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TMI Blog2019 (12) TMI 1229X X X X Extracts X X X X X X X X Extracts X X X X ..... rop of our aforesaid observations we are unable to persuade ourselves to subscribe to the view taken by the lower authorities. Resultantly, the order of the CIT(A) is set aside and the addition under Sec. 69 made by the A.O is vacated. - Decided in favour of assessee. - ITA No. 1236/Mum/2012 - - - Dated:- 19-12-2019 - Shri Rajesh Kumar, Accountant Member And Shri Ravish Sood, Judicial Member For the Appellant : Shri J.D. Mistry, Senior Advocate For the Respondent : Shri R. Manjunatha Swamy, D.R ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the CIT(A)-38, Mumbai, dated 19.12.2011, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income Tax Act, 1961 (for short Act ), dated 30.12.2009. The assessee has assailed the impugned order on the following grounds of appeal before us: GROUND 1: Addition on account of Unexplained paintings: ₹ 34,00,000/- 1. On the facts and circumstances of the case and in law, the Learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal income at ₹ 15,58,27,941/-. The case of the assessee was thereafter selected for scrutiny assessment under Sec. 143(2) of the Act. 3. In the course of the aforesaid search proceedings cash amounting to ₹ 13,19,000/- was found at the residence of the assessee situated at 2-B, Kashitji Swapanlok, Nepean Sea Road, Mumbai. On being called upon to explain the source of the aforesaid amount, the assessee failed to come forth with any plausible explanation. Instead, the assessee in his statement recorded under Sec. 132(4) on 18.04.2007 expressed his unawareness about the source of the aforesaid amount and stated that his wife would explain the same. On the other hand, the wife of the assessee viz. Smt. Kavita Singh though in her statement recorded under Sec. 132(4) on 17.04.2007 though confirmed the statement of her husband, but was unable to reconcile and explain the source of the aforesaid amount. In the absence of any plausible explanation forthcoming, an amount of ₹ 10,00,000/- (out of ₹ 13,19,000/-) was seized in the course of the search proceedings. Apart from that, in the course of the search action at the various business and residentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissed the appeal. 5. Being aggrieved, the assessee has assailed the order of the CIT(A) before us. The ld. Authorized Representative (for short A.R ) for the assessee took us through the facts of the case. It was submitted by the ld. A.R, that though the assessee in the course of the assessment proceedings had duly explained that cash amounting to ₹ 10,00,000/- (out of ₹ 13,19,000/-) found in the course of search proceedings from his residential premises was received by him from his brother Shri Ajit Singh for safe custody, however, the said explanation was whimsically rejected by the A.O and the said amount was treated as unexplained in the hands of the assessee. In order to fortify the genuineness and veracity of his aforesaid claim, it was submitted by the ld. A.R that the fact that a short/deficit cash of ₹ 10 lac had surfaced in the course of the simultaneous search proceedings which were carried out at the premises of Shri. Ajit Singh, therein substantiated the aforesaid explanation of the assessee. In order to support his aforesaid contention, it was submitted by the ld. A.R that the assessee had furnished with the A.O the confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished by the assessee in the course of the assessment proceedings, however, the A.O had without giving any cogent reason drawn adverse inferences in the hands of the assessee. It was submitted by the ld. A.R that the aforesaid two paintings were purchased by the assessee for a total consideration of ₹ 3,60,385/-. It was submitted by the ld. A.R, that the assessee had purchased the aforesaid two paintings from the Gallery : Daugava, 10/12, Alksnata Street, Latvia for a purchase consideration of ₹ 1,80,076.15 and ₹ 1,80,309.54/-, respectively. It was submitted by the ld. A.R that the aforesaid paintings were purchased by the assessee by using his credit cards i.e Visa Gold Master Gold on 17.06.2006. In order to substantiate his aforesaid contention the ld. A.R took us through the relevant pages of the assesses Paper book (for short APB ). Our attention was drawn towards the credit card statements wherein the aforesaid transactions were reflected. Also, the ld. A.R took us through the payment coupon. It was submitted by the ld. A.R, that as the aforesaid paintings were purchased by the assessee by using the credit cards of M/s Associated Capsules Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O under Sec.69 in respect of the two Paintings which were found in the course of the search proceedings from the business premises of the assessee, it was the claim of the ld. D.R that the said paintings were got valued by the revenue by availing the services of three experts, and in the absence of any explanation as regards the source of purchase of the same, their respective values had been added as an unexplained investment in the hands of the assessee. On the basis of his aforesaid contentions, it was the claim of the ld. D.R that as the appeal of the assessee was devoid of any merit, thus it was liable to be dismissed. 8. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. Our indulgence in the present appeal has been sought by the assessee, for adjudicating, as to whether the CIT(A) is right in law and the facts of the case in upholding the additions made by the A.O viz. (i) the addition of unexplained cash found in the course of search proceedings (from the residence of the assessee): ₹ 10,00,000/-; and (ii) the addition under Sec.69 towards unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 10,00,000/- Cash in Hand ₹ 19,13,250/- Cash found at residence- ₹ 13,19,000/- Cash found at Dalamal House-- ₹ 2,94,250/- Total ₹ 19,13,250/- On a perusal of the aforesaid reconciliation, we find, that it has been the claim of the assessee that an amount of ₹ 10 lac (out of ₹ 13,19,000/-) which was found in the course of the search proceedings at his residential premises, was received by him from his brother Shri Ajit Singh for safe custody, as the latter was proceeding on a foreign tour. We find that as the lower authorities were not impressed with the aforesaid explanation of the assessee, therefore, they had rejected the same and had held the said amount of ₹ 10,00,000/- as the unexplained income of the assessee for the year under consideration. 9. We have given a thoughtful consideration to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh, that during the period prior to the search i.e from 01.04.2007 to 17.04.2007, he had received an amount of ₹ 2,00,000/- from M/s ACPL Corporation. In the backdrop of the aforesaid facts, we are of the considered view, that the short/deficit cash found in the course of the search proceedings at the business/residential premises of Shri. Ajit Singh, therein substantially fortifies the claim of the assessee that his brother i.e Shri. Ajit Singh had kept an amount of ₹ 10 lac for safe custody with him. Apart from that, we find, that the fact that the confirmation of Shri Ajit Singh that he had in the month of April, 2007, before proceeding on a foreign tour that was spread over the period i.e 15.04.2007 to 28.04.2007, had kept an amount of ₹ 10 lac in safe custody of his brother, had not been dislodged or disproved by the revenue. In the backdrop of the aforesaid facts, we find substantial force in the claim of the ld. A.R that the lower authorities had without dislodging the veracity of the aforesaid claim of the assessee, therein most arbitrarily held the amount of ₹ 10 lac as the unexplained income of the assessee for the year under consideration. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was thereafter reimbursed by him to the company through a cheque payment that was made through an account payee Cheque No. 366544 for ₹ 3,60,385.69/-, drawn on his bank account with State Bank Of India, Nariman point, Mumbai. 11. We have given a thoughtful consideration to the issue before us and find substantial force in the aforesaid claim of the assessee. As can be gathered from a perusal of the orders of the lower authorities, the assessee had placed on record sufficient documentary evidence that goes to substantiate the transaction of purchase of the aforesaid two oil canvas paintings viz. . (i) painting titled Blue boats (Acrylic on canvas) size 48 x 78.5 [Artist: Liela]; and (ii) painting titled: Card Players (Oil on canvas) size 50 x 37.5 [Artist: Sluello ], vide two purchase transactions on 17.06.2006 from a gallery viz. Daugava , 10/12 Alksnaja Street, Latvia. No documentary evidence has been placed on record by the A.O which would conclusively dislodge the authenticity of the aforesaid claim of the assessee. In fact, it is not the case of the revenue that the aforesaid purchases transactions carried out by the assessee on 17.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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