Income Tax Appellate Tribunal - Indore
The Dcit, Central-2, Bhopal vs Shri Bhupendra Viswakarma, Bhopal on 20 October, 2020
आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर
IN THE INCOME TAX APPELLATE TRIBUNAL,
INDORE BENCH, INDORE
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER
AND SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA(SS) No.206/Ind/2019
Assessment Year: 2014-15
Shri Bhupendra
DCIT Central-2, Vs Viswakarma,
58, Tagore Garden, Phase-I,
Bhopal
Khajuri Kalan Road, Piplani,
Bhopal
(Revenue ) (Appellant)
PAN No.ABXPV6029J
Revenue by Smt. Ashima Gupta, CIT
Appellant by Shri S.S. Deshpande, CA
Date of Hearing 14.10.2020
Date of Pronouncement 20.10.2020
ORDER
PER MANISH BORAD, AM.
The above captioned appeal filed at the instance of revenue pertaining to Assessment Year 2014-15 is directed against the order of Commissioner of Income Tax (Appeals)-3 (in short 'Ld.CIT'], Bhopal dated 27/06/2019 which is arising out of the order u/s ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma 143(3) of the Income Tax Act 1961(In short the 'Act') dated 14.03.2016 framed by ACIT (Central)-II, Bhopal.
2. The brief facts of the case as culled out from the records are that the assessee is an individual deriving income from business, rental income and from other sources. The assessee was subjected to search u/s 132 of the Act on 29.1.2014 on account of his business association with "Signature Group". Subsequently notice u/s 153A of the Act were issued. The instant appeal relates to Assessment Year 2014-15. Since the due date of return was after the date of search the original return was filed on 31.7.2014 for Assessment Year 2014-15 declaring income of Rs.76,331/-.
Assessee was confronted with loose papers, incriminating materials found during the search. After considering the submissions assessment was completed u/s 143(3) by adding additions on account of unexplained cash at Rs.1,35,500/-, unexplained jewellery at Rs.38,96,987/- unexplained expenditure on account of foreign tour at Rs.3,00,000/- and unexplained opening balance of capital account at Rs.1,79,22,599/- thus assessing income at Rs.2,23,31,417/-.
2ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma
3. Aggrieved assessee preferred appeal before Ld. CIT(A) against the above additions and partly succeeded. Now the Revenue is in appeal before the Tribunal against the deletion of additions made by Ld. A.O. raising following grounds of appeal:-
(1) On the facts and in the circumstances of the case the Ld. CIT(Appeals) erred in deleting the addition of Rs.2,25,000/- made by Assessing Officer on account of unexplained expenses incurred in foreign tour u/s 69C of the Income Tax Act, 1961.
(2) On the facts and in the circumstances of the case the Ld. CIT(Appeals) erred in deleting the addition of Rs.38,96,987/- made by Assessing Officer on account of unexplained jewellery u/s 69B of the Income Tax Act, 1961.
(3) On the facts and in the circumstances of the case the Ld. CIT(Appeals) erred in deleting the addition of Rs.1,35,500/- made by Assessing Officer on account of unexplained cash found.
(4) On the facts and in the circumstances of the case the Ld. CIT(Appeals) erred in deleting the addition of Rs.1,79,22,599/- made by Assessing Officer on account of unexplained opening capital.
4. Ld. Departmental Representative vehemently argued on various grounds referring and relying on the findings of Ld. A.O and supporting the order of Ld. A.O.
5. Per contra Ld. Counsel for the assessee relied on the finding of Ld. CIT(A) as well as the written submission and documentary evidences placed in Paper Book dated 16.3.2020 running from page 1 to 93.
3ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma
6. We have heard rival contentions and perused the records placed before us and carefully gone through the findings of both the lower authorities and the submissions made by Ld. Counsel for the assessee.
7. Through Ground No.1 Revenue has challenged the deletion of addition of Rs.2,25,000/- made by the Ld. A.O u/s 69C of the Act on account of unexplained expenses incurred in foreign tour. We find that Ld. CIT(A) has elaborately dealt with the facts of the case and has sustained the addition at Rs.75,000/- as against Rs.3,00,000/- made by the Ld. A.O observing as follows:-
5.3 Gound No 3 for AYs 2012-13 & 2014-15: Through this ground of appeal, the appellant has challenged addition of Rs. Rs· 2,00,000/- in AY 2012-13 and Rs. 3,00,000/- in AY 2014-15 on account of unexplained expense incurred on foreign tour. The AO during assessment proceedings found that appellant along with his wife visited various foreign countries.
Therefore, notice u/s 142(1) was issued to assessee on 30.09.2015 requiring him to furnish details of such foreign travels. In reply, the assessee before AO submitted that the expenses of foreign tours have been made by his wife Smt Yogita Vishwkarma. The AO after considering reply of the assessee did not find it convincing and stated that:-
(i) On verification of passports submitted by the assessee, it is seen that the 4 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma assessee has not submitted complete details regarding foreign travels undertaken by him. It is seen from the passport of the assessee that the assessee has visited to the following countries during the relevant period, which was not disclosed by the assessee in his written submission.
Sr.No Name of the country Date of visit
01 Uzbekistan 24/07/2011 to 29/07/2011
02 Kazakistan 21/07/2013 to 29/07/2013
03 Russian Federation July 2013
(ii) The assessee has not furnished any details of expenses in his case. The assessee's submission that the expenditure on foreign travel of him is incurred by his wife Smt. Yogita Vishwakarma is also not correct. At the outset, his wife has shown foreign tour expenses on 20/07/2012 at Rs 50,000/- from her cash flow statement, whereas as per the passport entries, the assessee has visited foreign countries in the month of July 2011 and July 20l3. Thus the claim of the assessee is absolutely incorrect. From this fact it is also evident that the cash flow statement (cash book) submitted by Smt. Yogita Vishwakarma is also incorrect. The assessee has also failed to furnish the receipts / bills in support of correctness of his claim regarding foreign travel expenses. Thus the details submitted by the assessee regarding foreign travel expenses are incomplete and also incorrect.
(iii) The assessee's contention that the expenses are incurred by assessee's wife is also not supported by any proper and correct material evidence as the cash book submitted by her is incorrect as discussed above and also the income shown is without any basis and supporting documentary! evidences. considering these facts, the assessee's above contention is not acceptable.
(iv) Thus it is clear that the assessee has not accounted any expenditure on his 5 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma foreign travel and therefore the expenditure incurred on foreign travel is treated as unexplained expenditure of the assessee. In absence of specific details, the expenditure on foreign travels by the assessee is estimated on the basis of prevailing market rates in respective assessment years as under:
Date of No. Of A.Y Estimated Expenditure Unexplained journey persons expenditure shown (Rs.) expenditure (Rs.) (Rs.) Usbekistan 24.07.2011 1 2012- 2,00,000/- Nil 2,00,000/-to 13
29.07.2011 Kazakistan 21.07.2013 1 2014- 2,00,000/- Nil 2,00,000/-to 15
29.07.2013 Russian July 2013 1 2014- 1,00,000/- Nil 1,00,000/-Federation 15
(iv) Therefore, the difference as worked out above is considered as unexplained expenditure of the assessee and added to the total income of the assessee u/s 69C of the 1. T. Act, for the respective assessment years as under:
A.Y Unexplained Expenditure on
account of foreign travel (Rs.)
2012-13 2,00,000/-
2014-15 3,00,000/-
5,3.1 The appellant during the course of appellate proceedings has filed written submissions which are reproduced as under:-
During the course of assessment proceedings the assessee has submitted a copy of his pass port. On verification of the details appearing in the pass port it was observed by the AO that during FY 2011-12 the assessee has travelled to Uzbekistan for 6 days and during FY 2013-14(A.Y 2014-15) to Kazakisthan for 8 days and to Russia in July for an unspecified period. The AO estimated the expenses incurred on such tour at Rs. 2,00,000/-(A.Y 2012-13)- and Rs. 3,00,000/-( Rs. 2,00,000/- for Kazakistan and Rs. 1,00,000/- for Russia) (A. Y 2014-15) respectively and further presumed that it has been incurred out of undeclared sources by the assessee and 6 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma made additions for the same u/s 69C. The observation of the AO regarding additional tour to Russia in July 2013 is factually wrong. It would be observed from the pass part of the assessee a copy of which is enclosed herewith that the assessee has left New Delhi on 21.07.2013 and have reported back at New Delhi on 29.07.2013.
The assessee reached Uzbekistan on 21.07.13 and left Uzbekistan on 25.07.13. Thereafter the assessee reached Russia on 25.07.2013 and left Russia on 28.7.13 where after he landed at Delhi on 29.07.13. Thus the tour to Russia was a part of the tour to Uzbekistan and was undertaken within the period he was out of India. Thus there was a single tour against which the addition has been made twice. In this regards it is further submitted that up till 31.3.13 (A.Y 2013-14), the assessee has been filing his return of income u/s 44AD of the Act, a fact which is duly confirmed by the AO in Para 10 of his order and accordingly the assessee is not required to maintain any books of account. Thus the assessee has not maintained any books of account and in absence of any books of account it was not possible for the assessee to get the items of expenditure incurred by him during F.Y 2011-12 verified with the books. Thus the assessee could not have shown any specific withdrawal for such expense. It may however be mentioned that as per the details mentioned in Page 17 of the assessment order the income of the assessee during last 6 years up till 31.03.13 was Rs. 2,05,33295/- against which the value of total investment made by him as on 31.3.13 was Rs. 1,79,22,599/-. Thus the assessee had surplus of an amount of Rs. 26,10, 969/- during these six years which have not been invested by him and the normal presumption would be that this amount has been utilised by him for his expenses. It may be mentioned that this amount was in addition to the withdrawals made by the assessee towards house hold expenses. Thus the expense incurred were naturally out of the available known resources and could not have been held as made out of unexplained sources.
As regards expenses incurred in F.Y 2013-14 on the trip to Russia/Kazakhstan it is submitted that the payment for the foreign tour was made by M/s Ultimate Builders in which the assessee is a partner. The said firm has made a payment of Rs. 84,240/- to M/s Creative Travels P Ltd on 25.06.13. Copy of ledger account of the travel agent is enclosed.
It may also be mentioned that the AO has estimated the expenses at Rs.2,00,000/- and Rs. 3,00, 000/-without any basis. -
7ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma The assessee is enclosing herewith a paper cutting of advertisements published in news paper dated. .... in which the prices for similar tours are priced at Rs. 53,990/for Kazakistan and Rs. 63,815/- for Uzbekistan respectively by M/s. Make My trip/ Thomas Kook which is a very high class travel agent who organise tours for higher class of society. The tours undertaken by the assessee was substantially prior to this paper advertisement and naturally the cost of such tour in FY 2011-12 and FY 2013- 14 would be much lower. Thus the expenses on such tour have been estimated on a very higher side.
It may be mentioned that the above quoted rates for various tours are as prevailing today wherein the rate of dollar is app 65 Rs per USD whereas the tours were undertaken in the period when the rate of USD was app 45-50 Rs. per USD. Further the rates are also increased due to general inflation.
It may also be mentioned that the expenses incurred on the tour to Kazakhistan in FY 2013-14 was borne by the wife of the assessee and the same was duly disclosed by her in the cash f low submitted before the AO during the course of assessment proceedings in her case and a copy of the same was also furnished in the case of the assessee. Thus no addition could have been made in the hands of the assessee.
The additions have been made by the AO applying provisions of section 69C. Provisions of section 69C is applicable in case where the assessee is found to have incurred any expenditure in any financial year for which the assessee fail to explain the source to the satisfaction of the AO.
It is well settled proposition of law that addition u/s 69C can-not be made on adhoc basis or on presumption. The assessee relies on the following judgments _(2009) 311 ITR 175 (Del HC) Sec 69C postulates that first of all the assessee must have incurred some expenditure & there after if the explanation offered by the assessee about the source of such expenditure is not found satisfactory by the Assessing Officer the amount may be added to his income. There was nothing to snow that the expenditure was in fact incurred by the assessee.
8ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma (2010) 3 ITR (Trib) 177 (Mum) ... Under the provisions of section 69C addition on account of any unexplained expenditure can be made only when the assessee has incurred any expenditure about which he has offered no explanation. The burden is on the revenue to show that the expenditure has actually been incurred which is not explained.
(2009) 123 TT1 (Kol) (TM) 12 Apart from disbelieving the assessee's explanation. Assessing Officer has not brought on record any evidence with regard to transportation charges by the assessee-Sec 69C cannot be applied on mere presumption or suspicion- Assessing Officer has to first find the evidence of incurring the expenditure- Impugned addition based only upon presumption or suspicion can not be sustained. Under the circumstances the additions made is requested to be deleted".
5.3.2 Submission filed by appellant along with the details 1 material brought on record have been duly considered. Case laws relied upon by the appellant have been perused and considered. Due consideration has been given to the findings arrived at in the assessment order. The appellant is not maintaining regular books of accounts, therefore, no direct verification of the expenses with the books is possible. However It is seen that as per the details mentioned in Page 17 of the assessment order the income of the assessee during last 6 years up till 31.03.13 was Rs. 2,05,33,295/- against which the value of total investment made by him up to 31.3.13 was Rs. 1,79,22,599/-. The AO had disbelieved these details on the reasoning that date wise record was not produced, investment in jewellery/foreign travel is not included etc. However the AO had failed to bring on record any unexplained investment except for minor addition on account of jewelry/foreign expenses. Thus the fact that there was a surplus of Rs.26, 10,969/- during these six years remains undisputed and that the surplus which have not been invested by him has been utilized by him for his expenses cannot be termed as improbable .. It is also seen that the excess of income of Rs. 26,10,969/- was in addition to the withdrawals made by 9 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma the assessee towards house hold expenses. Thus the expenses on foreign tour could have easily come out of these surplus funds. Thus even on merits the AO was not justified in treating the expense on foreign tour as unexplained.
As regards expense incurred by the assessee on foreign tour in A.Y 2014- 15 it is seen that the assessee has undertaken one trip to the former USSR countries from 21.07.2013 to 29.07.2013 and the visit to Russia (25.07.13 to 28.07.13) was a part of this single trip. The assessee had submitted that the tour was undertaken to attend the meeting of CREDAl (Confederation of Real Estate Developers association of India) on behalf of the partnership firm "Ultimate Builder" in which the assessee was a partner and the expenses of Rs. 84,240/- were paid to M/s Creative Travels" by the said firm and have submitted a copy of ledger account of the travel agent. It is however seen that the assessee has not explained the source of day today expenses incurred in cash on this tour which were not covered by the travel plan. It is also seen that the expense are incurred in June 2013 and the tour is undertaken in July 2013. It is seen that similar tours are priced at Rs. 53,990/- for Kazakistan and Rs. 63,815/- for Uzbekistan respectively by M/s. Make My trip / Thomas Kook which are well recognized travel agents as against which the AO has estimated the total expense ofRs.3,00,000/- and no basis for such estimation has been given. Considering all the above facts the addition made by the AO is on higher side and therefore, addition amounting to Rs, 50,000/- in AY 2012- 13 and Rs, 75,000/- in AY 2014-15 are Confirmed and appellant gets relief of Rs. 1,50,000/- in AY 2012-13 and Rs. 2,25,000/- in AY 2014-15. Therefore, appeal on this ground is Partly Allowed.
10ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma
8. We have gone through the finding of Ld. CIT(A) and are of the view that a fair estimation has been made by him looking to the nature of expenditure which was incurred during foreign tour for both business and personal purpose. Thus no interference is called for in the finding of Ld. CIT(A) Ground No.1 of the Revenue's appeal is dismissed.
9. Apropos Ground No.2 wherein the revenue has challenged the finding of Ld. CIT(A) deleting the addition of Rs.38,96,987/- made by the Ld. A.O u/s 69B of the Act on account of unexplained jewellery, we observe that during the course of search jewellery was found at the residence and bank lockers of the assessee. The assessee was asked to explain the source of gold weighing 893.92 grams found in the Uco Bank locker and 273.41 grams of gold jewellery found at assessee's residence. We find that Ld. CIT(A) after having gone through the written submission of the assessee and the facts and circumstances of the case has deleted the addition for unexplained gold jewellery at Rs.38,96,987/- observing as follows:-
11ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma 5.5 Ground No 4 for AY 2014-15: Through this ground of appeal, the appellant has challenged addition of Rs.38,96,987/- on account of unexplained investment in jewellery. During the course of search gold jewellery of 893.92 gms was found from bank locker No 267 of UCO Bank and 273.41 gms at residence of the assessee. The assessee before AO claimed that the jewellery is covered under the preview of CBDT circular no 1916 dated 11.05.1994. The AO during the course of assessment proceedings did not consider the claim of the appellant for the following reasons:-
1.At the outset it is seen that the assessee has wrongly copied and paste the reply in the case of his wife Smt. Yogita Vishwakarma, whose case is also covered u/s 153A.
11.The assessee has not submitted any item wise details of the above jewellery found from residence and locker in the name of assessee and other family members.
III. The assessee has also not submitted any evidence which could substantiate the assessee's claim that the jewellery belongs to the various family members as claimed in written submission.
IV The assessee has also not submitted any confirmation of other family members to prove that partial jewellery belongs to them.
V The assessee has referred the Instruction No. 1916 dated 1110511994 of the CBDT issuing guidelines regarding seizure of jewellery during the course of search action. On the basis of this Instruction the assessee has computed permissible gold holding in respect of assessee and his family member and claimed that the jewellery found during the course of search is less than the permissible gold holding as per the CBDT's above instruction. In 12 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma support of his submission the assessee has relied upon the decision of Hon 'ble Gujrat High Court in the case of Kialashaben Manharlal Chokshi Vs. CIT (2010) 322 ITR 411 (Gujrat), wherein it was held that the Boards instruction is also relevant in considering the assessee's explanation regarding the jewellery found during the course of search.
The reliane placed by the assessee upon the CBDT Instruction No. 1916 dated 11/05/1994 is misplaced. The cited instruction is meant to be an administrative instruction for the guidance of the Authorized Officer at the time of search and seizure action regarding non-seizure of jewellery upto 500 gms for married woman and 100 gms for male member etc., given their sentimental attachment to it. However, non-seizure of jewellery does not imply that the jewellery is to be treated as explained in the assessment proceedings by the A. 0.
As regards the reliance on the above cited decision along with other citations, it is seen that the Hon 'ble High Court has observed that any middle class Indian family may be having jewellery to that extent which was found in that case. It is seen that the addition on account of gold ornament was made in that case at Rs 1 lakh only. Therefore considering the quantum of jewellery and other aspects of the case the Hon'ble High Court has come to the conclusion that addition cannot be made on that count. In the present case the quantum of jewellery found is much more higher than the case cited above and also the facts of that case are different than the assessee's case. Therefore the decision cited are not applicable to the assessee's case. The assessee has failed to furnish any documentary evidence showing that the investment in the jewellery has been recorded either in the case of assessee or his family 13 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma members. No wealth tax returns have also been furnished by the assessee and his family members which establish the holding of jewellery.
In view of the above facts and circumstances, the source of above jewellery remains unexplained. Further, keeping in view the discussion made in para 6 of the assessment order in the case of assessee's wife Smt Yogita Vishwakarma, whose case is also covered u/s 153A, wherein her cash flow has been rejected being not supported by any material evidences and also considering the fact that only earning member in the assessee's family is the assessee only, the investment in the jewellery amounting to Rs 38,96,9871- is treated as unexplained investment of the assessee. Therefore an addition of Rs 38,96,987/- is made to the total income of the assessee, on account of unexplained investment in jewellery, u/s 69B of the 1. T. Act, for A. Y 2014-15 5.5.1 The appellant during the course of appellate proceedings made allowing submissions: -
"During the course of search in the residential premises and the bank locker of the assessee 1167.33 grams of gold was found. The family of the assessee consists of his mother Mrs. Ram Dulari, his father Mr. B. R. Vishwkarma, himself, his wife Yogita Viswkarma, his daughter Sakshi and son Sagar. It may be mentioned that the total jewellery found with the family at the time of search was as under:
Location Gold Silver total
Locker No 267 Uco 893.92 - 893.92
Bank gram
At residence 273.41 252 525.41
Total 1167.33 252 1419.33
14
ITA (SS)No.206/Ind/2019
Bhupendra Viswakarma
It may be mentioned that the assessee is living along with his mother and the jewellery was found from the locker jointly owned by the assessee along with his wife. At the time of opening of the locker the assessee had specifically informed the search team that the jewellery in the locker belongs to the wife and her mother in law and this fact is duly mentioned in the statement recorded.
It may be mentioned that in Instruction No 1916 dated 11.05.1994 the board has issued guidelines that In the case of a person not assessed to wealth-tax gold jewellery and ornaments to the extent of 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family need not be seized.by virtue of instruction of the CBDT the assessee the assessee family was entitled to hold jewellery of up to 1550 Gms as detailed below:
Name Relationship Status Permissible
Gold holding
Yogita
Wife Married 500 Gms
Viswkarma
Mrs Dulari Mother Married 500 Gms
Ms Sakshi Daughter Unmarried 250 Gms
Mr. Bhupendra Self 100 Gms
Mr. B.R.
Father 100 Gms
Vishwkarma
Sagar Son 100 Gms
Total 1550Gms
Thus the family was found to be holding only 1167.33 grams of gold as against 1550 grams considered as reasonable for the size of the assessee's family by the CBDT.
It has further been held by various courts that the limits specified by CBDT are not only for the purpose of seizure but it can also be considered that up till such quantity the ornaments should be accepted as explained and no addition shall be made. Reference in 15 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma this regards may be made to the judgments reported at (2004) 90 TT J (Jab) 974, (2000) 159 CTR (Kar) 28, (2010) 235 CTR (Guj) 568.
In this regards reference can also be made to the decision of Hon 'ble Gujrat High Court in the case of Kialashben Manharlal Chokshi vs CIT (2010) 328 ITR 411 (Guj) wherein it was held that the Boards instruction is also relevant in considering the assessee's explanation regarding the jewellery found during the course of search wherein it was held by the court that " .. so far as the addition on account of gold ornaments to the tune of Rs.1 lakh is concerned, the assessee has given the explanation that was reproduced by the Assessing Officer in his assessment order which says that during the course of search and seizure proceedings, statement of the assessee's wife Smt Kailasben Chokshi was recorded and according to which she had received about 25 tolas of gold each from her parents and from her parent-in- law side at the time of her marriage in the year 1960. She had given 15 tolas of gold ornaments to her daughter Ritaben at the time of her marriage in the month of March 1988. If the total jewellery found during the course of search is taken into consideration, in the light of instruction issued by the Board, any middle class Indian family may be having jewellery and gold jewellery to that extent. Hence addition can be made on that count".
Similar view is also expressed by the Hon 'ble Karnataka High Court in the case of Smt. Pati Devi vs ITO (1999) 240 ITR 727(Kar).
Under the circumstances as the gold found was much lower than the limits ascertained as per the circular of CBDT the addition made is requested to be deleted.
16ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma 5.5.2 I have considered the facts of the case, plea raised by the appellant and findings of the AO. During the course of search total gold jewellery weighing 1167.33 grams and silver articles of 252 grams were found from bank locker and residence of the appellant. the appellant has claimed that the jewellery found during the course of search belongs to his wife and his mother who was staying with him. At the time of opening of the locker the assessee had specifically informed the search team that the jewellery in the locker belongs to the wife and her mother in law and this fact is duly mentioned in the statement recorded at the time of opening of the locker.
It has been further claimed that whole jewellery was not belonging to the assessee alone but to his entire family. The details of the various family members in the family was also submitted as detailed below and it was claimed that as per the CBDT circular the gold quantity of up to 1550 Grams should have been considered as explained against which the assessee is found to own only 1167.33 gram of gold.
Name Relationship Status Permissible
Gold holding
Yogita Viswkarma Wife Married 500 Gms
Mrs Dulari Mother Married 500 Gms
Ms Sakshi Daughter Unmarried 250 Gms
Mr. Bhupendra Self 100 Gms
Mr.
Father 100 Gms
B.R.Vishwkarma
Sagar Son 100 Gms
Total 1550 Gms
It has also been strongly contended that no incriminating paper/document was seized to indicate that appellant had earned any undisclosed income or has made any unexplained investment in gold ornaments & jewellery. Since the gold jewellery was for personal use, so assessee did not keep 17 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma any bill/invoice in support of his claim. In my view, AO was not justified in insisting for bills/invoice or any other documentary evidence in support of his claim. Ld. AR of the assessee has heavily relied upon the CBDT circular no 1916 dated 11th May 1914 clearly specifying that in case of person not assessed to Wealth Tax, gold jewellery & ornaments upto 500 grams per married lady, 250 gms per unmarried girl & 100 gms per male member of family need not be seized. On the basis of CBDT Circular No. 1916, the appellant has claimed that quantum of jewellery found from bank Locker was within tolerable limits and no addition was called for. Ld AR of the assessee has placed reliance on various case laws wherein courts have taken judicial notice of above-mentioned CBDT circular and allowed the relief to the appellant. These are:-
• Hon'ble Gujrat High Court in the case of Kialashben Manharlal Chokshi vs CIT (2010) 328 ITR 411 (Guj) Harakchand N Jain vis ACIT (1998) 61 TTJ 223(MUM) • Hon'ble Karnataka High Court in the case of Smt. Pati Devi vs ITO (1999) 240 ITR 727(Kar).
5.5.3 Before embarking upon the discussion of issue at hand, I find it appropriate to reproduce the relevant extract from CBDT, circular no 1916 dt. 11.05.2014 reliance is placed on Circular no. 1916 of CBDT:
"Instruction No. 1916 (F.No. 286/63/93-IT(INVII), dated 11-5-1994, issued by the Central Board of Direct Taxes (,CBDT,) directs the income tax authorities, conducting a search, to not seize jewellery and ornaments found during the course of search of varying quantities specified in the instructions, depending upon the marital status and the gender of a person searched. The guidelines are issued to address the instances of seizure of jewellery of small quantity in the course of search operations u/s. 132 that have been noticed by the CBDT A common approach is suggested in situations where search parties come across items of jewellery for strict compliance by the authorities. The CBDT directed that in the case of a person not assessed to wealth-tax, gold jewellery and 18 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma ornaments to the extent of 500 gms. per married lady, 250 gms. per unmarried lady and 100 gms. per male member of the family, need not be seized. "
5.5.4 The law with respect to quantity of jewellery and ornaments which could generally be held by the family members of an assessee has gone through huge litigations. Nevertheless, almost all Tribunals/ courts have consistently taken judicial notice of CBDT, Circular no. 1916 dated 11th may 1994 which lays down guidelines for seizure of jewellery and ornaments which has also been interpreted by various courts and tribunals in following manner:
•In the case Commissioner of Income Tax vs Ratanlal Vyaparilal Jain [(2010) 235 CTR 0568: (2010) 45 DTR 0290; (2011) 339 ITR 0351] it has been held that:
"Instruction no. 1916, dt 11th may 1994 which lays down guidelines for seizure of jewellery in the course of search takes into account the quantity of jewellery which would generally be held by the family members of an assessee and, therefore unless anything contrary is shown, it can be safely presumed that the source to the extent of the jewellery stated in the circular stands explained".
•In the case Commissioner of Income Tax vs M.S Agrawal (HUF) [(2008) 76 CCH 0802 MPHC: (2008) 11 DTR 0169 (MP)] it has been held that:
"In the absence of any material found during search having nexus with undisclosed income, no addition could be made in block assessment under chapter XIV-B; further Tribunal was justified in deleting addition on account of jewellery having regard to CBDT Instruction No. 1916 dt. 11 may 1994. "
•In the case Ashok Chaddha vs ITO (2011)202 Taxman395 it has been held that:
"Section 69A of the Income-tax Act, 1961 - Unexplained moneys - Assessment year 2006-07 - During a search at assessee's residential premises, 906.900 gems jewellery was found from assessee - Assessee explained that he was married 25 years back and jewellery was received by his wife in form of 'streedhan' or on other occasions such as birth of a child, etc. - Assessing Officer accepted only 400 gms of jewellery as explained and treated 506.900 gms of jewellery as unexplained and, accordingly, made addition under section 69A - Whether collecting jewellery of 906.900 gms by a woman in a married life of 25 years in form of streedhan 19 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma or on other occasions is abnormal - Held, no - Whether therefore, Assessing Officer was unjustified in treating only 400 gms as 'reasonable' and treating remaining jewellery as 'unexplained' - Held, yes - Whether, therefore, addition made was to be deleted - Held, yes [In favour of assessee] ".
•In the case Smt. Pati Devi vs Income TaxOfficer and others Reported in 240 ITR -727 (Karnataka High Court) it has been held that:
"by referring to instruction no 1916 it was held that it is not the value which is considered but it is the weight which is considered reasonable looking to the social circumstances prevailing in the country. "
• In the case of Harakchand N Jain v/s ACIT (1998) 61 TTJ 223(MUM) In which Hon 'ble Tribunal held that in the Indian society everyone receives gifts at the time of marriage & other occasion. Therefore, keeping in view the number of family members we are of the view that further rebate of 500gms out of the entire jewellery may be treated as explained".
The learned AO is the above case has given rebate of only 300 gms in respect of his wife and only 180 gms with regard to his daughters out of the jewellery, weighing 1721.07 gms (gross) and 1662.05 gms (net) was found out of which only 765.25 gms seized.
• In the case of Smt. Sulochana Devi Jaiswal v/s DCIT (2004) 90 TTJ (JAB)974 In this case it was held that The Board vide its Circular No. 1916, dated. 11th May, 1994, has prescribed the limit of 500 gms. for gold jewellery which is not to be seized. In other words, the Board has considered the issue and felt that gold jewellery to the extent of 500 gms. could be possessed by an ordinary family. The intention behind such circular was, therefore, very clear.
As the unexplained jewellery found during the course of search was much less than 500 gms. We have no hesitation in holding that the addition on account of unexplained investment in jewellery is not justified and the same is deleted.
• In the case of Ritubajaj v/s ACIT ID ITA no 4101/DEL/2017 dated 09.03.2018 20 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma It was undisputed that all theses members were residing together. Under these circumstances, the submissions of the appellant that jewellery could not be said kept in water tight compartments in the Joint Family Members.
The fact that at the time of search no statement was recorded from the appellant and hence there was no occasion for her to state that the part of the jewellery belongs to her mother-in-law/ father-in-law or to specify the items of such jewellery.
5.5.5 Last but not the least, the appellant has been filing his returns of income showing substantial income. The appellant has claimed that his mother and father are staying with them and that the gold jewelry found in the locker belonged to his mother also. This statement was also made before the search team at the time of opening of the locker. This claim of the assessee has not been disputed by the AO and adjustment of the jewelry belonging to the mother/father cannot be denied. Thus, looking into the income and status of the appellant family and in view of the decisions cited above, the gold ornaments & jewellery in possession of the appellant Shri. Bhupendra Viswkarma along with his parents and wife Smt Y ogita Viswkarma and his children Ms Sakshi( daughter) & son Master Sagar to the extent of 1550 grams is reasonable as prescribed in Board's circular 1916 as under:-
In grams Bhupendra Viswkarma (Appellant) 100 Yogita Viswkarma (Appellant's wife) 500 Ms Sakshi (daughter of Appellant) 250 Master Sagar (son of the appellant) 100 Mr. B.R.Viswakarma (Father of the appellant)100 Mrs. Dulari(mother of the appellant) 500 Total 1550 Grams As discussed earlier, It is, held that out of the total gold jewellery found in possession with the family of 1167.33 grams is quite reasonable and within permissible limits as per boards circular No 1916. As regards silver 21 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma articles of 252 grams found during search it has to be held that looking to the nominal value of the articles(less than Rs. 10,000) and the status of the family no addition is justified. Thus, addition made by the AO amounting to Rs. 38,96,987/- made on account of 1167.33 grams of gold jewellery and 252 grams of silver articles is Deleted. Therefore, appeal on this ground is Allowed".
10. From going through the above finding of Ld. CIT(A) we observe that Ld. CIT(A) has duly considered the permissible limits provided in the Central Board of Direct Taxes Circular No. 1916 dated 11.5.2014, ratios laid down by Hon'ble Courts and considering the number of family members, has rightly deleted the addition for unexplained jewellery of Rs.38,96,987/- made by the Ld. A.O u/s 69C of the Act. We thus find no reason to interfere in the finding of Ld. CIT(A) and confirm the same. Accordingly Ground No.2 raised by the Revenue stands dismissed.
11. Apropos Ground No.3 wherein the Revenue has challenged the deletion of addition for unexplained cash at Rs.1,35,500/- found at the assessee's residence during the course of search. We observe that Ld. CIT(A) deleted the additions observing as follows:-
5.6 Ground No 5 for AY 2014-15:- Through this ground of appeal, the appellant has challenged addition of Rs. 1,35,500/- on account of cash found during the course of search. The AO during the course of assessment proceedings in the case of Smt Yogita Vishwakarma wife of the assessee, who has claimed to be owner of the cash found from 22 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma residence and bank locker, has rejected cash flow submitted by Smt Yogita Vishwakarma in support of her claim by stating that the assessee is only earning member of the family.
5.6.1 The appellant during the course of appellate proceedings filed written submissions which are reproduced as under:-
"During the course of assessment the AO was informed that the cash in hand found at the residence of the assessee belonged to the wife. The relevant submissions mode before the AO are reproduced herein below for ready reference "The wife of the assessee has withdrawn cash of Rs. 51000/- on 13.01.2014 which was retained by her. The balance cash of Rs. 34500/- relates to her past savings. Assessee is informed that the wife has prepared a cash book incorporating all her transactions which duly explain the source of cash balance available in her hands a copy of which is enclosed for your kind verification".
It may be mentioned that the assessment of the wife was also completed u/s 153A simultaneously by the same AO.
Thus there was no reason for the AD to disbelieve the explanation furnished by the wife/assessee. Further every family holds some cash balance to meet its medical emergencies out of the past savings of the family members and holding a total cash balance of Rs. 135500/- in the family specially where the parents of the assessee both of whom are Senior Citizens does not warrant any addition.
Under the circumstances the additions made is requested to be deleted.
5.6.2 Submission filed by appellant along with the details / material brought on record have been duly considered. Due consideration has been given to the findings arrived at in the assessment order. It is seen that the assessment in the case of Smt Yogita Vishwakarma wide of the appellant has been completed u/s 153A of the Act and the cash is hand found at the 23 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma residence and locker was submitted to be belonging to her. Smt Yogita Vishwakarma has shown income from salary received through cheque and tuition and has also filed cash flow in support of her claim. The AO had rejected the cash flow statement furnished by Smt Yogita Vishwakarma on account of non furnishing of salary certificate (Form 16) and details of students to whom tuition was provided. The assessee is also having substantial taxable income ( Rs. 4,96,720/-, Rs. 7,53,710/- Rs. 15,48,730/-
Rs. 12,53,770/-, Rs. 24,74,340/- and Rs. 24,41,330/-) in A.Y 2008-09 to A.Y 2013-14 respectively. The assessee is also having his aged father and mother residing with him. Thus availability of cash in hand with the entire family of Rs. 1,35,500/-, looking to the size of the family and its status cannot be treated as unexplained. Thus, the addition made by the AO amounting to Rs.l,35,500/- Deleted. Therefore, appeal on this ground is Allowed.
12. From perusal of the above finding of Ld. CIT(A) and also going through the facts and circumstances of the case we observe that looking to the consistent substantial taxable income offered by the assessee for Assessment Year 2008-09 to 2013-14 and withdrawals made, we are of the view that the cash found at assessee's residence is reasonable and explainable. We thus find no reason to interfere in the findings of Ld. CIT(A) and the same stands confirmed. Accordingly Ground No.3 of the appeal of Revenue stands dismissed.
24ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma
13. Now we take up Ground No.4 wherein the revenue has challenged the deletion of addition for unexplained opening balance of capital at Rs.1,79,22,599/-. Brief facts are that during the course of assessment proceedings Ld. A.O observed that up to Assessment Year 2013-14 assessee has not maintained regular books of accounts and was showing the income on estimated basis under the provisions of Section 44AD of the Act but for Assessment Year 2014-15 i.e. the year under appeal assessee has submitted the balance sheet for the first time and opening capital balance was shown at Rs.1,79,22,599/-. The assessee has the income and expenditure statement for last six assessment years along with statement of withdrawals and household expenses thereby showing that the net income earned during the year and the surplus left after deducting household expenses and other withdrawals it added together from Assessment Year 2008-09 to Assessment Year 2013- 14 the resultant figure is more than the opening capital balance taken by the assessee in the balance sheet. However Ld. A.O was not convinced and he made the addition. When the matter came up before Ld. CIT(A) he after examining the facts and submissions 25 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma made by the assessee deleted the addition of unexplained opening balance of Rs.1,79,22,599/- observing as follows:-
5.7 Ground No 6 for A.Y. 2014-15: Through this ground of appeal, the appellant has challenged addition of Rs. 1,79,22,599/- treating the opening capital as on 01.04.13 as unexplained. The AO during the course of assessment proceedings found that the assessee upto AY 2013-14 has been showing income on estimated basis U/S 44AD of the Act and no regular books of accounts are maintained. However, from AY 2014-15 the assessee has submitted balance sheet with opening capital of Rs.
1,79,22,599/-. Therefore, the AO required the assessee to justify the opening balance in AY 2014-15. The AO after considering reply of the assessee did not find the same acceptable for the following reasons:-
(i) The assessee has not maintained and submitted the date wise record for these years and therefore no verification of the assessee's above chart can be made.
(ii) The chart submitted by the assessee does not contain the bank details wherein lot of transactions are made during the relevant period.
(iii) The chart submitted by the assessee does not contain the details in respect of investments in land / immovable properties, movable properties and capital accounts in the firm/ companies wherein the assessee is a partner / director.
(iv) In what form the so called cumulative capital was invested is not submitted by the assessee.26
ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma
(v) The above chart does not show the correct picture of assessee's withdrawals for household expenses, as the withdrawals shown by the assessee are very low keeping in view the standard of living of the assessee and his family.
(vi) The investments in the jewellery and cash found at residence and l ocker is not reflected in the above mentioned chart.
(vii) The expenditure incurred on foreign travels are not included in the above chart.
5.7.1 The appellant during the course of appellate proceedings has filed written submissions which are reproduced as under:-
"The assessee had been offering his income for tax under various presumptive provisions of the Act and has not been maintaining any books of accounts as per the option available to him under the act. This fact is mentioned by the AD also in Para 10 of the assessment order. However the various companies and firms in which the assessee was a partner or shareholder or director were required to maintain books of account and were accordingly maintaining their books of accounts in the regular course of business in which all transactions undertaken by the assessee with those firms were duly recorded in the capital account of the assessee. All these firms and companies were also assessed u/s 153A by the AO simultaneously and the books of accounts of these firms were duly produced and verified by the AO and no specific defects/deficiencies were found by the AO in the books maintained.
The assessee has prepared his balance sheet for the first time on 01.04.2013 in which all the assets and liabilities were recorded as per records maintained by the various firms/companies and purchase deeds of the properties. The balance of the two was shown as capital of the assessee at Rs. 1, 79, 22,599/-. In addition to above as a cross check the assessee also prepared a chart containing the details of the income earned and expenses made by the assessee in various years which is reproduced by the AO in the assessment order. The income considered was in reconciliation with the computation of income and copy of capital accounts of the assessee maintained by the various firms. The balance of the 27 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma respective years was considered as addition to the capital. As per this cross check sheet the assessee had earned a cumulative surplus of Rs.20533295/-over the last six years as against which the total opening capital was considered at RS. 17922599/-
Thus it would be appreciated that the capital balance taken by the assessee was duly explained.
However the AO disregarded the above factual status and made addition of the same after making various observations which along with the submissions of the assessee are given herein below:
Sr. Observation of the AO Submissions of the assessee No. I Verification of the chart The incomes and the expenses (excluding cannot be made withdrawal for house hold exp) are readily verifiable from the ITR/Computation of income of various years. The investments made were verifiable from the purchase documents of asset and ledger accounts of associate concerns which were already verified by the AO in assessment of the respective firms and companies ii The chart does not The chart was a summary of income earned as contain bank details per ITR and expenses incurred to ascertain the increase in capital in various years and thus details of bank account does not have any relevance iii The chart does not The chart was a summary of income earned as contain investment per ITR and expenses incurred to ascertain the details increase in capital in various years and thus details of investments have no reliance. iv In what form The AO was informed in writing that all the cumulative capital was assets and liabilities are recorded as per invested is not records maintained by the various submitted firms/companies and purchase deed of the properties. Thus the investment of the capital was naturally made in these firms/ companies and properties. Further the assessee had prepared a notional balance sheet as on 31.3.13 as per which the excess of investments over the liabilities was 28 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma ascertained at Rs.1,79,22,599/- which was taken as capital. These balances were incorporated as opening balance as on 01.04.2014 in the regular books of account maintained by the assessee since then. Thus the details of investment of the capital was readily verifiable from the books maintained by the assessee in A.Y. 2014-15 which were duly produced before the AO and verified by him during the course of assessment proceedings as confirmed by him in Para 2 of the assessment order.
v The chart does not The withdrawn shown by the assessee has contain correct picture been accepted by the AO and no additions are of assessee made on this account. Thus this observation is withdrawal as the not relevant.
withdrawals shown by the assessee are low vi Investment in jewellery The chart was a summary of income earned as is not reflected in the per ITR and expenses incurred to ascertain the chart increase in capital in various years and thus details of investment in jewellery have no relevance. It may also be mentioned that the jewellery belonged to the other members of the family and could not have been a part of the balance sheet of the assessee.
vii Expenditure on foreign The expenditure are claimed to have been travel are not included incurred by the wife. Further the incremental in the chart capital was Rs.2,05,33,295/- against which the capital considered is only Rs.1,79,22,599/-
As detailed above the observation of the AO are totally irrelevant and needs to be ignored. Further the opening capital taken by the assessee does not represent any inflow or out flow of funds and is only a journal entry thus cannot be added as income. The addition is made u/s 69 which is applicable when the assessee is found to have made any investment which is not recorded in the books of account. In the case under consideration none of the investment has been made during the year. Further the assessee has not maintained any books in the past years as the income was offered under the presumptive provisions. However all the 29 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma investments made were duly recorded in the books of account of those firms in the respective years which were also assessed u/s 153A and books of accounts of those firms were duly verified by the AO.
Thus the addition made is requested to be deleted.
5.7.2 Submission filed by appellant along with the details / material brought on record have been duly considered. Due consideration has been given to the findings arrived at in the assessment order. The appellant upto 31.03.2013 was carrying on his proprietary business of civil construction and was offering his income under the presumptive provisions of section 44AD of the Act. The assessee was not required to maintain any books of accounts and the assessee had not maintained any books for the various years up till 31.03.2013. The assessee commenced maintaining of regular books of accounts from 01.04.2013 and the books for F.Y 2013-14 (AY 2014-15) were made in the regular course and were produced before the AO which were verified by the AO. The assessee for starting maintenance of regular books was required to incorporate the opening balances of his asset and liabilities as on 31.03.2013. For this purpose the assessee has taken copies of his account in the various firms/companies in which he was a partner/shareholder or had any business dealings and the balances appearing in these accounts as on 31.03.2013 were taken as the assets/liabilities of the assessee. Similarly all the lands and other properties purchased by him until 31.03.2013 and owned by him on that date were also taken as opening balances of asset. The bank balances were also accounted accordingly. After completion of this exercise, the total value of liabilities and investments made up till 31.03.13 was determined at Rs.2,91,21,421.55/- and Rs. 4,70,44,020.55/- respectively. The difference between the assets and liabilities was calculated at Rs. 1,79,22,599/- which was recorded as opening balance of the capital. The 30 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma assessee also prepared a chart of income earned by him in the past 6 years (FY 2007-08 to FY 2012-13) and the estimated withdrawals made by him to determine the surplus earned by him every year. The chart is reproduced as under:-
Details of Assessment Year
Capital
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Salary from 172428 649427 0 800000 1800000 1800000
Ultimate
Constr
Salary & Int 997434 1173761 2119113 145865 2502310 2917697
CNP
construcdtion
Exempted 0 145667 414466 1931542
profit
Ultimate
Builder
Exempted 38845 285130 821634 306829
profit CNP
cost
Profit u/s 369815 267881 1235638 128404
44AD
Rental 50400 86400 213313 149570 57600 180760
income
Interest 4031 41898 144788
income
Capital gain 2313820
1594108 2177469 6116895 2080436 6462748 7947038
Withdrawal
LIC 108533 140822 128067 133915 189349 325730
Income Tax 106316 150435 476691 279464 702160 660374
House 0 200000 262574 265809 267338 277822
interest
House hold 120000 150000 180000 210000 240000 270000
expenses
334849 641257 1047332 889188 1398847 1533926
Net Capital 1259259 1536212 5069563 1191248 5063901 6413112
Cumulative 1259259 2795471 7865034 9056282 14120183 20533295
Capital
These figures were adopted by him on the basis of figures reported in the ITR(S) of respective years. Based on this calculation it was calculated that the assessee has earned a cumulative surplus of Rs. 2,05,33,295/- during these 6 years. The assessee by preparing this chart has made an attempt to show that the opening capital considered by him was adequately explained.
The AO had however disbelieved the contention of the assessee by observing that date wise details of the transaction are not provided, the 31 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma chart does not contain the details of bank transactions, it also does not contain the investments made by the assessee and also does not provide the details of investment made through this cumulative surplus. He also mentioned that the chart does not contain the details of investment in jewelry and expense incurred on foreign tours.
5.7.3 I have considered the observations of the AO and have gone through the chart referred to by the AO and reproduced at Page 17 of the assessment order. It is seen that the chart is depicting the income earned by the assessee in the respective years as disclosed by him in his ITR/ITR of other firms in which he is a partner and ITR of the respective assessment year has already been accepted by the AO. Thereafter, deduction has been made for the expenses incurred by the assessee on the Income Tax, interest on House loan and estimated house hold expenses. After this deduction the net surplus earned by the assessee has been estimated and have been totaled for 6 years to calculate the cumulative surplus, Thus this chart was in the nature of income and expenditure account and thus there was no scope for details of the bank account, or the details of investments made, or the details of purchase of jewelry appearing in this chart and the observation of the AO in this regard are not relevant. The assessee admittedly was given an option under the Income Tax act, not to maintain the books of account and thus no adverse inference could have been drawn from his inability to submit date wise record for these years. The observation of the AO that withdrawals for house hold expenses shown by the assessee are very low does not carry any weight as he has not brought any material to substantiate that the assessee has incurred expenses more than what is estimated by him and further he has not made any addition for low house hold expenses.
32ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma It is also seen that the AO has made addition towards unexplained investment u/s 69 of the Act. However the amount of Rs. 1,79,22,599/ reflected the opening capital of the assessee which was the difference of all assets and liabilities of the assessee as on 31.03.2013. The amount did not reflect any investment. The AO has failed to bring on record any specific investment made by the assessee which remained unexplained. It is further seen that all the investments represented by the assets taken as opening balance as on 01.04.13 were made in earlier years prior to 31.03.2013 and were taken as opening balance as on 1.4.13 and no part of investment was made during this year. This fact is also verified from the copy of account of the assessee in various firms/companies and the ownership documents of other assets. Hence, this credit of capital was in the nature of a journal entry passed to incorporate the opening balances as on a particular date and did not reflect any actual inflow or outflow of funds. In view of the above discussion, the AO was not justified in making the addition on account of unexplained opening capital which was difference of all assets and liability of the appellant. it is also important to mention that the calculation given by the appellant is on the basis of returns filed by the appellant which were also accepted by the AO in respective assessment year. Therefore, addition made by the AO amounting to Rs. 1,79,22,599/- is Deleted. Therefore, appeal on this ground is Allowed.
14. After going through the detailed finding of Ld. CIT(A) and also going through the chart of fund flow from Assessment Year 2008-09 to Assessment Year 2013-14 placed by the assessee before the lower authorities and also before us, we observe that the income shown in all these years has been offered to tax in the return of income and after subtracting the withdrawals for LIC premium, 33 ITA (SS)No.206/Ind/2019 Bhupendra Viswakarma Income Tax, House loan interest and household expenses the resultant figure if cumulatively added and carry forward from Assessment Year 2008-09 onwards till the Assessment Year 2014- 15 the opening capital balance would have been Rs. 2,05,33,295/-. However the assessee has taken the opening capital balance of Rs.1,79,22,599/- which is less than the cumulative fund shown by the assessee in the chart. We thus in the given facts and circumstances of the case are of the view that Ld. CIT(A) has rightly appreciated the facts and deleted the addition of Rs.1,79,22,599/- as the assessee had duly explained the source of opening capital balance. Thus the finding of Ld. CIT(A) is confirmed and accordingly ground No.4 raised by the revenue stands dismissed.
15. In the result all the grounds raised by the Revenue in Appeal No.ITA(SS) No.206/Ind/2018 stands dismissed. Revenue's appeal stands dismissed.
The order pronounced in the open Court on 20.10.2020.
Sd/- Sd/-
( KUL BHARAT) (MANISH BORAD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
नांक /Dated : 20 October, 2020
/Dev
Copy to: The Appellant/Respondent/CIT concerned/CIT(A)
concerned/ DR, ITAT, Indore/Guard file.
By Order,
Asstt.Registrar, I.T.A.T., Indore
34