AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (2) TMI 2083
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....SBC Bank without appreciating the fact that the amount was received pursuant to the Will of Late Abdul Aziz Habib Currimbhoy who had passed away on 25.08.2004, therefore, the addition sustained was not justified. 2.1 Briefly stated, the facts of the case are that a search and seizure action u/s 132(1) was carried out at the business and residential premises of Zakagroup on 22.02.2011 by the Deputy Director of Income Tax (Investigation), Unit-III(3), Mumbai. The assessee was also covered u/s 132(1) of the Act. The Zakagroup was engaged in providing services related to tour and travel and was founded by the assessee. Later on, the group diversified into other related business which includes tour operation, cargo handling, technology solutions etc. The Assessing Officer (AO) issued notice u/s 153A on 30.01.2012 to the assessee. In response to it, the assessee filed its return of income for the AY 2006-07 on 09.03.2012 declaring total income at Rs.3,84,497/-. During the course of assessment proceedings, the AO found that amount of Rs.5,00,000/-, Rs.15,00,000/- and Rs.25,00,000/- were credited in the account of the assessee in HSBC Bank Account No. 37679. The assesseemade the following....
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....cumentary proof before me regarding the applicability of the balance (Rs.45,00,000-Rs.15,50,000/-) in appellate proceedings also. Therefore, I have no other option but a confirm this amount of Rs.29,50,000/- and delete the balance Rs.15,50,000/-." 2.3 Before us, the Ld. counsel of the assessee relies on the decision in CIT v. Continental Warehousing Corporation (2015) 374 ITR 645 (Bom) and submits that since the addition made by the AO in the assessment completed u/s 143(3) r.w.s. 153A is not based on seized material or any incriminating material found during the course of search action, the same may be deleted. 2.4 On the other hand, the Ld. DR relies on the order passed by the Ld. CIT(A). 2.5 We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. In the case of Continental Warehousing Corporation(supra), a search was carried out on the premises of the assesseeand a notice u/s 153A was issued. The assessee declared a total income of Rs.5,54,63,220/- while claiming the deduction u/s 80-IA(4) of Rs.1,25,77,637/-. The Assessing Officer held that the assessee was not entitled to the deduction u/s 80-IA. The ....
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.... the Hon'ble Bombay High Court, we delete the addition of Rs.29,50,000/- confirmed by the Ld. CIT(A). 2.7 In the result, the appeal filed by the assessee is allowed. ITA No. 303/MUM/2015 Assessment Year: 2010-11 3. The ground of appeal filed by the assessee reads as under: The Ld. CIT(A) erred in sustaining the disallowance u/s2(22)(e) of Rs.1,66,80,010/- as deemed dividend without appreciating that the provision was not applicable to facts of the case. 3.1 The assesseealso filed an additional ground reiterating the submission made at para 2.2 hereinbefore. It is found that the same additional ground was filed before the Ld. CIT(A). Therefore, we admit the same for adjudication. 3.2 The AO found, during the course of assessment proceedings, from the bank statement of Bombay Mercantile Bank, that the assessee had received Rs.52,00,000/- from M/s Zaireen Travels (Partnership Firm) and Rs.2,50,00,000/- from M/s Indo Saudi Services (Carrier) Pvt. Ltd(in short 'ISSCPL'). The assessee was holding 50% of shares in ISSCPL. The assessee explained to the AO that these payments were received by him to dispose off the liability in pursuance of the order of Hon'ble Bombay High Court. T....
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....was directed that the assessee pays the agreed amount to Mrs. Michelle Al Fahoum towards purchase of her shares. The assessee paid Rs.3.50 crores to Mrs. Michelle Al Fahoumas follows: - Rs.48,00,000/- from own fund, - Rs.52,00,000/- from amount received form M/s Zaireen Travel Services, - Rs.2,50,00,000/- from amounts received from ISSCPL It is argued that since the assesseewas a party to the suit, he was directed by the Bombay High Court to pay the amount as per the consent terms. Since business interests were most affected, the assessee took the money from ISSCPL and immediately within two days paid the amount as per the consent terms. Thus, it is argued that the above transaction is not that of a loan/advance to the assessee for his benefit but a normal business transaction wherein to protect its business interests, ISSCPL paid the impugned sum. Furthermore, the beneficiary of the said sum is not the assessee but ISSCPL and other companies of the group. To sum up, it is submitted that it was a commercial and business decision to protect the business interest of all the parties. Reliance is placed by him on the decision in S.A. Builders Ltd. v. CIT (2007) 288 ITR 1 (SC) ....
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....son, on behalf, or for the individual benefit, of any such shareholder. Such shareholder here means a shareholder who is beneficial owner of shareholding less than 10% voting power. 3.6.2 In order to ascertain the factual matrix we ask : What better material is there than to look at the Paper Book ? The assessee has filed a Paper Book(P/B) before us. Let us read it. The assessee was having 50% shareholding in ISSCPL. We find that ISSTPL was incorporated on 17.01.1983 and started operation in the year 1985 with two directors - the assessee(Mr. Zakaullah Siddiqui) and Mr. Jawad Al Fahoum( a Saudi national married to Ms Michelle Rodriguez and after marriage her name changed to Mrs Michelle Jawad-AI-Fahoum) (Page 339 of the P/B). Mrs Michelle Jawad-AI-Fahoum filed a petition on 24th March 1995, before the Company Law Board, Principal Bench, New Delhi (Interim Application No 14 of 1995 in C.P. No. 2 of 1995) (Page 80-86 of the P/B). The Respondents are ISSTPL, Mr. Mohammad Zakaulla Siddiqui (the assessee) and others. Therein the petitioner has submitted that the respondents, in criminal conspiracy, abetment and collusion with one another have been steadfastly terrorizing her minor c....
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....eem Z. Siddiqui and (4) Miss Tasneem Z. Siddiqui whereas the Respondents are (1) Mrs Michelle Jawad-AI-Fahoum, (2) Mr. Bomi H. Hansotia, (3) Mr. A. Fernanades and (4) Mr. M.G.Qazi. As per it "the Respondent No.1 holds 500 equity shares, Respondent No.6 holds 500 equity shares and the Respondent No. 7 holds 1000 equity shares aggregating to 2500 equity shares in 1st appellant company, Indo Saudi(Travels) Pvt. Ltd." Then it is stated that the 2nd Appellant would pay to the Respondent No. 1 an aggregate sum of Rs.4,45,00,000/- in full and final settlement and discharge of all the claims of the Respondent No. 1, 5, 6 & 7 raised by them in Company Petition No. 2 of 1995 filed before the Company Law Board. The Hon'ble Bombay High Court in Indo Saudi (Travels) & Others v. Mrs Michelle Jawad-AI-Fahoum and others (Appeal No. 581 of 1998 in Company Appeal No. 3 of 1998) vide order dated 15th December 2009 disposed off the appeal in view of the consent terms (Page 281-283 of the P/B). 3.6.3 The CBDT Circular 19/2017 relied on by the Ld. Counsel clarifies that trade advances, which are in the nature of commercial transactions would not fall within the ambit of the word 'advance' in section 2....
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....l for the AY 2010-11 filed by the assessee is dismissed. ITA No. 304/MUM/2015 Assessment Year: 2011-12 4. The 1st ground of appeal filed by the assessee reads as under: The Ld. CIT(A) erred in confirming the order of the Assessing Officer making the alleged addition of Rs.19 lacs on basis of loose paper which was not related to the assessee, therefore, the addition ought to be deleted. 4.1 The assessee also filed an additional ground reiterating the submission made at para 2.2 hereinbefore. It is found that the same additional ground was filed before the Ld. CIT(A). Therefore, we admit the same for adjudication. 4.2 The AO observed that on Page No. 70 of Annexure-A1 cash transaction appears, such as: "one is in the name of S. Kalmadi for the payment of Rs.7 lacs. Further it is written that Rs.6 lacs are already paid. And total is Rs.12 lacs appeared on the sheet." In this regard, he asked the assessee to explain the details of transaction appearing on the paper. The assessee submitted that: "this piece of paper is pertaining to the operations of the Islam Gymkhana. Shri Zakaullah Siddiqui is the president of the Islam Gymkhana. This Gymkhana is available for the marria....
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....m Gymkahana, of which the assessee was the president. It is stated that the figures mentioned in the loose sheets are mere rough jottings. Furthermore, the total of any of the figures mentioned does not come to Rs.12,00,000/- as mentioned. This shows that this is nothing but a dumb document and addition based merely on this is not justified. The AO failed to appreciate that no cash was ever paid to Mr. S.H. Karmali as alleged. 4.5 On the other hand, the Ld. DR relies on the order passed by the Ld. CIT(A). 4.6 We have heard the rival submissions and perused the relevant materials on record. It is found that the assessee has filed his return of income for the AY 2011-12 on 16.11.2011. The AO can issue notice u/s 143(2) within six months from the end of the financial year in which the return is furnished i.e. 2011-12. The search took place on 22.02.2011. Therefore, the ratio laid down in Continental Warehousing Corporation (supra) is not applicable to the AY 2011-12. The additional ground of appeal is therefore dismissed. 4.7 We find that the AO has failed to co-relate the amount written in the loose sheet of papers with any transaction. Rarely a transaction remains in isolation. T....
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....e assessee reads as under: The Ld. CIT(A) erred in confirming the addition of jeweller at Rs.10,85,915/- without appreciating the complete facts. 6.1 The 1st, 2nd and 3rd ground in cross appeal filed by the Revenue read as under: 1. On the facts and in the circumstances of the case and in the law, the Ld. CIT(A) erred in deleting the addition of Rs.44,10,240/- made on account of Gold, Diamond and jewellery by relying on the CBDT instruction no.1916 and judgment pronounced by Hon'ble High Court Mumbai and ITAT Mumbai without appreciating the fact that it is nowhere mentioned in the instruction no. 1916 that such jewellery is treated as explained and exempted from tax. 2. On the facts and in the circumstances of the case and in the law, the Ld. CIT(A) erred in deleting the addition of Rs.44,10,240/- made on account of Gold, Diamond and jewellery without appreciating the fact that the assessee in the statement u/s 132(4) has accepted that the jewellery was acquired through his unaccounted income and offered for tax. 3. On the facts and in the circumstances of the case and in the law, the Ld. CIT(A) erred in deleting the addition of Rs.44,10,240/- made on account of Gold, ....
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....ccasions of her marriage, birth of children etc. from parents, and friends. The relevant proofs regarding these occasions inform of photographs be produced before your Honour, should Your Honour consider it necessary to peruse the same. Your Honour would appreciate that the appellant belongs to a well-to-do family and it is customary in such families to gift gold ornaments on such occasions. The AO is not justified in seeking evidence inform of confirmations for such gifts. These gifts are very old and the appellant cannot now be expected to ask for confirmations and bills of jewellery items. Out of the jewellery found at the time of search, some of the jewellery was of Mrs. Tasneem Daud Ally daughter of the appellant. She is an Australian Citizen, (Pg. no.239 to 241 of paper book II). Mrs. Tasneem kept her jewellery in India with her parents for safe custody and for use when she comes in India to attend social function/celebrations. At Australia there is no culture of wearing gold jewellery, hence she considers the carrying this gold jewellery a burden as well as risk The chart giving the valuation worked out by the Department and by the appellant is also reproduced below : ....
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....ewellery received on social occasions, he failed to file any documentary/supporting evidence in support of his new claim, (vi) even the reliance placed by the assessee on CBDT Instruction No. 1916 is misplaced as the said instruction lays down certain guidelines for the non-seizure of jewellery in respect of various persons in a family, such as married lady, unmarried lady and male members in order to stipulate how much quantum of jewellery is to be exempted from the seizure. The said Instruction also states that a quantity greater than the specified amount for non-seizure may be decided by the authorized officer, having regard to the status of family as well as customs and practices of the community. Thus the Ld. DR submits that the Ld. CIT(A) failed to appreciate the fact that the assessee during his first statement on oath clearly admitted the jewellery being unaccounted. It is submitted that the Ld. CIT(A) failed to elaborate as to how in view of the chart giving bifurcation of jewellery in the appellate proceedings, does the jewellery stand explained and also as to what exact documentary evidence was given so as to make her arrive at the conclusion that the jewellery stand ex....
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....the members of the family including the father and mother of the assessee. Both the assessee as well as the Revenue challenged the order the CIT(A) before the ITAT. The Tribunal found from the statement of the assessee and particularly the answer to the question no. 17 that the entire jewellery claimed to have been received by the wife of the assessee on various occasions and some part of the jewellery was purchased by the assessee himself. The Tribunal held that the Ld. CIT(A) has taken a correct and proper view in granting the benefit vide CBDT Circular No. 1916 dated 11.05.1994. The Tribunal dismissed the appeals filed by the assessee and the revenue. In Ratanlal Vyparilal Jain (supra), the Hon'ble Gujarat High Court held: "Instruction No. 1916, dated 11th May 1994 which lays down guidelines for seizure of jewellery in the course of search takes into account the quantity of jewellery which would generally be held by the family members of an assessee and, therefore, unless anything contrary is shown, it can be safely presumed that the source to the extent of the jewellery stated in the circular stands explained." In M.S. Agarwal (HUF) (supra), the Hon'ble High Court held that....