Gujarat High Court
Commissioner vs Sarojdevi on 18 July, 2011
Author: Akil Kureshi
Bench: Akil Kureshi
Gujarat High Court Case Information System
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TAXAP/725/2010 6/ 6 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 725 of 2010
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COMMISSIONER
OF INCOME TAX - III - Appellant(s)
Versus
SAROJDEVI
S KABRA - Opponent(s)
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Appearance
:
MRS
MAUNA M BHATT
for
Appellant
None for
Opponent
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI 18th July 2011
ORAL
ORDER (Per
: HONOURABLE MS JUSTICE SONIA GOKANI) Present Appeal is preferred by the Revenue against the judgment and order of the Income Tax Appellate Tribunal, Ahmedabad ["Tribunal" for short] dated 9th October 2009, raising the following questions of law :
[A] "Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by CIT (A) deleting the addition of Rs. 2,31,400/= made on account of unexplained investment in jewellery ?"
[B] "Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by CIT [A] deleting the addition of Rs. 5,56,000/= representing investment in bank FDRs ?"
[C] "Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by CIT [A] deleting the addition of Rs. 1,56,000/= made on account of noting on loose paper file ?"
[D] "Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by CIT (A) deleting the addition of Rs. 16,39,000/= made on account of unexplained investment in shares of Minaxi Textiles Limited ?"
Challenging the order of the Tribunal dated 9th October 2009, to briefly state the facts, a search was carried out at the residential and business premises of Kabra Group, where present assessee-respondent is one of the family members. The group runs many business activities - one of which is financing and share trading. During the course of search, some of the documents seized revealed income of different assessees of the said group. After the notices were served and explanation sought, the Assessing Officer deemed it fit to make certain additions. This was, when challenged before the CIT [A], it deleted the additions. When the Revenue challenged it further before the Tribunal, the Tribunal concurred with the findings of the CIT [A]. The impugned order of the Tribunal is in challenge before this Court, raising the aforementioned questions of law.
On hearing learned counsel for the Revenue and on thoughtfully considering the submissions of the learned counsel and also the orders of the Adjudicating Authorities, the issues are decided as follow :-
The first ground of challenge is addition of Rs. 2,31,400/= made on account of "unexplained investment in jewellery".
On the ground that the purchase vouchers produced at the block assessment stage did not match with the description given in the seizure memo as well as there was a discrepancy in the weight of the jewellery. Likewise, the number of diamonds also were not found to be matching in the bill as well as in the seizure memo, these discrepancies led Assessing Officer to make addition of the aforementioned amount of Rs. 2,31,400/=.
The CIT [A], after examining the papers and the original panchnama dated 12th July 2001 and satisfying all the requirements on the basis of other documentary evidence, was of the opinion that there was no sound footing available with the Assessing Officer to make addition. Moreover, there was a complete absence of material evidence for arriving at such a decision, and resultantly, it deleted the addition made by the Assessing Officer.
This was approved by the ITAT vide the impugned Order dated 9th October 2009, in the following words :-
"81. We find that the CIT (A) has verified the original panchnama Annexure JF, Page No.3., dated 12-07-2001, at item at Sr. No. 37, and held that this item has been mentioned as "Single Line Diamond Bangel-2, Dia 160, CTS 11, and gross weight 40.200 has been stated. The CIT (A) further held that Panchnama Inventory has been cross verified with Page No. 27 of the Paper Book which is the sale Bill of Goldfinch Jewellary Ltd., wherein also Carets of Diamons has been stated at 11.52 whereas the gross weight has been stated at 40.37. He also noted that the copy of the bill which was placed before the A.O. which has been certified by the seller M/s. GoldFinch Jewellary Ltd., with No. of Diamonds ie., 160 is factually correct. We find no infirmity in this finding of the CIT (A) and this issue of the Revenue's appeal is dismissed."
It can be clearly seen from the treatment given to this issue by both the Adjudicating Authorities that they have on fact concurrently held in favour of the assessee-respondent. The issue is decided on the facts and materials presented before these authorities and nothing to controvert to these findings is brought before this Court. Hence, no interference is called for.
The second issue pertains to investment in bank FDRs and addition of Rs. 5,56,000/= made by the Assessing Officer in connection therewith. The CIT [A], while dealing with this issue, concluded that the cash funds which were available with the assessee respondent from the sale proceeds of diamonds were utilized for FDRs in the names of different persons. The CIT [A] further stated that there were number of judicial pronouncements justifying the view that the cash funds available from sale proceeds of diamonds were required to be given set-off by telescoping effect with the cash funds deposited in the FDRs in the name of different persons. There were no doubt with regard to the genuineness of the transactions, and there were further substantiating materials to establish the sale of diamonds and depositing the amount in the bank FDRs. Accordingly, the addition of Rs. 5,56,000/= had been deleted. The Tribunal also, while examining this issue, found that the Assessing Officer himself admitted that the respondent had declared under VDIS 1997 the sale proceeds of diamonds, and therefore, were was not infirmity in the findings of the CIT [A]. Therefore, the issue is purely factual and the reasonings being sound, requires no interference.
The third issue pertains to addition of Rs. 1,56,000/= made on account of notings on loose paper-file.
The CIT [A] deleted the addition by stating that in the block assessment order of Shri Satyanarayan Kabra, the Assessing Officer considered an amount of Rs. 1,25,000/= against the name of the respondent. Similarly, the Assessment Order of Shri Satyanarayan Kabra reflects the noting as "SDK" an amount of Rs. 31,000/=. The CIT [A] while dealing with this issue also made a reference of FDR placed by the respondent in different names out of explained cash funds against the sale proceeds of diamonds and the funds available with the respondent on maturity of such FDRs were also explained, and therefore, it was of the opinion that everything which was held to be "unexplained on account of noting" found was, in fact, to be treated as "explained". The Tribunal appears to be having concurred with the said observations and findings, and rightly so. Merely on account of the noting on loose paper-file, on the basis of surmises or mere suspicion, no additions could be made when otherwise, there is sufficient evidence to explain the amount otherwise added in the total income of the assessee.
With regard to the fourth issue, which is relating to account of unexplained investment and thereby adding Rs. 16,39,000/=, the Tribunal held that there the shares of Minaxi Textiles Limited were purchased on 13th January 1996 and were sold on 18th January 1996. The payment was made and received by cheque and the profit was duly reflected in the return. There were substantiating evidence produced before the Assessing Officer. It further held that the broker to whom the assessee had sold the shares sent back the shares to the assessee for requesting the Transfer Deeds, and meanwhile, the search took place where shares were found. These transactions were reflected in the regular books of account and statement of share portfolio for the Financial Year 1995-96 from which the said transactions could be verified were presented before the Assessing Officer. With the cumulative effect of all these proved by substantiating evidence, the Tribunal upheld the view of the CIT [A] and deleted the addition made by the Assessing Officer.
As mentioned in the case of rest of the three issues, this issue is also decided mainly based on the facts, and when two authorities concurrently have held in favour of the assessee-respondent and against the Revenue, with nothing pointed out to this Court to take a contrary view than is already taken by the Tribunal and with no question of law arising, this issue also stands rightly answered.
In the result, the present Tax Appeal fails, and is accordingly, dismissed with no order as to costs.
[Akil Kureshi, J.] [Ms. Sonia Gokani, J.] Prakash* Top