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Income Tax Appellate Tribunal, DELHI BENCH G, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI
ORDER PER H.S. SIDHU, JM
The Assessee and Department has filed Cross Appeals which are emanate from the common order dated 29.10.2012 of the Ld. CIT(A)
(Central), Gurgaon pertaining to A.Y. 2009-10. Since the issues involved in these appeals are common and identical, hence, the appeals were heard together and are being disposed of by this common order for the sake of convenience.
The grounds raised in Assessee’s Appeal read as under:-
On the facts and circumstances applicable to the case the Ld. CIT(A) has failed to appreciate that the information in respt of undisclosed watches and confirmed addition of Rs. 14,92,000/-. The addition confirmed by CIT(A) is unwarranted.
2. Appellant craves leave to amend alter and delete above ground of appeal.
3. The grounds raised in Revenue’s Appeal read as under:-
1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in deleting the addition made of Rs. 27,26,750/- on account of unexplained cash found at the residence of the assessee at the time of search by accepting the contention of the assessee. Cash of the company JMD Ltd., was kept for safekeeping at assessee’s residence ignoring the fact that the AO had actually reconciled cash book of the company with the bills and vouchers for the period 15.7.2008 to 6.8.2009 (date of search) and after reconciliation found that no proof of cash having, been taken from company’s office to residence of assessee?”.
4. The brief facts of the case are that a search and seizure operation under section 132(1) of the Income Tax Act, 1961 (hereinafter referred as the Act) was conducted at the residential / business premises of the persons associated with the JMD Group on 06.8.2008. Residence of Sh. 2 Sunil Bedi and Smt. Pinky Bedi was also subject to search and seizure operation. Assessee filed his return on 31.12.2009 declaring the income of Rs. 1,87,77,150/- which including the surrender of Rs. 1,40,00,000/- surrendered u/s. 132(4) of the Act. Notice u/s. 143(2) of the Act was issued which culminated into assessment framed at Rs. 2,15,03,900/- u/s. 153A(1)(b) of the Act by addition of Rs. 27,26,750/- and Rs. 16,00,000/- vide order dated 30.12.2010.
5. Against the assessment order dated 30.12.2010, the assessee appealed before the Ld. CIT(A), Gurgaon, who vide his impugned order dated 29.10.2012 has partly allowed the appeal of the assessee.
Aggrieved with the impugned order, the Assessee as well as Revenue are in cross appeals before the Tribunal on some of the issues mentioned in their respective appeals.
Ld. Counsel of the assessee has submitted that Ld. CIT(A) has failed to appreciate that the information in respect of undisclosed watches and confirmed addition of Rs. 14,92,000/-, which is totally uncalled for.
6.1 Ld. DR relied upon the orders of the AO with regard to deletion of addition of Rs. 27,26,750/- pertaining to cash found at the residence of the assessee. Ld. DR also filed the written submissions in the case and relied upon some of the case laws.
We have heard both the parties and perused the records, especially the written submissions. The Assessee and Revenue has contested their respective additions before us. 3 7.1 We first deal with Revenue’s appeal and find that it is the assessee's case that the money was kept at the residence for safe keeping, which was practical, being a family held concern and that lack of evidence of safe keeping was not sufficient reason for the additions. Certain facts were found not in dispute that the cash book of the company was not up-to-date at time of search; the assessee is the CMD of the closely held company; and importantly, there was no proof that cash was taken from the office to the residence. However on updating the cash book as on the date of search the same worked out to be Rs. 66,59,750/-, so the difference from the cash found in the first instance was rightly added back as unexplained in the hands of the assessee, Therefore Rs. 2,00,000/- was added back. Now as regards the cash stated to be kept in the residence for safe keeping the contention of the assessee was found to be acceptable in view of the facts of the case. The assessee was provided a part relief of Rs. 27,26,750/-, which does not need any interference on our part, hence, we uphold the same. As a result, the ground raised in the Revenue’s appeal is rejected and accordingly, the Revenue’s appeal is dismissed.
7.2 As regards the Assessee’s appeal is concerned, in this appeal the assessee has challenged the confirmation of addition of Rs. 16 lacs on account of undisclosed investment in watches. We note that this addition was on the basis of valuation done by some shopekeeper who deals in high end watches. We further note that out of 39 watches which were found during the search operation, a sum of Rs. 40,00,000/- stand surrendered on this account and two watches a Rolex and a Cartier were already declared in VDIS Scheme which fact was not considered by the AO. Moreover the assessee also disclosed the value of Rolex watch and another Cartier of Rs. 1.5 lac. The AO has taken the value of Rs. 56 lakh on the basis of estimated value only. We further note that AO relied on the information taken from the internet without referring to model number and taken valuation from vendor by showing him photograph.
Moreover, these watches were very old and information taken by the AO from internet may be of latest watches, therefore, value arrived at by AO is wrong. In view of the above, the addition of Rs. 16 lacs confirmed by the Ld. CIT(A) is totally wrong and therefore, we delete the same and allow the ground raised by the assessee.
In the result, the Appeal filed by the Assessee stand allowed and Appeal filed by the Revenue stand dismissed.
Order pronounced on 27/10/2017.