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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
Captioned appeal filed by the assessee is directed against the order passed by the Learned Commissioner of Income Tax (Appeal)-11, Ahmedabad [in short ‘Ld. CIT(A)’], dated 27.02.2024, which in turn arises out of an assessment order passed by the Assessing Officer (AO) under Section 143(3) r.w.s 153C of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) vide order dated 19.12.2019.
The grievances raised by the assessee are as follows:
“1. The grounds of appeal mentioned hereunder are without prejudice to one another.
2. The ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the "CIT(A)"]erred on facts as also in law in dismissing the appeal ex-parte.
3. The ld. CIT(A) erred on facts as also in law in rejecting ground of appeal related to validity of assessment order passed u/s.153C of the Act. That on facts as also in law, initiation of action u/s 153C of the Act is invalid and assessment made on such invalid initiation deserves to be quashed and may kindly be quashed.
4. The ld. CIT(A) erred on facts as also in law in confirming addition of Rs.2,12,800/-, made on protective basis on the alleged ground of failure to substantiate actual ownership of the gold seized. The addition made and confirmed is totally unjustified and uncalled for, which is deserved to be deleted and may kindly be deleted.
5. Your Honour'sassessee craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.”
The facts of the case which can be stated quite shortly are as follows: The assessee is an individual and engaged in the business of manufacturing and trading in Gold Ornaments. The assessee has maintained his books of account, which was audited u/s 44AB of the Income-tax Act, 1961.The ADIT, Investigation, Rajkot had intercepted two persons namely, Shri SureshkumarJalkishanBhangarwa and Shri Jagdish Prasad of Bright Courter on 27.10.2017, at Rajkot Airport who were carrying various parcels including parcels allegedly sent by M/s Calcutta Chain & Ball House, Secunderabad weighing 70.05 gms valued at Rs. 2,12,800/-. The parcels allegedly were to be delivered to the assessee, containing total Fine Gold weighing 70.05 gms. The said Gold was finally seized by the ADIT, Rajkot and on not being satisfied with the supporting documents provided or produced regarding the ownership of -A.Y. 2018-19 Shri Pankajkumar Odhhavjibhai Lumbhani vs. ACIT above stated Gold during post interception Interrogation/investigation. Subsequently, proceedings u/s 153C was initiated in the case of the present assessee and AO has also sent the information/his satisfaction note for initiation of proceedings u/s 153C to the jurisdictional AO of the supplier M/s. Calcutta Chain & Ball House, Secunderabad. The AO had in the assessment order, held that the Fine Gold received by the assessee were belonging to M/s. Calcutta Chain & Ball House, Secunderabad weighing 70.05 gms, but it was not known whether it is explained one or unexplained. Therefore, in order to protect the Interest of revenue, assessing officer made addition of Rs.2,12,800/-, being the value of Fine Gold weighing 70.05 grams in the hand of the assessee, on protective basis.
Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has confirmed the action of the assessing officer. Having gone through the order of the assessing officer, the CIT(A) found that assessing officer has made protective, addition in the hands of the assessee, because the real owner is not known and the assessment in the hands of the real owner is pending, therefore, ld. CIT(A) confirmed the addition made by the assessing officer.
Aggrieved by the order of the Ld. CIT(A), the assessee is in further appeal before us.
Learned Counsel for the assessee, argued that in assessee’s case under consideration, the substantive addition was already made in the hands of Shaik Taslim Mahammad. Therefore, for the same amount, the protective addition, so made in the hands of the assessee, should be deleted.
We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record.We note that the assessing officermade the addition to the tune of Rs.2,12,800/-. The same addition on substantive basis was made in the hands of Shaik Taslim Mahammad, by the assessing officer, vide, order dated 18.12.2023, passed u/s. 147 r.w.s. 144 read with Section 144B of the Act, which is reproduced below:
“Unexplained money u/s69A of the Act- As discussed above, a parcel no. J 21 containing fine gold weighing 70.05 grams valued at Rs.2,12,800/- was seized at Rajkot Airport during the Assembly Election, 2017 which belongs to the assessee. In this regard, ample opportunities have been given to the assessee to furnish details alongwith the documentary evidence in respect of the issued mentioned above. However, the assessee has not complied with the statutory notices issued in his case. In view of the above discussion and in absence of any submissions from assessee’s side, the gold weighing 70.05 gram valued at Rs.2,12,000/- remain unaccounted in assessee’s hands. Since, the assessee is the owner of the said gold, hence, the assessee was asked to show cause as to why the source of acquisition of the said gold of Rs.2,12,000/- should not be treated as unexplained money under section 69A r.w.s. 115BBE of the Income Tax. Penalty is also proposed to be initiated u/s271AAC of the Income Tax Act, 1961.
9.We note that protective assessment is made when there is uncertainty about who the real owner of the income. The protective assessment is done to safeguard the interest of the Revenue, ensuring the income is taxed in at least one hand. Thus, protective addition is temporary and subject to deletion when the substantive addition is confirmed in the hands of the correct assessee.
-A.Y. 2018-19 Shri Pankajkumar Odhhavjibhai Lumbhani vs. ACIT 10.We note that substantive additionof the same amountof Rs.2,12,800/- has been made in the hands of real owner, Shri Shaik Taslim Mahammad, vide assessment order dated 18.12.2023, framed u/s.147 r.w.s. 144/144B of the Act. Therefore, we find that since the substantive addition has been made in the hands of the real owner, therefore, there is no logic to keep protective addition, in the hands of the assessee, under consideration. Hence, we delete the protective addition in the hand of assessee.
In the result, the appeal filed by the assessee is allowed.
Order is pronounced in the open court on 07/01/2025