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Shri Naresh Saboo Versus ACIT, Central Circle-12, Mumbai

2015 (7) TMI 837 - ITAT MUMBAI

Assessment of long term capital gain as unexplained cash credits u/s 68 - Held that:- Persuing the decision relied upon by the assessee in the case of “Smt.Rooplata Jain vs. ACIT” (2015 (7) TMI 637 - ITAT MUMBAI), wherein, the Tribunal has considered the identical issues of purchase and sale of shares of M/s Robinson Worldwide Trade Ltd and has observed that the evidences furnished by the assessee with regard to the purchase and sale of shares should have been discreetly examined and then a holi .....

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for statistical purposes.

Unexplained investments in relation to jewellery found during the search action - Held that:- As per the CBDT circular No.1916 dated 11.5.1994, the gold jewellery and ornaments to the extent of 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male member of the family need not be seized. In such circumstances, unless the Revenue shows anything to the contrary, it can be safely presumed that source to the extent of the jewellery stated in .....

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ove, out of the seized jewellery worth about ₹ 24.75 lakhs, the assessee explained the source of acquisition of the jewellery worth about ₹ 8.85 lakhs which has been duly disclosed in the returns of his family members. It is also evident that the assessee is a Charted accountant and his family is having good financial status. The possession of a jewellery worth value of about ₹ 24.75 lakhs by the assessee and his family members cannot be said to be improbable or beyond the sour .....

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I 769 - Gujarat High Court ) as well as the explanation submitted by the assessee, it cannot be said to be a case of unexplained jewellery. - Decided in favour of assessee. - ITA Nos.6769, 6770 & 6771/M/2010 - Dated:- 30-6-2015 - Shri G.S. Pannu and Shri Sanjay Garg, JJ. For the Petitioner : Shri Jayant Bhatt, A.R. For the Respondent : Shri S.J. Singh, D.R. ORDER Per Sanjay Garg, Judicial Member: The above titled three appeals relating to A. Y. 2005-06, 2006-07 & 2007-08 have been preferred .....

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ief facts of the case relevant to the issue under consideration are that are that the assessee is a Chartered Accountant and director in M/s. Soboo Capitals & Securities Pvt. Ltd. The assessee declared Long term Capital gain (LTCG) on sale of shares of M/s Robinson Worldwide Trade Ltd and claimed the same as exempt. There was a search and seizure action u/s. 132 of the Act undertaken on 18/1/2007 in the premises of the appellant including his residences. Consequent to the said search operati .....

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r the director of M/s DPS shares & securities P Ltd namely shri Pratik C. Shah on 18.11.2008 and recorded his statement, wherein the said director also confirmed the fact of providing only accommodation bills in the shares of M/s Robinson Worldwide Trade Ltd. Accordingly, the Assessing Officer (hereinafter referred to as the AO) proposed to assess the Long term Capital gain as income of the assessee. The assessee sought for cross examination of the director of M/s DPS Shares & Securities .....

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ses were made either by adjusting the speculation profits claimed to have been earned by the assessee or by paying cash. Accordingly, the AO came to the conclusion that the purchases had been back dated in order to declare Long term capital gain. Accordingly, the AO came to the conclusion that the whole of transactions of purchase and sale were sham transactions. He, accordingly, assessed the long term capital gain as income of the assessee under income from other sources. The AO also assessed 5 .....

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n F.Y. 2004-05 relevant to A.Y. 2005-06, which resulted into Long Term Capital Gain of ₹ 1,86,375/-. The said equity shares of Robinson were purchased on 22/5/2003@ ₹ 5.05 per share through M/s.DPS Shares and Securities Pvt. Ltd, who was a member of Stock Exchange. He has further submitted that copies of the sales bills were furnished before the Assessing officer. The sale proceeds were received by the assessee through account payee cheque and the delivery of the shares was given to .....

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are transactions carried on by the assessee and hence, in order to suit its convenience, the director of the above said company has stated the transactions of purchase to be bogus transactions. The Ld A.R has further placed reliance on the decision rendered by the coordinate bench of this Tribunal in I.T.A. No.6747/Mum/2010 for AY 2007-08 in the case of Smt.Rooplata Jain vs. ACIT decided on 8.4.2015. On the contrary, the Ld D.R placed strong reliance on the orders of tax authorities. 6. We have .....

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es. The Tribunal in the said case has restored the matter for fresh examination to the assessing officer. The Tribunal has also directed the AO to take into account the decision rendered by the co-ordinate bench in the case of Shri Arvind M Kariya ITA NO.787/M/2010 decided on 30.12.2011. The relevant part of the order of the Tribunal in the case of Smt.Rooplata Jain vs. ACIT (Supra), for the sake of convenience, is reproduced as under: 6. Before us, the assessee filed copies of income tax return .....

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res & Securities Ltd. There may be merit in the contentions of the assessee that the statement given by the directors of the above said company should not be relied upon, since they have given the statement to suit their own conveniences, since these transactions were not accounted for by them. Under these circumstances, in our view, it may not be proper to draw adverse inferences against the assessee based upon the statement given by the directors of M/s DPS Shares & Securities P Ltd al .....

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bench in the case of Shri Arvind M Kariya (referred supra). Accordingly, we set aside the order of Ld CIT(A) and restore all the issues to the file of the assessing officer for fresh examination in the light of discussions made supra. 7. Since the facts of the case in hand are also identical, the contentions raised by the assessee are also on the same line, we therefore following the above decision of the Co- Ordinate Bench of the Tribunal, we set aside the order of Ld CIT(A) and restore all th .....

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matter is restored to the file of the AO for decision a fresh as per the directions given above for A.Y. 2005-06. ITA No.6771/M/2011 for 2007-08 9. The assessee in this appeal has challenged the action of the Ld. CIT(A) in confirming the additions made by the AO as unexplained investments in relation to jewellery found during the search action. 10. During the course of the search operation u/s 132 of the Act, total jewellery weighing 1798 gms was found from the premises of the assessee. The gol .....

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him and his family members i.e. his wife, his unmarried daughter, his son and parents who have been living with him. That the jewellery weighing 307.01 gms and diamond set were shown in the balance sheet of Kum. Madhu Malpani (now Smt. Madhu Saboo) since 1980. The balance jewellery of Madhu Saboo was received during marriage dated 2.12.88. The details were filed with the return filed for AY 89-90. That jewelleiy weighing 649.400 gms was shown in the balance sheet of his mother Smt. Saraswati De .....

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fe which was given by her parents at the time of marriage. The jewellery found was the personal effect his wife & mother. The major portion of jewellery was shown in the balance sheet and disclosed during the scrutiny assessment proceedings. He further submitted that looking to the status of family and the customs and the practice of the community to which the family belonged, the jewellery found should be treated as duly explained. The AO however did not agree with the explanation offered b .....

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of jewellery found valuing to ₹ 24,75,237/-, jewellery valuing to ₹ 7,59,950/- only could be treated as explained. Jewellery valuing to ₹ 17,15,287/- remained unexplained. He accordingly added the said amount into the income of the assessee. Aggrieved by the addition made by the AO, the assessee preferred appeal before the Ld. CIT(A). 13. The Ld. CIT(A) observed that apart from the jewellery treated by the AO as explained ,the assessee was entitled to further relief of 160gms. .....

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. As per the CBDT circular No.1916 dated 11.5.1994, the gold jewellery and ornaments to the extent of 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male member of the family need not be seized. The family of the assessee consists of 3 male members i.e. Assessee himself, his father and son, two married ladies i.e. his wife and mother, one unmarried lady i.e. his daughter. The Hon ble Gujarat High Court in the case of CIT vs. Ratanlal Vyaparilal Jain 235 CTR (Guj) 568 has he .....

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the CBDT Circular (Supra), it has been mentioned that the authorized officer may, having regard to the status of the family, and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure. We further find that the AO the addition made by the AO also includes ₹ 61500/- on account of silver items. As observed above, out of the seized jewellery worth about ₹ 24.75 .....

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