Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: SHRI WASEEM AHMED, & SHRI T.R. SENTHIL KUMAR
आदेश/O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals)-11, Ahmedabad, dated 07/03/2022 arising in the matter of assessment order passed under s.143(3) r.w.s. 153C of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2018-19.
2. The only issue raised by the assessee is that the learned CIT (A) erred in holding that the fine gold weighing 949.18 gram was sent to him for job work without considering the material evidence that such gold was purchased by him.
The facts as arising from the order of the authorities below are that the assessee in the present case is an individual and claimed to be engaged in the business of gold jewelry. The history of the case goes like this that there is a person namely Shri Suresh Kumar, an employee of “Jay Mata Di Air Services” who came to Rajkot airport to collect the parcel/delivery which came through Jet Airways. On being intercepted by the Air Surveillance Unit dated 27-10-2017, it was discovered that Shri Suresh Kumar has taken the delivery for the gold which was to be delivered to different parties. But Shri Suresh Kumar failed to furnish the necessary details about the parties with respect to the ownership of the gold. Thereafter, the enquiry was consequently converted into the search under section 132 of the Act on Shri Suresh Kumar and subsequently, the gold was seized.
The search team during the course of post search proceedings found that one of the parcel bearing No. J-31 containing 949.18 grams of fine gold was sent by M/s Brij Mohan Jewellers for the purpose of the job work to the assessee, proprietor M/s J Ali & Sons. Based on such information, the proceedings under section 153C of the Act were initiated against the assessee.
The assessee in the proceedings initiated under section 153C of the Act contended that he has purchased the gold from the party namely M/s Brij Mohan Jewellers. The assessee in support of his contention has filed the copy of the tax invoice dated 26 October 2017, ledger copies, bank statement to justify the payment, GST return of the supplier declaring the sale to the assessee and the stock registers in the books of the supplier. Likewise, the supplier namely M/s Brij Mohan Jewellers has also confirmed the fact of having supplied/sold the impugned gold to the assessee. Thus, the impugned gold represents the actual purchases made by the assessee which was made out of the accounted sources. Thus, the same cannot be assumed to have been sent by M/s Brij Mohan Jewellers for the purpose of the job work.
However, the AO disagreed with the contention of the assessee by observing that the assessee came before search team after 20 days of seizure of gold. The gold parcel was not containing the name of sender and receiver. There was no documentary evidence available with the parcel suggesting the name of sender and receiver, the purpose of sending the gold. The assessee before search authority has clearly admitted to be engaged in the activity of job work and impugned gold was sent by the said party for making ornaments on job work basis. The assessee also expressed his inability to produce relevant evidences.
Likewise, the AO also found that Shri Sandeep Gupta proprietor of M/s Brij Mohan Jewellers have clearly admitted in his statement to have made the sale of the gold 949.18 gram to the assessee vide invoice dated 26th October 2017 and the same was handed over assessee. As such Shri Sandeep Gupta denied to have made any courier to the assessee.
The AO also found that in case of interstate transfer of gold on sale or for job work purpose it is necessary to produce the forms 402/403 of the GST but there was no such form produced by either of the party being the sellers and the purchasers with respect to seized gold.
8.1 Based on the above, the AO concluded that the both the parties have failed to prove the genuineness of transaction w.r.t. seized gold. The documentary evidences furnished during the assessment proceeding are afterthought to give color of unaccounted transaction as genuine transaction. Hence, the claim of the assessee that the seized gold is purchased by him is not acceptable as the assessee failed to substantiate his actual ownership. However, the AO to protect the interest of revenue made protective addition of Rs. 29,01,486/- in the hand of the assessee being value of seized gold weighing 949.18 grams.
The aggrieved assessee preferred an appeal to learned CIT-A.
9.1 The assessee before the learned CIT-A reiterated that the impugned gold was purchased by him from M/s Brij Mohan Jewellers of Hyderabad and same is duly accounted and supported by the documentary evidences. However, the AO only in the absence of form 402/430 of GST disbelieved the documentary evidence furnished and made addition under section 69A of the Act on protective basis.
9.2 The learned CIT-A after considering the facts in totality deleted the protective addition made by the AO by observing as under: “5.3.3 From the assessment order passed in the case Shri Sandeep Gupta, Prop. of M/s. Brij Mohan Jewellers, Hyderabad for Asst. Year 2018-19, it is seen that the Assessing Officer has categorically given the finding that the Fine Gold weighing 949.18 grams sent to the appellant actually belongs to Shri Sandeep Gupta, Prop. of M/s. Brij Mohan Jewellers, Hyderabad. Therefore, as the amount fo Gold seized has already been added in the hands of sender on substantive basis, the protective addition made in the hands of the appellant do not survive. Therefore, the addition of Rs.29,01,486/- is directed to be deleted. Ground of appeal no. 3 & 4 is allowed.”
Being aggrieved by the finding of the learned CIT(A) the assessee is in appeal before us.
11. The learned AR before us filed a paper running from pages 1 to 291 and contended that the gold belongs to the assessee which is supported by various documents such as purchase bills, payment details, VAT returns etc. Furthermore, the learned CIT-A has deleted the protective in addition made by the AO which has not been challenged before the higher forum. As such, the finding of the learned CIT-A has reached to the finality.
On the other hand, the learned DR has filed the written submissions vide letter dated 7 December 22 which is reproduced as under:
“Sub: Written submission in the matter of JaliluddinJummat Ali Shekh, Rajkot (PAN:BYFPS8402Q) for A.Y.2018-19 - – regarding. Ref: Hearing on 06.12.2022. Kindly refer to the above.
Following are the brief of submissions made by the CIT(DR) during the course of hearing:-
(1) That the parcel, which bore neither the name of the sender nor the name of the receiver, was apprehended at Rajkot Airport. The parcel had no documents (pg.104 of the paper book, Q.No16).
(2) That the assessee appeared after 20 days before Income tax department and claimed that the parcel and the gold belongs to him which he purchased from M/s.Brij Mohan Jewellers, Hyderabad for which he provided bill dtd.26.10.2017. The assessee further informed that till date he is engaged only in petty job works (pg.103 & 104 of the paper book, Q.No.9,10&14).
(3) That the assessee was not even able to produce the required Form No.403 even after 20 days of procurement (pg.104 Q.No.13&14).
(4) That the seller party has informed the income tax department that they had on 26.10.2017 sold gold worth Rs.29,01,486/- to the assessee. Then they have handed over the goods to Mr.S.KJalil who might have done the courier {pg.110 of the paper book as well as pg.52 of the paper book, paragraph beginning "with regard to fine gold')
(5) That the sale has happened by bill dated 26.10.2017. That the seller has handed over the items sold (gold bullions) to the assessee ShriJaliluddin J. Ali Shekh, proprietor of J.Ali& Sons on 26.10.2017, But, the parcel booking records suggest that in Hyderabad, the date of booking was 24.10.2017 and the date of dispatch from Hyderabad to Rajkot on 25.10.2017. As such, the seized gold In Rajkot is different from the gold which has been purchased and received by Shri Jaliluddin J. All Shekh, proprietor of J.Ali& Sons (pg.53, para.iii).
(6) That the Assessing Officer had made additions in the hands of the assesses on protective basis (pg.115 of the paper book and para.6 of the assessment order).
(7) That the Ld.CIT(A), upon consideration that the department has made substantive additions in the hands of Hyderabad based seller M/s.Brij Mohan Jewellers, on thesame item, has deleted the protective assessment (pg.8 of the paper book para.5.3,3).
(8) That as such the assessee has no point of grievance against the department. As per facts available on record, he purchased gold on 26.10.2017 and received possession of such gold on the same date. He has presented bill dated 26.10.2017 before Income tax authorities. He has presented no evidence to suggest that the parcel, which was booked on 24.10.2017 and couriered on 25.10.2017 contained gold purchased by him on 26.10.2017, which was also received by him on 26-10.2017. As on date the protective assessment in his case has been deleted by Ld. CIT (A). By no stretch of imagination one can assume that gold purchased and handed over to the assessee on 26.10.2017 can be couriered on 24.10.2017 ( two days before such purchase) and despatched on 25.10.2017.
(9) That the assessee has at no point of time disputed that M/s.Brij Mohan Jewellers, have sold gold bullion worth Rs.29.01 lakhs on 26.10.2017 and that the same items were handed over to the assessee on the same date, i.e. 26.10.2017.
(10) That the assessee has not produced any communications with the Income tax department seeking release of the seized gold. It is probably because he is not the owner of seized gold, as the gold in parcel was couriered on 24.10.2017 while the assessee purchased gold on 26.10.2017. Notwithstanding, though the Ld AR has raised this contention and sought Hon ITATs intervention in getting seized gold released, the grounds of appeal by the assessee contain no such prayer. (11) That the facts are still not clear as to how the gold parcel which was booked on 24.10.2017 and dispatched on 24.10.2017 can contain the same gold bullion which was purchased by the assessee on 26.10.2017 and received by hand on 26.10.2017. As on date, the gold bullion has been considered the property of Seller, in whose hands substantive additions have been made.
3. As such it is humbly prayed that the matter requires further clarity of facts and the matter may be opened up for necessary arguments and may not be considered as Heard.”
Both the learned AR and the DR before us vehemently supported the order of the authorities below as favourable to them.
We have heard rival contentions of both the parties and perused the materials available on record. In the present case, the AO made the addition in the hands of the assessee on protective basis for � 29,01,486/- under the provisions of section 69A of the Act. It was alleged by the AO that the assessee has failed to establish the genuineness and ownership of fine gold weighing 949.18 gram seized from Rajkot Airport sent by the party namely M/s Brij Mohan Jewellers of Hyderabad. Still, the AO to protect the interest of revenue made addition on protective basis in the hand of the assessee. However, the learned CIT (A) found that substantive addition has already been made by the AO in the hands of Shri Sandeep Gupta the proprietor of M/s Brij Mohan Jewellers by treating the impugned gold belonging to him. Therefore, the learned CIT (A) was pleased to delete the protective addition made by the AO in the hand of the assessee.
14.1 The controversy before us relates whether the impugned gold seized by the Revenue belongs to the assessee and sent to assessee on account of purchases or for job work. Admittedly, the assessee in support of the genuineness of purchases has furnished the details as mentioned having below:
“…Appellant also enclosing here with following supporting in this regard for your ready reference. M/s BrijJewellers Prop. Sandeep Gupta a) Copy of purchase invoice GST/189. b) Copy of ledger of M/s BrijJewellers for the F.Y. 2017-18 reflecting the transaction of Rs. 29,01,486/- c) Copy of GSTR-1 of brij jewelers reflecting the purchases of Rs. 29,01,486/- d) Copy of our stock register reflecting stock of Rs. 949.180/- e) Copy of stock register of brij jewelers. f) Copy of assessment order in case of brij jewelers wherein addition of Rs. 29,01,486/- is made. g) Copy of our bank statement reflecting part payment of Rs. 15,16,000/- h) Copy of Audited Financial Statements of BrijJewellers. i) Copy of bills of parties from where BrijJewellers has purchased gold. We therefore state that the said goods are duly accounted in the books and therefore no addition can be made on presumptive basis in our hands. It is further submits that appellant also enclosing following documents for your ready reference. Copy of Audited Financial Statement for the F.Y. 2017-18” a)
14.2 The above details furnished by the assessee were not doubted by the authorities below. As such the doubt of the revenue is this that the proprietor of M/s Brij Mohan Jewellers namely Shri Sandeep Gupta in the statement has stated that the fine gold weighing 949.18 grams was sold to the assessee dated 26 October 2017 which was personally handed over to the assessee whereas as per the assessee the gold was couriered to him (the assesse). The Revenue also found that the seized gold was booked for courier dated 24 October 2017 and was in transit from 25 October 2017. As such there was mismatch in the statement furnished by Shri Sandeep Gupta and the submission made by the assessee and further the fact that seized gold was in transit with courier service from 24 October 2017. Based on the above, a doubt crept in the mind of the AO and therefore the AO held documentary evidences produced with regard to purchase of gold dated 26 October 2017 are afterthought and futile effort to give color of genuineness to an unaccounted transaction. In the result the addition was made in the hands of the assessee on protective basis viz a viz the additions in the hands of the Sandeep Gupta (M/s Brij Mohan Jewellers) on substantive basis. Admittedly, the facts brought on record by the AO are crucial but we note that such mismatch was never confronted to the assessee for his rebuttal. Thus, it appears to us that some details has been used by the AO against the assessee behind his back which is not desirable under the provisions of law. The Hon’ble Gujarat High Court in the case of CIT vs. Mahendra N. Shah reported in 280 ITR 462, has held as under: The Tribunal had also noted the fact that the bank official had been summoned and examined by the Assessing Officer, but behind the back of the assessee and in the circumstances, the said evidence could not be considered. [Para 7] 14.3 Proceeding further, there were various documents which have been furnished by the assessee during the proceedings before the respective authorities as elaborated in the preceding paragraph. With respect to the same, no iota of doubt was raised by the revenue. In fact, the assessee has shown payments against the purchases which were duly recorded in the books of accounts and reported in GST return by both the parties’ i.e assessee and seller M/s Brij Mohan Jewellers. In the absence of any infirmity in all these details, it seems to us that the assessee is being faced certain difficulties. On one hand, the assessee has made the payment against the purchases but failed to take the delivery of the gold which was purchased by him.
At this juncture, it is also important to note that the persons namely Shri Suresh Kumar representing the courier agency “Jay Mata Di Air Services”, has submitted that the impugned gold was to be delivered to the assessee. This fact can be verified from the order disposing of objection raised in the proceedings under section 153C of the Act. The relevant finding of the AO stands as under: “3. As per the statement given by Sh. Suresh/jagdish the parcel no. J-31 has to be delivered to you. Therefore, as per the provision of Section 153C, being the person other than person referred u/s 153A as the information with regard to the gold seized in the case of pertains to, /, relates to you undersigned is being assessing officer is both the parties i.e. AO of the assessee covered u/s 154A an d also AO of the assessee covered u/s 153C, has drawn satisfaction note in both the cases, considering all the facts of the case which is discussed in detail in the note and after satisfying themselves by the informing officer and the jurisdiction officer notice u/s 153C has been issued to initiate the proceedings for completion of the assessment. Formally, I drawn satisfaction note on 11/09/2019, which was transferred to the assessing officer of the other person i.e. Central Circle-2, Rajkot as per the letter reproduced herewith for ready reference.”
15.1 We also note that the Hon’ble Gujarat High Court in the context of the same search involving identical facts and circumstances in the case of Shri RakeshKumarBabulal Aggarwal reported in 136 taxmann.com 329 has held as under: 10. Thus, the CIT(A) recorded a finding that the writ applicant herein had purchased gold from M/s. ParvKundan and Diamonds Private Limited vide the bill dated 26th October 2017 and had also made payment through the banking channels. There is a finding of fact recorded by the CIT(A) which has attained finality as the Revenue not thought fit to challenge the order passed by the CIT(A) before the appellate Tribunal that the purchases were duly accounted in the books of account of the assessee i.e. the writ applicant herein. The CIT(A) further recorded that even if the version of M/s. ParvKundan and Diamonds Private Limited as regards the transaction with the writ applicant herein before the DDIT (Investigation), Delhi was to be accepted as true, still it would not make any difference because the purchase has been recorded in the books of account of the writ applicant and payment has been made by the writ applicant through banking channel. The CIT(A) came to the conclusion that the said purchase cannot be termed as unaccounted.
In view of the aforesaid findings recorded by the CIT(A) and such findings having attained finality as the order of CIT(A) has not been challenged further by the Revenue before the appellate Tribunal, we are left with no other option, but to accept the case put up by the writ applicant that he had purchased the gold in question from M/s. ParvKundan and Diamonds Private Limited and had also accounted for the same in his books of account. In such circumstances, the Revenue cannot withhold the seized gold jewellary weighing 524.500 grams. It has got to be released in favour of the writ applicant.
From the above, it is transpired that one of the party being Seller has denied to have made sales to the assessee whereas in the case on hand both the buyer and the seller have admitted to have carried out the transaction of purchase and sales. Thus, what appears is this that the case on hand is stronger than the case cited above. It is for the reason that the transaction on hand for the purchase and sale is duly supported based on the documentary evidence which have not been disputed or doubted by the authorities below.
It is the settled law for the additions made under the provisions of section 69A of the Act, the onus lies upon the Revenue to establish that the assessee is found owner of money, bullion, jewellery or other valuable article which is not recorded in the books of accounts. Further, the assessee failed to offer an explanation about the nature and source of acquisition of such money, bullion, jewellery or other valuable article. In the case on hand no cogent material brought on record suggesting that impugned gold is unaccounted and assessee failed to offer an explanation. As such both the assessee and the seller duly recorded the transaction of sale and purchase of fine gold weighing 949.18 gram.
The seller confirmed to have made sale to the assessee vide tax invoice dated 26 October 2017 and received payment against such sale. Therefore, merely for the reason that the seller behind the back of the assessee stated that he physically handed over the gold to the assessee instead of making courier, the documentary evidences in the form of tax invoice, proof of payment, and recording of transactions in books of account cannot be brushed aside.
In view of the above and after considering the facts in totality and in the light of the principles laid down by the Hon’ble Gujarat High Court (supra), we are inclined to hold that the assessee is the owner of the gold. Hence, the ground of appeal of the assessee is allowed.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the Court on 11/01/2023 at Ahmedabad.