TaxTMI 
TaxTMI 
2013 (8) TMI 671
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....d against agreement of sale of plot. The Revenue in its appeal challenged the order of ld. CIT(A) in deleting the addition of Rs.65,00,000/- out of total addition of Rs.85,00,000/-. 5. The brief facts of the case are that the assessee has filed return on 31.07.2007 declaring income of Rs.79,000/- from job work along with interest of Rs.15,450/- and long term capital gain of Rs.5,106/-. During the course of search conducted on 29.06.2006 under the provisions of Foreign Exchange Management Act 1999 at the residence of Shri Shailendra Kumar Tamotia, resident of Bhubaneshwar, Orrisa, Indian Currency of Rs.82,14,500/- has been recovered and seized. Shri Tamotia, in his statement dated 10.07.2006, has stated that the seized amount of Rs.82,14,500/- is part of Rs.85,00,000/- received by him from Shri Raghvav Garg. Mall Road, Motor, Gwalior i.e. the appellant, as advance against sale of his (Tamotia's) house 'Shankar-Shanti' at Gwalior. The assessee vide his statement dated 27.09.2007 recorded by concerned authorities has also admitted the fact of payment of Rs.85,00,000/- in cash to Shri S.K. Tamotia during the year under consideration. The source of cash payment has been stated by the....
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....e of his immovable property situated near Basant Nagar, Moarar, Gwalior. A copy of sale agreement executed on 06.06.2006 between the assessee and Shri Kaushal Kishore Pawaiya was also filed. Thus total amount of Rs.85,00,000/- was paid to Shri Shailendra Kumar Tamoita on 23.06.2006 in cash at the time of agreement. Vide quarry letter dated 16.07.2009 assessee was asked to explain the source of acquisition of jewellery by himself and his family members. In compliance to his quarry assessee filed a copy of Will dated 20.04.1995 written by his father Shri Lalta Prasad Garg who expired on 01.09.1995. As per will gold ornaments weighing 1250 gms and silver ornaments weighing 1700 grams to be passed on to the assessee after the death of his father. The assessee also furnished copies of sales bills in respect of sale of gold and silver ornaments issued by the jeweler namely M/s. AKalicharan Durgaprasad of Sarafa Bazar, Gwalior. As per will the details of gold and silver jewellery passed on to the other members of family of Shri Raghav Garg are as under: S.No. Name of the family member Gold jewellery weight Silver jewellery weight 1. Smt. Tara Garg. W/o Late Shri Lalta Pr....
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.....65,24,270/- Since the assessee has filed to explain the source of acquisition of jewellery satisfactorily the payment of Rs.65 lacs made to Shri Shailendra Kumar Tamotiya out of sale of gold & silver jewellery is treated as unexplained. As regards sale of gold & silver jewellery, the assessee has furnished copy of ledger account of gold & silver ornaments sold during the period from 01.04.2006 to 12.06.2006 along with copies of bills issued by M/s Kalicharan Durgaprasad of Sarafa Bazar, Lashkar. On perusal of ledger account of gold ornaments it is seen that it contains as many as 51 entries from 01.04.2006 to 12.06.2006 each entry below Rs.20,000/- totaling to Rs.9,74,210/- and contains only weight of the gold jewellery but it does not contain the description of the gold jewellery. Similarly the ledger account of silver ornaments contains as many as 16 entries each below Rs.20,000/- totaling to Rs.3,05,250/- and contains weight of the silver jewellery only but does not contain description of the silver jewellery. All the payments stated to have been received in cash on sale of gold & silver jewellery. It is not understood that what were the circumstances which compelled the ....
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....bers. It may be mentioned here that the total sales disclosed in the quarterly sales-tax return filed with the Sales Tax Department for the quarter ending 30.06.2006 have been shown at Rs.36,86,000/-. (iii) On going through the purchase bill books produced by Shri Rakesh Mangal, Prop.: of M/s Kalicharan Dugaprasad,Sarafa Bazar, Lashkar, Gwalior it is found that he is maintaining three sets of purchase bill books running simultaneously through which purchases are made. The detailed analysis of purchase bill books produced are as under: Set No.1 : Purchase bill book no.1 from S.No.251 to 300- Bills issued from S.No.251 to 300 for the period from 03.04.2006 to 28.11.2007. Set No.2 : Purchase bill book no.2 from S.No.201 to 250- Bills issued from S.No.201 to 243 for the period from 31.102005 to 12.03.2007. Set No.3 : Purchase bill book no.3 from S.No.251 to 300- Bills issued from S.No.251 to 300 for the period from 01.04.2006 to 08.04.2006. All issued in the name of Shri Raghav Garg & his family members. Purchase bill book no.4 from S.No.301 to 350--Bills issued from S.No.301 to 350 for the period from 10.04.2006 to 19.04.2006. All issued in the name of Shri Raghav Garg ....
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....Appealer Gold (gms.) Silver (gms.) Gold (gms.) Silver (gms.) Amount released (gms.) on sale 1. Raghav Garg Appellant 1250 1700 1209.140 1606.420 Rs.12,79,460/- 2. Smt. Tara Garg Mother 1425 1500 1412.530 1390.450 Rs.13,98,170/- 3. Smt. Poonam Garg Wife 1450 1500 1418.480 1402.746 Rs.14,05,990/- 4. Ku. Roma Garg Daughter 1100 1800 1067.710 1603.360 Rs.11,60,800/- 5. Shri Rajan Garg Son 1400 1000 1378.970 901.000 Rs.12,79,850/- Total Rs.6524270 The appellant disposed of this jewllery by cash sales made to M/s Kalicharan Durgaprasad, Sarafa Bazar, Gwalior. The sales consideration received has been shown above. Out of this sale proceeds the assessee paid Rs.65 Lacs for making these advance. The sale of jewellery has been affected from 01st April, 2006 to 12th June 2006. The appellant further submitted that 20 lacs advance from Shri Kaushal Kishore Pawaiya and Rs.65 lacs by way of sale proceeds of jewellery of family members in all Rs.85 Lacs were paid towards agreement....
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....rges from the discussion of the learned AO in his order. First the will is not supported by any other incidental evidences such as WT returns, status, of HUF etc. and secondly the sale consideration received from M/s Kalicharan Durgaprasad itself has not been accepted. The family of the appellant and his late Father was one of the most highly reputed families of Morar. They were the landlords of the area in the past. The tradition was such that in old time the persons use to keep jewellery for the purpose of family traditions. The jewellery in question is not only of his but the same is also inherited by him form his family. The will is duly notorised and has not been challenged by any other authority or family member therefore its genuineness cannot be challenged. As regards WT assessment as the person who has written will passed away on 01.09.1995, thereafter the jewellery has been divided on to family members. None of them would come in WT liability therefore non filing WT returns cannot be an issue. As regards return filed by Late Shri Lalta Prasad Ji Garg as the matter is so old, no such evidence could be found. Therefore in absence presuming will to be not correct canno....
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....annot be denied that Shri Lalta Prasad Ji Garg passed away on 01/09/1995 and looking to his status he must left jewellery. The learned AO has not considered the same. In case of Rajan Garg the jewellery received by way of will and as well as sale to Kalicharan Durgaprasad have been found satisfactorily explained. The appellant on his part gave every information as desired by the Learned AO without assigning any reasons of default on our part has passed the order. This is not as per law." 7. The ld. CIT(A) considering the explanation of the assessee evidences and material on record deleted the addition of Rs.65,00,000/-. His findings in paras 4.3 and 4.4 of the appellate order are reproduced as under : "4.3 Appellant's submissions have been considered carefully along with assessment order. Assessment records have also been perused. The fact of payment of Rs.85,00,000/- in cash for purchase of property vide agreement dated 23.06.2006 for consideration of Rs.1,00,80,000/- has not been disputed. For this payment, source of Rs.65,00,000/- is stated to be sale of jewellery of Rs.65,24,270/- on various dates between 01.04.2006 to 12.06.2006 by appellant and his family members.....
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....in the months of April to June. AO has not accepted the said purchase and sale of jewellery on the ground that there is a manipulation in the issue of the bills which have been issued after finalization of the accounts. However, AO has not proved that the said bills have not been recorded in the books of accounts of M/s. Kalicharan Durgaprasad. In fact information obtained from Commercial Tax Offier, Circle-1, Gwalior u/s 133(6) by the AO shows that total purchase of jewellery for the year stands at Rs.1,69,49,690/- by M/s. Kalicharan Durgaprasad as per his quarterly sales tax return. Similarly for the first quarter ending 30.06.2006, total purchase of jewellery has been declared at Rs.91,70,469/- which is found to be higher than and inclusive of purchase of Rs.65,00,000/- from the appellant and his family members. These sales tax returns have been accepted by the Commercial Tax Authorities but not accepted by the AO on the ground that approximate 54% of total sales & purchases have been shown by M/s Kalicharan Durgaprasad during the first quarter itself which is not acceptable. However, no basis of justification of the same has been given. From records it is seen that return of Sh....
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....mitted that the property in question was disputed property. From the above facts it is clear tht Shri Kaushal Kishore Pawaiya was financially weak at the time of agreement and also was not in a position to make a payment of Rs.20 lacs in cash to Shri Raghav Garg. In the light of above facts the source of receipt of Rs.20,00,000/- in cash from Shri Kaushal Kishore Pawaiya is treated as not to have been explained satisfactorily." 9. The assessee challenged the addition of Rs.20,00,000/- before the ld. CIT(A) and his written submission is quoted in the appellate order as under : "Coming to the sum of Rs.20 lacs being advance received from Shri Kaushal Kishore Pawaiya against agreement of sale of plot Rs.40 lacs. The Learned ITO is of the opinion that since the status of Shri Pawaiya is too small he does not have sum of Rs.20 lacs to advance to the appellant. Therefore he has not given this sum as advance. On the contrary the Learned ITO was shown regular books of accounts maintained by Shri Pawaiya from where he has paid sum of Rs.20 lacs is also recorded in his cash book. Unfortunately this fact has not been brought on record that he has also filed his balance sheet etc. Alt....
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....dtd. 11.01.2011 given by Mr. Pawaiya's counsel to return alleged advance of Rs.20,00,000/- for failure to transfer the said plot in his name. Shri Kaushal Pawaiya has failed to produce any bank statement, copy of income tax return filed in support of opening balance of Rs.15,05,751/-. In fact as per his statement recorded by the AO on 06.09.2011 his source of income is liasioning work and before that he was an employee in Scindia Dev Sthan Trust. As per his own admission he has not earned income for last 9 to 10 years for which return is required to be filed. Alleged advance of Rs.20,00,000/- has been given in cash on 06.06.2006 when no taxable income has been earned during that period either. Source of Rs.20,00,000/- is stated to be sale of his movable and immovable assets in respect of which not even a single piece of evidence submitted by him. Even during the course of appeal proceedings no evidence whatsoever in support of submissions of receipt of Rs.20,00,000/- has been submitted by the appellant. Further, as per balance sheet of Shri Pawaiya's fixed assets are nil and nominal balances in bank account at Syndicate Bank, UCO bank and SBI. Alleged payment of Rs.20,00,000/- has ....
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....zar, Gwalior and the assessee furnished sale/purchase bills in respect of sale of gold and silver ornaments issued by the above party before the AO. The purchaser has confirmed purchase of jewellery and giving amount to the assessee. In the case of one of the family members, Shri Rajan Garg who has also received jewellery through Will, the AO has accepted his return of income u/s. 143(3) of the IT Act. Therefore, on the same matter in issue when similar claim has been accepted in the case of Shri Rajan Garg, the addition has been rightly deleted by the ld. CIT(A) in a sum of Rs.65,00,000/-. Evidences are also placed on record before the Tribunal. With regard to the addition of Rs.20,00,000/-, copy of the agreement with Kaushal Kishore Pawaiya dated 06.06.2006 is filed on record (PB 11 & 12). The ld. counsel for the assessee submitted that the agreement in question has not been disputed by the AO. The notice of demand issued for return of advance amount has also not been disputed. Shri K.K. Pawaiya admitted in his statement giving of advance of Rs.20,00,000/- to the assessee for purchase of property. Therefore, the source of the source should not have been asked by the AO. Regular b....
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....specifically found in his findings that information was also obtained from commercial tax officer, Gwalior u/s. 133(6) by the AO to show that the jewellery was purchased by M/s. Kalicharan Durga Prasad, which is also disclosed in the Sales Tax Return. Therefore, the purchase of jewellery from the assessee and their family members are not in dispute. The returned income of the purchaser has been accepted by the AO also. Considering the totality of facts and circumstances and overwhelming evidences on record, we are of the view that the ld. CIT(A) on proper appreciation of evidences on record correctly deleted the addition of Rs.65,00,000/-.. The source of the same is, therefore, explained. In the departmental appeal, the Revenue has not produced any material to contradict the findings of facts recorded by the ld. CIT(A). We, therefore, do not find any merit in the departmental appeal. The same fails and is dismissed. 12.1 As regards the addition of Rs.20,00,000/- confirmed by the ld. CIT(A), it is not in dispute that the assessee produced agreement to sale dated 06.06.06 before the AO through which the assessee received advance of Rs.20,00,000/- from Shri Kaushal Kishore Pawaiya.....