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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आदेश / O R D E R
PER KUL BHARAT, J.M: This bunch of 7 appeals by the assessee are against the consolidated order of the Commissioner of Income Tax (Appeals)-3, Bhopal dated 27.7.2017 pertaining to the assessment years 2008-09 to 2014-15. Since the common issues are involved, all these appeals are taken up together and are being disposed of by way of a consolidated order.
We take IT(SS)A No.239/Ind/2017 pertaining to the assessment year 2008-09 as a lead case for the purpose of narrating the facts. In this appeal, the assessee has raised following grounds of appeal:
1. “That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition in the years where the assessment proceedings were not pending and no incriminating material was found during the course of search.
2. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition of Rs.15,825/- towards unexplained investment made in construction of his house based on the report of the DVO.
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in holding that the source of cash of Rs.21,500/- deposited by the assessee in his bank account as unexplained and making addition of the same.
4. The assessee craves leave to add, alter, delete, or modify any ground(s) of appeal during or before the hearing of the appeal.” 2. The facts in brief are that a search u/s 132 of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) was conducted at the residential premises of the assessee as well as on the premises of other related concerns on 29.1.2014. Subsequently, notices u/s 153A of the Act dated 12.9.2014 were issued. In response to the notices, the assessee filed returns for the assessment years 2008- 09 to 2013-14 on 17.11.2014. Thereafter, the A.O. after considering the submissions and material placed before him, framed assessment, thereby, the A.O. made addition in respect of the unexplained investment in construction of house of Rs.15,825/- and unexplained cash deposit in bank account of Rs.21,500/- in the year under appeal.
Similarly, as per the DVO's report, the A.O. made addition 3
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] in respect of unexplained investment in construction of house in the A.Ys 2009-10 & 2010-11 and unexplained cash deposits in bank account and unexplained capital introduction in the assessment year 2009-10. The A.O. made addition in respect of unexplained investment in construction of house, as per DVO's report and unexplained cash deposit in bank account in the assessment year 2011-12. In the assessment year 2012-13 also addition was made by the A.O. on account of unexplained investment in construction of house and unexplained cash deposit. The A.O. in respect of the assessment year 2013-14, apart from making addition in respect of unexplained investment in construction of house and unexplained cash deposit in bank also made addition in respect of unexplained capital introduction. In the assessment year 2014-15, the A.O. made addition in respect of unexplained cash u/s 69A of the Act of [IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] Rs.20,66,450/-, unexplained jewellery u/s 69B of the Act of Rs.9,87,075/- and also additional income admitted u/s 132(4) of the Act on account of unexplained investment in residential houses of Rs.40,00,000/-.
3. Against this consolidated order, the assessee had preferred an appeal before the Ld. CIT(A), who after considering the submissions and material on record, partly allowed the appeal, thereby, the Ld. CIT(A) in respect of undisclosed investment dismissed the appeal of the assessee for all the assessment years and in respect of the cash deposits, the addition was confirmed in respect of the assessment years 2008-09, 2011-12 & 2013-14. However, in respect of the addition pertaining to the assessment year 2009-10 was deleted. The Ld. CIT(A) sustained additions on account of introduction of capital in the assessment years 2009-10 and 2013-14. Further, in the assessment year 2014-15, Ld. CIT(A) reduced the addition made in 5
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] respect of the jewellery, thereby he gave relief as per the Board’s circular No.1916 and in respect of the addition made on amount surrendered was sustained. Against this consolidated order, the assessee has filed present appeal.
Ld. Counsel for the assessee has reiterated the submissions as made in the written submissions for all the assessment years. The written submissions of the assessee are reproduced as under:
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
3. Ld. Counsel for the assessee has also placed reliance on the decision of this Tribunal rendered in the case of [IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] ACIT Vs. Shri Sudeep Maheshwari in ITA No.524/Ind/2013.
Ld. D.R. opposed these submissions and supported the orders of authorities below.
IT(SS)A No.239/Ind/2017:
Ground No.1 is against legality of addition made and sustained by the Ld. CIT(A). We find that the assessee had raised grounds of legality of the addition before the Ld. CIT(A). It is observed by the Ld. CIT(A) that the ground on legality was not pressed before him. Therefore, this ground before this Tribunal in our view would not be maintainable.
Moreover, the assessee could not bring any material on record to prove the observation of Ld. CIT(A) being wrong.
Under these uncontroverted facts, ground No.1 of the assessee’s appeal is dismissed.
Ground No.2 is against addition made on the basis of the DVO's report. Ld. Counsel for the assessee reiterated 13
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] the submissions as made before the A.O. It is stated that DVO had adopted CPWD rates which as per the assessee cannot be applied in private constructions. Moreover, the alleged difference between the value declared and value adopted by the DVO is only 15%. It is submitted that no incriminating material in the form of bills & vouchers were found at the premises of the assessee suggesting that investment declared by the assessee was not correct.
These submissions of the assessee are opposed by the Ld. D.R. and supported the finding of the authorities below.
We have considered the rival submissions. It is noticed that DVO adopted CPWD rates for valuing the value of investment made by the assessee. The report of the DVO is enclosed at paper book page nos.70 to 86. The DVO has recorded specifications of the construction in his report, which is reproduced as under for the sake of clarity:
“It is a RCC framed structure duplex residential building with a room at terrace. Brick masonary filler walls cement plastered and 14
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] distempered in side. Terrace is accessible. The parapet walls over terrace are having granie topping works, roof treatment works are carried ouit and tiles are also executed at terrace. Door frame of teak wood and glazed windows and fly wire mess shutters and MS grills, at GF and FF vetrified floor tiles and marble flooring, in some portion stone cladding over walls, In kitchen room granite stone over top and modular kitchen fittings provided. Stair case are having stainless steel railings and grass wall partitions are provided, POP false ceilings and wall panelling works in rooms, standard water supply and sanitary fittings and electrical fittings provided. Compound wall and a MS gate provided. One bore well and a septic tank: 8. It is also noticed that the construction was started in Oct’06 and completed in the year 2012-13. The DVO adopted cost index method, plinth area rates with reference to base 100 as on 1.10.2007 for the type of structure/specifications emanated, etc. duly enhanced by cost index of prevalent time of construction, the reason for adopting this method is that this being the most commonly and approved method of valuation of a building under construction and for newly constructed building to determine the cost of construction of such building. The DVO is an expert in the field of valuation of property such report generally should not be disbelieved, unless it is [IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] perverse and contrary to the facts as available on the record. It was stated before the Ld. CIT(A) that DVO had applied CPWD rates while working out the investment made in the property instead of PWD rates. It is contended that the DVO ought to have adopted the PWD rates at Bhopal, which would have given a fair estimation of the value of investment. In catena of judgements, the coordinate benches of this Tribunal have directed the A.O. to adopt the PWD rates for the purpose of working out investment made in the property. The extant PWD rates are not furnished by the parties. We therefore, direct the A.O. to verify the rates of PWD Bhopal, if it is found that PWD Bhopal rates are lower than the CPWD rates as applied by the A.O. In that event, he would apply the PWD rates and work out the value of investment on the basis of PWD rates. It is noticed that DVO has not commented upon as to why the rates of CPWD are [IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] applicable and why the rates of PWD are not applicable in the given facts and circumstances of the case. In our view, the DVO has to make a fair estimation after considering all the aspects of the matter the tax payer should not be fastened liability of tax purely on the basis of estimation only. This ground of the appeal is allowed in terms indicated herein above.
Ground No.3 is against confirming addition of Rs.21,500/- disbelieving the source of cash. Ld. Counsel for the assessee reiterated the submissions as made in the written submissions.
Ld. D.R. opposed these submissions.
We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. Ld. CIT(A) has confirmed the addition on the basis that no bifurcation of cash deposits made in respect of assessment year and source there of [IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] was furnished. The assessing officer in the assessment order at para 12 observed that the assessee had deposited cash in his savings bank account with Andhra Bank. In response to the query by the A.O. regarding source of deposits, it was stated by the assessee that he had received salary from firm and also the deposits were made out of cash in hand. However, the A.O. did not accept this contention on the ground that assessee did not furnish specific supporting documents. Ld. CIT(A) also sustained addition excepting the assessment year 2009-10.
Admittedly, it is incumbent upon the assessee to prove the source of deposits in his bank account. The contention of the assessee was that such deposits were made out of salary received from partnership firm and also out of cash on hand. In our view, the assessing officer was required to verify this contention of the assessee before rejecting the explanation as there is no dispute with regard to the fact
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] that the assessee had been carrying out business activity as a contractor, therefore, it cannot be presumed that no cash was generated out of business activities. Further, the assessee has been filing return and claiming the benefit of section 44AD of the Act. The assessee was not required to maintain book of accounts. This fact is not rebutted by the revenue. Therefore, considering the totality of the facts, we are of the view that the authorities below were not justified in rejecting the explanation of the assessee without making further enquiry, therefore, considering the fact that the assessee was having source of income and there is withdrawal of salary from the partnership firm and also the assessee had contended that in the course of business, he had received cash which was deposited in the bank account as a business receipt. We direct the A.O. to delete the addition. This ground of the assessee’s appeal is allowed.
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
Ground No.4 is general in nature and needs no separate adjudication.
In the result, the appeal filed by the assessee in IT(SS)A No.239/Ind/2017 is partly allowed.
Now we take up IT(SS)A No.240/Ind/2017 pertaining to the assessment year 2009-10. In this appeal, the assessee has raised following grounds of appeal:
1. “That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition in the years where the assessment proceedings were not pending and no incriminating material was found during the course of search.
2. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition of Rs.31,650/- towards unexplained investment made in construction of his house based on the report of the DVO. 3. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in holding that the source of capital introduction of Rs.1,00,000/- as unexplained and making addition of the same. 4. The assessee craves leave to add, alter, delete, or modify any ground(s) of appeal during or before the hearing of the appeal.”
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
In this appeal, ground No.1 raised by the assessee is identical to ground No.1 raised by the assessee in IT(SS)A No.239/Ind/2018, which was already adjudicated in para 5 above. For the same reasoning this ground is also dismissed.
Ground No.2 raised by the assessee is identical to ground No.2 raised by the assessee in IT(SS)A No.239/Ind/2018, except figures, which was already adjudicated in para Nos.7 & 8 above. For the same reasoning this ground of appeal is also allowed.
17. Ground No.3 is against introduction of capital of Rs.1 lakh. Ld. Counsel for the assessee reiterated the submissions as made before the Ld. CIT(A). It was stated before the Ld. CIT(A) that the additions are made in computation portion of the assessment order as unexplained capital introduction, however, no detailed
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] discussion regarding any unexplained capital is made in the body of the order.
Ld. D.R. opposed these submissions.
We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The Ld. CIT(A) has decided the issue of capital introduction by observing as under:
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
The A.O. in para-11 of his order has observed as under:
Admittedly, the assessee is not maintaining any books of accounts. However, it is stated that in the 23
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] submissions that the assessee has prepared receipt and payment account for all the years.
However, the A.O. made addition on the basis that the assessee is not maintaining the receipt and payment account. Contention of the assessee is that he has made the receipt and payment account in respect of the business of the assessee. Therefore, we direct the A.O. to verify from the receipt and payment account whether the assessee was having sufficient cash to introduce capital. This ground of the assessee’s appeal is allowed for statistical purposes as indicated herein above.
Ground No.4 raised by the assessee is general in nature and needs no separate adjudication.
In the result, the appeal filed by the assessee in IT(SS)A No.240/Ind/2017 is partly allowed.
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
Now we take up IT(SS)A No.241/Ind/2017 pertaining to the assessment year 2010-11. In this appeal, the assessee has raised following grounds of appeal:
1. “That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition in the years where the assessment proceedings were not pending and no incriminating material was found during the course of search.
2. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition of Rs.5,71,280/- towards unexplained investment made in construction of his house based on the report of the DVO. 3. The assessee craves leave to add, alter, delete, or modify any ground(s) of appeal during or before the hearing of the appeal.”
26. In this appeal, ground No.1 raised by the assessee is identical to ground No.1 raised by the assessee in IT(SS)A No.239/Ind/2018, which was already adjudicated in para 5 above. For the same reasoning this ground is also dismissed.
27. Ground No.2 raised by the assessee is identical to ground No.2 raised by the assessee in IT(SS)A
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] No.239/Ind/2018, except figures, which was already adjudicated in para Nos.7 & 8 above. For the same reasoning this ground of appeal is also allowed.
28. Ground No.3 raised by the assessee is general in nature and needs no separate adjudication.
In the result, the appeal filed by the assessee in IT(SS)A No.240/Ind/2017 is partly allowed.
Now we take up IT(SS)A No.242/Ind/2017 pertaining to the assessment year 2011-12. In this appeal, the assessee has raised following grounds of appeal:
1. “That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition in the years where the assessment proceedings were not pending and no incriminating material was found during the course of search.
2. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition of Rs.34,815/- towards unexplained investment made in construction of his house based on the report of the DVO. 3. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in holding that the source of cash of Rs.48,000/- deposited by the assessee in his bank account as unexplained and making addition of the same. . 26
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
4. The assessee craves leave to add, alter, delete, or modify any ground(s) of appeal during or before the hearing of the appeal.” 31. In this appeal, ground No.1 raised by the assessee is identical to ground No.1 raised by the assessee in IT(SS)A No.239/Ind/2018, which was already adjudicated in para 5 above. For the same reasoning this ground is also dismissed.
Ground No.2 raised by the assessee is identical to ground No.2 raised by the assessee in IT(SS)A No.239/Ind/2018, except figures, which was already adjudicated in para Nos.7 & 8 above. For the same reasoning this ground of appeal is also allowed.
Ground No.3 raised by the assessee is identical to ground No.3 raised by the assessee in IT(SS)A No.239/Ind/2018, except figures, which was already adjudicated in para No.11 above. For the same reasoning this ground of appeal is also allowed.
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
Ground No.4 raised by the assessee is general in nature and needs no separate adjudication.
In the result, the appeal filed by the assessee in IT(SS)A No.242/Ind/2017 is partly allowed.
Now we take up IT(SS)A No.243/Ind/2017 pertaining to the assessment year 2012-13. In this appeal, the assessee has raised following grounds of appeal:
1. “That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition in the years where the assessment proceedings were not pending and no incriminating material was found during the course of search.
2. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition of Rs.78,971/- towards unexplained investment made in construction of his house based on the report of the DVO. 3. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in holding that the source of cash of Rs.32,080/- deposited by the assessee in his bank account as unexplained and making addition of the same. . 4. The assessee craves leave to add, alter, delete, or modify any ground(s) of appeal during or before the hearing of the appeal.” 37. In this appeal, ground No.1 raised by the assessee is identical to ground No.1 raised by the assessee in [IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] IT(SS)A No.239/Ind/2018, which was already adjudicated in para 5 above. For the same reasoning this ground is also dismissed.
Ground No.2 raised by the assessee is identical to ground No.2 raised by the assessee in IT(SS)A No.239/Ind/2018, except figures, which was already adjudicated in para Nos.7 & 8 above. For the same reasoning this ground of appeal is also allowed.
Ground No.3 raised by the assessee is identical to ground No.3 raised by the assessee in IT(SS)A No.239/Ind/2018, except figures, which was already adjudicated in para No.11 above. For the same reasoning this ground of appeal is also allowed.
40. Ground No.4 raised by the assessee is general in nature and needs no separate adjudication.
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
In the result, the appeal filed by the assessee in IT(SS)A No.243/Ind/2017 is partly allowed.
Now we take up IT(SS)A No.244/Ind/2017 pertaining to the assessment year 2013-14. In this appeal, the assessee has raised following grounds of appeal:
1. “That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition in the years where the assessment proceedings were not pending and no incriminating material was found during the course of search.
2. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in making addition of Rs.3,52,969/- towards unexplained investment made in construction of his house based on the report of the DVO. 3. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in holding that the source of cash of Rs.1,80,000/- deposited by the assessee in his bank account as unexplained and making addition of the same. 4. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in holding that the A.O. was justified in treating the source of capital introduction of Rs.2,25,000/- as unexplained and making addition of the same. 5. The assessee craves leave to add, alter, delete, or modify any ground(s) of appeal during or before the hearing of the appeal.” 43. In this appeal, ground No.1 raised by the assessee is identical to ground No.1 raised by the assessee in [IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] IT(SS)A No.239/Ind/2018, which was already adjudicated in para 5 above. For the same reasoning this ground is also dismissed.
Ground No.2 raised by the assessee is identical to ground No.2 raised by the assessee in IT(SS)A No.239/Ind/2018, except figures, which was already adjudicated in para Nos.7 & 8 above. For the same reasoning this ground of appeal is also allowed.
45 Ground No.3 raised by the assessee is identical to ground No.3 raised by the assessee in IT(SS)A No.239/Ind/2018, except figures, which was already adjudicated in para No.11 above. For the same reasoning this ground of appeal is also allowed.
46. Ground No.4 raised by the assessee is identical to ground No.3 raised by the assessee in IT(SS)A No.240/Ind/2018, except figures, which was already
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] adjudicated in para No.22 above. For the same reasoning this ground of appeal is also allowed for statistical purposes.
46 Ground No.5 raised by the assessee is general in nature and needs no separate adjudication.
In the result, the appeal filed by the assessee in IT(SS)A No.244/Ind/2017 is partly allowed. to the assessment year 2014-15. In this appeal, the assessee has raised following grounds of appeal:
“That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in providing relief of only 331.112 grams of gold as explained as against ….Grams of gold held by the A.O. as unexplained.
That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in confirming addition of Rs.20,66,450/- treating the cash found during the course of the search with the family as unexplained. 3. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A) was not justified in confirming addition of Rs.40,00,000/- being the income declared u/s 132(4) without any evidence. 4. The assessee craves leave to add, alter, delete, or modify any ground(s) of appeal during or before the hearing of the appeal.” 32
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
Ground No.1 is against addition made in respect of unexplained investment in jewellery. Ld. Counsel for the assessee reiterated the submissions as made in the written submissions and also the submissions made before the Ld. CIT(A). It is submitted that the assessee is residing in a family with his mother Smt. Madhu Khilwani, his wife Smt.
Komal Khilwani and his two daughters. The total gold jewellery found at residence of the bank locker was of 662.224 gms. and silver of 210 gms. It is stated that as
per instruction No.1916 dated 11.5.94, the set off should be given to the assessee to the extent of 1600gms. The reliance is placed on the judgement of Hon'ble Karnataka High Court rendered in the case of Smt. Pati Devi Vs. ITO and Another 240 ITR 727, wherein it has been held that benefit of instruction has to be given to the assessee.
Respectfully following the same, we hereby direct the A.O. to delete the addition if it is found in accordance with the [IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] instruction No.1916 dated 11.5.1994. This ground of the assessee’s appeal is allowed in the terms indicated herein above.
Ground No.2 of the assessee’s appeal is against confirming addition of Rs.20,66,450/- treating the same as unexplained. Ld. Counsel for the assessee reiterated the submissions as made before the Ld. CIT(A) and also the written submissions. It is contended that the assessee had received cash from M/s. Sainath Colonisers from 30.11.2009 to 27.10.2010 totalling to Rs.70 lakhs as advance against sale of property by the HUF. This cash has been entered into Sainath Colonisers and the assessment was made in that case accepting this amount.
Out of this cash, a sum of Rs.50 lakhs was introduced in various business activities by the assessee and the balance of Rs.20 lakhs was kept in locker. It is in the joint name of the assessee and his mother. It is submitted that the 34
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] amount is duly explained. The authorities below were not justified in making the addition.
Ld. D.R. opposed these submissions and supported the orders of the authorities below.
We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The contention of the assessee is that amount of Rs.20 lakhs as recovered from the bank locker is part of the sale consideration received in cash from M/s. Sainath Colonisers. This fact is not rebutted by the revenue. It is further stated that this amount is duly recorded in the books of accounts of M/s. Sainath Colonisers and the assessment was framed accordingly.
Considering this fact, we are of the view that when the assessee has explained source of cash recovered without any contrary material on record, the addition ought not to [IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal] have made, hence, we direct the A.O. to delete this addition.
Ground No.3 is against sustaining the addition of Rs.40 lakhs being the income declared u/s 142(4) of the Act. Ld. Counsel for the assessee reiterated the submissions as made in the written submissions. He submitted that the authorities below were not justified in making the addition. He submitted that there is no incriminating material to connect the disclosure so made in the statement. Ld. Counsel for the assessee placed reliance on the judgement of this Tribunal rendered in the case of ACIT Vs. Shri Sudeep Maheshwari in ITA No.524/Ind/2013. Ld. D.R. opposed these submissions and supported the orders of the authorities below. He submitted that the decision as relied by the Ld. Counsel for the assessee is not applicable on the facts of the present case. 36
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The contention of the assessee that the addition has been made merely on the basis of the statement of the assessee recorded during the course of search. We find that the A.O. had raised a specific query in the form of question No.13, in response thereto, the assessee has categorically stated that investment in the house is out of undisclosed source. Therefore, in our considered view, decision of this Tribunal in the case of ACIT Vs. Shri Sudeep Maheshwari in as relied by the Ld. Counsel for the assessee is not applicable on the facts of the present case as in that case the disclosure made in respect of self was sustained by the Ld. CIT(A) and was affirmed by this Tribunal by observing as under:
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
We have given our thoughtful consideration to the rival contentions of the parties. It is undisputed fact that the statement recorded u/s 132(4) of the Act has a better evidentiary value but it is also a settled position of law that the addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the contents of the statement. In the case in hand, revenue could not point out as what was the material before the A.O., which supported the contents of the statement. In the absence of such material, coupled with the fact that it is recorded by the Ld. CIT(A) that the assessee himself had surrendered a sum of Rs.69,59,000/- and Rs.75,00,000/- in A.Y. 2008-09 and 2009-10 respectively. The A.O. failed to co-relate the disclosures made in the statement with the incriminating material gathered during the search. Therefore, no inference is called for in the finding of the Ld. CIT(A) and is hereby affirmed. Ground raised by the revenue is dismissed.
55. Thus, this ground of the assessee is rejected since there is a direct correlation with the disclosure made and unexplained investment in the house.
Ground No.4 raised by the assessee is general in nature and needs no separate adjudication.
In the result, the appeal filed by the assessee in is partly allowed for statistical purposes.
[IT(SS)A Nos.239 to 244/Ind/2017 & ITA 632/Ind/2017] [Shri Anil Khilwani, Bhopal]
In the result, the appeals filed by the assessee in IT(SS)A Nos.239 to 244/Ind/2017 are partly allowed and the appeal of the assessee in is partly allowed for statistical purposes.
Order was pronounced in the open court on 30 .05.2019.