2018 (6) TMI 1230 - AT - Income Tax

Undisclosed income of the assessee u/s 69 - seizure of the gold - carrying gold bars and jewellery - contradictory statements - gold claimed as not belong to the assessee - Held that - AO has made necessary inquiries and found that though Mr. Meer Ahmed Ali has shown the sources for purchase of the gold as the withdrawal of the money in the months of November, 2011 and January, 2012 and has produced the invoices from M/s. Anushri Commodities Trading Pvt. Ltd, the AO has verified the said vouchers and found that there is a difference between the buyer and sales bills. Further, he has also noticed that with the same voucher No., there was another bill given by ACPTL in favour of Shri Krishna Jewellers for the same quantity except for the description i.e. 2 bars of 1000g each. Therefore, the contention of the assessee was not being substantiated/supported by the documents produced by him. VAT returns for the relevant month of 2012 is filed between 5th June, 2011 to 15th February, 2012, i.e. after the denial of Mohd. Khan Jewellers (P) Ltd of any transaction with the assessee. Therefore, the subsequent statement of the assessee that the gold belongs to Mr. Meer Ahmed Ali and the documents relied upon by him in support of such statements are not reliable. Contention of the assessee has always been that the entire gold does not belong to him and only part of the gold belongs to him and his family members. Even with regard to the gold which he stated to be belonging to Mohd. Khan Jewellers, he failed to prove the same and it is only thereafter, that he took a stand that it belonged to Mr. Meer Ahmed Ali. - decided against assessee.

Summary

Issues:
Assessee's appeal against CIT (A)'s order for A.Y 2012-13 - Possession of excess gold bars - Discrepancies in statements - Unaccounted gold - Reliability of evidence - Addition of undisclosed income u/s 69 of the I.T. Act.

Analysis:
The case involved the assessee's appeal against the CIT (A)'s order for the assessment year 2012-13 concerning the possession of excess gold bars. The assessee, a goldsmith, was intercepted at Kolkata Airport carrying gold bars in excess of 13 kg, contradicting his initial statement of carrying only 2 kg. The jurisdictional AO issued a notice under section 142(1) of the Act, leading to scrutiny under section 143(3). The assessee claimed the gold belonged to another individual, Mr. Meer Ahmed Ali, submitting documents to support this assertion. However, the AO found discrepancies in the evidence provided, including conflicting invoices and lack of direct nexus between cash withdrawals and gold purchases. The AO treated ?56,31,600 as unaccounted income, a decision upheld by the CIT (A).

The assessee contended that the evidence provided was reliable, citing a Tribunal decision from Delhi. However, the ITAT Hyderabad found the evidence presented by the assessee to be unsubstantiated. Despite the VAT return showing a sale of gold, it did not establish the purchase of gold. The tribunal noted the inconsistency in the assessee's claims regarding ownership of the gold and the failure to prove the gold's origin. While the Tribunal acknowledged the absence of evidence showing the gold was purchased with the assessee's own funds, it concluded that the assessee's shifting statements and lack of concrete proof rendered the evidence unreliable. Consequently, the ITAT upheld the CIT (A)'s decision to treat the sum as undisclosed income under section 69 of the I.T. Act.

In summary, the ITAT Hyderabad dismissed the assessee's appeal, emphasizing the lack of substantiated evidence supporting the claim that the gold belonged to another individual. The tribunal highlighted discrepancies in the documents provided and the shifting nature of the assessee's statements, ultimately affirming the addition of undisclosed income by the AO. The decision underscored the importance of credible evidence and consistency in statements in tax assessments to prevent the concealment of income.