R.Chandrasekar, CHENNAI V. ACIT, Trichy

ITA 1128/CHNY/2013

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6191 (ITAT-CHENNAI)
• Duration Of Justice: 6 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 23-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M SRINIVASA RAOC I TD R
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained investment; Gift
• Section: 250; 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & S HRI RAMIT KOCHAR , ACCOUNTANT MEMBER ./ I.T.A.NO.1128/CHNY/2013 / ASSESSMENT YEAR : 2010-11 SHRI R.CHANDRA SEKAR , PROP.M.S,SRI VIJAYA PLYWOODS, MADURAI ROAD, TIRUCHIRAPALLI-620 008. [PAN AAEPC 8378 H ] VS. THE ASSISTANT COM MISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, TIRUCHIRAPALLI. ( / APPELLANT) ( ! /RESPONDENT) / APPELLANT BY : MR.S.SRIDHAR,ADVOCATE !' /RESPONDENT BY : MR.M.SRINIVASA RAO,C.I.T,D.R & / DATE OF HEARING : 09 - 10 - 201 9 & / DATE OF PRONOUNCEMENT : 09 - 10 - 201 9 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), TIRUCHIRA PALLI IN I.T.A NO.370/11-12 DATED 26.02.2013 FOR THE ASSESSME NT YEAR 2010-11. ITA NO.1128/CHNY/2013 :- 2 -: 2. MR.S.SRIDHAR REPRESENTED ON BEHALF OF THE ASSESSEE AND MR.M.SRINIVASA REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY LD.AR THAT GROUND NO.1 WAS GENERAL IN NATURE. IN RESPECT OF GROUND NOS.2 TO 5, LD.AR SUBM ITTED THAT IN THE COURSE OF SEARCH ON THE ASSESSEE ON 26.08.2009, CAS H, TO AN EXTENT OF RS.64,84,850/-, HAD BEEN FOUND IN THE RESIDENCE OF THE ASSESSEE. IT WAS A SUBMISSION THAT THE ASSESSEE HAD CLAIMED THAT AN AMOUNT OF RS.15,84,850/- WAS PART OF UNACCOUNTED TRADE DISCOU NT INCOME, OUT OF THE AMOUNT RS.1,26,00,000 OFFERED IN THE HANDS OF T HE FIRM M/S.SREE VIJAYA PLYWOODS. IT WAS SUBMITTED THAT THE BALANCE WAS AN AMOUNT OF RS.1,10,00,000/- FOUND IN THE FORM OF CASH IN THE L OCKER OF THE ASSESSEE. IT WAS SUBMITTED THAT OUT OF THE BALANCE RS.9/- LAKHS REPRESENTED CASH DRAWN FROM M/S.SREE VIJAYA PLYWOOD S AND M/S.GREEN MARKETING SERVICES, RS.20/- LAKHS REPRESENTED THE A MOUNT RECEIVED FROM RELATIVES, AND RS.20/- LAKHS REPRESENTED FAMIL Y AGRICULTURAL INCOME. IT WAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER DID NOT ACCEPT THE CLAIM OF ASSESSEE IN RESPECT OF WITHDRAW ALS FROM M/S.SREE VIJAYA PLYWOODS AND M/S.GREEN MARKETING SERVICES, A S ALSO THE AMOUNT RECEIVED FROM RELATIVES AND FAMILY AGRICULTURAL INC OME. IT WAS A SUBMISSION THAT THE ASSESSEE HAD PRODUCED THE RELAT IVES, WHO HAD ALSO CONFIRMED THE TRANSACTIONS BEFORE THE ASSESSING OFF ICER. IT WAS A FURTHER SUBMISSION THAT THE ADDITION WAS LIABLE TO BE DELETED. ITA NO.1128/CHNY/2013 :- 3 -: 4. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE OR DERS OF THE ASSESSING OFFICER AND THE LD.CIT(A). THE LD.DR DREW OUR ATTENTION TO PARA-12 OF THE ORDER OF LD.CIT(A) AND SUBMITTED TH AT OUT OF RS.9/- LAKHS REPRESENTING CASH WITHDRAWALS FROM M/S.SREE V IJAYA PLYWOODS AND M/S.GREEN MARKETING SERVICES, THE LD.CIT(A) HAD ALLOWED THE ASSESSEES CLAIM OF RS.2,79,205/- AS THAT WAS THE A MOUNT SHOWN AS CASH AVAILABLE IN THE GROUP COMPANY BOOKS. IT WAS SUBMITTED THAT IN RESPECT OF BALANCE OF RS.6,20,795/-, NO EVIDENCE HA D BEEN PRODUCED TO SHOW THAT CASH WAS AVAILABLE IN THE BOOKS OF THE FI RM, OR THAT CASH WAS WITHDRAWN FROM THE BOOKS OF THE FIRM. IN RESPECT OF AMOUNT OF RS.20/- LAKHS REPRESENTING THE AMOUNT RECEIVED FROM ASSESSE ES BROTHER-IN- LAWS, IT WAS SUBMITTED THAT THE BROTHER-IN-LAWS HAV E NOT FILED ANY RETURN OF INCOME NOR ANY EVIDENCE TO SHOW THAT THEY WERE HAVING AGRICULTURAL INCOME. OTHER THAN STATING THAT THEY O WNED AGRICULTURAL LAND. LD.DR SUBMITTED THAT OWNING THE AGRICULTURAL LAND WAS TOTALLY DIFFERENT FROM EARNING AGRICULTURAL INCOME. IT WAS SUBMITTED THAT WHERE THIS CASH WAS BEING MAINTAINED OR WHAT WAS TH E TOTAL AGRICULTURAL INCOME, IN THE ABSENCE OF ANY EVIDENCE , THE CLAIM OF ASSESSEE WAS NOT LIABLE TO BE ACCEPTED. IN RESPECT OF THE AGRICULTURAL INCOME OF THE FAMILY OF THE ASSESSEE TO AN EXTENT O F RS.20/- LAKHS, IT WAS SUBMITTED BY LD.DR THAT NO EVIDENCE WAS FOUND I N THE COURSE OF SEARCH TO SHOW THAT THE ASSESSEE HAD EARNED ANY AGR ICULTURAL INCOME. ITA NO.1128/CHNY/2013 :- 4 -: IT WAS A FURTHER SUBMISSION THAT NO EVIDENCE WAS AL SO PRODUCED TO PROVE THIS CLAIM OF ASSESSEE. IT WAS SUBMITTED THAT THE ADDITIONS WERE LIABLE TO BE CONFIRMED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, A PERUSAL OF PARA-12 OF THE ORDER OF LD.CIT(A) CLEARLY SHOWS THAT IN RESPECT OF AMOUNT OF RS.6,20,795/-, THE ASSESSEE HAS NOT BEEN ABLE TO SH OW ANY EVIDENCE THAT THE AMOUNTS WERE THE CASH WITHDRAWN FROM THE F IRMS. IN FACT, THE REVENUE HAS SUCCESSFULLY PROVED TO CONTRARY THAT TH E FIRMS DID NOT HAVE NECESSARY CASH AVAILABILITY IN THEIR BOOKS FOR SUBSTANTIATING OR JUSTIFYING THE SAID ALLEGED CASH WITHDRAWAL. IN R ESPECT OF THE AGRICULTURAL INCOME OF THE RELATIVES, WHICH IS CLAI MED TO BE GIVEN TO THE ASSESSEE ALSO, NO EVIDENCE WHATSOEVER HAS BEEN PROD UCED BEFORE THE LOWER AUTHORITIES, NOR BEFORE THIS TRIBUNAL. SIMILA RLY, IN RESPECT OF AMOUNT OF RS.20/- LAKHS REPRESENTING THE ASSESSEES FAMILY AGRICULTURAL INCOME, NO EVIDENCE HAS BEEN PRODUCED, NOR ANY EVID ENCE WAS FOUND IN THE COURSE OF SEARCH. THIS BEING SO, WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE LD.CIT(A) ON THIS ISSUE AND CONSEQ UENTLY, GROUNDS NOS. 2 TO 5 STAND DISMISSED. 6. IN RESPECT OF GROUNDS NOS.6 TO 8, IT WAS SUBMIT TED BY THE LD.AR THAT IN THE COURSE OF SEARCH 2,988.020 GRAMS OF JEWELLERY WAS ITA NO.1128/CHNY/2013 :- 5 -: FOUND. THE ASSESSEE HAD GIVEN AN EXPLANATION IN RES PECT OF 1824 GRAMS AND THE BALANCE OF GOLD JEWELLERY OF 1164.020 GRAMS WAS TREATED AS UNEXPLAINED JEWELLERY FOUND IN THE HANDS OF THE ASSESSEE AND THE SAME WAS ADDED AS UNACCOUNTED INVESTMENT IN JEWELLERY. IT WAS SUBMITTED THAT THE ASSESSEE MAY BE GRANTED THE BENEFIT OF 250 GRAMS FOR EACH OF THE TWO CHILDREN OF THE ASSESSEE, WHICH IS AS PER THE CIRCULAR ISSUED BY THE CBDT IN INSTRUCTION NO.1916 DATED 11 TH MAY 1994. IT WAS SUBMITTED THAT AS PER THE SAID INSTRUC TION, 250 GRAMS FOR UNMARRIED LADY WAS NOT TO BE SEIZED. 7. IN REPLY, THE LD.DR SUBMITTED THAT THE SOURCE O F JEWELLERY HAS NOT BEEN EXPLAINED BY THE ASSESSEE NOR THE ASSESSEE HAS CLAIMED THE SAME IN HIS RETURN OR BEFORE THE LOWER AUTHORITIES NOR HAS THE ASSESSEE PROVED SUCH A CLAIM. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE CBDT CIRCULAR IN INSTRUCTION NO.1916 DATED 11 TH MAY 1994 CLEARLY SHOWS THAT THE SAME IS IN RESPECT OF SEIZURE OF JEWELLERY. HOWEVER, THE FACT THAT IN RESPECT OF JEWELLERY, THE CBDT HAS ISSUED THE INSTRUCTIONS TO NOT SEIZE 250 GRAMS PER UNMARRIED LADY IN THE FAMILY, SHOWS THAT THE CBDT WAS OF THE VIEW THAT NORMALLY WELL TO DO TAX-PAYING ASSESS EE WOULD BE ABLE TO AFFORD AT LEAST A MINIMUM OF SO MUCH OF JEWELLERY F OR EACH OF THE ITA NO.1128/CHNY/2013 :- 6 -: UNMARRIED LADIES IN THE FAMILY. IN THE ASSESSEES C ASE, CLEARLY ASSESSEES FATHER WAS FOUND WITH 960 GRAMS OF JEWEL LERY HAVING BEEN RECEIVED BY WAY OF WILL FROM HIS MOTHER, ASSESSEES WIFE WAS FOUND TO HAVE RECEIVED 648 GRAMS BY WAY OF SREEDHAN AND 216 GRAMS AS GIFT FROM HER MOTHER-IN-LAW. IT IS NOT AS IF THE ASSESSE E IS ONE, WHO HAS NO MEANS. CLEARLY, THE PRINCIPLES LAID DOWN BY CBDT C IRCULAR IN INSTRUCTION NO.1916 DATED 11 TH MAY 1994 CAN BE APPLIED TO THE FACTS IN THIS CASE. CONSEQUENTLY, THE ASSESSEES TWO UNMARRIED DAUGHTER S ARE LIABLE TO BE ELIGIBLE FOR 250 GRAMS OF JEWELLERY EACH. CONSEQUEN TLY, THE ASSESSING OFFICER IS DIRECTED TO GRANT THE ASSESSEE THE BENEF IT OF 500 GRAMS ADDITIONAL RELIEF IN RESPECT OF GOLD JEWELLERY FOUN D IN THE COURSE OF SEARCH. THUS, THE EXPLAINED JEWELLERY WOULD STAND A T 1824 GRAMS + 500 GRAMS, TOTALING TO 2324 GRAMS AND THE UNEXPLAIN ED INVESTMENT IN THE JEWELLERY WOULD BE REDUCED TO 664.020 GRAMS. AC CORDINGLY, THE GROUND NOS.6 TO 8 OF THE ASSESSEES APPEAL STAND PA RTLY ALLOWED. 9. IN RESPECT OF GROUNDS NOS.9 TO 11, WHICH IS AGA INST THE SUSTAINING OF AN ADDITION REPRESENTING PURCHASES FR OM M/S.ROYAL TRADERS, LD.AR HAS NOT PLACED ANY SUBSTANTIAL ARGUM ENTS BEFORE US. CONSEQUENTLY, GROUNDS NOS.9 TO 11 OF THE ASSESSEES APPEAL STAND DISMISSED. ITA NO.1128/CHNY/2013 :- 7 -: 10. GROUNDS NOS.12 TO 14 ARE GENERAL IN NATURE AND NO SPECIFIC ARGUMENT HAS BEEN RAISED. CONSEQUENTLY, THE SAME ST ANDS DISMISSED. 11. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH OCTOBER, 2019, AT CHENNAI. SD/- SD/- ( ) ( ) (RAMIT KOCHAR) ( /ACCOUNTANT MEMBER (GEORGE MATHAN) ) ( / JUDICIAL MEMBER / CHENNAI * / DATED: 09 TH OCTOBER, 2019. K S SUNDARAM !,- .- / COPY TO: 1 . / APPELLANT 4. / / CIT 2. !' / RESPONDENT 5. - !2 / DR 3. / () / CIT(A) 6. / GF