Income Tax Appellate Tribunal - Jodhpur
Deputy Commissioner Of Income Tax vs Vinod Kamra on 11 October, 2005
Equivalent citations: (2006)102TTJ(JODH)152
ORDER
R.S. Syal, A.M.
1. This appeal by the Revenue and cross-objection by the assessee emanate from the order passed by the CIT(A) on 21st Jan., 2000 in relation to block period 1987-88 upto 4th March, 1997.
2. First ground of Revenue's appeal is against the deletion of addition of Rs. 1,44,808 made by the AO on account of unexplained investment in jewellery.
3. Briefly stated, the facts of this ground are that the residential premises of the assessee was searched on 4th March, 1997 in which certain incriminating documents were found. It was found as per Annex. J and Annex. J-1 to the Panchnama that jewellery of 222 gms. and 753.5 gms. was respectively found in the residential premises and locker No. 89 held in the joint name of Smt. Kusum Kamra, the wife of the assessee and Shri Vijay Munjal, brother of Smt. Kusum Kamra in Allahabad Bank, Sriganganagar. Besides that, jewellery of 38 gms. was found on the person of Smt. Kusum Kamra which made the total jewellery of 1013.500 gms. On being called upon to explain the source of investment in gold jewellery, it was stated by the assessee that it belonged to his wife Smt. Kusum Kamra which was received by her at the time of marriage in 1967 from her parents and parents-in-law and also at the time of ceremonial occasions like, birth of son, etc. It was also submitted that part of the jewellery belonged to the wife of Shri Vijay Munjal who was brother of assessee's wife. The reason for keeping the jewellery in the locker by the wife of Shri Vijay Kumar Munjal was also explained. The AO treated gold jewellery of 698.700 gms. as explained and balance gold jewellery of 314.800 gms. was treated as acquired out of undisclosed income of the assessee. As a result of that an addition of Rs. 1,44,808 was made. The learned CIT(A) deleted the addition after considering the fact that the locker was in the name of Smt. Kusum Kamra, wife of the assessee, who was separately assessed to tax and she had duly stated in her statement that the jewellery belonged to her and her bhabhi. It was clearly stated that her husband had nothing to do with her jewellery.
4. After considering the rival submissions and perusing the relevant material on record, it is observed from para 5.2 of the impugned order that the wife of the assessee had independent source of income and was being assessed to income-tax. She had claimed the ownership of the entire gold jewellery found at the residence and locker except that belonging to her brother. In such circumstances, there was no question for considering the making of addition in the hands of the assessee. Rather, the addition should have been considered only in the hands of Smt. Kusum Kamra, to whom the jewellery belonged and was an independent income-tax assessee. We, therefore, do not find any infirmity in the impugned order warranting any interference. This ground is not allowed.
5. Second ground of the Revenue's appeal is against the deletion of Rs. 86,685 made by the AO on account of entries contained in p. 8 of the seized material.
6. Facts are that page marked No. 8 was found in search whose ownership was denied by the assessee. This paper denoted the name of nine persons against whom certain amounts as per detail below were written on 6th May, 1996;
1. Prera 25/ 6/5/1996 4060
2. Raj _______________________ 24655
3. K.K. _______________________ 9000 4. K.K. _______________________ 480 Mama _______________________ 5400 Sunil _______________________ 3740 Subash _______________________ 14620 Narender _______________________ 1150 Ram _______________________ 21600 + 1980 The AO came to the conclusion that the amounts mentioned on this page were advances given to the persons named in the paper by the assessee on 6th May, 1996. A sum of Rs. 86,685, being total of these items, was added to the assessee's total income under Section 69B of the Act. The learned CIT(A) deleted the addition vide para 7 of his order.
7. After considering the rival submissions and perusing the relevant material on record, it is observed from the copy of this page, placed at p. 49 of the paper book, it contains certain names along with amounts and further date of 6th May, 1996 is found written thereon. Neither the name of the assessee is appearing on this page nor it is signed by the assessee. Apart from mentioning the contents, which have been extracted above, there is not even an iota of evidence to suggest that these represented the loans made by the assessee to the persons named in this page. An important aspect which cannot be lost sight of is that it is a case of search and if such entries had represented the giving of loans by the assessee, as is opined by the AO, there would have been some other material found in the search to correlate the advancing of the loan to these persons outside the books of account. In the absence of any such material placed on record, we are not inclined to disturb the finding of the first appellate authority. Moreover, it is found that the assessee had disowned the paper throughout the proceedings and the said paper was neither found in the possession of the assessee. It is also not the case of the AO that the said paper was recovered from the almirah, etc. of the assessee kept at his office. In view of these facts, we uphold the impugned order on this count. This ground is, therefore, not allowed.
8. Last revised ground of Revenue's appeal and first ground of assessee's cross-objection deal with the addition on account of marriage expenses of the assessee's daughter.
9. The assessee performed the marriage of his daughter (Radhika) on 3rd Dec, 1994 with Shri Sanjeev Nagpal of Sriganganagar. The assessee admitted expenditure of Rs. 2 lakhs on the marriage, in his preliminary statement recorded on 4th March, 1997. Vide his letter dt. 23rd May, 1997, the following detail of daughter's marriage expenses was given:
From seized papers:
(i) Ornaments-jewellery 45,000
Clothes 70,000
Kiryana goods 8,000
Others 3,000
_________
1,26,000
(ii) Tent house, lighting, decoration, 50,000
Halwai, waiters, etc.
(iii) Other expenses 30,000
__________
2,06,000
__________
The AO found that certain papers relating to marriage expenses were also found during the course of survey under Section 133A on the premises of M/s Sriganganagar Enterprises, which concern was being run from Nohra No. 17 belonging to Shri Subash Kamra. Photocopies of the papers were confronted to the assessee who admitted that the papers related to the marriage expenses of his daughter. He, however, raised dispute with regard to certain pages as under.
Page 34 The amount of this paper was taken by the assessee at Rs. 17,425, which related to the purchase of four bangles, the value of which was worked out at Rs. 27,465 [coded as 274.65] including Rs. 280 labour charges. After considering payment of Rs. 10,000 [coded as 100], the balance was shown at Rs. 17,465 [coded as 174.65]. The AO found that the total investment in the purchase of four bangles was, therefore, Rs. 27,465 as against which the assessee had considered it to be Rs. 17,465. The amount of Rs. 27,465 was, therefore, considered in totalling the extent of jewellery at Rs. 98,965.
Page 35 This page related to the purchase of 98.900 gms. of gold ornaments, the value of which was shown at Rs. 51,400 out of which Rs. 47,650 were paid and Rs. 3,750 remained due. The assessee stated it to be an estimate. The AO did not accept this explanation for the reason that if it had been estimate, then there was no need to subtract Rs. 47,650 from Rs. 51,400 as shown on the paper. He, therefore, treated the investment of Rs. 51,400 in the purchase of jewellery amounting to Rs. 98,965.
Page 39 On this page the details of sarees were mentioned as per which the assessee had purchased five sarees for Rs. 15,000 and. eight sarees of Rs. 7,000 to which Rs. 1,000 debit of earlier bill was added and thus total amount was shown at Rs. 23,000. The assessee considered the expenditure of Rs. 8,000 in respect of this page. It was explained that five sarees of Rs. 15,000 were not purchased. The AO did not accept this explanation for the reason that there was nothing mentioned on this page regarding the return or no purchase of five sarees for Rs. 15,000. He, therefore, considered Rs. 23,000 in the total expenditure of Rs. 53,965 for the purchase of sarees.
After considering all these details the AO worked out the head wise expenditure as under:
Rs. Rs.
(i) Jewellery 98,965
[including expenditure mentioned on pp. 34
and 35 as discussed above]
(ii) Clothes
(a) shawls 21,330
(b) nighties, pullover, cardigan, etc. 9,136
(c) sarees (including Rs. 15,000 on page No. 39) 53,965
(d) suits 30,619
________
1,15,050
(iii) Kirana Items
[as per p. 25 in seized papers] 8,193
(iv) Misc.
Hair drier, briefcase, bed sheet 3,010
________
2,25,218
(v) Details of other exp. furnished by the assessee
vide his letter dt. 23-11-1998
(a) Tent, water, light 16,000
(b) Halwai 3,100
(c) Photographer 3,005
22,105
_________
2,47,323
_________
It was further observed that several other expenses were not included in the above items. The AO further noted that the expenditure on tent house, light, decoration, halwai and waiter etc. (Rs. 50,000) and other expenses (Rs. 30,000) totalling Rs. 80,000 were admitted by the assessee in his letter dt. 23rd May, 1997 addressed to the ADIT, Bikaner which was now stated at Rs. 22,600 (Rs. 16,000 + Rs. 3,100 + Rs. 3,500). The AO got further enquiry conducted. He, therefore, estimated the gathering at around 700 to 800 persons and estimated the food expenses at Rs. 50,000 which was admitted by the assessee in his statement dt. 29th Dec, 1998 that the expenditure on food may be at around Rs. 70 per head. As the assessee had shown expenditure of Rs. 8,193 the AO allowed credit for this amount and calculated the undisclosed expenditure at Rs. 41,807 (Rs. 50,000 minus Rs. 8,193). He further made estimate of expenses on decoration, furniture, tikka, etc. at Rs. 50,000. The total expenditure thus estimated by the AO on marriage came to Rs. 3,39,130 (Rs. 2,47,323 + Rs. 41,807 + Rs. 50,000) rounded to Rs. 3,39,000. The assessee was required to give explanation about the source of such expenditure, which was stated by the assessee as under:
(i) Drawings from Sriganganagar Urban Co-operative Rs. 26,000
Bank on 2-5-1994
(ii) Drawings from Sriganganagar Urban Co-operative Rs. 1,05,000
Bank on 17-10-1994
(iii) Drawings from Sriganganagar Urban Co-operative Rs. 1,000
Bank on 24-11-1994
(iv) Receipt of sagan from near relatives as per details Rs. 60,600
furnished
(v) Receipt of sagan from other relatives and friends Rs. 32,000
[Actual Rs. 32,111]
_______________
Rs. 2,24,600
_______________
The AO did not accept the utilization of Rs. 26,000 on marriage as the name of Shri Kundan Lal was shown as the receiver of the amount from the bank. It was explained by the assessee that Shri Kundan Lal was an employee of M/s Bharat Enterprises, a family concern of the assessee and he, being the accountant, used to handle bank deposits and withdrawals of cash and cheques, etc. The AO did not accept this explanation. He, therefore, determined the amount available with the assessee for the marriage expenses at Rs. 1,98,711 (Rs. 2,24,711 minus Rs. 26,000) against the total expenditure estimated by him at Rs. 3,39,000. This resulted into an addition of Rs. 1,40,289 (Rs. 3,39,000 minus Rs. 1,98,711). The learned CIT(A) accepted the AO's view on the additions made on the basis of papers marked at pp. 35 and 39 of the paper book on the ground that the assessee himself had admitted that these papers were recovered from the almirah of the assessee kept in his office situated at Sriganganagar along with other papers of marriage expenditure. He further upheld the AO's view on the addition made on the basis of p. 34. As regards the estimation of expenditure on food and other items, it was found that the assessee had received Rs. 92,000 in the form of customary gifts (shagun) and the AO had not brought on record any material for making estimate of Rs. 50,000 under the head 'food' and Rs. 50,000 on other items totalling Rs. 1 lakh. He scaled down the estimate to Rs. 80,000. However, the contention of the assessee with regard to Rs. 26,000 withdrawn from the bank by the assessee and utilized towards marriage expenses was accepted by the first appellate authority. He, therefore, in his final analysis, sustained the addition (by considering the rectification order also) as under:
1. Jewellery Rs. 98,965
2. Clothes Rs. 1,15,050
3. Misc. Hair drier, briefcase, etc. Rs. 3,010
4. Expenditure of food and other items as discussed in this order Rs. 80,000 ______________ Rs. 2,97,025 Less expenditure, the source of which has been held as explained Rs. 2,24,600 ______________ Sustainable addition worked out Rs. 72,425 ______________
10. We have heard the rival submissions and perused the relevant material on record. Before elucidating the issue further, it is important to note that the addition on account of marriage expenses is not an estimate simpliciter by the AO. Not only certain incriminating papers were found during the course of search and survey relating to marriage expenditure of the assessee's daughter, but they were also accepted by the assessee as relatable to marriage expenses. In such circumstances, it is found that the addition made by the AO is not only in the realm of estimates but the actual papers found in the course of search and survey coupled with the making of estimates on the strength of such incriminating papers. Turning to the merits of the addition, we find that the learned CIT(A) has discussed all the items one by one and gave sufficient reasons for their acceptance or otherwise. The learned Authorised Representative failed to convince us on allowing any further relief on the additions sustained by the learned CIT(A) in the impugned order and the order passed in rectification, thereby setting right the calculation mistake etc. In the same manner, the learned Departmental Representative also could not explain as to on what basis the view taken by the learned CIT(A) be disturbed. The learned CIT(A) has elaborately discussed separately the contents of pp. 34, 35 and 39 with which we are fully agreeable. The benefit of Rs. 2,24,600, as claimed by the assessee, being the source of investment, has also been fully accepted as the AO had no reason to dispute the withdrawal of Rs. 26,000 made by Shri Kundan Lal, the assessee's accountant on his behalf. Considering the facts in totality, we are of the considered opinion that the addition so sustained in the first appeal is reasonable and does not warrant any interference. The ground raised by the Revenue as well as the assessee in his cross-objection are, therefore, not allowed.
11. Last ground of assessee's cross-objection is against the confirmation of addition of Rs. 9,118 under Section 69C of the Act.
12. Facts of the ground are that during the course of search, some loose papers were found from the assessee's residence which indicated that the assessee had purchased building materials like, marble, sanitary goods, cement, bajri, etc. On being called upon to explain these papers, it was stated by the assessee that he converted his bathroom into bathroom-cum-toilet and also provided marble flooring in the lobby. It was further admitted that the total expenditure to the extent of Rs. 76,000 was incurred. During the course of assessment proceedings, the assessee filed valuation report of the approved valuer in respect of the expenditure on renovation/alteration. The AO found certain defects in the report, which have been discussed in the assessment order. The AO, thereafter estimated the expenses at Rs. 76,000 as admitted by the assessee himself before the ADIT, Bikaner vide his letter dt, 23rd May, 1997 and before the AO vide his letter dt. 23rd May, 1998. The assessee explained the following sources of investment in the construction:
1. Loan from Smt. Gayatri Kamra Rs. 30,000
2. Drawing made by Smt. Kusum Kamra from her bank account No. 3540 Rs. 32,200
3. Sale of 50 shares of TISCO @ 191.10 by Shri Vinod Kamra through Abhishek Consultant Rs. 9,955
4. Drawing by Shri Vinod Kamra from SB A/c No. 5696 in UCO Bank Rs. 4,682
5. Receipt of agricultural income of Fazilka land by Shri Vinod Kumar Rs. 12,000 ____________ Rs. 88,837 ____________ The AO accepted the source of expenditure except Rs. 9,955 and Rs. 12,000 for the reason that the amount of Rs. 9,955 was claimed on account of sale of shares and on conducting enquiries from the proprietor of Abhishek Consultant, Shri Ranpartap, it was noticed that contract note of sale of shares was not executed as the assessee expressed his inability to deliver the shares to Shri Ranpartap. Further, in his statement before the AO, Shri Ranpartap stated that he had made payments for all the purchases through his bank account, Since the assessee failed to produce any evidence to show that the assessee had received Rs. 9,955 on account of shares through any of his bank accounts, the AO came to the conclusion that this amount was not genuine. Second amount of Rs. 12,000 was also not accepted by the AO because the assessee had claimed it to be receipt of agricultural income from his brother-in-law. When the assessee was required to furnish evidence to show as to when this income was received and where it was deposited and whether it had been shown in the return, the assessee failed to give any evidence. The AO further observed that no such agricultural income was ever declared in the past. The AO, therefore, did not accept the receipt of these two amounts, namely, Rs. 9,955 and Rs. 12,000 totalling to Rs. 21,955. By subtracting it from Rs. 88,837 shown as total source available for construction/renovation vis-a-vis the total expenditure at Rs. 76,000 on such construction, the AO made addition of Rs. 9,118. No relief was allowed in the first appeal.
13. Having heard the rival submissions and perused the relevant material on record, it is found that the AO had not accepted the receipt of Rs. 9,955 because the transaction of sale of shares was not found to be actually effected. Further, the assessee could not adduce any evidence regarding the receipt of agricultural income of Rs. 12,000. In such circumstances, we are of the considered opinion that the learned GIT(A) was justified in upholding the addition of Rs. 9,118 being the difference between the amount of Rs. 76,000 spent on construction/renovation and source of Rs. 66,882 available with the assessee.
14. In the result, the appeal of the Revenue as well as the cross-objection of the assessee stand dismissed.