TMI Blog2018 (12) TMI 1688X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Preponderance of probability, in our opinion, is on the side of the assessee. We are of the opinion that the claim of the assessee that a sum of ₹ 3,14,93,768/- had come out of sale proceeds of jewellery deposited by his relatives with him, ought not have been disbelieved. Addition stands deleted. Grounds of the assessee stand allowed. Addition under the head long term capital gains - HELD THAT:- Assessing Officer has given a clear finding that actual sale effected by the assessee was ten plots and its guideline value came to ₹ 16,71,475/-. After giving allowance for indexed cost of land of ₹ 1,72,695/-, ld. Assessing Officer had computed the capital gains at ₹ 14,98,780/-. Assessee had through his letter dated 14.03.2014 agreed for adoption of the guideline value u/s.50C of the Act. Having agreed for adopting guideline value, we are of the opinion that assessee cannot now take a grievance that such Section was wrongly applied. Addition as unexplained cash - HELD THAT:- It is not disputed that cash of A4,50,000/- was found at the time of search. Pawn register found at the time of search reflected cash balance of ₹ 1,27,052/- only. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fere with the orders of the lower authorities. Capital gains on sale of jewellery - what is claimed as erroneous computation of cost of acquisition of the jewellery - Contention of the ld. Authorised Representative is that Shri. C. Kishanlal had sold the jewellery given to him by the HUF without the permission of the HUF - HELD THAT:- We are afraid, we cannot accept the claim of the assessee. This is due to the reason that Shri. C. Kishanlal to whom the jewellery was given was the Kartha of the assessee (HUF). Hence, he cannot say that he was unaware of the sale of jewellery. Hence, ground of the assessee assailing the addition made long term capital gains is dismissed. However viz-a-viz, cost of acquisition, it is an admitted position that ld. Assessing Officer had considered such cost at 50% of the sale value. Contention of the assessee is that the jewellery which was sold was reflected in the Wealth Tax return of the HUF from assessment year 2001-02. We direct the ld. Assessing Officer to verify this claim of the assessee and consider the cost shown by the assessee in the Wealth Tax return for assessment year 2001-02, for the purpose of computing the long term capital gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s u/s.153A of the Act for filing his returns. Assessee in the return filed for the impugned assessment year 2006-07, pursuant to such notices, declared an income of ₹ 21,85,268/-. It is to be noted that the income declared was very same as shown in the regular return filed on 08.05.2007. During the course of the search, revenue stumbled upon certain records relating to a suit filed by one Shri. Dharmendra Bafna and others before High Court of Madras. From subsequent enquiries it was learned by the revenue that assessee had paid a sum of ₹ 4,65,00,000/- to Shri Dharmendra Bafna, who was the Managing Director of a company called M/s. Surana Corporation Ltd, as an investment in the gold trading business conducted by M/s. Surana Corporation Ltd. It seems assessee had requested Shri. Dharmendra Bafna to close the account and return the money, whereupon latter claimed that he was only a sub-agent of M/s. Surana Corporation Ltd and the money was dealt by the directors of M/s. Surana Corporation Ltd. Assessee was questioned by the Revenue on the source for the sum of ₹ 4,65,00,000/- advanced by him to M/s. Surana Corporation Ltd through Dharmendra Bafna. Assessee thereupo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) M/s. C. Madanlal Sons ₹ 50,000/- (d) M. Jeevaraj ₹ 2,00,000/- (e) Kalyanmalji Ranka ₹ 2,00,000/- (f) C. Kamalachand ₹ 4,00,000/- (g) A.Pukhraji Gulecha ₹ 1,00,000/- 59,40,160/- It is to be noted that out of the total sum of ₹ 60,00,000/- claimed by the assessee to have been received from Shri. Sivarajan Nadar, a sum of ₹ 49,40,160/- was accepted by the ld. Assessing Officer and balance sum of ₹ 10,59,840/- alone was considered to be unexplained. The claims which were not accepted by the ld. Assessing Officer were as under:- M/s. C. Kishanlal Sons and C. Kishanlal A6,56,232 M/s. C. Kishanlal (HUF) A7,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) against the additions aggregating to ₹ 90,66,072/- disbelieving the claim of receipt of loans/ advances, did not meet with any success. Though the assessee argued that all the above loans were reflected in the returns of the respective parties, ld. CIT(A) was not appreciative of such contention. 9. Now before us, ld. Authorised Representative strongly assailing the orders of the lower authorities submitted that cash balance of ₹ 6,56,232/- with the assessee ought not have been disbelieved. According to him, assessee s capital account balance as on 01.04.2005 was ₹ 62,83,274/- and assessee had gross total income of ₹ 10,64,876/- during the previous year relevant to assessment year 2006-2007. Thus, according to him, cash balance of ₹ 6,56,232/- ought not have been disbelieved. 10. Alluding to the sum of ₹ 7,00,000/- claimed to have been received from Shri. C. Kishnalal Sons (HUF), ld. Authorised Representative submitted that the said amount was reflected in the Trial Balance and return of income filed by the said HUF. As per the ld. Authorised Representative, HUF had earlier advanced a sum of ₹ 10,20,000/- to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such amounts from close relatives was only a story made up by the assessee for justifying the source of ₹ 4,65,00,000/- advanced by him to M/s. Surana Corporation Limited. 16. We have considered the rival contentions and perused the orders of the authorities below. It is not disputed that total claim of receipts of loans/ advances made by the assessee came to ₹ 1,50,06,232/-, out of which ld. Assessing Officer had accepted the evidence for ₹ 59,40,160 /- and made an addition of ₹ 90,66,072/-. Breakup of the sum disbelieved by the ld. Assessing Officer is reproduced at para 6 above. First item therein is a claim of the assessee that ₹ 6,56,232/- had come out of his cash balance. Paper book page No.109, which gives the capital account of the assessee for the period 01.04.2005 to 31.03.2006, reflects opening balance of ₹ 62,83,274.73 and closing balance of ₹ 89,11,499.75. Transactions in this capital account do not show any amount to have been utilized for effecting payment to M/s.Surana Corporation. If it had come out of the cash balance, as claimed by the assessee, it would be definitely reflected in his capital account. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Kishanlal, residing at No.23, Kutchery Road, Mylapore, Chennai - 600 004 towards the purchase of Agricultural land at Mangadu Village, Sriperurnudur Taluk, After Sale of ₹ 10,59,840/. adjusted in the advance. Balance ₹ 49,40,160/- is Advance till date. Sd/- SIVARAJA PAN NO. ARNPS447OQ To Shri. C.Kishanlal No.2 3, Kutchery Road, Mylapore, Chennai -600 004. Ledger page of Shri. Shivraj Nadar in the books of the assessee clearly reflected all the above transactions. In our opinion, receipt of ₹ 60,00,000/-has been duly shown in assessee s books. Sum of ₹ 10,59,840/- was only an adjustment due to sale of land and this did not result in depletion of the funds available with the assessee. We are of the opinion that assessee has substantiated the claim of receipt ₹ 60,00,000/- in full. 19. Fourth item is a claim of ₹ 30,00,000/- received from Shri. B. K. Vimalchand. What we find is that the Auditor of Shri. B. K. Vimalchand had given a confirmation to the ld. Assessing Officer, copy of which is available at paper book page 149 and it read as under:- RICABCHAND CO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 2006-07, placed at paper book page 146 clearly show a sum of ₹ 31,61,400/- in the credit of Shri. C.Kishnalal. Shri. B. K. Vimalchand had filed his return for assessment year 200607 on 19.10.2006 much earlier to the date of the search and acknowledgment is placed at paper book page 142. In such circumstances, we are of the opinion that there was no reason to disbelieve the loan of ₹ 30,00,000/- received from Shri. B. K. Vimalchand. 20. Coming to the fifth item which is a claim loan of ₹ 9,00,000/- received from Smt. V. Suvitha, daughter-in-law of the assessee, we find that Smt. V. Suvitha had filed her Income Tax return for assessment year 2006-07 on 19.10.2006. Acknowledgement has been placed at paper book page 156. Trial balance of Smt. V. Suvitha as on 31.03.2006 placed at page book page 158 reflected an agricultural loan advance of ₹ 9,00,000/- to Shri. C. Kishnalal. In such circumstances, conclusion of the Revenue that Smt. V. Suvitha had no sufficient income to give an advance of ₹ 9,00,000/- to the assessee cannot be accepted. Just because Smt. V. Suvitha had total income of ₹ 1,38,088/- only for the impugned assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AN.No: AAIPK 6835 H / 2006-07 Sub: Income Tax assessment -assessment year 2006-07.Details of for Agri.Land / Plot given by me. With reference to the above, I state that I have given a sum of ₹ 2540000/- (₹ 23,50,000 on 18/10/2005 and ₹ 1,90,000 on 24/03/06) as security / margin money to Shri C Kishan Lal by way of cash for leasing out the agriculture land measuring 2.17 acres at Agaraharam Village,Poonamalee Taluk,Thiruvallur District and measuring Acres at Veeraghavapuram, Agri.Land measuring 1.45 acres at Mangadu Village and 2.39 acres at Padamatikhandriga village sullurpet mandal as per entered with him. The Lease was terminated and the amount was received back by me by way of Cheque as follows: cheque No Date Amount 488319 11.05.2010 440000.00 982781 15.09.2010 700000.00 982782 15.09.2010 600000.00 982783 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer was that his family members had in their respective Wealth Tax returns shown the jewellery owned by them and therefore the sale of such jewellery by him was genuine. However, the ld. Assessing Officer was of the opinion that there was nothing on record to prove the sale of such jewellery. The claim was disbelieved and an addition of ₹ 3,14,93,768/- was made. The said addition was confirmed by the ld. Commissioner of Income Tax (Appeals) as well. 25. Now before us, ld. Authorised Representative strongly assailing the orders of the lower authorities submitted that copies of the bills for sale of the jewellery were given to the Crime Branch Police, in connection with the cheating case filed by the assessee against Shri. Dharmendra Bafna and M/s. Surana Corporation Ltd. According to him, ownership of the jewellery by the relatives of the assessee was not disputed by the lower authorities. Submission of the ld. Authorised Representative was that confirmations were available from each of the relatives who had given the jewellery as deposit with the assessee. According to him, lower authorities fell in error in disbelieving the sale of jewellery claimed by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd decided to use the profit for the compound wall erection at the Trust at Sulurpet. iv. The De-facto Complainant collected ₹ 39,37,910)- by way of cash and jewels from one Vimal Chand, ₹ 53,51,930/- by mortgaging the land and jewels from Tmt. Kanchan Bai, ₹ 70 lakhs worth of jewels from Tmt.Prema Bai, ₹ 40 lakhs by cash and jewels from Tr. Kamalchand, ₹ 36 lakhs by way of jewels from Tmt. Tr. Abayakumar, ₹ 17 lakhs by cash and jewels from Susila Bai, ₹ 40 lakhs by mortgaging the land and jewels from Tmt, Suvitha, ₹ 31 lakhs by way of jewels from Tmt.Sasikala, ₹ 2 lakhs by cash from Ti. Jeevaraj, ₹ 2 lakhs by cash from Tr. Kalyanmal, Rs. One lakh by cash from Tr. Pukkiraj, ₹ 7 lakhs worth of jewels from Selvi Priyanka and his own funds. Thus in all he has collected ₹ 4.65 crores. The documents collected during investigation all are vouched the source for the by the defacto complainant. v. The De-facto Complainant entrusted the above said ₹ 4.65 crores to the petitioner I accused in between 06-10-2005 and 17-11-2005 in several occasions at R.B. Jewellery, Sowcarpet, Chennai, believing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee submitted that assessee had sold two plots at Mangadu for a sale consideration of ₹ 3,59,680/- and paid capital gains thereof. According to him, ld. Assessing Officer had applied Section 50C of the Act and substituted the guideline value and made an addition of ₹ 14,98,780/-. According to him, Section 50C of the Act ought not have been applied on the sale of the land. 30. Per contra, ld. Departmental Representative strongly supported the orders of the lower authorities. 31. We have considered the rival contentions and perused the orders of the authorities below. Ld. Assessing Officer has given a clear finding that actual sale effected by the assessee was ten plots and its guideline value came to ₹ 16,71,475/-. After giving allowance for indexed cost of land of ₹ 1,72,695/-, ld. Assessing Officer had computed the capital gains at ₹ 14,98,780/-. Assessee had through his letter dated 14.03.2014 agreed for adoption of the guideline value u/s.50C of the Act. Having agreed for adopting guideline value, we are of the opinion that assessee cannot now take a grievance that such Section was wrongly applied. Thus, we do not find any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 1997. However, according to him, this was disbelieved by the lower authorities for non availability of evidence for conversation of silverware to silver bars. According to him, assessee ought have been given credit for the silver already declared by his mother. 40. Per contra, ld. Departmental Representative submitted that bars found at the time of search were imported and assessee could not show that silver utensils were converted into imported bars. 41. We have considered the rival contentions and perused the orders of the authorities below. It is not disputed that silver weighing 243.784 kg were declared by assessee s mother under VDIS scheme in 1997. It may be true that the silver-ware was declared in the VDIS return as house hold articles. However, it is not disputed that Smt. Saya Bai mother of the assessee lived with the assessee till her demise. Claim of the assessee is that his father had converted the silver articles to silver bars which were found at the time of search. In our opinion, if assessee had with him any silver-ware other than the silver bars, it would have definitely come to the notice of the search officials at the time of the search. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh, aggregating to ₹ 10,00,000/- from six persons and repaid ₹ 3,00,000/- in cash to two persons. Ld. Assessing Officer took a view that assessee having violated Section 269SS and Section 269T of the Act levy of penalty u/s.271D and 271E of the Act was called for . Penalty of ₹ 10,00,000/- was levied u/s.271D of the Act and ₹ 3,00,000/- was levied u/s.271E of the Act, which were confirmed by ld. Commissioner of Income Tax (Appeals) on the appeals of the assessee. 48. We have heard the rival counsel. We find that assessee could not give any reasonable ground for accepting loans in cash and repaying loans in cash. Though assessee argued before lower authorities that amounts were received as advance against sale of agricultural land, no evidence to substantiate such claim was produced. In the absence of any reasonable cause for accepting loans in cash and repaying loans in cash, we are of the opinion that there was clear violation of Section 269SS and Section 269T of the Act. Levy of penalty u/s.271D and 271E in our opinion was justified. We do not find any reason to interfere with the orders of the lower authorities. 49. This leaves us with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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