Jai Prakash Goyal, Mandi Gobindgarh V. ACIT, Patiala

ITA 1287/CHANDI/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5020 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 05-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJ
• Keywords: Unexplained investment; Gift; Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 1287/CHD/2016 ASSESSMENT YEAR: 2012-13 SH. JAI PARKASH GOYAL, VS. THE ACIT, CENTRAL CIRC LE, H.NO. 416, SECTOR 4, BLOCK C, PATIALA SHASTRI NAGAR, MANDI GOBINDGARH PAN NO. AFVPG8799J (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHWANI KUMAR, CA RESPONDENT BY : SH. GULSHAN RAJ, CIT- DR DATE OF HEARING : 28.03.2018 DATE OF PRONOUNCEMENT : 28.03.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S), [HEREINAFTER REFERRED TO AS CIT(A)]-5, LUDHIANA DATED 15.09.20 16. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF AP PEAL:- 1. THAT THE ORDER PASSED BY LD. CIT(A) IS AGAINST FASTS OF THE CASE AND BAD IN LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN NOT ACCEPTING THE CONTENTION OF THE APPLICANT IN RELATION TO ITA NO.1287/CHD/2016- JAI PARKASH GOYAL, MANDI GOBINDGRH 2 POSSESSION OF JEWELLERY & SILVER WERE AS PER THE CUSTOMS & STATUS OF THE ASSESSEE AND HIS FAMILY. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 14,10,700/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY & SILVER WARES. 3. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE PREMISES OF THE AS SESSEE ON 14.7.2011. DURING THE COURSE OF SEARCH, THE SILVER UTENSILS VA LUED AT RS. 10.07 LACS AND GOLD AND DIAMOND JEWELLERY WORTH RS. 33.59 LACS WERE FOUND. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CLA IMED THAT THE AFORESAID JEWELLERY AND SILVER WERE COLLECTIVELY BE LONGED TO THE ASSESSEE, HIS WIFE AND CHILDREN. HOWEVER, THE ASSES SING OFFICER CONSIDERED THE JEWELLERY AND SILVER IN THE HANDS OF THE ASSESSEE FOR THE PURPOSE OF MAKING THE ASSESSMENT. THE ASSESSEE HIMS ELF HAD SURRENDERED RS. 10 LACS ON ACCOUNT OF THE AFORESAID JEWELLERY AND SILVER FOUND DURING SEARCH. 4. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED TO THE ASSESSING OFFICER THAT HE SHOULD BE GIVEN BENEFIT O F JEWELLERY WHICH IN NORMAL CIRCUMSTANCES IS SUPPOSED TO BE IN POSSESSIO N OF A MARRIED LADY, MALE MEMBERS AND UNMARRIED GIRL IN A FAMILY, COLLEC TED / ACCUMULATED ON ACCOUNT OF VARIOUS OCCASIONS / GIFTS AND ALSO FR OM THE DAY TO DAY SAVINGS. THE LD. COUNSEL ALSO RELIED IN THIS RESPEC T ON THE CBDT CIRCULAR NO.1916, DATED 11/5/1994 WHEREIN IT HAS BE EN DIRECTED THAT THE GOLD JEWELLERY UPTO 500 GMS FROM A MARRIED LADY, JE WELLERY OF 100 GMS ITA NO.1287/CHD/2016- JAI PARKASH GOYAL, MANDI GOBINDGRH 3 FROM MALE MEMBER AND GOLD JEWELLERY OF 250 GMS FROM UNMARRIED GIRL SHOULD NOT BE SEIZED. THE ABOVE CIRCULAR HAS BEEN I SSUED BY THE CBDT TAKING INTO CONSIDERATION THE PRACTICE OF PURCHASIN G AS WELL AS GIFTING OF THE GOLD ORNAMENTS AND JEWELLERY IN THE SOCIETY ON CERTAIN OCCASIONS LIKE BIRTHDAY /MARRIAGE ETC. THE LD. COUNSEL FOR TH E ASSESSEE, THEREFORE, HAS SUBMITTED THAT THE TOTAL QUANTUM OF GOLD JEWELL ERY OF THE FAMILY I.E IF TAKEN TOGETHER OF THE ASSESSEE, HIS WIFE, HIS SO N AND UNMARRIED DAUGHTER AS PER CBDT CIRCULAR WOULD COME TO 950 GMS WORTH RS. 23,94,000/-. HE, THEREFORE, SUBMITTED TO THE ASSES SING OFFICER THAT OUT OF THE TOTAL JEWELLERY (GOLD & DIAMOND) FOUND WHICH WAS VALUED AT RS. 43,67,303/- BY THE ASSESSING OFFICER, THE BENEFIT O F VALUE OF THE JEWELLERY AS PER THE CBDT CIRCULAR, WHICH IN THE CA SE OF THE ASSESSEE WAS CALCULATED AT RS. 23,94,000/- SHOULD BE GIVEN T O THE ASSESSEE. THE LD. ASSESSING OFFICER, HOWEVER, REJECTED THE ABOVE CONTENTION OF THE ASSESSEE ON THE GROUND THAT THE TOTAL GOLD JEWELLER Y FOUND IN THE PREMISES OF THE ASSESSEE WAS 710.030 GMS VALUING AT RS. 16,89,603/-. HE REJECTED THE CONTENTION OF ASSESSEE TO GIVE BENE FIT OF CBDT CIRCULAR TOWARDS THE VALUE OF THE DIAMOND JEWELLERY. HE OBSE RVED THAT AS PER CBDT CIRCULAR, THE BENEFIT OF GOLD JEWELLERY CAN BE GIVEN TO THE ASSESSEE IN RESPECT OF ACTUAL QUANTITY OF JEWELLERY FOUND OR UP TO THE EXTENT OF LIMIT PRESCRIBED IN CBDT CIRCULAR, WHICHE VER IS LESS. THAT BENEFIT CANNOT BE EXTENDED IN RESPECT OF GOLD JEWEL LERY MORE THAN THAT WAS ACTUALLY FOUND FROM THE PREMISES OF THE ASSESSE E. HE, THEREFORE, AFTER DEDUCTING THE AMOUNT ALREADY SURRENDERED BY T HE ASSESSEE AT RS. 10 LACS, MADE ADDITION OF RS. 14,07,000/- INTO THE INCOME OF THE ASSESSEE. ITA NO.1287/CHD/2016- JAI PARKASH GOYAL, MANDI GOBINDGRH 4 5. THE ASSESSEE UNSUCCESSFULLY CONTESTED THE APPEAL BEFORE THE CIT(A). 6. BEFORE US, THE LD. AR OF THE ASSESSEE REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE LOWER AUTHORITIES. THE LD. COUNSEL HAS SUBMITTED THAT FAMILY OF THE ASSESSEE WAS AN INFLUE NTIAL AND RICH FAMILY AND THE AFORESAID GOLD & DIAMOND JEWELLERY AS WELL AS SILVER FOUND FROM THE PREMISES OF THE ASSESSEE WERE NOT ABNORMAL LY HIGH, LOOKING INTO THE FAMILY STATUS OF THE ASSESSEE. THE LD. CO UNSEL HAS ALSO RELIED ON THE COPY OF THE WILL OF THE MOTHER OF THE ASSESS EE WHEREBY SHE HAS BEQUEATH OF 2500 SILVER COINS TO THE ASSESSEE. 7. THE LD. DR, ON THE OTHER HAND, HAS RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. SHE HAS FURTHER SUBMITTED THAT THE ASSESSEE COULD NOT SHOW FROM RELIABLE EVIDENCE THAT THE DIAMOND AND GO LD JEWELLER FOUND FROM THE PREMISES OF THE ASSESSEE HAD ACCUMULATED O VER THE YEARS AND FURTHER THAT NO PURCHASE VOUCHERS OR ANY EVIDENCE O F GIFT HAS BEEN FURNISHED. SHE HAS FURTHER SUBMITTED THAT EVEN THE ASSESSEE DID NOT FILE ITS WEALTH TAX RETURNS WHICH SHOWED THAT THE ASSESS EE WAS NOT IN POSSESSION OF THE AFORESAID JEWELLERY IN THE PAST. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THERE IS NO QUARREL ON THE ISSUE THAT THE CBDT HAS ISSUED CERTAIN GUIDELIN ES FOR THE INCOME TAX AUTHORITIES DIRECTING NOT TO SEIZE THE GOLD JEW ELLERY UPTO 500 GMS FROM A MARRIED LADY, UP TO 100 GMS FROM A MALE MEMB ER AND UPTO 250 GMS FROM AN UNMARRIED GIRL, AS UP TO THE SAID EXTEN T, AS IT IS CONSIDERED TO BE POSSESSED BY THE FAMILY MEMBERS OF TAKING INT O CONSIDERATION THE PREVALENT CULTURE AND CUSTOMS IN THE SOCIETY. APP LYING THE SAME ITA NO.1287/CHD/2016- JAI PARKASH GOYAL, MANDI GOBINDGRH 5 ANALOGY, THE VARIOUS BENCHES OF THE TRIBUNAL AS WEL L AS THE HIGHER COURTS HAVE HELD THAT THE ADDITION UP TO THE EXTENT OF QUANTUM OF JEWELLERY WHICH AS PER THE CBDT CIRCULAR IS DIRECTE D NOT TO BE SEIZED, SHOULD NOT BE MADE INTO THE INCOME OF THE ASSESSEE AS UP TO THAT EXTENT IT HAS BEEN CONSIDERED TO BE POSSESSED BY THE ASSES SEE IN NORMAL CIRCUMSTANCES. IT HAS ALSO BEEN HELD THAT IT IS OP EN TO THE ASSESSEE OR THE DEPARTMENT TO SHOW ANY DISTINGUISHING CIRCUMSTA NCES WHEREBY THE EVIDENCE CAN BE LEAD TO PROVE THAT IN THE SET OF CI RCUMSTANCES, THE JEWELLERY MORE THAN OR LESS THAN THE PRESCRIBED LIM IT CAN BE HELD TO BE POSSESSED BY AN ASSESSEE. 9. NOW COMING TO THE FACTS OF THE PRESENT CASE. AD MITTEDLY, THE TOTAL GOLD JEWELLERY FOUND DURING THE COURSE OF SEA RCH I.E. 710.030 GMS WAS LESS THAN THE PRESCRIBED LIMIT BY THE CBDT WHEN CONSIDERED IN THE HANDS OF THE FAMILY MEMBERS OF THE ASSESSEE WHI CH COMES TO TOTAL OF 950 GMS AS DISCUSSED ABOVE. THE ASSESSING OFFICE R, THEREFORE, HAS GIVEN THE BENEFIT OF 710.020 GMS TO THE ASSESSEE. H OWEVER, WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT NOW A DAYS, DUE TO THE CHANGING TREND / CUSTOMS, THE TREN D OF PURCHASING DIAMOND JEWELLERY HAS BEEN INCREASED. PRESENTLY, N OT ONLY THE PURCHASE AND GIFTS OF GOLD JEWELLERY IS PART OF THE CUSTOMS BUT IT ALSO INCLUDES DIAMOND JEWELLERY. IN VIEW OF THIS, WE FIND FORCE I N THE SUBMISSIONS OF THE LD. COUNSEL THAT THE ASSESSEE HAS NOT BEEN GIVE N ANY BENEFIT OF POSSESSION OF DIAMOND JEWELLERY BY THE ASSESSING OF FICER. THOUGH, NO LIMIT HAS BEEN PRESCRIBED BY THE CBDT IN CASE OF DI AMOND JEWELLERY, HOWEVER, THE FACT THAT CANNOT LOSE SIGHT OF, IS THA T IN THE NORMAL CIRCUMSTANCES, A FAMILY HAVING SUFFICIENT SOURCE OF INCOME, IN NORMAL ITA NO.1287/CHD/2016- JAI PARKASH GOYAL, MANDI GOBINDGRH 6 CIRCUMSTANCES, MIGHT POSSESS THE DIAMOND JEWELLERY ALSO. IN VIEW OF THIS, IN THE CASE IN HAND, THE FAMILY OF THE ASSESS EE CAN ALSO BE SUPPOSED TO HAVE POSSESSED SOME DIAMOND JEWELLERY A LSO. THE LD. COUNSEL FOR THE ASSESSEE HAS MADE VERY REASONABLE S UBMISSION THAT ATLEAST THE ASSESSEE SHOULD BE GIVEN BENEFIT UP TO THE VALUE OF GOLD JEWELLERY WHICH IN NORMAL CIRCUMSTANCES IS CONSIDER ED TO BE NOT ABNORMAL I.E UPTO THE PRESCRIBED LIMIT WHICH IN TH E CASE OF FAMILY COMES OUT TO 950 GMS, WHICH HAS BEEN VALUED AT RS. 23,94,000/-. 10. THE DEPARTMENT HAS NOT RAISED ANY OBJECTION SO FAR AS THE VALUE OF THE JEWELLERY IS CONCERNED. KEEPING IN VIEW THE AFO RESAID CIRCUMSTANCES, WE DIRECT THE ASSESSING OFFICER TO G IVE THE ADDITIONAL BENEFIT TO THE ASSESSEE ON ACCOUNT OF DIAMOND JEWE LLERY EQUAL TO THE VALUE OF GOLD JEWELLERY OVER AND ABOVE THE QUANTITY OF THE GOLD JEWELLERY FOUND AT THE PREMISES OF THE ASSESSEE UPT O THE PRESCRIBED LIMIT FIXED BY THE CBDT I.E. 950 GMS MINUS (-) 730. 030 GMS WHICH COMES TO 240 GMS. 11. SO FAR AS THE ADDITION ON ACCOUNT OF SILVER COI NS / UTENSILS IS CONCERNED, THE ASSESSING OFFICER HAS ALREADY GIVEN BENEFIT OF RS. 3 LACS, WHICH IN NORMAL CIRCUMSTANCES HE HAS CONSIDER ED TO BE IN POSSESSION OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE AS DISCUSSED ABOVE, HOWEVER, HAS RELIED UPON THE UNREG ISTERED WILL OF THE MOTHER OF THE ASSESSEE WHEREIN 2500 SILVER COINS HA VE BEEN BEQUEATH TO THE ASSESSEE. IN OUR VIEW, LOOKING AT THE INDIA N CULTURE OF THE SOCIETY, IT WAS NOT UNCOMMON AMONG THE ELDERS TO PR ESERVE GOLD AND SILVER COINS. THOUGH, THE ASSESSEE HAS RELIED UPON THE WILL OF HIS ITA NO.1287/CHD/2016- JAI PARKASH GOYAL, MANDI GOBINDGRH 7 MOTHER TO SAY THAT HE HAS GOT 2500 SILVER COINS FRO M HER MOTHER BY WAY OF WILL, HOWEVER, NEITHER THE ASSESSEE HAS PROVED T HE SAID WILL BY WAY OF PLAUSIBLE EVIDENCE BEFORE THE ASSESSING OFFICER NOR THE ASSESSING OFFICER HAS DELIBERATED UPON REGARDING THE AUTHENTI CITY OF THE WILL. CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES AND WITHOUT GOING INTO THE VALIDITY OF THE WILL, AT THIS STAGE, IN OUR VIE W, IT WILL BE PROPER TO GIVE THE ASSESSEE BENEFIT OF ANOTHER TWO LACS TOWAR DS SILVER COINS AND UTENSILS. IN VIEW OF THIS, ADDITION MADE BY THE ASS ESSING OFFICER IS RESTRICTED TO THE EXTENT OF RS. 14,73,330/- AFTER G IVING THE BENEFIT OF JEWELLERY AS DISCUSSED ABOVE. OUT OF THE SAID AMOUN T, THE ASSESSEE HAS ALREADY SURRENDERED RS. 10 LACS. IN VIEW OF THIS, A DDITION OF RS. 4,73,330/- IS CONFIRMED. NO OTHER POINT OR ARGUMENT ON ANY ISSUE HAS BEEN ADDRESSED. THE APPEAL OF THE ASSESSEE IS THEREFORE, TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28.03.2018 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR