TMI Blog2013 (8) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... eir family members are not in dispute - The returned income of the purchaser has been accepted by the AO also – Held that:- Revenue has not produced any material to contradict the findings of facts recorded by the ld. CIT(A) - ld. CIT(A) on proper appreciation of evidences on record correctly deleted the addition of Rs.65,00,000/-. As regards the addition of Rs.20,00,000/-, 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 - Shri Pawaiya, admitted in his statement of giving of advance of Rs.20,00,000/- in cash to the assessee - Purchaser of the property has admitted giving of advance to the assessee – In case of doubt in the minds of the AO of execution of agreement to sale, no examination of the marginal witnesses who have signed the agreement to sale to find out the truth in the matter, was done – Also, Shri Kaushal Kishore Pawaiya has maintained regular books of account which were produced before the AO in which availability of Rs.20,00,000/- as cash with him have been specifically mentioned - Plot of land was available to the assessee for sale at the time of enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee to be Rs.65,00,000/- from sale of jewellery of his wife (Mrs.Poonam Garg), his mother (Smt. Tara Garg) and his daughter (Kumari Roma Garg). Balance amount of Rs.25,00,000/- has been stated to be funds obtained by him as advance against proposed sale of his property. Accordingly, assessee's case along with his family members has been taken for scrutiny for verification. The assessee at the assessment stage reiterated the same submissions regarding the sale of jewellery and advance received from Shri Kaushal Kishore Pawaiya for sale of plot. The AO, however, made addition of Rs.65,00,000/- on account of sale of jewellery and treated it as unexplained. While making the addition the AO mentioned as under : "Vide quarry letter dated 16.07.2009 assessee was asked to furnish computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Prasad Garg 1425 grams 1500 grams 2. Smt. Poonam Garg, W/o Shri Ragha Garg 1450 grams 1500 grams 3. Ku. Roma Garg. D/o Shri Raghav Garg 1100 grams 1800 grams 4. Shri Rajan Garg, S/o Shri Raghav Garg 1400 grams 1000 grams It has been mentioned in the will that Shri Lalta Prasad Garg was having three sons and one daughter out of which two sons are in government service and well settled and one daughter is married and she is enjoying happy married life with her in-laws. In the last para of first page of the will the executor has stated that out of love affection and taking into consideration the services rendered by his third son namely Shri Raghav Garg i.e. assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee to sale his gold silver jewellery in places as many as 51 times within a short span of two months twelve days. In this regard, summons u/s 131 of the Income Tax Act was issued to Shri Rakesh Mangal, Properietor of M/s Kalicharan Durga Prasad, Sarafa Bazar, Lashkar asking him to produce books of accounts along with purchase sale bills for the period from 01.04.2006 to 31.03.2007whch were produced by him. Information u/s 133(6) was also called for form the Commercial Tax Officer, Circle-I, Gwalior asking him to supply the copies of quarterly sales tax returns filed by M/s Kalicharan Durga Prasad, Sarafa bazaar, Lashkar for the period fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 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 his family members. Purchase bill book no. 5 from S.No.351 to 400--Bills issued from S.No.351 to 400 for the period from 20.4.2006 to 30.04.2006. All issued in the name of Shri Raghav Garg his family members. Purchase bill book no.7 from S.No.51 to 100--Bills issued from S.No.51 to 96 for the period from 02.06.2006 to 14.06.2006. All issued in the name of Shri Raghav Garg his family members. From the above facts prima facie it appears that there had been a manipulation in the issue of purchase bills and bills have been issued from bill books S.No.3 to 7 in the name of Shri Raghav Garg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- 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 namely to Shri Shailendra Kumar Tamatia on 23.06.2006. The learned ITO to reach the conclusion of the above mentioned facts did as under :- 1. Examined appellant and he stated that he had received Rs.20 Lacs by way of advance form Shri Kaushal Kishor Pawaiya and sale proceeds of jewellery received in Father's will Rs.12,79,460/-. He also stated that he has paid Rs.85 Lacs advance against purchase of property to Shri Shailendra Kumar Tamotia. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 cannot be justified. As regards sales of this jewellery is too well known Gehana Shop who have been regularly filing returns of income and are showing many folds purchases and sales as compared to the consideration of the sale of jewellery under consideration of appeal. The learned AO has examined Shri Rakesh Mangal has gone through elaborately the books of accounts, vouchers etc. maintained by him no material deficiency was found reported by the Learned AO. In fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his 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. The source of acquisition of said jewellery is stated to be through will dated 20.04.95 of appellant's father namely Shri Lalta Prasad Garg. Appellant's father has expired on 01.09.1995 and copy of his death certificate has also been submitted. AO has not accepted this evidence more on premises and assumptions by stating that in absence of any clause in the will to indicate as to whether the assets bequeathed to the appellant's father alone. Similarly there is no clause r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 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 Shri Rakesh Mangal, Proprietor -M/s Kalicharan Durgaprasad for the assessment year under consideration has been filed on 26.10.2007 declaring income of Rs.4,01,042/- in Range-1(1), Gwalior. Total purchases of Rs.1,69,49,690/- have been shown along with sales and closing stock of Rs.1,74,66,056/- and Rs.2,55,45,620/- respectively. The same has been accepted by the AO and no adverse inference drawn against trading results and retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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. Although at present he may not have big business but earlier he was having hotel in his ownership and also a licence of Distillery etc. Since copies of this statement are not with the assessee, detailed submission cannot be made. However subsequently this agreement was cancelled as the property was in dispute and this dispute was existing even at the time of agreement. Shri Pawaiya pressing appellant for refund of advance with interest. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 been explained by way of cash in hand of Rs.21,39,977/-for which no cash flow statement or cash book or any other evidence of receipt or income justifying this amount has been filed. 5.3 The appellant has failed to satisfactorily explain amount of Rs.20,00,000/- purportedly received as property advance with any support documentary evidence. AO has rightly concluded, after enquiry that the so called lender is a person of insufficient mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen 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 books of account of Kaushal Kishore Pawaiya were produced to prove availability of cash with him. Since he has explained that he was not maintaining bank account for last ten years, therefore, nothing wrong was there in his statement in giving cash in advance to the assessee. He has filed copy of acknowledgement of return of income in the case of assessee supported by computation of income, capital account and balance sheet and submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The genuineness of the sale agreement has not been doubted by the AO. Copy of the sale agreement is produced in the paper book at page 11 12. The same agreement of sale is signed by two marginal witnesses. The AO examined Shri Kaushal Kishore Pawaiya, who has admitted in his statement of giving of advance of Rs.20,00,000/- in cash to the assessee. When the purchaser of the property has admitted giving of advance to the assessee, if there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above discussion and findings, the departmental appeal is dismissed and the appeal of the assessee is allowed. ITA No. 304/Agra/2012 (Smt. Poonam Garg): ITA No. 305/Agra/2012 (Ku. Roma Garg): ITA No. 306/Agra/2012 (Smt. Tara Garg): 13. All the departmental appeals are directed against different orders of ld. CIT(A), Gwalior dated 09.04.2012 for assessment year 2007-08, challenging the deletions of additions of Rs.14,05,960/-, Rs.11,60,800/- and Rs.13,98,170/- made on protective basis on account of income from undisclosed sources in the cases of above assessees respectively. 14. The substantive additions of the above amounts have been made in the case of assessee Shri Raghav Garg (supra). Since the substantive additions have been deleted in the case of Shri Raghav Garg of the aforesaid amounts, therefore, protective additions in the hands of above assessees would not stand. The ld. CIT(A), therefore, rightly following the order in the case of Raghav Garg, correctly deleted the protective additions. In the result, all the departmental appeals fail and are accordingly dismissed. 15. In the result, all the departmental appeals are dismissed and the appeal of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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