Income Tax Appellate Tribunal - Agra
Dharmendra Kumar Varshney, Hathras vs Assessee on 20 March, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
AGRA BENCH, AGRA
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND
SHRI A.L. GEHLOT, ACCOUNTANT MEMBER
ITA No.378/Agr/2012
Assessment Year: 2006-07
Shri Dharmendra Kumar Varshney, vs. Asstt. Commissioner of Income Tax,
C/o. M/s. D.K. Food Products, Central Circle, Agra.
Nai Ka Nagla Road,
Hathras (U.P.).
(PAN : AAYPV 1888 H).
(Appellant) (Respondent)
Appellant by : Shri Navin Gargh, Advocate
Respondent by : Shri Waseem Arshad, Sra. D.R.
Date of hearing : 20.03.2013
Date of pronouncement : 26.03.2013
ORDER
PER A.L. GEHLOT, ACCOUNTANT MEMBER:
This is an appeal filed by the Assessee against the order dated 10.02.2012 passed by the ld. CIT(A)-I, Agra for the Assessment Year 2006-07.
2. The assessee has raised as many as 3 grounds and sub-grounds but effectively there are two grounds, one is in respect of addition of Rs.2,89,693/- on 2 ITA No.378/Agra/2012 A.Y. 2006-07 account of Gold Biscuits (ticket) and second is in respect of confirming addition of Rs.48,000/- out of addition of Rs.1,08,000/- on account of low withdrawals.
3. The brief facts of the case are that the assessee derives income from manufacturing and trading of Churan, Chani, Jaljira etc. A search under section 132(1) and survey under section 133A of the Income Tax Act, 1961 ('the Act' hereinafter) were conducted on 28.02.2006. During the course of search, two gold biscuits worth Rs.3,99,373/- was found in locker no.27A in Aligarh Gramin Bank, Hathras. The value of gold biscuits was Rs.2,89,693/- and value of jewellery was Rs.1,09,680/-. The explanation of the assessee as noted by the A.O. in his order is as under :-
"That the gold weighing (weighing 363.35 gm. valued at Rs.289693/- found from Locker No.27A (S.No.5&6 of valuation report) was kept for sister Rekha Varnshey and deemed belonging to her. The item at S. No.5 gold piece weighing 116.650 gm. which has been valued at Rs.93320/- has been acquired for Rs.63250/- as per Annexure A-4 pg.42 which is further evident from the value of gold noted at Rs.5430/- per 10gm. for Rs.63250/- works out to 116.50 gms. Similarly item no.6 valued at Rs.196373/- has been acquired out of Rs.130000/- as per Annexure-A-4 pg.42. The investment in Annexure- A-4 pg.42 relates to Shri Ashok Kr. Varshney and is out of income which has been declared in the statement u/s 132(4) and included in the income shown in return."3 ITA No.378/Agra/2012
A.Y. 2006-07
4. The A.O did not accept the assessee's explanation on the ground that Shri Ashok Kumar Varshney, brother of the assessee, has not shown investment in gold biscuit in the capital account and Balance Sheet. Even in the amount surrendered by Ashok Kumar Varshney for A.Y. 2006-07 the value of gold biscuit and ornaments have not been included. The assessee did not furnish any evidence in support of his claim. The A.O. found that the gold biscuit was found in the locker belonging to the assessee and no satisfactory explanation with regard to source of acquisition of such ornaments and gold biscuits have been offered by the assessee. Therefore, it was held that investment in gold biscuit and jewellery was made on account of undisclosed sources. The A.O. made addition accordingly of Rs.3,99,373/-. The CIT(A), considering the C.B.D.T. Circular and some orders of I.T.A.T., deleted the addition of Rs.1,09,680/- made by the A.O. on account of jewellery found in locker of the assessee. However, the CIT(A) confirmed the addition of Rs.2,89,693/- on account of gold biscuit as under :- (Paragraph no.6.4, page nos.10 & 11) "6.4 I have considered the above written submission and affidavit filed by Shri Ashok Kumar Varshney owing up both the gold biscuits during the course of hearing of the appeal proceeding. It could not be explained by the Ld. AR satisfactorily why this affidavit was not filed during the course of assessment proceeding when the matter of source of acquisition of gold biscuits was under examination before the AO. It is also undisputed fact that both the gold biscuits were found in the 4 ITA No.378/Agra/2012 A.Y. 2006-07 locker of the appellant. As per section 132(4) and 292C, if any money, bullion, jewellery or valuable article or thing are or is found in the possession or control of any person in the course of a search operation, such bullion, jewellery or valuable article or thing etc. would be deemed to be belonging to that person. Though Ld. AR has tried to explain the source of acquisition of gold biscuits from page no.42 of Annexure A-4 of the seized document of which addition was also made in the assessment order of Shri Ashok Kumar Varshney for the A.Y. 2003-04 u/s 153A but it could not be explained that if these gold biscuits belonged to Shri Ashok Kumar Varshney, why it was kept in the locker belonging to the assessee (appellant). Even during the course of search and seizure operation, these gold biscuits were not owned up by Shri Ashok Kumar Varshney at the time of recording of his statement while making declaration/surrender of undisclosed income as discussed by the AO in the assessment order. The Ld. AR has made an argument in his written submission that the cash found in the locker of the appellant was owned up by Shri Ashok Kumar Varshney, which was accepted by the department. Here the question arises, if the cash found in the locker of the appellant was owned up by Shri Ashok Kumar Varshney during the course of search, why the gold biscuits was not owned up by him. It appears that now during the course of assessment proceeding as well as during the appeal proceeding, explaining the source of acquisition of gold biscuits from page no.42 of the seized document is nothing but after thought and the same is being justified in the appeal proceeding by filing an affidavit of Shri Ashok Kumar Varshney which was not filed during the course of appeal proceeding for which no reasonable explanation could be given by the Ld. AR justifying as to how the appellant was prevented by sufficient cause from producing this affidavit before the AO. Therefore, the affidavit of Shri Ashok Kumar Varshney filed by the appellant at the time of appeal proceeding is not admitted under Rule 46A of the I.T. Rule, 1961 and hence, agreeing with the findings of the AO, I confirm the addition of Rs.2,89,693/- made by the AO on account of unexplained investment in the gold biscuits."
5. The contention of the ld. Authorised Representative was that the gold biscuit belonged to assessee's brother Shri Ashok Kumar Varshney and addition has been 5 ITA No.378/Agra/2012 A.Y. 2006-07 made in the hands of Shri Ashok Kumar Varshney. The ld. Authorised Representative further submitted that loose paper dated 14.12.2002 was found of which copy has been placed at page no.16 of assessee's Paper Book. The ld. Authorised Representative tried to demonstrate that the so-called two gold biscuits found in the locker of the assessee was belonging to the assessee's brother Shri Ashok Kumar Varshney and Rs.2,00,000/- has already been added in his hand and investment in gold biscuit was out of that Rs.2,00,000/-. The ld. Authorised Representative submitted that since the amount of gold biscuit has already been taxed in the hands of the assessee's brother, therefore, the same addition cannot be made in the hands of the assessee.
6. Ld. Departmental Representative, on the other hand, relied upon the order of CIT(A) and submitted that the assessee has failed to furnish any evidence that the so-called loose paper dated 14.12.2002 was in fact pertaining to the gold biscuits found in the locker of the assessee. The ld. Departmental Representative submitted that some cash was found in the locker of the assessee. Shri Ashok Kumar Varshney submitted in his statement that the cash to the extent of Rs.5,00,000/- belonged to him. But at that time he did no say that the two gold biscuits also belonged to him.
6ITA No.378/Agra/2012
A.Y. 2006-07
7. We have heard the ld. Representatives of the parties and records perused. The assessee has taken inconsistency approach in his submission regarding two gold biscuits found in the locker of the assessee. In the explanation furnished before the A.O., it was submitted that the gold ornaments and gold biscuits belonged to sister Rekha Varshney. Shri Ashok Varshney never admitted that the said two gold biscuits belonged to him. When Shri Ashok Varshney, brother of the assessee, in his statement pointed out that cash of Rs.5,00,000/- found in the locker of assessee belonged to him, he did not point out that these two gold biscuits also belonged to him. The CIT(A) recorded the fact that if these gold biscuits belonged to Shri Ashok Kumar Varshney, why it was kept in the locker belonging to the assessee. Even during the course of search and seizure operation, these gold biscuits were not owned up by Shri Ashok Kumar Varshney at the time of recording his statement while making declaration/surrender of undisclosed income.
8. It appears from the facts that coincidentally some of the item of jewellery found in loose paper dated 14.12.2002 for which the addition in the hands of the assessee's brother was made. The assessee has tried to get the benefit of that addition in his hand without sufficient evidence. We, therefore, find that the CIT(A) has rightly confirmed the addition of Rs.2,89,693/- on account of two gold biscuits found from locker of the assessee.
7ITA No.378/Agra/2012
A.Y. 2006-07
9. The CIT(A) has noted that the explanations of the assessee is nothing but after thought and the same is being justified in the appeal proceeding by filing an affidavit of Ashok Kumar Varshaney which was not filed during the course of appellate proceeding for which no reasonable explanation could be given by the assessee justifying as to how the assessee was prevented by sufficient cause from producing this affidavit before the A.O. The ld. Authorised Representative contended that the CIT(A) has wrongly not admitted the affidavit filed by Shri Ashok Kumar Varshney. He relied upon the judgement of Hon'ble Allahabad High Court in the cases of Smt. Mohindar Kaur vs. Central Government and Others, 104 ITR 120 (All.) and order of I.T.A.T., Delhi Bench in the case of ITO vs. Jitender Mehra, 53 ITD 396. The judgement of Hon'ble Allahabad High Court and order of I.T.A.T. both do not help to the assessee as the facts of that cases are different than the facts of the case under consideration. The CIT(A) did not accept the said affidavit as Rule 46A(1) clearly provides the condition that the appellant was to show that he was prevented by sufficient cause from producing evidence before the A.O. In the case under consideration, the assessee has failed to give any sufficient cause for not producing the same before the A.O., therefore, we find that the CIT(A) has rightly rejected the contention of the assessee. 8 ITA No.378/Agra/2012
A.Y. 2006-07
10. The second addition is on account of house hold expenses. The A.O. made addition of Rs.1,08,000/- which has been reduced by the CIT(A) to Rs.48,000/-. The finding of CIT(A) in this regard is reproduced as under :- (Para no.5.3, page no.6) 5.3 Considering my decision on the reasonability of house hold expenses shown by the appellant as discussed in the order of A.Y. 2000-01, I estimate the house hold expenses of the appellant at Rs.5,000/- per month, which comes to Rs.50,000/- for entire year. After taking into account the house hold withdrawal shown by the appellant at Rs.12,000/-, the balance amount of Rs.48,000/- (Rs.60,000 - Rs.12,000) is to be added in the hand of the appellant on account of low withdrawal and therefore, the addition on account of low withdrawal is confirmed to the extent of Rs.48,000/- instead of Rs.1,08,000/- and therefore, the appellant gets a relief of Rs.60,000/- against ground no.1, accordingly Ground no.1 is partly allowed.
11. The ld. Authorised Representative did not argue much on the issue and also failed to point out any contrary material to the finding of CIT(A). There is no such material available on record against the finding of CIT(A). In the light of the fact, we do not find any infirmity in the order of CIT(A).
12. In the result, appeal filed by the assessee is dismissed.
(Order pronounced in the open Court)
Sd/- Sd/-
(BHAVNESH SAINI) (A.L. GEHLOT)
Judicial Member Accountant Member
PBN/*
9
ITA No.378/Agra/2012
A.Y. 2006-07
Copy of the order forwarded to:
1. Appellant
2. Respondent
3. CIT (Appeals) concerned
4. CIT concerned
5. D.R., ITAT, Agra Bench, Agra
6. Guard File.
By Order
Sr. Private Secretary
Income-tax Appellate Tribunal, Agra
True Copy