ITA No. 6859/Mum/2013, (Assessment Year: 2009-2010). Case: Neela P. Doshi Vs The Asst. Comm. of Income Tax. ITAT (Income Tax Appellate Tribunal)
| Case Number | ITA No. 6859/Mum/2013, (Assessment Year: 2009-2010) |
| Counsel | For Appellant: Mahesh O. Rajora and For Respondents: Vijay Kumar Soni, DR |
| Judges | Joginder Singh, Member (J) and Rajesh Kumar, Member (A) |
| Issue | Income Tax Act, 1961 - Sections 132, 143(3), 271(1)(c), 54, 54(1), 54EC, 54F, 69A |
| Judgement Date | October 21, 2015 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
Joginder Singh, Member (J), (ITAT Mumbai 'B' Bench)
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The assessee is aggrieved by the impugned order dated 07/10/2013 of the ld. First Appellate Authority, Mumbai, confirming penalty of Rs. 3,36,912/-, imposed u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter the Act).
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At the time of hearing, the ld. counsel for the assessee, Shri Mahesh O. Rajoura, contended that quantum addition has been deleted by the Tribunal vide order dated 31/07/2015 (ITA No. 3513/Mum/2012), in the case of assessee itself, therefore, it was pleaded that penalty does not survive. This factual matrix was not controverted by the ld. DR, Shri Vijay Kumar Soni.
2.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion of the aforesaid order dated 31/07/2015, on quantum addition, for ready reference:--
"ITA No. 3513/M/2012
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The assessee in this appeal has challenged the action of the Ld. CIT(A) in confirming the additions made by the Assessing Officer (hereinafter referred to as the AO) as unexplained investments in relation to jewellery found during the course of search action.
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The facts in brief are that a search action u/s. 132 of the I.T. Act was carried out in the case of Acme Group Companies and related persons. The assessee was also covered in the said search action. The assessee is a partner in various firms engaged in business of builder and developer. During the course of the search operation, total jewellery valued at Rs. 17330641/- was found from the premises of the assessee, out of which jewellery valued at Rs. 36,93,026/- was seized. During the course of the assessment proceedings, the AO asked the assessee to show cause why jewellery to the extent which has not been reflected in the return of income should not be treated as unexplained and added to the income of the assessee.
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The assessee explained the source of the jewellery and made his submissions vide letter dated 4.10.2010 and further vide letter dated 8.11.2010. He further submitted that looking to the status of family and the customs and the practice of the community to which the family belonged, the jewellery found should be treated as duly explained. The AO however did not agree with the explanation offered by the assessee. He observed that out of the total jewellery found, the jewellery valuing Rs. 21,58,524/- had remained unexplained. He accordingly added the said amount into the income of the assessee u/s. 69A of the Act. Aggrieved by the addition made by the AO, the assessee preferred appeal before the Ld. CIT(A).
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The assessee submitted before the Ld. CIT(A) that the jewellery found during the search action belonged to the members of the Doshi family, including the assessee, the names of whom are mentioned as under:
"i) Mr. Pravin H. Doshi (Spouse of Appellant)
ii) Mrs. Neela Pravin Doshi (Self-Appellant)
iii) Mr. Munish P. Doshi (Son of Appellant)
iv) Mrs. Alka Munish Doshi (Daughter in law)
v) Master Manav Munish Doshi (Grand Son of Appellant)
vi) Mr. Rajesh P. Doshi (Son of Appellant)
vii) Mrs. Priti Rajesh Doshi (Daughter in law)
viii) Pravin H. Doshi (HUF)
ix) Mrs. Ranjan Ben R. Doshi. (widow of late Shri Ratilal Doshi) (Aunty of spouse)"
The assessee also furnished the following evidences to explain the source of acquisition of the jewellery in question:
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Jewellery valuation Report dt. 1.11.1995 of Suresh C. Kapoor, Government Approved Value (during search action in 1995)
b) Jewellery valuation Report dt. 23.4.2004 as on 3 1.3.2004 of Shrenik R. Shah (Jewellery Report obtained for Wealth Tax Purpose)
b) Jewellery Valuation Report dt. 3.4.2000 as on 31.3.2000 in case of Priti Rajesh Doshi (Maiden name Priti Vinod Ambani)
c) Bills for purchase of Jewellery & making charges along with bank statement/pass book reflecting payment made along with few ledger account of parties.
The assessee also filed the ledger of the jewellery account reflecting the jewellery purchased for the relevant period. The assessee further submitted that considering the financial status of the family of the assessee, the jewellery found during course of search action could not be regarded as unexplained. The assessee further explained that some of the jewellery was received as gift from relatives on social and religious occasions like marriage, birthday anniversary etc. It was also explained that some of the jewellery was remade out of the old jewellery. The assessee further submitted that the total weight of jewellery found matched with the jewellery accounted by the Doshi family. The assessee further submitted that in case of some jewellery, the description did not match either due to absence of full description of the jewellery made by the Departmental Valuer during search action or due to the remaking of the jewellery from the old jewellery items. It was submitted that even in respect of Diamond Jewellery, the overall carat weight of diamonds approximately matched with that was already accounted by assessee's family members. It was therefore submitted that the additions under section 69A were not warranted in this case.
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The Ld. CIT(A), after considering the submissions of the assessee observed that it was correct that the overall weight of the gold jewellery declared by the assessee and his family in the books of accounts was in excess of gold jewellery found during the course of search action, however, the department had to match each and every item found with the items declared in the valuation reports of the Approved Valuers as furnished by the assessee and that the onus was on the assessee to prove the source of acquisition of each and every item of jewellery. He therefore called upon the assessee to prepare an item vise chart showing which of the items could be said to be matching and another chart in respect of items which did not match with the description of items made in the valuation report furnished by the assessee. The assessee made charts No. I & II in the above manner in relation to gold items, the contents of which have also been reproduced in the impugned order.
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The Ld. CIT(A), after tallying and making comparative analysis of the items disclosed by the assessee in the approved valuer's report with that of the report made during search action, observed that most of the items mentioned in chart No. I mathed with the description given in the valuation report of the approved valuer, except items No. 24 & 25 being gold ginni and gold coin respectively, which the assessee claimed to have been received as gift. The Ld. CIT(A), therefore directed the AO to delete the addition in respect of the remaining items mentioned in chart No. I, except the above stated two items amounting to Rs. 82,392/- and Rs. 75,823/- respectively. In relation to chart No. II, the Ld. CIT(A) observed that the items mentioned in chart No. II did not exactly match with the description made in the approved valuers' reports. He, therefore, confirmed the additions in respect of items of gold jewellery mentioned in chart No. II.
The Ld. CIT(A) also directed the assessee to prepare similar charts in respect of diamond jewellery. The assessee submitted the said charts accordingly. The Ld. CIT(A), after tallying the each of the items with that of valuation report of the approved valuer, found that though number of pieces of diamonds in respect of diamond jewellery were matching in almost all the items; however, there was difference in the estimate of carat weight. He therefore held that the description did not exactly match in respect of diamond jewellery. He, accordingly, confirmed the addition made by the AO in respect of diamond jewellery. Aggrieved by the...
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