATERIAL FOUND DURING SEARCH. 6. BRIEF FACTS ARE THAT IT IS NOTED BY THE AO IN PA RA.5 OF THE ASSESSMENT ORDER THAT AS PER PAGE 16 OF THE ANNEXURE B-18 FOUND AND SEIZED F ROM THE RESIDENCE OF THE ASSESSEE THERE IS ONE ACCOUNT OF ONE MAHESHJI SHOWING LARGE CASH TRANSACTIONS AND THE CONTENTS OF THESE ENTRIES ARE REPRODUCED BY THE AO ON PAGES 5 & 6 OF THE ASSESSMENT ORDER. IT IS FURTHER NOTED BY THE AO THAT SIMILARLY THERE WERE M ORE ENTRIES ON PAGE 17 OF THE ANNEXURE B-18 IN WHICH ACCOUNT OF SURESH NEPAL LOA N A/C AND OTHER WERE MENTIONED. THE CONTENTS OF THIS PAPER IS ALSO REPRODUCED BY TH E AO ON PAGE 6 OF THE ASSESSMENT ORDER. WHEN THE AO CONFRONTED THESE SEIZED PAPERS TO THE ASSESSEE IN COURSE OF ASSESSMENT PROCEEDINGS IT WAS THE SUBMISSION OF TH E ASSESSEE BEFORE THE AO THAT THESE PAGES HAVE NO RELATION TO THE ASSESSEE. IT WAS ALS O SUBMITTED THAT THE TRANSACTION RECORDED ON THESE PAGES DO NOT RELATE TO THE ASSESSEE OR TO ANY OF THE COMPANY UNDER THE CONTROL OF THE ASSESSEE. IT IS OBSERVED BY THE AO ON PAGE 8 O F THE ASSESSMENT ORDER THAT AS PER SECTION 132(4A) OF THE I.T. ACT THE PRESUMPTION IS AGAINST THE ASSESSEE. THE AO MADE ADDITION OF RS.3.50 LAKHS ON ACCOUNT OF RECEIPT OF CASH LOAN OF RS.3.50 LAKHS FROM SURESH NEPAL. REGARDING THE EVIDENCE ON PAGE 16 IT IS NO TED BY THE AO THAT THERE IS CREDIT IT(SS)A NO.39/DEL./2009 (BLOCK PERIOD : 1.4.89 TO 27.3.2000) 4 BALANCE OF RS.10.75 LAKHS IN THE ACCOUNT OF MAHESHJ I OUT OF WHICH THE SOURCE OF RS.10 LAKHS IS ACCEPTED TO BE EXPLAINED BEING THE MONEY R ECEIVED FROM SHRI JAYANTI BHAI AND P.D. MITTAL TO THE EXTENT OF RS.10 LAKHS AND THAT H ENCE THE BALANCE AMOUNT OF RS.75 000/- REMAINED UNEXPLAINED WHICH IS ADDED TO THE UNDISCLO SED INCOME OF THE ASSESSEE. THE AO MADE ADDITION OF RS.43 870/- ON ACCOUNT OF INTEREST PAYMENT TO JAYANTY BHAI AND ADDITION OF RS.90 000/- WAS MADE ON ACCOUNT OF INTEREST PAYM ENT TO MAHESHJI AND IN THIS MANNER HE MADE ADDITION OF RS.558870/-. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO HAS DELETED THIS ADDI TION ON THE BASIS THAT THE AO IN THIS CASE HAS NOT BEEN ABLE TO LINK THIS LOOSE SHEET WIT H THE ASSESSEE IN ANY MANNER WHATSOEVER. 7. NOW THE REVENUE IS IN APPEAL BEFORE US. LD.DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER AND IT IS ALSO SUBMITTED BY HIM TH AT THE FACTS OF THREE JUDGMENTS FOLLOWED BY CIT(A) AS NOTED BY HIM ON PAGE 3 OF HIS ORDER ARE DIFFERENT AND HENCE THESE JUDGMENTS ARE NOT APPLICABLE IN THE PRESENT CASE. IT IS ALSO SUBMITTED THAT AS PER SECTION 132(4A) THE PRESUMPTION IS AGAINST THE ASSESSEE. LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD WE FIND THAT APART FORM MAKING THESE GENERA L SUBMISSIONS THAT THESE TWO LOOSE PAPERS SEIZED FORM THE POSSESSION OF THE ASSESSEE A RE NOT RELATED TO THE ASSESSEE THE ASSESSEE HAS NOT EXPLAINED THE CONTENTS OF THESE LO OSE SHEETS. WE FIND THAT CIT(A) HAS FOLLOWED THREE JUDGMENTS OUT OF WHICH ONE JUDGMENT IS OF HONBLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF CIT VS. SMS INVESTMENT CORP ORATION PVT. LTD. AS REPORTED IN 207 ITR 364. WE FIND THAT THIS JUDGMENT IS OF NO HELP OF THE ASSESSEE BECAUSE IT WAS HELD IN THIS CASE THAT THE PRESUMPTION U/S 132(4A) THAT DOC UMENTS SEIZED IN SEARCH IS TRUE IS REBUT TABLE. IN THIS CASE IT WAS FOUND THAT THE D EBTOR IN QUESTION HAD NOT CREDITED INTEREST IN ITS ACCOUNT FROM 1968-69 AND HAD DECLINED TO PAY INTEREST. SEIZED DOCUMENT WAS SHOWING CALCULATION OF INTEREST. UNDER THESE FACTS SINCE THE ASSESSEE COULD REBUT THE PRESUMPTION U/S 132(4A) REGARDING CORRECTNESS OF TH E SEIZED DOCUMENTS IT WAS HELD THAT NO ADDITION CAN BE MADE ON THE BASIS OF SEIZED DOCU MENTS ONLY. IN THE PRESENT CASE THE ASSESSEE HAS NOT BEEN ABLE TO REBUT THE PRESUMPTION U/S 132(4A) AND HENCE THE JUDGMENT IT(SS)A NO.39/DEL./2009 (BLOCK PERIOD : 1.4.89 TO 27.3.2000) 5 OF HONBLE RAJASTHAN HIGH COURT IS OF NO HELP TO TH E ASSESSEE. THE SECOND JUDGMENT FOLLOWED BY THE CIT(A) IS THE TRIBUNAL DECISION REN DERED IN THE CASE OF ASHWANI KUMAR VS. ITO AS REPORTED IN 39 ITD 183. IN THAT CASE A DDITION WAS MADE ON THE BASIS OF A SLIP FOUND AT THE RESIDENCE PREMISES OF THE ASSESSEES F ATHER AND IT WAS HELD THAT NO ADDITION CAN BE MADE ON THE BASIS OF SUCH SEIZED DOCUMENTS. IN ADDITION TO THIS THERE WAS A DUMB DOCUMENT FOUND AND THE QUESTION WAS AS TO WHETHER A NY ADDITION CAN BE MADE ON THE BASIS OF SUCH DUMB DOCUMENTS. UNDER THESE FACTS I T WAS HELD THAT IN THE CASE OF A DUMB DOCUMENT THE PROVISIONS OF SECTION 132(4A) DO NOT PERMIT ANY ONE TO BIFURCATE THE TOTAL OF THE FIGURES OF THE RIGHT SIDE OF THE SLIP SUGGES TING ASSESSEES INCOME. IN THE PRESENT CASE THE DOCUMENTS IN QUESTION ARE NOT DUMB DOCUME NTS. THE NAME IS THERE DATES ARE THERE AMOUNTS ARE THERE DEBIT-CREDIT BIFURCATION IS THERE AND HENCE PRESENT DOCUMENTS ARE NOT DUMB DOCUMENTS. IN VIEW OF THESE FACTS THIS TR IBUNAL DECISION IS ALSO OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE. CIT(A) HAS ALSO FOLLOWED ONE MORE TRIBUNAL DECISION RENDERED IN THE CASE OF ACIT VS. KIRORI LAL AGGARWA L AS REPORTED IN 50 TTJ 393 (JAB.). IN THAT CASE A DIARY WAS FOUND IN THE COURSE OF SE ARCH REGARDING WHICH IT WAS EXPLAINED BY THE ASSESSEE AT THE TIME OF SEARCH THAT THE JOTT INGS IN THE DIARY REPRESENTED MONEY LENDING BUSINESS CARRIED ON BEHALF OF HIS MOTHER-I N-LAW. IN THE COURSE OF PROCEEDINGS U/S 132(5) AND ASSESSMENT PROCEEDINGS U/S 143(3) IT WA S STATED BY THE ASSESSEE IN THAT CASE THAT THE JOTTINGS IN THE DIARY REPRESENTED THE ACTI VITIES OF SHRI PARASRAM GUPTA IN THE JOINT FAMILY. IN THAT CASE IT WAS HELD BY THE TRIBUNAL THAT THE TRIBUNAL HAS CONFIRMED THE FINDING OF THE CIT(A) ABOUT THE EXISTENCE OF HUF IN THE NAME OF PARASRAM GUPTA AND THE CARRYING ON OF BUSINESS OF PAWNING AND SARAFI BY HU F. IT WAS ALSO HELD THAT THE CASH FOUND AT THE PREMISES OF PARASRAM GUPTA HAS BEEN HE LD TO BELONG TO THE HUF. IT WAS HELD THAT CONSIDERING THE TOTALITY OF FACTS AND CIRCUMST ANCES OF THAT CASE NO ADDITION ON THE BASIS OF JOTTINGS IN THE DIARY COULD VALIDLY BE MAD E IN THE CASE OF KIRORI LAL AGGARWAL. WE ARE OF THE CONSIDERED OPINION THAT THIS TRIBUNA L DECISION IS ALSO OF NO HELP TO THE ASSESSEE BECAUSE THE FACTS ARE DIFFERENT. IT WAS F OUND IN THAT CASE THAT THE DIARY WAS IN CONNECTION WITH THE MONEY LENDING BUSINESS OF PARAS RAM GUPTA HUF AND HENCE IN THAT CASE THE PRESUMPTION U/S 132(4A) WAS SUCCESSFULLY REBUTTED BY THE ASSESSEE WHEREAS IN THE PRESENT CASE PRESUMPTION U/S 132(4A) COULD NOT BE REBUTTED BY THE ASSESSEE AND HENCE THIS TRIBUNAL DECISION IS OF NO HELP TO THE A SSESSEE. SINCE THE ASSESSEE HAS NOT IT(SS)A NO.39/DEL./2009 (BLOCK PERIOD : 1.4.89 TO 27.3.2000) 6 EXPLAINED THE CONTENTS OF THE SEIZED PAPERS WE ARE OF THE CONSIDERED OPINION THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION M ADE BY THE AO ON THE BASIS OF THESE SEIZED DOCUMENTS. BECAUSE OF THE PRESUMPTION AVAI LABLE TO THE REVENUE U/S 132(4A) IT HAS TO BE HELD THAT THE DOCUMENTS FOUND IN THE COUR SE OF SEARCH BELONG TO THE ASSESSEE AND THE CONTENTS OF THESE DOCUMENTS ARE TRUE. THE ASSE SSEE HAS NOT BEEN ABLE TO REBUT THIS PRESUMPTION AND HENCE WE REVERSE THE ORDER OF THE C IT(A) AND RESTORE THAT OF THE AO. THIS GROUND OF THE REVENUE IS ALLOWED. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS PART LY ALLOWED. 10. ORDER PRONOUNCED IN OPEN COURT ON 12.03.2010. SD/- SD/- (R.P. TOLANI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: MARCH 12 2010. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) MEERUT. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. AR/ITAT