TaxTMI 
TaxTMI 
2017 (12) TMI 581
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.... namely M/s Reflections, was assessed for impugned AY u/s 143(3) read with section 153B consequent to search action on 17/04/2007 on ACG Art group, the assessee being part of the said group. 2.2 To Ld. AO noted that ACG art group was one of the multi locational organizations belonging to a business group in Mumbai. The group dealt in manufacturing of gelatin capsules and also traded in painting and sculptors under its concerns namely ACG Art & Properties Pvt. Ltd. & M/s Reflection. The assessee is proprietress of M/s Reflection who deals in trading of painting / sculptors. 2.3 It was further noted that the group had manufacturing unit at Kandivali and carried on trading activity of artwork from its offices located at Jogeshwari & Nepean Sea Road, Mumbai. The various locations of the group and residence of its directors / members were subjected to search action on 17/04/2007 where it was found that the group indulged in procuring bogus purchase bills of paintings. Further, unaccounted painting totaling 288 in number valued at Rs. 999.20 Lacs were found / inventorized during search operations out of which 71 painting were put under constructive seizure u/s 132(1)(iii). 2.4 T....
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....ailable on record and granted partial relief against painting listed at serial number 1 of the above table which was valued at Rs. 20 Lacs since the same was held by the assessee at the time of earlier search operations conducted upon assessee during January, 2002 and confirmed the balance additions. A partial relief to the extent of 676.60 grams of gold jewellery was also granted to the assessee which restricted the impugned additions against jewelry to Rs. 37,01,558/-. Aggrieved, the assessee is in further appeal before us. 4. The Ld. Counsel for Assessee [AR], drawing our attention to the documents placed in the paper book contended that the assessee produced certain evidences before lower authorities to demonstrate that the paintings in dispute were acquired by the assessee long time back and few paintings were received either in gifts or kept with the assessee by artist on sale on approval basis and therefore, additions thereof was not justified. Per Contra, Ld. DR contended that the assessee could not discharge the onus of proving the source of paintings with cogent evidences and therefore, additions were justified. 5. We have carefully heard the rival contentions and p....
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.... 8. Swapnalok 5 K.H.Ara Nude Water Colour 27x20 6,00,000/- 9. Swapnalok 7 A.R.Chugta Lady Holding Jug Water Colour 20x14 30,00,000/- 10. Swapnalok 8 A.R.Chugta Lady & Music Instrument Water Colour 20x14 30,00,000/- Total 1,46,75,000/- The assessee, in the paper book, has placed various documentary evidences to support the contentions that these painting were acquired by the assessee long time back in earlier assessment years in the following manner:- No. Location & Valuation Ref. No. Artist Name Supporting Evidences 1. Dalamal 8 Jehangir Jani Receipt dated 21/02/1994 Cheque No. 831487 dated 21/02/1994 2. Scitech 58 Shubham Kaw Bill No. 11 dated 24/01/1993 3. Reflections 60 Unknown (Prof. Capt. G.Soloman) Bill No. 162 dated 15/10/1997 for Rs. 3000/- 4. Reflections 22 Nandalal Bose Confirmation dated 02/01/1998, payment though DD No. 128906 dated 02/01/998 5. Brighton 37 Shanti Dave Bill No. 38 dated 12/11/1992 for Rs. 5000/- 6. Swapnalok 1 M.F.Hussain Payment throu....
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....bstantiate the source of these painting. The onus was shifted on revenue to negate the evidences adduced by the assessee by making further investigations etc., which, prima facie, has not been done. It is settled law that additions could not be made merely on the basis of doubts, conjectures or surmises. Therefore, in the absence of any cogent material on record to contradict the claim of the assessee, the addition thereof was not justified and hence, the same stands deleted. 9. The paintings listed at Serial Number 5 comprised of seven paintings. Out of these paintings, two paintings of an artist namely M.V.Dhurandhar valued at Rs. 3 Lacs each is supported by receipt dated 19/01/2000. From the perusal of stock record of M/s reflections as on 31/03/2008, it is seen that these painting forms part of the closing stock. Therefore, since the same have duly been accounted for in the books of accounts of the assessee and forms part of stock-in-trade, the addition thereof is not justified. No serious arguments have been adduced against other low value paintings aggregating to Rs. 4.60 Lacs. Hence, the addition to that extent stands confirmed. Further, our attention is drawn to the fact....