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Income Tax Appellate Tribunal, AHMEDABAD ‘C’ BENCH, AHMEDABAD
Per Pramod Kumar, AM:
By way of this appeal, the assessee appellant has challenged correctness of the order dated 01.11.2014, passed by the learned CIT(A)-VI, Baroda for the assessment year 2007-08, on the following grounds :-
Grievances of the assessee are against learned CIT(A)’s upholding the addition of Rs.91,000/- in respect of investment in fixed deposit and of Rs.4,33,125/- in respect of profit on sale of gold ornaments.
ITA No.217/Ahd/2015 Assessment Year : 2007-08 Page 2 of 3 3. To adjudicate on these grievances, only a few material facts need to be taken note of. The business premises of the assessee was subjected to survey under section 133A of the Income Tax Act, 1961. During this survey, the assessee admitted unaccounted investment in fixed deposit with Syndicate Bank to the tune of Rs.3,50,000/- and unaccounted sale proceeds of gold ornaments to the tune of Rs.4,33,125/-. However, when the assessee filed his return of income, he disclosed unaccounted income representing FD investment at Rs.2,59,000/- since actual FD investment was found to be this figure, and unaccounted income representing sale proceeds of gold ornaments at Rs.2,76,031/- after deducting indexed cost of acquisition at Rs.2,76,031/-. The explanations given by the assessee with respect to these variations were, however, rejected. The Assessing Officer proceeded to make additions on the basis of declarations, and learned CIT(A) confirmed the same. The assessee is aggrieved and is in appeal before us. 4. We have heard the rival submissions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.
As regards the investment in FDs, we have noted that the investment in FD is taken at Rs.3,50,000/- on the basis of a chit found during the survey but then the said figure is not corroborated by the Syndicate Bank’s certificate dated 24.12.2005 which shows payment at Rs.2,80,932/- including interest. In these circumstances, the Assessing Officer cannot make addition simply on the basis of surrender of income during survey under section 133A. Such statement does not have any evidentiary value and the addition, therefore, has to be on the basis of cogent material i.e. actual investment with FD. Similarly, entire sale proceeds of jewellery cannot be treated as income either. What can be brought to tax is only the income element on sale of
ITA No.217/Ahd/2015 Assessment Year : 2007-08 Page 3 of 3 jewellery which was not found with the assessee, even if it is assumed, as is assumed in this case, that gold jewellery not found with the assessee is sold by the assessee. Having held so, we may clarify that it is for the assessee to give reasonable details about actual investment in FD and the year in which gold jewellery in question was purchased. The assessee has to furnish these details to the Assessing Officer, and it is only after examining such details that the Assessing Officer has to decide the matter afresh in the light of our above observations, in accordance with the law and not solely on the basis of statement made by the assessee during the survey proceedings. With these directions, the matter stands restored to the file of the Assessing Officer for fresh adjudication.
No other issue was pressed before us.
In the result, the appeal is allowed for statistical purposes. Pronounced in the open court today on the 17th day of August, 2017. Sd/- Sd/- Mahavir Prasad Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the17th day of August, 2017 PBN/* Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad