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2015 (4) TMI 978 - CALCUTTA HIGH COURT

2015 (4) TMI 978 - CALCUTTA HIGH COURT - TMI - Unexplained investment - Treatment to the bottles of liquor - Tribunal treating the bottles of liquor, a consumable article, as a 'valuable article or thing' - whether Tribunal was right in law by denying the relief of ₹ 2,00,000/- on bottles of liquor granted by the Commissioner of Income Tax (Appeals)? - Held that:- The learned Tribunal, according to us, applied wrong standards in the matter of appreciation of facts. The case of the .....

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ttle was not disputed by the assessee. Reference in this regard may be made to the judgment of the CIT (A) quoted above. It is not also a fact that the assessee had failed to offer an explanation. The fact on the contrary is that the assessee did offer an explanation and the circumstantial evidence did not militate against the same. A question of fact has to be considered on the touchstone of probability. The relevant question to ask is "has the assessee been able to probabilize the defence take .....

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cepted the case of the assessee that "occasional social as well as official gifts can not be ruled out." Liquor after all is a consumable item and a person of ordinary prudence is not expected to preserve the cash memos in connection therewith.

The Commissioner of Income Tax (Appeals) applied the correct standard for appreciation of facts - Decided in favour of assessee. - ITA No. 76 of 2005 - Dated:- 31-3-2015 - Girish Chandra Gupta And Arindam Sinha,JJ. For the Appellant : Mr Sanjay .....

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on 132(I)(c ) of the Act ? (ii) Whether, on the facts and circumstances of the case, the Tribunal was right in law by denying the relief of ₹ 2,00,000/- on bottles of liquor granted by the Commissioner of Income Tax (Appeals) and holding that the approach of the Commissioner of Income Tax (Appeals) on this issue was wholly unjustified are based on any material and/or have been arrived at by ignoring the relevant materials and/or by taking into consideration irrelevant and/or extraneous mat .....

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essee and arguments of the a/r. I have also considered the fact that the assessee and his family members had undertaken many trips to foreign countries over the years. I have also considered the amount of foreign exchange purchased by the assessee and his family members during such overseas visits and also kept the Customs Baggage rules in view. It is fact that neither the assessee nor his family members have ever brought any foreign liquor over and above limits prescribed by the Customs since t .....

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hase through duty free shops and bottles received from gifts, I estimate unexplained investment at ₹ 2000 x 100 bottles or ₹ 2,00,000/-". The Commissioner of Income Tax (Appeals) reversed the order of the Assessing Officer for the following reasons : "On page-3 of the relevant assessment order, the AO has noted that 191 bottles of liquor were found during the course of search operation. During the course of assessment proceedings, the appellant stated that they were his col .....

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t ₹ 2000/- and has estimated unexplained investment in such liquor bottle at 2000 x 100 = ₹ 2,00,000/-. The absurd nature of this addition is self evident. This addition has no leg to stand upon and is hereby deleted in full. In short, the 3rd ground of appeal is hereby allowed". The Tribunal in an appeal preferred by the revenue reversed the order of the Commissioner of Income Tax (Appeals) for the following reasons : "We find that the CIT (Appeals) has deleted the additio .....

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as also received as gifts from business associates/friends. In spite of that, we consider that the A.O. was more than reasonable in restricting the addition to the value of 100 bottles of liquor only as against the huge stock of 191 bottles of liquor found at the residence of the assessee. The assessee has not challenged the value of foreign liquor estimated at ₹ 2000/- per bottle by the A.O. The plea of the Ld. Counsel for the assessee that the foreign liquor purchased or received by the .....

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department to prove that when actually the assessee has acquired such article or thing. In this case, the assessee had admittedly no evidence to prove the source of acquisition of the large stock of foreign liquor consisting of 191 bottles and accordingly in the facts of the case, we hold that the action of the A.O. in making the addition of the value of 100 bottles of foreign liquor in the hands of the assessee is wholly justified. In this view of the matter, we reverse the order of the CIT (A .....

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ssessing Officer, satisfactory. The fact that the assessee got some bottles of liquor by way of gift has been accepted by the assessing officer. It is sheer misapprehension on the part of the learned Tribunal when they observed that the price at ₹ 2000/- per bottle was not disputed by the assessee. Reference in this regard may be made to the judgment of the CIT (A) quoted above. It is not also a fact that the assessee had failed to offer an explanation. The fact on the contrary is that the .....

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d ordinarily be the end of the matter. The Assessing Officer misdirected himself in holding the assessee liable for an undisclosed income of a sum of ₹ 2,00,000/- purely on the basis of a guess work that each bottle must have been bought at ₹ 2000/- after having accepted the case of the assessee that "occasional social as well as official gifts can not be ruled out." Liquor after all is a consumable item and a person of ordinary prudence is not expected to preserve the cash .....

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