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2019 (12) TMI 1229
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....ned paintings on the alleged ground that there were certain discrepancies in the supporting documents. 2. He failed to appreciate and ought to have held that: • The aforesaid paintings were purchased several decades before the block period. • The Appellant had filed evidences such as bills, vouchers, photographs and magazines to establish the cost, date of acquisition and source of purchases. • Certain discrepancies in evidences filed should not be the reason for making any addition on account of unexplained expenditure since the Appellant had filed sufficient evidences in support of its claim. 3. The Appellant prays that the aforesaid addition be deleted. GROUND II: Addition on account of unaccounted cash: Rs. 10,00,000/- 1. On the facts and circumstances of the case and in law, the Learned CIT(A) erred in upholding the order of the AO in making an addition to total income on account of unaccounted cash on the alleged ground that the explanations offered by the Appellant were a mere afterthought. 2. He failed to appreciate and ought to have held that: • The aforesaid cash was received from the ....
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.... the A.O observed that the source of purchase of "two paintings" which were found at the business premises of the assessee at 7, Prabhat Industraital Estate, Jogeshwari (W), Mumbai, had remained unexplained by the assessee. Accordingly, the A.O observing that the assessee had made an unexplained investment towards purchase of the aforesaid "two Paintings", therein made an addition of Rs. 34,00,000/- in his hands, as under: Sr. No. Corresponding No. of Valuation Report Artist Name Titled Medium Size in inches Value Remarks ownership on the basis of explanation 1. 7 Liela Blue boats Acrylic on canvas 48 X 78.5 9,00,000/- Kutcha bill dated 28.09.2006. It is very difficult to accept Jagjit Singh 2. 13 Sluello Card Players Oil on canvas 51 X 37.5 25,00,000/- Proof shown is credit card payment. It is very difficult to accept Jasjit Singh On the basis of his aforesaid observations, the income of the assessee was assessed by the A.O at Rs. 16,02,27,940/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, the CIT(A) after deliberating at length on the contentions advanced....
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....and the same had not been carried any further in appeal before the Tribunal . 6. As regards the addition of Rs. 34 lacs made by the A.O towards unexplained investment in "two paintings", it was submitted by the ld. A.R that the same was based on misconceived facts and premature observations. It was submitted by the ld. A.R, that the assessee and his family members had nurtured a hobby of collecting paintings, antiques, artefacts and decorative articles for the last more than four decades. It was submitted by the ld. A.R that during the course of the search proceedings inventory of the paintings available at various business and residential premises of the ACG group entities and that of its directors/members was prepared. It was submitted by the ld. A.R, that in respect of "two paintings" (out of 228 paintings), the A.O being of the view that the same were purchased by the assessee out of his undisclosed sources, had thus made an addition of Rs. 34 lac to his returned income. It was submitted by the ld. A.R that though the requisite details as regards the source of purchase of the aforesaid "two paintings" along with the corroborative evidence in support thereof was furnished by ....
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....e the A.O. On the basis of his aforesaid contention, it was the claim of the ld. A.R that though the assessee had substantiated the source of purchase of the aforesaid "two paintings" on the basis of sufficient documentary evidence before the lower authorities, however, they had most arbitrarily made/sustained the addition of Rs. 34,00,000/- under Sec.69 of the Act. 7. Per contra, the ld. Departmental Representative (for short 'D.R') relied on the orders of the lower authorities. It was submitted by the ld. D.R, that as the assessee had failed to come forth with any explanation as regards the source of the amount of cash of Rs. 10,00,000/- (out of Rs. 13,19,000/-) that was found in the course of the search proceedings from his residential premises, therefore, the A.O had rightly added the same as his unexplained income. It was submitted by the ld. D.R that the subsequent reconciliation filed by the assessee in his attempt to explain the source of the aforesaid amount of Rs. 10,00,000/- was clearly a result of an afterthought and was rightly rejected by the lower authorities. As regards the addition of Rs. 34 lac made by the A.O under Sec.69 in respect of the "two Paintings" whic....
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....wever, in the course of her statement recorded under Sec.132(4), dated 17.04.2007, failed to do so. But then, on a perusal of the assessment order, we find, that the assessee in the course of the assessment proceedings had duly reconciled and texplained the source of the aforesaid amount of cash of Rs. 19,13,250/- [Rs. 13,19,000/- (+) Rs. 5,94,250/-] that was found in the course of the search proceedings from his aforesaid residential/business premises. As per the records, the assessee had vide his letter dated 10.09.2009 furnished an explanation as regards the aforesaid cash that was found in the course of the search proceedings, as under: "Cash in hand as per the cash book on 31.03.2007 Rs. 10,10,331/- Less: Drawing upto 16.04.2007 Rs. 97,081/- Rs. 9,13,250/- Add: Cash Received from Ajit Singh for safe Custody Rs. 10,00,000/- Cash in Hand Rs. 19,13,250/- Cash found at residence- Rs. 13,19,000/- Cash found at Dalamal House-- Rs. 2,94,250/- Total Rs. 19,13,250/-" On a perusal of the aforesaid reconciliation, we find, that it has been the claim of the assessee that an amount of Rs. 10 lac (out of Rs. 13,19....
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....hri Ajit Singh at the business premises of M/s ACG Arts Group at 1001, Dalamal House, Nariman Point, Mumbai. On a perusal of the assessment order in the case of Shri Ajit Singh for A.Y 2008-09, we find, that the cash in hand as per his 'cash book' on 31.03.2007 was Rs. 13,07,980/-. As against the aforesaid amount, cash amounting to Rs. 4,16,650/- only was found in the course of the search proceedings that were conducted at his residential/business premises. Also, it is the claim of the Shri Ajit Singh, that during the period prior to the search i.e from 01.04.2007 to 17.04.2007, he had received an amount of Rs. 2,00,000/- from M/s ACPL Corporation. In the backdrop of the aforesaid facts, we are of the considered view, that the short/deficit cash found in the course of the search proceedings at the business/residential premises of Shri. Ajit Singh, therein substantially fortifies the claim of the assessee that his brother i.e Shri. Ajit Singh had kept an amount of Rs. 10 lac for safe custody with him. Apart from that, we find, that the fact that the 'confirmation' of Shri Ajit Singh that he had in the month of April, 2007, before proceeding on a foreign tour that was spread over the....
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....aintings were purchased by him by using the 'credit cards' of M/s Associated Capsules Pvt. ltd., which were held in his name. Accordingly, the assessee by drawing support from the aforesaid statements/documents had tried to impress upon us that as the aforesaid two paintings were purchased by him by using the funds of M/s Associated Capsules Pvt. Ltd. i.e the company in which he is a director, therefore, the said purchase consideration was thereafter reimbursed by him to the company through a cheque payment that was made through an 'account payee' Cheque No. 366544 for Rs. 3,60,385.69/-, drawn on his bank account with State Bank Of India, Nariman point, Mumbai. 11. We have given a thoughtful consideration to the issue before us and find substantial force in the aforesaid claim of the assessee. As can be gathered from a perusal of the orders of the lower authorities, the assessee had placed on record sufficient documentary evidence that goes to substantiate the transaction of purchase of the aforesaid two oil canvas paintings viz. . (i) painting titled "Blue boats" (Acrylic on canvas) - size 48" x 78.5" [Artist: Liela]; and (ii) painting titled: "Card Players" (Oil on canvas) - s....