There is no dispute that during the course of assessment proceedings the assessee while explaining the source of jewellery interalia stated that Mrs. Darshana K. Jethani has received jewellery of gold and diamond by way of ‘Will’ of Smt.Lachmi Ukarmal Mangtani, her grandmother. In support, he also placed on record the copy of the said will for verification and also stated that the said will was executed in the presence of Dr.Murli M. Ratnani (PAN- address).
It was further stated that the said doctor is a income tax payee and practicing in Thane City itself and ready to visit your office for a statement to prove the genuineness of the said will. It was also stated that the true copy of the will was not found at the time of search as it was lying with the executors of the will. It was, therefore, submitted that the jewellery found at the time of search be treated as explained. However, the AO merely on the ground that neither the will is registered nor it is notarised, the same was not found at the time of search and nothing was stated in the statement recorded u/s 132(4) rejected the plea of the assessee that it is after thought. Since the assessee has filed the copy of the will with an explanation that the same was lying with the executors of the will and the assessee was ready to produce one of the executors i.e. Dr.Murli M. Ratnani, therefore, we are of the view that the AO was not justified in rejecting the valid document of ‘Will’ filed by the assessee without recording any statement of Dr.Murli M.Ratnani. In this view of the matter and keeping in view that the AO has accepted part of the jewellery as explained and no contrary material has been placed on record by the Revenue to show that the part of the explanation given by the assessee was found to be false and untrue, we are of the view that the addition made by the AO and sustained by the Ld.CIT(A) is not sustainable and accordingly the same is deleted.
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA No.4630/Mum/2008 – (Assessment Year: 2005-06)
Mr .Hemraj K.Jethani
V/s
Dy. Commissioner of Income Tax,
ITA No.4631/Mum/2008 – (Assessment Year: 2005-06)
Mr .Bharat Hemraj Jethani V/s Dy. Commissioner of Income Tax,
ITA No.4632/Mum/2008 – (Assessment Year: 2005-06)
Mrs.Darshana Kailash Jethani V/s Dy. Commissioner of Income Tax
Date of Pronouncement: 18.4.2012
O R D E R
PER DINESH KUMAR AGARWAL (JM)
All these appeals by three respective assessees are directed against the separate orders dated 10.4.2008 passed by the ld. CIT(A) for the Assessment Year 2005-06. Since facts are identical and issues involved are common, all these appeals are disposed of by this common order for the sake of convenience.
ITA No.4630/Mum/2008(By Mr .Hemraj K.Jethani)
2. Briefly stated facts of the case are that the assessee an individual derives income from salary, business income and other sources. The assessee’s business premises as well as residential premises were searched u/s 132 of the Income Tax Act, 1961 (the Act) on 9.9.2004 along with other group cases. The return was filed on 31.10.2005 declaring total income at Rs.3,17,200/-. However, the assessment was completed at an income of Rs.10,86,070/- including the addition of unexplained cash credit Rs.3,88,500/- and unexplained investment in diamond jewellery Rs.3,80,374/-, vide order dated 13.12.2006 passed under section 143(3) read with section 153B(b) of the Act. On appeal, the Ld.CIT(A) dismissed the appeal.
3. Being aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us.
4. Ground No.1 is against the validity of the order passed by the AO and Ground No.2 is the general ground.
5. At the time of hearing, the Ld. Counsel for the assessee did not press the above grounds which was not objected to by the Ld.DR.
6. That being so and in the absence of any other supporting materials placed on record by the Ld. Counsel for the assessee, the Ground Nos.1 and 2 taken by the assessee are, therefore, rejected being not pressed.
7. Ground No.3 is against the sustenance of addition of unexplained cash Rs.3,88,500/-.
8. Brief facts of the above issue are that during the course of assessment proceedings, the AO observed that during the course of search, at the residence of assessee, cash of Rs.5,83,350/- was found and out of it cash of Rs.3,88,500/- was found from the bed room of the assessee. On inquiry during the course of search the assessee was unable to give the source except stating that it is a combined cash of family. He also admitted that books of accounts were not up-to-date. However, during the course of assessment proceedings the assessee submitted that the cash of Rs.5,83,350/- from the residence belong to various family members including M/s Bell Computronics, proprietary concern of Shri Bharat Jethani son of the assessee . The assessee further submitted that the cash was kept at the residence for the safety purposes. However, the AO did not accept the assessee’s explanation. According to the AO the assessee has no business relation with M/s Bell Computronics. Further M/s Bell Computronics has bank account, therefore, it cannot be believed that for safety purposes cash was kept at the residence than into bank account. In this view of the matter and keeping in view that the cash book of the family members were not found to be upto- date, the AO treated the cash of Rs.3,88,500/- as unexplained cash and added the same to the income of the assessee. On appeal, the Ld.CIT(A) while aggreeing with the views of the AO confirmed the addition made by the AO.
9. At the time of hearing, the Ld. Counsel for the assessee while referring to the relevant questions and answers to statement of the assessee appearing at pages 34 and 35 of the assessee’s paper book, details of cash balances appearing belonging to various family members appearing at page 75 of the assessee’s paper book, Schedule-“F” of the Audit Report of M/s Bell Computronics for the period ended 31.3.2005 showing amount of cash seized by the department Rs.4,44,061/- appearing at page 125 of the assessee’s paper book submits that in view of the entries recorded in the respective books of account of the family members, the cash found at the time of search may be treated as fully explained and the addition made by the AO and sustained by the Ld.CIT(A) be deleted. The reliance was also placed on the decisions in (a) Amar Natvarlal Shah V/s ACIT (1997) 60 ITD 560(Ahd) and (b) Ms. Aishwarya K.Rai V/s DCIT (2007) 104 ITD 166 (Mum)( TM)
10. On the other hand, the Ld.DR supports the order of the AO and the Ld.CIT(A).
11. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that there is no dispute that in the statement recorded at the time of search, the AO specifically asked about the cash of Rs.3,88,500/- vide question No.8 as under :
“Q.No.8: Cash of Rs.3,88,500/- was found from your bedroom. Do you confirm that the same belongs to you only.
Ans: It is combined cash of family”
We further find that during the course of assessment proceedings the assessee vide letter dated 13.10.2006 has stated as under:
“Regarding seizure of Rs.5,00,000/- I want to state that during the course of search in my statement I stated that this cash belongs to us and our family members. All our family members are income tax payer since last so many years. In every case we are filling balance sheet and paying income tax regularly. I have to married sons and we all three are also filing return in HUF capacity. Whatever cash was found it was accounted and explained and it was …
