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TMI Blog2013 (8) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO to show that the jewellery was purchased by M/s. Kalicharan Durga Prasad, which is also disclosed in the Sales Tax Return. Therefore, the purchase of jewellery from the assessee and their 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- received by him from 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copies of sales bills 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. assessee he executed the will in respect of above mentioned movable properties i.e. gold and silver jewellery in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 from 01.04.2006 to 31.03.2007 which were supplied by him on 23.11.2009 along with a copy of sales-tax assessment order for the said period dated 26.06.2009. On verification of purchases and sale bills with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 & his family members only after finalization of accounts. It is held that in- fact no actual of sale of gold & silver jewellery has been made by the assessee and his family members. 4. On verification of the sale bill books produced with the books of accounts by Shri Rakesh Mangal, Prop.: of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. This sum included value of jewellery sold by other family members also. 2. Smt. Tara Garg (Mother) was examined who stated that she received Rs.13,98,170/- by way of sale of aforesaid jewellery received in will and gave to Shri Raghav Garg for the purpose of giving advance to Shri Tamotia. 3. Smt. Poonam Garg (wife) was examined who stated that she has received Rs.1405990/- by way of sale of jewellery received in will and gave to Shri Raghav Garg for the purpose of giving advances to Shri Tamotia. 4. Kumari Roma Garg gave affidavit admitting that she has sold aforesaid jewellery received in will for Rs.11,60,800/- and gave this amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce 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 fact these accounts are accepted in case of Shri Rakesh Mangal by the Deptt. The payment of cash made by the firm towards purchases of this jewellery has not been disputed. The presumption of the learned AO that total purchases, total sales, purchases from other does not signify anything except to find out some reasons to not to accept any genuine thing only on presumption and conjectures. Thus is fact that a sum of Rs.85 lacs has been advanced by the appellant. The appellant has submitted the sources of the same and it has been verified by taking statement of all the persons involved. In case the sum of Rs.85 lacs is not as declared by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2006 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 regarding no objection of the remaining two sons of the appellant's father for the distribution of such huge movable property in the name of the appellant and his immediate family members. However, no adverse material has been brought on record by the AO to show that duly notarized will, as signed in presence of two witness, is fictitious or that no asset has been received by the appellant and his family members in form of jewellery etc. as mentioned in the said will. AO has examined other family members of the appellant during the course of assessment proceedings. Their statements have also been recorded, who have categorically confirmed the fact of sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 return income declared on the basis of his books of accounts. AO has failed to bring any adverse material on record before rejecting the submissions, statements, affidavits and books of accounts of purchasers, seller produced during the course of assessment proceedings. On the basis of facts above and after perusal of records, AO is not found justified in treating sale of jewllery of Rs.65,00,000/- as income undisclosed sources. Accordingly, addition of Rs.65,00,000/- is not found sustainable and hereby deleted." The Revenue is in appeal challenging the deletion of addition of Rs.65,00,000/- by the ld. CIT(A). 8. The AO also made addition of Rs.20,00,000/- for advance of property as unexplained. The AO in the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. In fact this plot of land was in the name of the appellant however there was illegal possession of some other person for this reason the registration of the pilot was not possible. Since the title although was clear but its possession was disputed Mr. Pawaiya has cancelled the same and the amount has been refunded to him by the appellant. The cost of a plot in present times Rs.40 lacs is very reasonable and therefore Shri Pawaiya was prompted to buy with a hope that the dispute will get resolved and he will own a very valuable property. His statement confesses amount given as advance. He has shown it in the books of accounts and in his balance sheet. It is also true that although he does not have any important source of earning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 means to lend and has consented to lend his name only for the purpose; thus the story of the deposit or loan/advance falls to the ground. Section 68 of the IT Act empowers the AO to make enquiry specifically satisfied regarding the cash credit in the appellant's books of accounts. If AO is satisfied that these entries are not genuine he has every right to add these income as inform from other sources. It is clear from the language employed in Section 68/69 that it is the appellant, and the appellant alone, who is to offer the explanation with supporting documentary evidences, whether initially or subsequently. The onus has been laid upon the appellant to furnish the information as required by the AO. The appellant has failed miserably to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gular 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 main source of income of the assessee is income from capital and income from other sources. Therefore, the assessee did not maintain any books of account as having no business activities. The ld. CIT(A), therefore, should not have maintained the addition of Rs.20,00,000/-. On the other hand, the ld. DR relied upon the orders of the authorities below. 12. We have considered the rival submissions and the material available on record. The facts noted by the ld. CIT(A) in the appellate order have not been disputed before us. It is not in dispute that father of the assessee Shri Lalta Prasad Garg has executed Will in favour of the assessee and other family members. The genuineness of the Will has not been doubted by the AO and no marginal wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ya. 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 any doubt in the minds of the AO of execution of agreement to sale, at least he should have examined the marginal witnesses who have signed the agreement to sale to find out the truth in the matter. The AO, however, did not take any such step. Therefore, it is proved on record that the assessee and Shri Kaushal Kishore Pawaiya have genuinely entered into the agreement to sale dated 06.06.06, whereby the assessee was given advance of Rs.20,00,000/- by the purchaser. It is also not in dispute that 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. The AO has not adversely commented upon the same. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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