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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI VIKAS AWASTHY, HONBLE & SHRI S. RIFAUR RAHMAN, HONBLEShri Ashok Bansal Shri Suresh Periasamy
O R D E R PER S. RIFAUR RAHMAN (AM)
This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] dated 06.10.2021 for the A.Y.2012-13.
(A.Y. 2012-13) Meena Kashiprasad Murarka 2. Brief facts of the case are, assessee filed return of income for the A.Y. 2012-13 on 28.09.2012 declaring total income of ₹.17,53,700/-. The return was processed u/s. 143(1) of Income-tax Act, 1961 (in short “Act”). Subsequently information received from ITO Ward 1(1)(4), Surat that the assessee has entered into non-genuine transaction with Shri Anil Chokhara (Proprietor of Keshav Impex). As per the information in case of Anil Chokhara there is no real business activity related to diamond and therefore all the transactions done from him are also not genuine. The assessee has made transaction with Shri Anil Chokhara worth of ₹.1,98,620/- in the A.Y. 2012-13. Accordingly, the case of the assessee was reopened by issue of notice u/s. 148 of the Act. The notices u/s.142(1) were issued and served on the assessee. In response to notice u/s.142(1) of the Act the assessee filed relevant information and submitted that assessee has duly accounted in the form of self-ornaments in the Books of Accounts and has duly offered the said jewellery in her wealth tax return and had paid the same amount by account payee cheque. In view of the above, the said purchase of the ornaments cannot be disallowed u/s. 69C of the Act. Subsequently the Assessing Officer issued notice u/s. 133(6) of the Act to Shri Anil Chokhara for confirming the genuineness of the bill provided to the assessee. Since there was no (A.Y. 2012-13) Meena Kashiprasad Murarka response from him the addition was made u/s. 69 of the Act in the hands of the assessee.
Aggrieved assessee preferred an appeal before National Faceless Appeal Centre, Delhi. After considering the submissions of the assessee the addition was sustained by relying on the decision of the Hon'ble Calcutta High Court in the case of CIT v. M/s. Precision Finance Pvt. Ltd., [208 ITR 465] as per which mere transaction through banking channel is not sacrosanct.
Aggrieved assessee is in appeal before us raising following grounds in its appeal: - “1. Learned Commissioner of Income tax(Appeals) erred in confirming the addition made to Total Income of the Appellant u/s 143(3) of the Act to the tune of Rs 1,98,620/- being unexplained investment u/s 69 of the Income Tax Act,1961 on the plea that no details have been filed regarding this transaction which could establish the investment without referring to submission made by the appellant giving full detail and source of investment made. Appellant submits that in view of the facts and circumstances of the case as well as in law, the said addition to Total Income of the Appellant to the tune of Rs 1,98,620/- u/s 69 is bad in law and ought to be allowed in full while passing order u/s 143(3) of the Act. The Tax effect of addition is Rs 1,21,700/- as per notice of demand u/s 154
2. Appellant submits that in view of the facts and circumstances of the case as well as in law, the said additions made to the Total
(A.Y. 2012-13) Meena Kashiprasad Murarka Income of the Appellant to the tune of Rs 1,98,620/- may please be deleted.”
At the time of hearing, it is brought to our notice that the assessee has made investment in jewellery for personal use and does not relate to the business of the assessee, therefore the provisions of section 69 of the Act are not attracted and it was submitted that only the payment was made from partnership firm.
On the other hand, Ld.DR relied on the orders of the Authorities below.
Considered the rival submissions and material placed on record, we observe that the assessee has entered into transaction with Shri Anil Chokhara and assessee has purchased certain jewellery which was properly declared by the assessee in her wealth tax return as the personal belongings. Therefore, since the assessee has clearly declared the same in wealth tax return and the payment is relating to jewellery which is used for personal use of the assessee and this payment cannot be brought to tax u/s. 69 of the Act and nowhere it is proved that this transaction is relating to the business of the assessee. Therefore, we deem it fit and (A.Y. 2012-13) Meena Kashiprasad Murarka proper to delete the addition made by the Assessing Officer. Accordingly, Ground raised by the assessee is allowed.
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 21st June, 2022.