DCIT, New Delhi V. Shri Shiv Priya, Noida

ITA 1101/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3059 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 04-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 26-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Unexplained investment; Deemed to accrue or arise in india
• Section: 153A; 132; 15; 139

Judgement Text

1 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 IN THE INCOME TAX APPELLATE TRIBU NAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEM BER I.T.A .NO.6779/DEL/20 13 (A.Y 2010-11) ACIT CENTRAL CIRCLE-7 NEW DELHI (APPELLANT) VS SHIV PRIYA C-56/40, SECTOR-62 NOIDA AGDPS2265G (RESPONDENT) C.O .NO.238/DEL/2014 (A. Y 2010-11) SHIV PRIYA C-56/40, SECTOR-62 NOIDA AGDPS2265G (APPELLANT) VS ACIT CENTRAL CIRCLE-7 NEW DELHI (RESPONDENT) I.T.A .NO.1101/DEL/20 14 (A.Y 2011-12) DCIT CENTRAL CIRCLE-7 NEW DELHI (APPELLANT) VS SHIV PRIYA C-56/40, SECTOR-62 NOIDA AGDPS2265G (RESPONDENT) C.O .NO.300/DEL/2014 (A .Y 2011-12) SHIV PRIYA C-56/40, SECTOR-62 NOIDA AGDPS2265G (APPELLANT) VS DCIT CENTRAL CIRCLE-7 NEW DELHI (RESPONDENT) APPELLANT BY SH. S. S. RANA, CIT DR RESPONDENT BY SH. AMIT GOYAL, CA DATE OF HEARING 22.05.2017 DATE OF PRONOUNCEMENT 26.05.2017 2 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 ORDER PER BENCH THESE APPEALS AND CROSS OBJECTIONS ARE FILED BY THE REVENUE AND THE ASSESSEE ON VARIOUS GROUNDS. 2. THE GROUNDS AS UNDER:- (ITA NO. 6779/DEL/2013) 1. THE ORDER OF LD.CIT(A) IS NOT CORRECT IN LAW AN D FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.1,2 6,09,224/- (RS.18,72,000/-) + RS. 1,07,37,224/-) MADE BY A.O A S BENEFIT/PERQUISITE U/S 2(24) (IV) OF THE INCOME TAX ACT, 1961. (C.O NO. 238/DEL/2014) 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW THE NOTICE U/S 153A ISSUED IN THIS CASE IS ILLEGAL & WITHOUT JURISDICTION AND ACCORDINGLY, THE ASSESSM ENT ORDER PASSED ON THE FOUNDATION OF SUCH NOTICE IS NOT SUST AINABLE AND IS LIABLE TO BE QUASHED. ON THE FACTS AND CIRCUMSTANC ES OF THE CASE AND IN LAW, THE CIT(A) SHOULD HAVE HELD THAT THE AS SESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS BAD IN LA W AND VOID. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW, THE INITIATION OF ASSESSMENT PROC EEDINGS AND ISSUE/SERVICE OF NOTICES BY THE ASSESSING OFFICER IS NOT IN ACCORDANCE WITH THE PROVISIONS OF LAW AND ACCORDING LY THE ASSESSMENT ORDER PASSED IS LIABLE TO BE QUASHED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW, THE ADDITION OF RS.18,72,000/- AN D RS.1,07,37,224/- MADE BY A.O BY APPLYING PROVISIONS OF SECTION 2(24) (IV) OF INCOME TAX ACT, 1961 ARE TOTALLY ERRO NEOUS. ON THE 3 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSING OFFICER HAS MISAPPLIED THE PROVISIONS OF SECTION 2 (24) (IV) OF INCOME TAX ACT, 19961. (ITA NO. 1101/DEL/2014) 1. THE ORDER OF THE LD.CIT(A) IS NOT CORRECT IN L AW AND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.18, 72,000/- MADE BY A.O ON ACCOUNT OF BENEFIT/PERQUISITE U/S 2(24) (IV) OF IT ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,0 8,44,950/- MADE BY A.O ON ACCOUNT OF BENEFIT/ PERQUISITE U/S 2 (24) (IV) OF IT ACT.. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.57, 78,839/- MADE BY A.O ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWE LLERY U/S 69A OF THE ACT. (C.O NO. 300/DEL/2014) 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ADDITION OF RS.18,72,000/- AND RS.2,08,44,950/- MAD E BY A.O BY APPLYING PROVIS9IONS OF SECTION 2(24)(IV) OF INC OME TAX ACT, 1961 ARE TOTALLY ERRONEOUS. ON THE FACTS AND CIRC UMSTANCES OF THE CASE AND IN LAW, THE ASSESSING OFFICE HAS MISA PPLIED THE PROVISIONS OF SECTION 2(24) (IV) OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) ERRED IN CONFIRMING THE ADDITION TO THE EXT ENT OF RS.12,77,654/- ON ACCOUNT OF ALLEGED UNEXPLAINED JE WELLERY. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) SHOULD HAVE DELETED THE ENTIRE ADDITION OF RS.57,78 ,839/- MADE 4 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNE XPLAINED JEWELLERY. 3. A SEARCH & SEIZURE OPERATION U/S 132 OF THE INCO ME TAX ACT, WAS CARRIED OUT ON 9/9/2010 IN M/S AMARPALI GROUP O F CASES WHICH INCLUDED THE ASSESSEE SHIV PRIYA. ORIGINAL RETURN U/S 139 OF THE INCOME TAX, ACT, 1961 WAS E-FILED BY THE ASSESSEE O N 30/3/2011 DECLARING INCOME OF RS. 1,76,8,0,900/- FOR ASSESSM ENT YEAR 2010- 11. NOTICE U/S 153(A) OF THE INCOME TAX ACT, 1961 DATED 20/7/2011 WAS ISSUED TO THE ASSESSEE REQUIRING HIM TO FILE TH E RETURN. IN RESPONSE, THE ASSESSEE VIDE LETTER DATED 8/8/2011 R EQUESTED THAT THE ORIGINAL RETURN FILED U/S 139 OF THE ACT MAY BE TREATED AS HIS RETURN FILED IN RESPONSE TO NOTICE U/S 153(A). THE A.O OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE RECEI VED ADVANCE FROM M/S. AHS JOINT .VENTURE AMOUNTING TO RS. 3,12,00,00 0/- FOR WHICH NO INTEREST WAS BEING PAID. DURING THE COURSE OF AS SESSMENT PROCEEDINGS OF M/S. AHS JOINT VENTURE, IT WAS FOUND THAT THE M/S. AHS JOINT VENTURE (FIRM) RECEIVED AN AMOUNT OF RS. 12,77,12,707/- FROM M/S. ULTRA HOME CONSTRUCTION PVT. LTD. (UHCPL) UNDER THE| HEAD PARTNERS CURRENT ACCOUNT. THE A.O OBSERVED THAT THIS AMOUNT WAS UTILIZED BY THE FIRM FOR ADVANCEMENT OF LOAN TO THE DIRECTORS/SUBSTANTIVE SHARE HOLDERS OF M/S. ULTRA H OME CONSTRUCTION PVT. LTD. AS PER THE FOLLOWING DETAILS : S. NO. NAME DESIGNATION LOAN AMOUNT (IN 1RS.) INTEREST @ 6% (IN RS.) 1 SH. AJAY KUMAR DIRECTOR 28,00,000/ - 1,68,000/ - 2 SH. ANIL KUMAR SHARMA DIRECTOR 5,67,70,500/ - 34,06,230/ - 3 SH. SHIV PRIYA DIRECTOR 3,12,00,000/ - 18,72,000/ - 4 SH. MADAN MOHAN SHARMA DIRECTOR 50,00,000/- 3,00,000/ - 9,57,70,500/- 57,46,230/- 5 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 THE A.O OBSERVED THAT M/S. AHS JOINT VENTURE (FIRM ) DID NOT CHARGED ANY INTEREST ON THE ABOVE LOAN & ADVANCES. THE A.O. FURTHER OBSERVED THAT THE ASSESSEE DID NOT FILE ANY DETAILS/TRANSACTIONS FOR WHICH THESE ADVANCES WAS M ADE. THE A.O MADE OBSERVATION THAT THE AMOUNT RECEIVED FROM M/S. UHCPL UNDER THE CURRENT ACCOUNT WAS PRIMARILY USED FOR PR OVIDING INTEREST FREE LOAN TO THE DIRECTORS/SUBSTANTIVE SHA RE HOLDERS OF M/S. UHCPL. THUS, THE A.O. OBSERVED THAT THE PAYMEN T RECEIVED BY THE SAID PERSONS ARE DE-FACTO PAYMENT MADE BY M/ S. UHCPL BUT ROUTED THROUGH THE FIRM I.E. M/S. AHS JOINT VEN TURE. THUS, THE A.O. HELD THAT THIS TRANSACTION ATTRACTED THE PROVI SION OF SECTION 2(24)(IV) OF THE I.T. ACT, AS ALL THE PERSONS WERE DIRECTORS IN M/S. UHCPL AND ENJOYED THE BENEFITS OF INTEREST FREE LOA N THROUGH ROUTING THE MONEY IN THE SHAPE OF PAYMENTS TOWARDS CURRENT ACCOUNT, IN THE SAID FIRM. THEREFORE, A.O ADDED THE INTEREST @ 6% WHICH COMES TO RS. 57,46,230/- TO THE INCOME OF RES PECTIVE DIRECTOR. THE INTEREST @ 6% WHICH COMES TO RS. 18,7 2,000/- WAS ADDED TO THE INCOME OF THE ASSESSEE, AS PER THE ABO VE CHART AS BENEFITS/PERQUISITE DE-FACTO RECEIVED M/S. UHCPL D UE TO HIS POSITION AS THE SUBSTANTIVE SHARE HOLDER/DIRECTOR, AND TAXED AS INCOME U/S. 2(24)(IV) OF THE I.T. ACT. THE ASSESSIN G OFFICER ALSO MADE ADDITION IN RESPECT OF ADVANCE FROM M/S AMARPA LI INFRASTRUCTURE PVT. LTD (AIPL). THE A.O. MENTIONED THAT THE FINDINGS IN THE CASE OF M/S. AMRAPALI INFRASTRUCTURE PVT. LT D. FOR THE A.Y. 2010-11, IN WHICH M/S. AMRAPALI INFRASTRUCTURE PVT. LTD. FOUND TO HAVE RECEIVED UNSECURED LOAN OF RS. 1,13,67,00,000/ -FROM M/S. AMRAPALI SAPPHIRE DEVELOPERS PVT. LTD. THIS LOAN WA S RECEIVED 6 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 WITHOUT ANY INTEREST, AS THE LOAN CREDITORS WERE AN ASSOCIATED COMPANY. THIS AMOUNT IS FURTHER BEEN USED BY M/S. AIPL IN ADVANCEMENT OF LOAN TO THEIR OTHER ASSOCIATED COMPA NIES AND THE DIRECTORS. THE LOAN/ADVANCEMENT GIVEN BY M/S. AIPL WERE ALSO INTEREST FREE. HOWEVER, THE A.O NOTED THAT M/S. AEP L ADVANCED SUM OF RS.32,36,90,344/- TO SH. ANIL KUMAR SHARMA A ND RS. 17,89,53,740/- TO SH. SHIV PRIYA, WHO ARE SUBSTANTI VE SHARE HOLDER AND DIRECTORS OF THE ASSESSEE COMPANY. THERE FORE, THE A.O HELD THAT THE AMOUNT RECEIVED BY THESE DIRECTORS WI THOUT ANY INTEREST DIRECTLY ATTRACTED THE PROVISION OF SECTIO N 2(24)(IV) OF THE I.T. ACT, AS THE INTEREST FREE ADVANCE RECEIVED BY THE DIRECTORS WAS TREATED AS BENEFIT/PERQUISITE RECEIVED BY THE DIREC TORS AS THEY WERE THE PERSON WHO CONTROLLED THE AFFAIRS OF THE A SSESSEE COMPANY AND ALSO THE GROUP COMPANIES AND ADVANCING LOAN TO THEMSELVES THAT TO INTEREST FREE WAS SELF SERVING ARRANGEMENT TO AVOID THE TAX. THEREFORE, THE A.O HELD THAT THE INTEREST FREE ADVA NCE SHOWN FROM THE BOOKS OF M/S. AIPL APPARENTLY DID NOT FETCH INT EREST COST BUT THE FUND DEFINITELY HAD OPPORTUNITY COST OF INTERES T WHICH THE DIRECTOR OF MS. AIPL VIZ. SH. ANIL SHARMA & SH. SHI V SHARMA AVAILED BEING THEIR POSITION AS THE SUBSTANTIVE SHA RE HOLDER & DIRECTORS OF MS. AIPL. THUS, THE A.O TOOK CONSERVAT IVE ESTIMATE OF THE BENEFIT & DETERMINED IT BY TAKING THE RATE OF I NTEREST @ 6% P.A. AND THE TOTAL INTEREST COMPUTED AT RS. 3,01,58,645/ - (6% ON RS. 50,26,44,084/-) OUT OF WHICH RS. 1,94,21,420/- PERT AINED TO SH. ANIL KUMAR SHARMA AND RS. L,07,37,224 PERTAINED TO SH. SHIV PRIYA. THIS AMOUNT WAS TAXED IN THE HAND OF RESPECT IVE DIRECTORS AS THE BENEFIT/PERQUISITE RECEIVED BY THE DIRECTORS AS INCOME U/S 2(24)(IV) OF THE I.T ACT. ACCORDINGLY, RS. 1,07,37 ,224/- WAS ADDED 7 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 TO THE INCOME OF THE ASSESSEE AS BENEFIT U/S 2(24)( IV) OF THE I.T. ACT. 4. BEING AGGRIEVED BY THIS THE ASSESSEE FILED APPEA L BEFORE THE CIT(A) . THE CIT(A) HELD IN PARA 4.2 AS UNDER:- AS REGARDS THE AMOUNT OF RS. 18,72,000/- RECEIVE D BY THE APPELLANT FROM M/S AHS JOINT VENTURE (AHS), IT IS S EEN FROM THE LEDGER ACCOUNT THAT THERE IS NO PAYMENT BY M/S ULTR A HOME CONSTRUCTION PVT. LTD. (UHC) TO AHS WHICH CAN BE LI NKED EVEN REMOTELY TO THE SAID ADVANCE. THEREFORE, THE AVERME NT OF THE REVENUE THAT THE ADVANCE ORIGINATED FROM UHC HAS NO FACTUAL BASIS. IT IS FURTHER NOTED THAT THE PROVISIONS OF S ECTION 2(24)(IV) ARE NOT APPLICABLE IN THE CASE OF PARTNERSHIP FIRM BUT ARE APPLICABLE ONLY IN THE CASE OF COMPANIES. THUS, THE PROVISION IS INAPPLICABLE IN THE PRESENT CASE. REGARDING THE AMOUNT OF RS. 1, 07,3 7,224/- RECEIVED FROM AMARPALI INFRASTRUCTURE PVT. LTD. (AI PL), IT IS SEEN FROM THE LEDGER ACCOUNT THAT NO SUCH AMOUNT WAS ACT UALLY RECEIVED BUT THERE ARE ONLY JOURNAL ENTRIES PASSED DEBITING THE APPELLANTS ACCOUNT AND CORRESPONDINGLY CREDITING T HE UHC ACCOUNT TO ENHANCE THE PROMOTERS CONTRIBUTION IN T HE JOINT VENTURE PROJECT BETWEEN AIPL AND UHC. THESE BOOK EN TRIES WERE MADE TO FACILITATE BANK FINANCE FOR THE PROJECT AND DO NOT HAVE ANY TAX IMPLICATION AS SUCH. IN THIS FACTUAL BACKGR OUND OF THE MATTER, THE ADDITION MADE WAS NOT WARRANTED, CANNOT BE LEGALLY SUSTAINED AND ARE DELETED. THIS DECISION IS IN ACCO RDANCE WITH THE DECISION TAKEN EARLIER VIDE ORDER DATED 18.09.2 013 IN THE CASE OF SH. ANIL KUMAR SHARMA, CO-PROMOTER OF THE T WO COMPANIES AND PARTNER OF AHS JOINT VENTURE ALONG WI TH THE APPELLANT, FOR ASSESSMENT YEAR 2010-11 IN APPEAL NO . 134/13- 8 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 14. THESE GROUNDS OF APPEAL ARE ACCORDINGLY ALLOWE D AND APPELLANT GETS RELIEF OF RS.1,26,09,224/-. 5. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY MADE AN ADDITION AS THE ASSESSEE HAS RECEIVED THE P AYMENT FROM M/S USCPL UNDER THE CURRENT ACCOUNT AND WAS PROVIDE D INTEREST FREE LOAN THOUGH THE SAID M/S USCPL ROUTED IT THRO UGH THE FIRM I.E. M/S AHS JOINT VENTURE. THUS, THIS TRANSACTION CLEA RLY ATTRACTS THE PROVISION OF SECTION 2(24) (IV) OF THE I.T ACT. TH E CIT(A) HAS NOT TAKEN THE COGNIZANCE AND CORRECT INTERPRETATION OF THE PROVISIONS OF SECTION 2(24) (IV). THE LD. DR RELIED ON THE JUDGME NT OF CIT VS. GURDYAL SINGH (1998) 100 TAXMAN.507 OF THE DELHI HI GH COURT AS WELL AS CIT(A) VS. TARA SINGH 1998 233 ITR 669 WHER EIN IT WAS HELD THAT THE ASSESSEE SHOULD BE DEEMED TO HAVE DERIVE D BENEFITS FROM COMPANY ACCESSIBLE TO TAX WITHIN MEANING OF SECTION 2(24) (IV) OF VALUE OF SUCH BENEFIT WAS ADDED INCOME OF THE ASSES SEE. THE LD. DR FURTHER SUBMITTED THAT THE INTEREST FREE ADVANC E SHOWN FROM THE BOOKS OF M/S AIPL DID NOT FETCH INTEREST COST BUT F UND HAS THE OPPORTUNITY COST OF INTEREST WHICH THE DIRECTOR OF M/S AIPL VIZ SH. ANIL KUMAR SHARMA & SH. SHIV SHARMA ARE AVAILING BE ING SUBSTANTIVE SHAREHOLDER & DIRECTORS. THEREFORE, TH E A.O RIGHTLY DETERMINED BENEFIT AT THE RATE OF INTEREST @ 6% P.A . & TOTAL INTEREST COMPUTED AT RS.3,01,58,645/- OUT OF WHICH RS.1,94,2 1,420/- PERTAINS TO ANIL KUMAR SHARMA & RS.1,07,37,224/- PE RTAINS TO SHIV PRIYA . 6. THE LD. AR SUBMITTED THAT THIS CASE IS SQUARELY COVERED BY THE DELHI TRIBUNALS DECISION IN CASE OF ANIL KUMAR SHA RMA (ITA NO. 9 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 6204/DEL/2003) FOR ASSESSMENT YEAR 2010-11 WHERE IN THE SAME GROUP OF USCPL HAS BEEN SEARCHED & MR. ANIL KUMAR S HARMA IS A DIRECTOR WHOSE NAME APPEARS IN PARA 5 OF THE PRESEN T ASSESSMENT ORDER OF THE ASSESSEE HEREIN. THE TRIBUNAL IN PARA 18 HELD AS UNDER:- IN VIEW OF FOREGOING DISCUSSION, WE ARE INCLINED TO AGREE WITH THE CONCLUSION OF THE CIT(A) THAT NO AMOUNT OF LOAN/ADV ANCE WAS ACTUALLY RECEIVED BY THE ASSESSEE FROM AIPL BUT IT WAS ONLY A JOURNAL ENTRY PASSED ON 31/03/2010 DEBITING THE ASSESSEES ACCOUN T AND CORRESPONDINGLY CREDITING THE UHCPL ACCOUNT TO ENHA NCE THE PROMOTERS CONTRIBUTION IN THE JOINT VENTURE OBJECT BETWEEN AIPL AND UHCPL. HENCE, ESTIMATED NOTIONAL ADDITION MADE BY THE AO U/S 2(24)(IV) OF THE ACT ON BOTH THE COUNT COULD NOT BE HELD AS SUSTAINABLE AND THE SAME WAS RIGHTLY DELETED BY THE CIT(A). TH E SAID CONCLUSION ALSO GETS SUPPORT AND STRENGTH FROM THE RATIO OF TH E ORDER OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF S OHAN SINGH VS. CIT (SUPRA). WE ALSO HOLD THAT THE INTEREST FREE ADVAN CE/LOAN TO ASSESSEE FROM AHS ALSO DOES NOT ATTRACT PROVISIONS OF SECTIO N 2(24)(IV) OF THE ACT BECAUSE THIS PROVISION IS ONLY APPLICABLE TO TH E CASES WHEREIN A COMPANY PROVIDES BENEFITS/PERQUISITES AND THIS PROV ISION IS NOT APPLICABLE IN THE CASE OF PARTNERSHIP FIRM SUCH AS AHS. WE ARE UNABLE TO SEE ANY INFIRMITY OR PERVERSITY OR ANY OT HER VALID REASON TO INTERFERE WITH THE ORDER OF THE FIRST APPELLATE AUT HORITY AND WE UPHOLD THE SAME. ACCORDINGLY SOLE GROUND OF THE REVENUE B EING DEVOID OF MERITS ON BOTH THE LIMBS OF THE ISSUE IS DISMISSED. 7. WE HAVE HEARD BOTH THE PARTIES. IT IS PERTINENT TO NOTE THAT IN THE PRESENT CASE THE ASSESSEE IS THE DIRECTOR OF TH E GROUP USCPL & THE FACTS IN THE CASE OF MR. ANIL KUMAR SHARMA ARE IDENTICAL. NO AMOUNT OF LOAN/ADVANCE WAS ACTUALLY RECEIVED BY THE ASSESSEE FROM AIPL BUT IT WAS ONLY A JOURNAL ENTRY PASSED ON 31/0 3/2010 DEBITING THE ASSESSEES ACCOUNT AND CORRESPONDINGLY CREDITIN G THE UHCPL ACCOUNT TO ENHANCE THE PROMOTERS CONTRIBUTION IN TH E JOINT VENTURE 10 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 PROJECT BETWEEN AIPL AND UHCPL. HENCE, ESTIMATED N OTIONAL ADDITION MADE BY THE AO U/S 2(24)(IV) OF THE ACT ON BOTH THE COUNT COULD NOT BE HELD AS SUSTAINABLE AND THE SAME WAS R IGHTLY DELETED BY THE CIT(A). PROVISION OF SECTION 2(24) (IV) IS N OT APPLICABLE IN THE PRESENT CASE AS THE RATIO HELD IN CIT VS. MADHU GUP TA (2012) 303 TAXMAN 303 THAT INTEREST ON INTEREST FREE LOANS AVA ILED BY THE ASSESSEE FROM A COMPANY IN WHICH SHE WAS A DIRECTOR , COULD NOT BE TREATED AS DEEMED INCOME U/S 2(24)(IV) OF THE ACT. THE RELEVANT OPERATIVE PART OF THIS ORDER AT PARAS 9 TO 11 READS AS UNDER: 9 . LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT TH E JUDGMENTS OF CALCUTTA HIGH COURT AS ALSO OF MADRAS HIGH COURT REFERRED TO BY THE COUNSEL FOR THE REVENUE HAVE BEEN CONSIDERED BY THE HONBLE SUPREME COURT IN V.M. SALGAOCAR & BROS. (P) LTD. VS. CIT [2000] 243 ITR 383 /110 TAXMAN 67 (SC). THE HONBLE SUPREME COURT HAS APPROVED THE VIEW OF CALCUTTA HIGH COURT AND ALSO NOTICED THAT THE JUDGMENTS OF MADRAS HIGH COURT ARE PRIOR TO AMENDMENT CARRIED OUT BY THE TAXATION LAWS (AMENDME NT) ACT, 1984 AND CONSEQUENT REPEAL BY THE FINANCIAL ACT, 19 85. SUCH INTERVENTION MAKES THE INTENTION OF THE LEGISLATURE CLEAR THAT HAD THE EXISTING PROVISIONS BEEN SUFFICIENT TO TREAT TH E BENEFIT OF INTEREST FREE LOAN, AS DEEMED INCOME, THE SAME WOUL D NOT HAVE BEEN INCORPORATED BY WAY OF AMENDMENT AND SUBSEQUEN T REPEALED. IN THE AFORESAID CASE, THE ASSESSEE WAS IN APPEAL AGGRIEVED AGAINST THE JUDGMENT OF KARNATAKA HIGH CO URT, WHEREIN RELIANCE WAS PLACED UPON JUDGMENTS OF MADRA S HIGH COURT, AS MENTIONED ABOVE. THE HONBLE SUPREME COU RT HAS ALSO QUOTED WITH APPROVAL, THE PASSAGE FROM THE JUD GMENT OF P.R.S. OBEROIS CASE (SUPRA). IT OBSERVED: THE AMENDMENT MADE BY THE 1984 AMENDING ACT WAS BO TH TO SECTION 17(2) AND SECTION 40A(5). IN THE IMPUGNED JUDGMENT 11 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 REFERENCE IN FACT HAD BEEN MADE TO INCLUSION OF SUB CLAUSE (VI) IN CLAUSE (2) OF SECTION 17. MOREOVER, THE HIGH COURT IN THE IMPUGNED JUDGMENT DID NOT CONSIDER THE AMENDMENTS M ADE BY THE AMENDING ACT, 1984 ON THE GROUND IT IS DIFFICU LT TO SEE HOW THIS AMENDMENT CAN HAVE ANY BEARING UPON THE INTERP RETATION OF THE THEN EXISTING PROVISIONS OF THE ACT. WE DO NO T THINK THIS APPROACH WAS ALSO CORRECT. AN AMENDING PROVISION C AN CERTAINLY GIVE GUIDANCE TO INTERPRETATION OF THE EXISTING PRO VISIONS. THE JUDGMENTS OF THE MADRAS HIGH COURT WHICH WERE RELIE D UPON BY THE HIGH COURT IN THE IMPUGNED JUDGMENT WERE FOR TH E PERIOD PRIOR TO THE 1984 AMENDMENT AND THE MADRAS HIGH COU RT HAD NO OCCASION TO CONSIDER THE IMPACT OF THE AMENDMENTS T O SECTION 17(2) AND SECTION 40A(5) OF THE ACT. ****** THE HIGH COURT IN THE IMPUGNED JUDGMENT COULD NOT H AVE BRUSHED ASIDE THE CONSIDERATION OF THE AMENDING ACT , 1984 AND ITS SUBSEQUENT REPEAL BY THE FINANCE ACT 1985, BY T ERMING THEM OF NO CONSEQUENCE ACT. 10 . AT THIS STAGE, WE MAY NOTICE THAT SECTION 17 FALL ING IN CHAPTER IV DEALS COMPUTATION OF INCOME UNDER THE HE AD SALARY. SECTION 17(2) DEFINES PERQUISITE FOR THE PURPOSES OF SECTIONS 15 & 16 AND FOR THE PURPOSES OF SECTION 17, WHEREAS SE CTION 40A CONTEMPLATES THAT THE COMPUTATION OF INCOME UNDER T HE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. SEC TION 2(24)(IV) DOES NOT DEFINE THE EXPRESSION ANY BENEFIT OR PERQ UISITE. THE PERQUISITE HAS BEEN DEFINED IN SECTION 17(2) AND ALSO WERE DEFINED IN SECTION 40A(5) PRIOR TO ITS OMISSION BY DIRECT TAX LAWS (AMENDMENT) ACT, 1987. THE PROVISIONS OF SECT ION 40A(5) PRIOR TO ITS OMISSION, DEAL WITH EXPENDITURE RESULT ING DIRECTLY OR INDIRECTLY IN THE PROVISION OF ANY PERQUISITE WHETH ER CONVERTIBLE INTO MONEY OR NOT I.E. THE CONVERSE OF SECTION 2(24 )(IV). THEREFORE, 12 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 THE INTERPRETATION IN V.M. SALGAOCAR AND BROS. P. L TD.S CASE (SUPRA) INTERPRETING SECTION 17(2) AND EFFECT OF AM ENDMENT IN SECTION 40A(5) WOULD BE APPLICABLE TO THE EXPRESSIO N BENEFIT AND PERQUISITE APPEARING IN SECTION 2(24)(IV) AS WELL AS IS OBSERVED BY CALCUTTA HIGH COURT. THE JUDGMENT OF CALCUTTA H IGH COURT IN P.R.S. OBEROIS CASE (SUPRA) CONSIDERING THE BENEFI T OF PERQUISITE APPEARING IN SECTION 2(24)(IV) OF THE ACT, HAS BEEN APPROVED BY THE HONBLE SUPREME COURT. 11 . IN VIEW OF THE AFORESAID JUDGMENTS, WE ARE OF THE OPINION THAT INTEREST ON INTEREST FREE LOANS ADVANCED TO TH E ASSESSEE BY THE COMPANY CANNOT BE TREATED AS DEEMED INCOME IN T ERMS OF SECTION 2(24)(IV) OF THE ACT. ON SIMILAR ISSUE THE HONBLE JURISDICTIONAL HIGH CO URT OF DELHI, FOLLOWING THE LAW LAID DOWN BY THE HONBLE APEX COU RT IN THE CASE OF V.M. SALGAONCAN AND BROS. PVT. LTD. VS. CIT (2000) 243 ITR 383 (SC) , IN THE JUDGMENT IN THE CASE OF SOHAN SINGH VS. C IT (2002) 253 ITR 331 (DELHI) HELD THAT IN VIEW OF INSERTION OF SECTION 17(2)(VI ) OF THE ACT AND THE AMENDMENT OF SECTION 40A(5) OF THE ACT BY THE TAXATION LAWS (AMENDMENT) ACT, 1984 AND THEIR SUBSE QUENT DELETION W.E.F. 1.4.1985 BY THE FINANCE ACT, 1985, AS A MEASURE OF RELIEF TO THE SALARIED TAXPAYERS, AND THE CIRCULAR DATED 12.6.1985 OF CBDT RELATING THERETO, THE INTEREST NOT CHARGED COU LD NOT BE TREATED AS ASSESSEES INCOME U/S 2(24)(IV) OF THE ACT. THE RELEVANT OPERATIVE PART OF THE ORDER OF THE HONBLE HIGH COURT AT PAGE 332-333 IS BEING RESPECTFULLY REPRODUCED AS FOLLOWS: 13 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 THE APEX COURT HAD AN OCCASION TO CONSIDER A SIMI LAR QUESTIN IN V.M. SALGAOCAR AND BROS. PVT. LTD. VS. CIT [2000] 243 IT R 383. IT WAS, INTER ALIA, HELD AS FOLLOWS (HEADNOTE): SECTIONS 17(2) AND 40A OF THE INCOME TAX ACT, 1961 , WERE AMENDED BY THE TAXATION LAWS (AMENDMENT) ACT, 1984. SUB-CL AUSE (VI) OF CLAUSE (2) OF SECTION 17 OF THE ACT, AS INSERTED BY THE AMENDMENT ACT OF 1984, PROVIDED THAT WHERE THE EMPLOYER HAS ADVAN CED ANY LOAN TO THE EMPLOYEE AND EITHER NO INTEREST IS CHARGED BY T HE EMPLOYER ON THE AMOUNT OF SUCH LOAN OR INTEREST IS CHARGED AT A RAT E LOWER THAN THE RATE OF INTEREST WHICH THE CENTRAL GOVERNMENT MAY S PECIFY, THEN, (A) WHERE THE LOAN IS ADVANCED WITHOUT CHARGING ANY INT EREST, THE INTEREST CALCULATED IN THE PRESCRIBED MANNER ON SUCH LOAN AT THE RATE SO SPECIFIED, AND (B) WHERE THE LOAN IS ADVANCED BY CH ARGING INTEREST AT A RATE LOWER THAN THE RATE SO SPECIFIED, THE DIFFER ENCE BETWEEN THE RATE OF INTEREST CALCULATED IN THE PRESCRIBED MANNER ON SUCH LOAN AT THE RATE SO SPECIFIED AND THE INTEREST CHARGED BY THE E MPLOYER, SHALL BE DEEMED TO BE A PERQUISITE. AN AMENDMENT ON SIMILAR LINES WAS MADE IN SECTION 40A OF THE ACT TO PROVIDE THAT THE AMOUN T OF INTEREST REFERRED TO AN ITEM (A) OR ITEM (B), AS THE CASE MAY BE OF S UB-CLAUSE (VI) OF SECTION 17(2) OF THE ACT, SHALL BE REGARDED AS PERQ UISITE PROVIDED BY THE ASSESSEE TO HIS EMPLOYEE FOR THE PURPOSES OF SE CTION 40A(5) OF THE ACT. THESE AMENDMENTS WERE INTENDED TO TAKE EFFECT FROM APRIL 1, 1985. HOWEVER, SUBSEQUENTLY, THE FINANCE ACT, 1985 , SOUGHT TO OMIT BOTH THE AFORESAID PROVISIONS WITH EFFECT FROM THE DATE OF THEIR INSERTION, NAMELY, APRIL 1, 1985. CLAUSE 20 OF THE MEMORANDUM EXPLAINING THE PROVISIONS OF THE FINANCE BILL, 1985 [152 ITR (ST.) 91], STATED THAT AS A MEASURE OF RELIEF TO SALARIED TAXP AYERS, THE BILL SOUGHT TO OMIT THE AFORESAID PROVISION WITH EFFECT FROM THE DATE OF ITS PROPOSED INSERTION, NAMELY, APRIL 1, 1985. THE CEN TRAL BOARD OF DIRECT TAXES ISSUED A CIRCULAR DATED JUNE 12, 1985, INCORPORATING THE OBJECTIVES SOUGHT TO BE ACHIEVED BY OMISSION OF CLA USE (VI). EARLIER, THE CENTRAL BOARD OF DIRECT TAXES HAD ISSUED A CIRC ULAR EXPLAINING THE OBJECTIVES IN INSERTING CLAUSE (VI). BY THE 1984 A MENDMENT ACT, PARLIAMENT WANTED TO CARVE OUT A PARTICULAR EXCEPTI ON FROM THE OTHERWISE EXCLUSIONARY CLAUSES FOR THE PURPOSES OF COMPUTATION OF INCOME-TAX. THIS PROVIDES A CLEAR DIRECTION TO INT ERPRET THE PROVISIONS 14 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 OF SECTIONS 17(2) AND 40A(5) BEFORE INSERTION OF CL AUSE (VI). THE CIRCULARS OF THE CENTRAL BOARD OF DIRECT TAXES ALSO PROVIDE AS TO HOW THE REVENUE ITSELF UNDERSTOOD THE EFFECT OF THE AME NDMENT AND WHAT WAS THE LAW BEFORE THE AMENDING ACT, 1984. THE ABOVE BEING THE LAW LAID DOWN BY THE APEX COURT , THE TRIBUNALS VIEW CANNOT MAINTAIN. THE QUESTIONS REFERRED, THERE FORE, HAVE TO BE ANSWERED IN THE NEGATIVE, IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE PRESENT CASE IS SQUARELY COVERED AS THE INTERES T FREE ADVANCE/LOAN TO ASSESSEE FROM AHS DOES NOT ATTRACT PROVISIONS OF SECTION 2(24)(IV) OF THE ACT BECAUSE THIS PROVISION IS ONLY APPLICABLE TO THE CASES WHEREIN A COMPANY PROVIDES BENEFITS/PE RQUISITES AND THIS PROVISION IS NOT APPLICABLE IN THE CASE OF PAR TNERSHIP FIRM SUCH AS AHS. THUS, THE CIT(A) HAS RIGHTLY DELETED THE AD DITIONS MADE BY THE ASSESSING OFFICER. THERE IS NO NEED TO INTERFER E WITH THE ORDERS OF THE CIT(A). 8. IN THE RESULT, ITA NO. 6779/DEL/2013 & CO NO. 23 8/DEL/14 ARE DISMISSED. 9. AS REGARDS ASSESSMENT YEAR 2011-12 THERE IS ONE MORE ISSUE RELATED TO THE JEWELLERY IN CROSS-OBJECTION FILED B Y THE ASSESSEE. THE ASSESSING OFFICER HELD IN PARA 5.3 AS UNDER:- 5.3. IN THIS REGARD, IT IS ALSO IMPORTANT TO MENTI ON THAT ANOTHER SEARCH WAS CARRIED OUT AT THE RESIDENCE OF THE ASSE SSEE BY THE INVESTIGATION WING ON 25/3/2011, IN WHICH TOTAL GOL D JEWELLERY OF 58.800 GRAMS OF GOLD AND DIAMOND SET TOTAL VALUE AT 15 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 RS.15,34,340/- WERE FOUND. THESE ITEMS ARE INCLUSI VE IN THE TOTAL JEWELLEY FOUND AT THE TIME OF SEARCH ON 9/9/2010. THEREFORE, THEY ASSESSMENT YEAR NOT ENQUIRED SEPARATELY. THE ASESSEES CASE AND HIS EXPLANATION FOR JEWELLERY FOUND & SEIZ ED IS NOT INSPIRING CONFIDENCE AS TO THE SOURCE OF ACQUISITIO N IN THE INCOME TAX & WEALTH TAX RETURNS. THOUGH, THE AR OF THE AS SESSEE IS ALSO STATED THAT PART OF THE JEWELLERY IS BELONGS T O THE ASSESSEES WIFE WHO IS ALSO ASSESSED SEPARATELY AND FILING HER I.T/W.T RETURN. HOWEVER, THE ASSESSEE DID NOT FILE ANY EVI DENCE AS TO THE ACQUISITION OF JEWELLERY EITHER IN HIS OWN NAME OF IN THE NAME OF SPOUSE. THEREFORE, THE ASSESSEE FAILED TO ADD ANY INFORMATION AS TO THE SOURCE OF JEWELLERY WHAT VIRTUALLY HE HAD EX PLAINED TO THE SEARCH TEAM AT THE TIME OF SEARCH, WHICH LEAD TO TH E SEIZURE OF JEWELLERY WORTH RS.57,78,839/-. THEREFORE, FOLLOWI NG THE SAME TENANT OF PRINCIPLE THE JEWELLERY RELEASED AT THE T IME OF SEARCH AMOUNTING TO RS.564040/- IS CONSIDERED EXPLAINED AN D JEWELLERY SEIZED AT THE TIME OF SEARCH AMOUNTING TO RS.57,78, 839/- IS TREATED AT UNEXPLAINED JEWELLERY WHICH HAS BEEN A CQUIRED BY THE ASSESSEE OUT OF HIS UNDISCLOSED SOURCES AND THE REFORE NEED TO BE TAXED U/S 69A OF THE I.T ACT. ACCORDINGLY, ADDI TION OF RS.57,78,839/- IS TREATED AT UNEXPLAINED JEWELLERY U/ S 69A OF THE I.T. ACT. 10. THE CIT(A) IN PARA 6.2 HELD AS UNDER:- 6.2 I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE. THE TOTAL VALUE OF JEWELRY FOUND DURING THE COURSE OF SEARCH WAS RS. 1,14,19,079/- OUT OF WHICH JEWELRY OF THE VALUE OF RS.57,78,839/- WAS SEIZED. THE CASE OF THE APPELLANT 16 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 IS THAT THE ENTIRE JEWELRY FOUND DURING THE COURSE OF SEARCH IS EXPLAINED AND PURCHASED DURING FY 2004-05 TO 2010-1 1 OUT OF DISCLOSED AND TAX PAID SOURCES BY THE APPELLANT AND HIS WIFE. THE CASE OF REVENUE IS THAT THE APPELLANT DOES NOT HAVE COMPLETE DOCUMENTATION SUCH AS PURCHASE BILLS TO ESTABLISH H IS CLAIM. I FIND THAT APPELLANTS CLAIM OF PAYMENTS FOR PURCHASE OF JEWELRY FROM THE DISCLOSED BANK ACCOUNTS OF HIMSELF AND HIS WIFE IS NOT CONTROVERTED. I ALSO FIND THAT THE NET WEALTH OF TH E APPELLANT AS ON 31.03.2010 INCLUDED JEWELRY VALUED AT RS.99,60,500/ - AND WAS ASSESSED AS SUCH U/S 16(3) OF THE WT ACT. ON 31.03. 2011, THE NET WEALTH DISCLOSED IN WEALTH TAX RETURN INCLUDED JEWE LRY VALUED AT RS. 1,03,22,350/-. THE APPELLANT WAS SEARCHED ON 09 .09.2010 AND THE VALUE OF JEWELRY FOUND WAS RS. 1,14,19,079/ -. SINCE THE SEARCH PERIOD WAS MID-WAY BETWEEN MARCH 2010 AND MA RCH 2011, THE VALUE OF JEWELRY UNDISPUTEDLY WITH THE AP PELLANT AS ON THE DATE OF SEARCH IN SEPTEMBER 2010 WOULD HAVE BEE N BETWEEN THE TWO VALUES AT RS. 1,01,41,425/- (I.E. RS.99,60, 500/- MINUS RS. 1,03,22,350/- DIVIDED BY TWO, ADDED TO / REDUCE D FROM THE EARLIER / LATTER VALUE). THEREFORE, THE OVERALL DIF FERENCE IN THE VALUE OF JEWELRY AS PER WT RECORD AND THAT FOUND / SEIZED IN THE SEARCH WAS RS. 12,77,654/- (I.E. RS. 1,14,19,079/- MINUS R S. 1,01,41,425/-). I HOLD ACCORDINGLY. OUT OF THE ADDI TION OF RS.57,78,839/- MADE, THE AMOUNT OF RS.12,77,654/- I S TREATED AS THE VALUE OF UNEXPLAINED JEWELLERY AND SUSTAINED. APPELLANT GETS RELIEF OF RS.45,01,185/-. THIS GROUND OF APPEAL IS DECIDED IN THESE TERMS. 11. THE LD. DR SUBMITS THAT THE WEALTH TAX RETURN W ERE FILED MUCH MORE AFTER THE SEARCH TOOK PLACE. THEREFORE THE AS SESSING OFFICER 17 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 WAS NOT HAVING ALL THE RELEVANT MATERIAL BEFORE HIM ABOUT THE WEALTH TAX WAS PAID OR NOT BY THE ASSESSEE. 12. THE LD. AR SUBMITTED THAT THE WIFE HAS DECLARED THE JEWELLERY. THE ASSESSING OFFICER HAS ERRED IN MAKING ADDITION OF RS. 57,78,839/- AS ALLEGED UNEXPLAINED JEWELLERY. THE ASSESSEES WIFE ALSO DECLARED JEWELLERY OF RS.53,41,720/- AS PER HE R WEALTH TAX RETURN AS ON 31.03.2011. THUS THE LD. AR SUBMITS TH AT THERE IS NO CASE FOR ANY UNEXPLAINED JEWELLERY. THE LD. AR SUBM ITTED THAT THE A.O. HIMSELF HAS ADMITTED THAT BESIDES THE VALUATIO N REPORT OF 1323.22 GM OF JEWELLERY SHOWN IN WEALTH TAX RETURN OF EARLIER YEAR, THE ASSESSEE HAS GIVEN DETAILS OF PURCHASE OF JEWEL LERY OF RS.41,84,524/- ALONGWITH THE COPY OF BANK ACCOUNT T HROUGH WHICH THE JEWELLERY WERE PURCHASED. THE LD. AR SUBMITTED THAT WHEN THE JEWELLERY HAS BEEN ACQUIRED BY CHEQUES PAYMENTS, ME RELY BECAUSE BILL THEREOF WERE NOT TRACEABLE WITH THE ASSESSEE, IT WILL NOT MAKE THE JEWELLERY SO ACQUIRED AS UNEXPLAINED JEWELLERY. SIM ILARLY IF JEWELLERY WAS NOT FULLY DISCLOSED IN WEALTH TAX RETURNS OF SO ME OF THE EARLIER YEARS, THE ASSESSEE CAN BE ASKED TO PAY WEALTH TAX THEREON. HOWEVER, FOR THE PURPOSE OF INCOME TAX ACT, THE SAM E CANNOT BE TREATED AS UNEXPLAINED BY ANY STRETCH OF IMAGINATIO N. THE LD. AR FURTHER REITERATED THAT THE ASSESSING OFFICER HAS HIMSELF ACCEPTED IN THE WEALTH TAX ASSESSMENT ORDER MADE BY HIM U/S 16( 3) OF WEALTH TAX ACT, 1957 THAT THE ASSESSEE WAS HAVING JEWELLER Y OF RS.99,60,500/- AS ON 31.03.2010, AND, THEREFORE, TH ERE IS NO BASIS LEFT FOR TREATING THE JEWELLERY OF RS.57,78,838/- A S ALLEGED UNEXPLAINED JEWELLERY ACQUIRED IN F.Y. 2010-11 (A.Y . 2011-12). THE LD. AR SUBMITTED THAT THE CIT(A) HAS ERRED IN CONFI RMING ADDITION TO 18 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 THE EXTENT OF RS. 1277654/- & ) OUGHT TO HAVE DELET ED THE ENTIRE ADDITION OF RS.5778839 - MADE BY THE ASSESSING OFFI CER. 13. WE HAVE HEARD BOTH THE PARTIES. THE ISSUE RELA TED TO GROUND NO. 1 & 2 ARE SIMILAR TO THE EARLIER ASSESSMENT YEA RS WHEREIN THE APPEAL OF THE REVENUE IS DISMISSED. THUS, GROUND NO . 1 AND 2 ARE DISMISSED. AS RELATED TO CROSS-OBJECTIONS GROUND RE LATING TO JEWELLERY THE WIFE OF THE ASSESSEE HAS DECLARED THE SAID JEWE LLERY WHICH WAS NOT TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER OR BY THE CIT(A). AT THE OUTSET IT IS POINTED OUT THAT AS PER THE WEALTH TAX RETURN FOR ASSESSMENT YEAR 2010-11, THE ASSESSEE HAS DECLA RED JEWELLERY OF RS. 99,60,500/- AS ON 31/3/2010. THE SAID JEWELLERY HAS BEEN DULY ACCEPTED BY THE ASSESSING O FFICER HIMSELF VIDE HIS ORDER DT. 31.03.2013 U/S 16(3) OF WEALTH TAX ACT, 1957. THUS, THE ASSESSING OFFICER HAS ACKNOWLEDGE THE FA CT THAT ALL JEWELLERY WAS ACQUIRED BY THE ASSESSEE PRIOR TO 31.03.2010. FURTHER HE HAS NOT MADE ADDITION ON ACCOUNT OF ANY ALLEGED UNEXPLAINED JEWELLERY FOR A.Y. 2010-11 OR ANY OTHER EARLIER ASSESSMENT YEAR. IN THE WEALTH TAX RETURN OF A.Y. 2 011-12, THE JEWELLERY DECLARED AT ON 31.03.2011 WAS RS.1,03,22,350/-. THUS THERE IS NOT MUCH VARIATION BETWEEN THE JEWELLERY AS ON 31.03.2010 AND 31.03.2011 EXCEPT MAINLY ON ACCOUNT OF CHANGE I N MARKET VALUE OF GOLD ETC. UNDER THE CIRCUMSTANCES THERE WAS NO B ASIS / RATIONALE FOR THE A.O. TO MAKE ADDITION FOR ASSESSMENT YEAR 2 011- 12.THEREFORE, THE CROSS OBJECTION IS ALLOWED TO THI S EXTENT ONLY. 19 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 15. IN RESULT, APPEAL IN ITA NO. 1101/DEL/2014 OF T HE REVENUE IS DISMISSED. C.O NO. 300/DEL/2014 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MAY, 2017 . SD/- SD/- (R. K. PANDA) (SU CHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 26/05/2017 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 22/05/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 23/05/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND .2017 JM/AM 20 ITA NOS. 6779/DEL/2013, C.O 238/DEL/2011, ITA NO.1101/2014 & C.O NO. 300/DEL/2014 MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 26.05.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 6 .05.2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.