×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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05-12-2018, Abdul Kader Abdul Latif, Section 115, 132, 153A, 131,Tribunal Mumbai
This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals)-37 (‘ld.CIT(A) for short) dated 24.02.2014 and pertains to the assessment year (A.Y.) 2009-10.
2. The grounds of appeal read as under:
1. On the facts and circumstances of the case and according to law the Learned CIT (A) erred in confirming the order of Learned Assessing Officer for addition of Rs.77,26,700/- on account of undisclosed jewellery, without appreciating that the said jewellery did not belong to the appellant and hence, no addition can be made in the hands of the Appellant
2. On the facts and circumstances of the case and according to law the Learned CIT (A) erred in confirming the order of the Learned Assessing Officer for addition of Rs.70,00,000/- in respect of alleged transaction with Shri. I. M Patel Civil Contractor, Pune.
2.1 Without prejudice to above, the learned CIT(A) failed to appreciate that no addition of Rs.70,00,000/- can be made in the impugned assessment year as the said transaction is recorded in the earlier years.
3. Brief facts of the case are as under:
A search action u/s. 132 of the I.T. Act was carried out in the case of the assessee on 29/04/08. Notices u/s. 153A of the IT, Act was issued for A.Y. 2003-04 to 2008-09. The assessee filed return of income for A.Y. 2009-10 on 04/03/10 declaring a total income of Rs.10,34,840/-. Notice u/s, 143(2) was issued on 09/03/10. Assessment was completed vide order dated 31/12/10 in which the income was assessed at Rs.1,65,25,220/-. In the assessment additions were made in respect of certain issues.
4. The facts of the issue which are subject matter of this appeal are as under: During the course of the search, jewelry valued at Rs.1,40,38,367/- was found which comprises of:
The jewellery held by the entire family of the assessee was to the extent of 2635.200 gms. There were further accounted purchases of 914.770 gms. After examining the details of the jewelry found and that which was accounted for in the tax returns of the family, the assessee, in his statement recorded u/s. 132(4) during the search action, had declared an amount of Rs.77,26,700/- as undisclosed and unaccounted investment in jewelry.
On account of excess gold jewelry Rs.18,52,245/-
On account of diamond jewelry Rs.58,74,455/-
In the assessment proceedings, the assessee retracted his admission and explained that 1he jewelry found during the search was old jewelry as per the valuation report of 2001 which was seized by the department and also comprised of the jewelry received at the time of 4 marriages which took place in the family. This explanation was not accepted by the AO since Wealth tax Returns had not been filed over the years. In respect of the explanation that the jewelry was received at the time of marriage in the family the AO noted no evidence was furnished in support of the jewelry claimed to be thus received. He therefore made an addition of Rs.77,26,700/- in respect of the jewelry/-.
5. Further, one of the seized documents was on P. 43 and 44 of bundle no. A-3 found at the office premises of Sopariwala Exports which read as follows:
"In the case of my death- :
I) Patel (Poona Civil Contractor) -70 lacs loan to be converted in Donation for Rashid Khan School."
At the time of search the assessee in reply to question no. 17 stated that Rs. 70 lacs of the said loan to Shri I.M.Patel was not recorded in the books of accounts. However, during the assessment proceedings the appellant retracted his admission and submitted that Rs. 45 lacs loan to Shri I M Patel was accounted for in A.Y. 2003-04, 2004-05 and 2006-07 and that subsequently the loan was paid off. The A.O. held that the recorded transaction of Rs. 45 lacs is a different transaction from Rs.70 lacs mentioned in the seized documents. The accounted transaction will be covered by accounting norms and in such case there was no need for the assessee to give a direction that such amount should be converted into donation to Rashid Khan School. He therefore added Rs. 70 lacs as undisclosed income of the assessee for this year.
6. Against the above order, the assessee filed appeal before the ld. CIT(A).
7. The ld. CIT(A) considered the assessee’s submissions. But he did not find himself in agreement with the same. He confirmed the addition made by the assessing officer. The ld. CIT-A held as under: In the appellate proceedings the appellant has submitted that the gold and diamond jewelry was collected from Flat Nos. 342, 352 and 362 Kalpataru Heights, Dr.