Krishna Kumar, Hyd, Hyderabad V. ACIT, Circle-7(1), Hyd, Hyderabad

ITA 1075/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2611 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: L R AMJI RAO
• Assessee Lawyers: KISHORE KABRA
• Keywords: Unexplained investment; Search and seizure; Opportunity of being heard; Valuation report
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1075/HYD/2016 ASSESSMENT YEAR: 2009-10 KRISHNA KUMAR, HYDERABAD. PAN ACFPK6100J VS. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 7(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KISHORE KABRA REVENUE BY : SHRI L. RAMJI RAO DATE OF HEARING : 30-08-2017 DATE OF PRONOUNCEMENT : 27-09-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - 3, H YDERABAD, DATED 13-05-2016 FOR AY 2009-10. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE PREMISES OF THE ASSE SSEE U/S 132 OF THE INCOME-TAX ACT, 1961 ( IN SHORT THE ACT) ON 2 9/01/2009. DURING THE COURSE OF SEARCH, JEWELLERY FOUND IN THE RESIDE NCE OF THE ASSESSEE WAS VALUED BY REGISTERED VALUER AT RS. 4,19,67,132/ - VIDE HIS REPORT DATED 29/01/2009. SUBSEQUENT TO SEARCH, ASSESSEE FI LED RETURN OF INCOME FOR AY 2009-10 ADMITTING AN INCOME OF RS. 23 ,59,550/-. 2.1 SCRUTINY ASSESSMENT U/S 143(3) READ WITH SECTIO N 153A OF THE ACT WAS COMPLETED ON 31/12/2010 DETERMINING TOTAL I NCOME OF THE ASSESSEE AT RS. 1,51,19,613/- BY MAKING AN ADDITION OF RS. 2 ITA NO. 1075/H/16 KRISHNA KUMAR, HYD. 1,27,60,063/- TOWARDS UNEXPLAINED INVESTMENT IN GOL D JEWELLERY. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND THE CIT(A) HAD GIVEN SUBSTANTIAL RELIEF TO THE ASSESSEE. 2.2 IN THE FIRST ROUND OF APPEAL BY THE DEPARTMENT BEFORE THE TRIBUNAL, THE TRIBUNAL IN ITS ORDER ITA NO. 968/HYD /2012, DATED 29/11/2013 SET ASIDE THE MATTER BACK TO THE FILE OF THE AO BY DIRECTING AO TO CONSIDER THE JEWELLERY DECLARED BY SHRI KRISH NA KUMAR, HUF IN ITS WEALTH TAX RETURN AMOUNTING TO RS. 60,36,175/- AND THE VALUE OF SILVERWARE OF RS. 27,22,890/-, WHICH WAS ALSO DECLA RED IN THE WEALTH TAX RETURN AND THE SAME WAS INCLUDED IN THE VALUATI ON REPORT DATED 29/01/2009. 2.3 IN THE COURSE OF SET ASIDE PROCEEDINGS, AFTER G IVING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THE AO HAS GIVEN THE FOLLOWING RELIEF TO THE ASSESSEE: I) JEWELLERY DECLARED IN WEALTH TAX RETURN OF HUF RS. 60,36,175/- II) SILVERWARE DECLARED IN WEALTH TAX RETURNS OF FAMILY MEMBERS 27,22,890/- III) DIFFERENCE IN GOLD RATE AS ON 31/03/2008 AND 29/01/2009 (DATE OF VALUATION) A) VALUE OF GOLD AS ON 31/03/2008 12,125 PER 10 GM B) VALUE OF GOLD AS ON 29/01/2009 13,900 PER 10 GM C) INCREASE IN GOLD RATE 14.64% D) VALUE OF GOLD IN INDIVIDUAL HAND 2,63,60,261 E) VALUE OF GOLD JEWELLERY IN HUF 60,36,175 3,23,96,201 ========= 14.64% OF THE ABOVE = RS. 47,42,571/- AFTER GIVING THE ABOVE RELIEF TO THE ASSESSEE, AO H AD CONFIRMED THE UNACCOUNTED INVESTMENT IN JEWELLERY FOR THE DIFFERE NCE IN VALUE OF JEWELLERY DECLARED IN WEALTH TAX RETURN AND VALUATI ON REPORT SUBMITTED BY THE VALUER TO THE EXTENT OF RS. 21,02,235/-. 3 ITA NO. 1075/H/16 KRISHNA KUMAR, HYD. 3. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(A). 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, CIT(A) HAD CONFIRMED THE ADDITION MADE BY THE AO. 5. AGGRIEVED WITH THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER PASSED BY THE COMMISSIONER OF INCOME T AX (APPEALS) - 3 IS ERRONEOUS IN LAW AND ON FACTS OF T HE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 3, ERRED IN SUSTAINING THE ADDITION OF RS.21,02,235/ - BEING THE DIFFERENCE IN THE VALUATION OF JEWELLERY AS ON THE DATE OF SEARCH I.E. 29TH JANUARY 2009 AND AS ADMITTED IN WEALTH TA X RETURN WITHOUT APPRECIATING THE FACT THAT THE DIFFERENCE I S ONLY ON ACCOUNT OF VALUATION AND WITHOUT FULLY APPRECIATING THE DIRECTIONS OF THE HON'BLE INCOME TAX APPELLATE TRIB UNAL AND WITH TOTAL DISREGARD TO EARLIER ORDER OF COMMISSION ER OF INCOME TAX (APPEALS). 6. LD. AR SUBMITTED THAT THE AO SUSTAINED THE ADDIT ION OF RS. 21,02,235/- BEING THE DIFFERENCE IN THE VALUATION O F JEWELLERY AS ON THE DATE OF SEARCH AND ADMITTED JEWELLERY IN THE WEALTH TAX RETURN. HE SUBMITTED THAT IT IS PURELY ON ACCOUNT OF VALUATION OF JEWELLERY. HE SUBMITTED THAT THE VALUATION DIFFERENCE OF THE JEWE LLERY MAY BE CONSIDERED AND DIRECT THE AO TO DELETE THE ADDITION . 7. LD. DR, ON THE OTHER HAND, VEHEMENTLY ARGUED THA T THERE IS NO VALUATION DIFFERENCE AS SUBMITTED BY THE ASSESSEE A ND WHATEVER THE DIRECTIONS GIVEN BY THE TRIBUNAL WAS ALREADY CONSID ERED BY THE AO AND THERE IS A DIFFERENCE IN THE VALUATION OF PRECI OUS METALS AND GEMS AND THERE IS NO DIFFERENCE IN TERMS OF GOLD VALUATI ON. HE SUBMITTED THAT THE SAME MAY BE NOTICED IN THE WORKING SHEET O F VALUATION FOR THE WEALTH TAX SUBMITTED BY THE ASSESSEE. 4 ITA NO. 1075/H/16 KRISHNA KUMAR, HYD. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. LD. AR SUBMITTED BEFORE US A STATEMENT W HICH GIVES INFORMATION OF VALUATION OF JEWELLERY AND PRECIOUS STONES ADOPTED BY ASSESSEE FOR THE PURPOSE OF WEALTH TAX FOR THE PERI OD 2001-02 TO 2007-08. HE COMPARED THE PERIODICAL DATA AND THE VA LUATION REPORT AS ON THE DATE OF SEARCH. HE MADE THE SUBMISSION THAT THERE IS NO DIFFERENCE IN THE QUANTITY BUT THERE IS CONSIDERABL E DIFFERENCE IN VALUATION OF THE JEWELLERY. WE HAVE GONE THROUGH TH E STATEMENT AND FOR THE SAKE OF CLARITY, THE SAME IS EXTRACTED BELO W: PERIOD NET GOLD QTY/WEIGHT RATE PER 10 GM OF GOLD NET GOLD VALUE IN RS. 2001-02 4,465.45 5,010.00 2,237,196.00 2002-03 5,291.60 5,310.00 2,809,845.00 2003-04 5,291.60 6081.00 3,217,828.00 2004-05 5,291.60 6150.00 3,254,340.00 2005-06 5,291.60 8,560.00 4,529,618.00 2006-07 5,291.60 9,510.00 5,032,322.00 2007-08 5,321.61 12,280.00 6,534,471.00 DATE OF SEARCH 5321.61 13,900 73,97,024 FROM THE ABOVE STATEMENT, IT IS CLEAR THAT THE VALU ATION OF GOLD IS PROPERLY EVALUATED AND THERE IS NO MUCH VARIATION, WHEREVER THERE IS VARIATION IN THE QUANTITY, IT WAS EXPLAINED BEFORE THE LOWER AUTHORITIES. WHEN WE ANALYSE THE PRECIOUS STONE VALUATION, THE V ALUATION SUBMITTED BY THE ASSESSEE AS PER THE WEALTH TAX RET URNS IS REPRODUCED BELOW: PERIOD WT. OF DIAMONDS IN CT/GRAM PRECIOUS STONES AND DIAMONDS 2001-02 1058 12,545,771.00 2002-03 1225 16,893,617.00 2003-04 1225 17,528,506.00 2004-05 1225 18,813,634.00 2005-06 1225 20,685,632.00 2006-07 1225 22,711,119.00 2007-08 1225 25,861,959.00 5 ITA NO. 1075/H/16 KRISHNA KUMAR, HYD. DATE OF SEARCH 1230 3,17,23,300 FROM THE ABOVE STATEMENT, IT IS OBSERVED THAT IN TH E PERIOD 2007-08, QUANTITY OF PRECIOUS STONE IS 1225 CRT AND WAS VALU ED AT RS. 2,58,61,959, WHEREAS ON THE DATE OF SEARCH, THE QUA NTITY STATED BY ASSESSEE IS 1230 CRT WHICH WAS VALUED BY VALUER AT RS. 3,17,23,300/-. THUS, IT IS EVIDENT THAT THERE IS SU BSTANTIAL VARIATION IN THE VALUATION OF THE PRECIOUS STONES. FURTHER, WE H AVE ALSO ANALYSED THE VALUATION REPORT OF THE REGISTERED VALUER ON T HE DATE OF SEARCH AND FOUND THAT THE QUANTITY VALUED WAS 1789.10 CRT AND NOT 1230 CRT AS STATED BY THE ASSESSEE AND, THEREFORE, THERE IS A DIFFERENCE IN QUANTITY AS WELL, WHICH SUBSTANTIATES THE DIFFERENC E IN VALUATION OF PRECIOUS STONES. IN OUR CONSIDERED VIEW, IT IS NOT ONLY VARIATION IN VALUATION, BUT ALSO, VARIATION OF QUANTITY. 8.1 IT IS ALSO PERTINENT TO NOTE THAT IN THE FIRST ROUND OF APPEAL, THE LD. CIT(A) HAS FOUND EXCESS OF VALUATION TO THE EXT ENT OF RS. 14,88,694/- AND DISALLOWED TO THE EXTENT OF 50% AMO UNTING TO RS. 7,44,347/-. AT THAT STAGE, THE FINDINGS OF CIT(A) W ERE ACCEPTABLE TO ASSESSEE. THE REVENUE CAME IN APPEAL AND ITAT HAD S ET ASIDE THE MATTER BACK TO AO FOR VERIFICATION. NOW, THE ASSESS EE CANNOT ARGUE THAT IT IS ONLY VALUATION DIFFERENCE AND THAT THERE IS NO DIFFERENCE IN QUANTITY. 8.2 CONSIDERING THE VARIATIONS IN THE QUANTITY OF P RECIOUS STONES AS INDICATED ABOVE, IN OUR CONSIDERED VIEW, THE VALUAT ION REPORT AS ON THE DATE OF SEARCH IS PROPER AND THE DIFFERENCE IN THE VALUATION REPORT AND THE WEALTH TAX RETURN, AS DETERMINED BY THE AO IS PROPER AND ACCORDINGLY, THE CONTENTION OF THE ASSESSEE IS REJE CTED AND GROUND RAISED BY THE ASSESSEE IS DISMISSED. 6 ITA NO. 1075/H/16 KRISHNA KUMAR, HYD. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER, 2017. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RA HMAN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 27 TH SEPTEMBER, 2017. KV COPY TO:- 1) KRISHNA KUMAR, 21-2-636, URDUGALLI, PATHERGATTI, HYD. 2) ACIT, CIRCLE 7(1), HYDERABAD. 3) CIT(A) - 3, HYDERABAD 4 PR. CIT - 3, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE