2016 (5) TMI 1304 - HC - Income Tax

Remand of Ashiyana Apartments & Capital Gain, Property at Raja Park, Purchase & Sale of Plots for re-evaluation.

CIT, Bikaner Versus Ravi Mathur, Smt. Prem Kumari Mathur, Ravi Mathur & Sons, Smt. Sheena Mathur, Anuj Mathur & Sons, Smt. Rini Mathur, Anuj Mathur, R.B. Mathur and Smt. Prem Kumari Mathur v. CIT, Jaipur & Another

The court remanded the issues of Ashiyana Apartments & Capital Gain, Property at Raja Park, and Purchase & Sale of Plots back to the Tribunal for ... Ashiyana Apartments & Capital Gain Addition in three hands - Jewellery Addition - Medical expenses Addition in four hands - Seized documents Addition - Property at Raja Park Addition in various hands - Purchase & sale of plots Addition in various hands - Held that:- In view of what we have analysed hereinbefore, the findings of the Tribunal that the AO cannot travel beyond the material found during the course of search, in our view, is not proper. To come to a reasonable and plausible conclusion in case the seized papers do not show a correct picture, the AO can certainly travel beyond even the seized papers to come to a logical conclusion and the AO can even examine the entries recorded in the books of account and such entries or other material have to be taken note of by the AO and the assessee has to offer a satisfactory explanation even of the recorded transactions and the genuineness of the same is also required to be proved. For the reasons aforesaid :- i) the additions relating to : (a) Ashiyana Apartments of ₹ 31,00,000/- and issue relating to Capital Gain of ₹ 13,50,384/- in 3 hands; (b) Property at Raja Park of ₹ 1,59,333/-; and (c) Purchase & sale of plots of ₹ 2,29,533/- in each hand, of the instant appeals are restored to the Tribunal to redecide the issues after giving adequate opportunity of hearing to both the sides and the Tribunal is directed to pass speaking order and redecide the three issues in accordance with law within a period of four months from the date certified copy of this order is placed before it. Let the parties may provide copy of this judgment to the Tribunal and let the Registry send a copy of this order separately to the Tribunal and the Tribunal would thereafter proceed ahead to redecide the issues. ii) the finding of the Tribunal insofar as deleting the addition of ₹ 93,575/- relating to Gold Ornaments and Jewellery, is found in accordance with law and we uphold the finding of the Tribunal in this regard and reject the claim of the Revenue; iii) we reverse the finding of the Tribunal with reference to Medical expenses, addition whereof was made of ₹ 99,880/- each in four cases; iv) we reverse the finding of the Tribunal insofar as addition of ₹ 44,28,500/- is concerned and uphold the finding of AO; Issues Involved:1. Ashiyana Apartments & Capital Gain2. Jewellery3. Medical Expenses4. Seized Documents5. Property at Raja Park6. Purchase & Sale of PlotsDetailed Analysis:1. Ashiyana Apartments & Capital Gain:The court addressed the addition of Rs. 31,00,000 for unaccounted investment in Ashiyana Apartments and Rs. 13,50,384 for capital gain in three hands. During the search, voluminous bills and vouchers were seized, and the assessee admitted to unaccounted investments. The District Valuation Officer valued the property at Rs. 87,70,000, whereas the books showed only Rs. 52,76,457. The Tribunal deleted the addition, accepting the retraction by the assessee. The court remanded the matter back to the Tribunal to re-evaluate the valuation report and the statements of the assessee, considering the material on record.2. Jewellery:The addition of Rs. 93,575 was made for excess gold ornaments and jewellery found during the search. The assessee claimed that the jewellery belonged to family members and was declared in Wealth Tax Returns. The Tribunal deleted the addition, considering the customs and traditions of gifting jewellery during weddings. The court upheld the Tribunal's finding, noting that the jewellery found was reasonable and in line with CBDT guidelines.3. Medical Expenses:An addition of Rs. 99,880 was made for medical treatment expenses in London. The AO estimated the expenses based on foreign exchange and air tickets found during the search. The Tribunal reduced the addition by Rs. 1,50,000, accepting the assessee's claim of staying in a single-room apartment and carrying raw food. The court reversed the Tribunal's finding, stating that the claim was implausible given the family's status and upheld the AO's addition.4. Seized Documents:The addition of Rs. 44,28,500 was made based on seized documents and the statements of the assessee, indicating amounts in coded form. The Tribunal deleted the addition, accepting the retraction of the statements. The court found the retraction improper and upheld the AO's addition, noting that the Tribunal's deletion was perverse and unsupported by material evidence.5. Property at Raja Park:An addition of Rs. 1,59,333 was made based on a torn paper found during the search, indicating the purchase of property at Raja Park. The AO noted that the property was undervalued compared to the DLC value and another property in the vicinity. The Tribunal deleted the addition, stating it was beyond the scope of block assessment. The court remanded the matter back to the Tribunal to re-evaluate the issue, considering the incriminating document and the judgment in Elegant Homes Pvt. Ltd.6. Purchase & Sale of Plots:The addition of Rs. 2,29,533 was made based on incriminating documents revealing undisclosed transactions of purchase and sale of plots. The Tribunal deleted the addition, stating that generalization cannot be permitted without specific evidence. The court remanded the matter back to the Tribunal to re-evaluate the issue, considering the material pointed out by the AO and ensuring a speaking order.Conclusion:The court remanded the issues of Ashiyana Apartments & Capital Gain, Property at Raja Park, and Purchase & Sale of Plots back to the Tribunal for re-evaluation. The addition for Jewellery was upheld in favor of the assessee, while the additions for Medical Expenses and Seized Documents were upheld in favor of the Revenue. The Tribunal is directed to redecide the issues within four months, providing a speaking order.