SMT DEEPSHIKHA JAMWAL, JAMMU V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, JAMMU

ITA 177/ASR/2022

AI Insights

The case involves multiple appeals by Smt. Deepshikha Jamwal against the orders of the Commissioner of Income Tax (Appeals)-5, Ludhiana, which confirmed various additions made by the Assessing Officer (AO) under sections 28(iv), 69A, and 153A of the Income Tax Act, 1961. The additions were primarily related to unexplained expenditures on foreign trips, capital contributions to a partnership firm, and unexplained cash and jewellery found during a search operation. The Tribunal examined the merits of each addition, considering the explanations and evidence provided by the assessee, and found that the revenue had not substantiated its claims, leading to the allowance of the appeals.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114708 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-06-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 04-09-2022
• Other Referred Cases: Kabul Chawla (2016) 380-ITR-573 (Del), CIT v/s Mahindra and Mahindra Ltd. in Civil Appeal No.6949 and 6954 of 2004, CIT v/s Alchemic Pvt. Ltd. 130 ITR 168 (Guj), Ravinder Singh V/s CIT- (1994)- 205 ITR 353
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Document seized; Documents seized
• Section: 69; 132; 28; 80C; 143(3); 153A; 143(2); 69A; 13; 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. Nos. 177 to 179/Asr/2022 Assessment Years: 2014-15, 2016-17 & 2020-21 Smt. Deepshikha Jamwal, House No. 73, Sector-B, Sainik Colony, Jammu (J&K)-180015 [PAN: AEMPJ 3507P] Vs. Deputy Commissioner of Income Tax, Central Circle, Aayakar Bhawan, Railhead Complex, Panama Chowk, Jammu (Appellant) (Respondent) Appellant by : Sh. Joginder Singh, CA Respondent by: Sh. S. R. Kaushik, CIT-DR Date of Hearing: 21.06.2023 Date of Pronouncement: 12.07.2023 ORDER Per Bench: These captioned appeals have been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-5, Ludhiana even dated 21.07.2022 in respect of Assessment Years: 2014-15, 2016-17 & 2020-21. ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 2 2. The assessee has raised the following grounds of appeal in ITA No. 177/Asr/2022: “1. That on the facts and circumstances of the case, the order passed by the Ld. CIT(A)-5, Ludhiana is bad both in the eye of law and on facts. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A)-5 Ludhiana has confirmed the additions made by the Ld. AO in the Assessment Order passed in absence of seizure of any incriminating document belonging to the appellant. Neither any addition or disallowance was made on the basis of alleged seized documents nor any reference to seized material was made in connection with additions/ disallowances and also ignored the judgment of Hon'ble Delhi High Court in the case of Kabul Chawla (2016) 380-ITR-573 (Del). 3. That on the facts and in the circumstances of the case, the Ld. CIT(A)-5, Ludhiana has erred in confirming the addition of Rs.19,50,000/- by invoking the provisions of section u/s 28(iv) of the Act without appreciating the merits of the case and the explanation put forth by the assessee. 4. The appellant craves leave to add, amend, alter or otherwise raise any other ground of appeal.” 3. The assessee has raised the following grounds of appeal in ITA No. 178/Asr/2022: “1. That on the facts and circumstances of the case, the order passed by the Ld. CIT(A)-5, Ludhiana is bad both in the eye of law and on facts. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A)-5 Ludhiana has confirmed the additions made by the Ld. AO in the Assessment Order passed in absence of seizure of any incriminating document belonging to the appellant Neither any addition or disallowance was made on the basis of alleged seized documents nor any reference to seized material was made in connection with additions/ disallowances and ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 3 also ignored the judgment of Hon'ble Delhi High Court in the case of Kabul Chawla (2016) 380-ITR-573 (Del). 3. That on the facts and in the circumstances of the case, the Ld. CIT(A)-5, Ludhiana has erred in confirming the addition of Rs.13,00,000/- on account of capital contribution in the firm M/s Paradise Avenue without appreciating the merits of the case and the explanation put forth by the assessee. 4. That on the facts and in the circumstances of the case, the Ld. CIT(A)-5, Ludhiana has erred in confirming the addition of Rs.13,20,000/- by invoking the provisions of section u/s 28(iv) of the Act without appreciating the merits of the case and the explanation put forth by the assessee. 5. That on the facts and in the circumstances of the case, the Ld. CIT(A)-5, Ludhiana has erred in confirming the addition of Rs.99,240/- on account of capital gain in respect of sale of immovable property u/s 45 without appreciating the merits of the case and the explanation put forth by the assessee. 6. The appellant craves leave to add, amend, alter or otherwise raise any other ground of appeal.” 4. The assessee has raised the following grounds of appeal in ITA No. 179/Asr/2022: “1. That on the facts and circumstances of the case, the order passed by the Ld CIT(A)-5, Ludhiana is bad both in the eye of law and on facts. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A)-5, Ludhiana has erred in confirming the addition of Rs.2,00,000/-out of total cash of Rs.2,77,100/- on account of cash found at residence during the course of search without appreciating the merits of the case and the explanation put forth by the assessee. 3. That on the facts and in the circumstances of the case, the Ld. CIT(A)-5, Ludhiana has erred in confirming the addition of Rs.7,76,500/- on account ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 4 qf cash deposits without appreciating the merits of the case and the explanation put forth by the assessee. 4. That on the facts and in the circumstances of the case, the Ld. CIT(A)-5, Ludhiana has erred in confirming the addition of Rs.6,27,772/- on account of investment made in purchase of jewellery without appreciating the merits of the case and the explanation put forth by the assessee. 5. The appellant craves leave to add, amend, alter or otherwise raise any other ground of appeal.” 5. We are first taking up the appeal in ITA No. 177/Asr/2022 in respect of the Assessment Year 2014-15. 5.1 The appellant assessee challenged the action of the Ld. CIT(A) in confirming the addition of Rs.19,50,000/- by invoking the provisions of section u/s 28(iv) of the Act without appreciating the merits of the case and the explanation put forth by the assessee. 5.2 The appellant assessee is a partner in M/s Paradise Avenue and SPA Reality & Leasing who has shown the total returned income at Rs.3,95,700/-. In this case, search and seizure action u/s 132 of the Income tax Act, 1961 was conducted on 27.06.2019 and the jurisdiction of the case was transferred to the Central Circle, Jammu vide order issued u/s 127 of the Income tax Act, 1961 dated 19.09.2019. Since the name of the assessee appeared in the search warrant, therefore, a notice u/s 153A of ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 5 the Income tax Act, 1961 was issued to the assessee on 12.10.2020. In response to the said notice, the assessee filed her return of income on 02.11.2020 declaring total income at Rs.3,95,700/-. The assessment was completed vide order passed u/s 153A of the Income tax Act, 1961 vide order dated 26.09.2021. As per the said order, the income was assessed at Rs.23,45,700/- as against the returned income of Rs.3,95,700/- and the excess income was assessed on account of addition made u/s 28(iv) of the Income tax Act, 1961 amounting to Rs.19,50,000/-. 5.3 Aggrieved with the said order, the assessee filed appeal before the Ld. Commissioner of Income tax (Appeals)-5, Ludhiana who had confirmed the addition made by the Ld. AO and dismissed the appeal of the Appellate vide order dated 21/07/2022 passed in Appeal No,10728/IT/CIT(A)- 5/Ldh/2013-14 by observing as under: “4.2 Ground of Appeal No. 2 relates to addition of Rs. 19,50,000/- by invoking the provisions of section u/s 28(iv) of the Income tax Act, 1961. The AO has mentioned that search u/s 132 was conducted in the case of the assessee on 27.06.2019 and in response, the assessee filed return declaring total income of Rs. 3,95,700/-. It is further mentioned that in response to questionnaire u/s 142(1), the assessee furnished reply which was not complete and thereafter, a show- cause dated 19.09.2021 was issued to the assessee which is reproduced in the assessment order. During the year, the assessee/family members undertook foreign tour and assessee was asked to give details of expenditure in response to which the assessee submitted that foreign tour was sponsored by Sh. Hilal Ahmad Rather. ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 6 As per the AO, no complete details were furnished in respect of expenditure on Air Ticket, Visa Fee, Local Travelling, Sightseeing, Food Expenses, Place & Period of stay etc., therefore the AO was constrained to determine the expenditure on estimation basis in respect of foreign tour conducted by the assessee/family. The AO tabulated the details giving the Date, Country Visited, Period of Stay, Names of the Persons and estimated expenditure incurred on various tours since June, 2013 to October, 2016 and mentioned that the assessee could not denied that she was beneficiary to the extent of the expenditure incurred on her foreign tour by virtue of being partner in the said firm. Regarding the argument of the assessee that the said expenditure is to be examined in the hands of partnership firm, it is mentioned by the AO that the issue was being considered in the hands of the firm separately but the assessee cannot avoid the applicability of Section 28(iv) of the Income Tax Act, 1961 as the assessee is the ultimate beneficiary of the said amount. Therefore, as per the AO, as discussed in the final show-cause, the amount of Rs. 19,50,000/-, estimated as expenditure in respect of foreign tour during the year under consideration, is to be assessed as income of the assessee under the head 'income from business & profession'. Accordingly, an addition of Rs. 19,50,000/- was made to the income of the assessee u/s 28(iv) of the Income Tax Act, 1961 for the year under consideration. The facts of the case, basis of addition made by the AO and the arguments of the AR during the course of appellate proceedings have been considered. The AR has submitted that during the course of assessment proceedings it was explained to the AO that the foreign tour undertaken by the assessee and her family were sponsored in fully by M/s Paradise Avenue in which the assessee is one of the partner and therefore as per the AR, the question of estimation of expenditure in the hands of the assessee does not arise. The AR further submitted that M/s Paradise Avenue has furnished a letter dated 15.03.2014 to the Visa Officer of USA, Chankyapuri, New Delhi for sources of funds. The AR further argued that the expenses of the entire trip was borne by M/s Paradise Avenue and whatever disallowance is to be made that should be made in the hands of the firm M/s Paradise Avenue from which the expenses of foreign trip have been incurred. The AR also argued that the provisions of section 28(iv) are not applicable to the case of the assessee as in order to invoke the provisions of section 28(iv) of the Act, the benefit which is received has to be in some other form rather than in the shape of money. The AR placed reliance on the judgment of Hon'ble Supreme Court in the case of CIT v/s Mahindra and Mahindra Ltd. in Civil Appeal No.6949 and 6954 of 2004 ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 7 dated 24.04.2018 and judgment of the Hon'ble Gujarat High Court in the case of CIT v/s Alchemic Pvt. Ltd. 130 ITR 168 (Guj). These argument of the AR about the applicability of Section 28(iv) have been considered and it is relevant to mention that the assessee did not receive any direct cash benefits but received benefit or perquisite in the shape of sponsoring of foreign tour, which falls under the definition of Section 28(iv) of the Income Tax Act, 1961 which for reference is reproduced below: “(iv) The value of any benefit or perquisite, whether convertible into money or not arising from business or the exercise of a profession" Therefore, it is clear that provisions of Section 28(iv) are attracted in this case and nothing was received directly in cash by the assessee rather benefit & perquisites in the shape of foreign tour were received. Further, it is a fact that the assessee/family members undertook foreign tour during the year and onus was on the assessee to substantiate the source of meeting the expenditure including the expenses on Air Ticket, Visa Fee, Local Travelling, Sightseeing, food expense etc. but no complete details were furnished by the assessee. Even during the appellate proceedings, the assessee has not filed any documents to explain the sextent of expenses which are claimed to be met by M/s. Paradise Avenue and hence the AO was right in estimating the same as per the table in the assessment order. The allow-ability or otherwise of such expense in the hands of M/s. Paradise Avenue is altogether a different issue to be considered in the case of M/s. Paradise Avenue, but that will not affect the chargeability of tax on this amount in the hands of the assessee. The undisputed fact is that the assessee and her family members had undertaken foreign tour, the expense of which was claimed to be met by M/s. Paradise Avenue and as such, it was benefit or perquisites arising from the business and thus, chargeable to Income Ta x under the head 'profit & gains of business & profession' as per provisions of Section 28(iv) of the Income Tax Act, 1961. Therefore, the addition of Rs. 19,50,000/- made by the AO is upheld.” 5.4 The Ld. AR for the appellant assessee submitted that the Ld. CIT(A) dismissed the appeal without taking cognizance and appreciating the full facts of the case. He filed a written note which reads as under: ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 8 Without prejudice to the facts as discussed under Ground No.2 above, it is submitted that this ground of appeal relates to addition of Rs.19,50,000/- on account of foreign trip of Dubai in the month of June, 2013, January, 2014, February, 201, Europe in the month of July, 2013, Uzbekistan in the month of October, 2013 and China in the month of March, 2014 with the family of the assessee for a period of 10 days, 10 days 5 days, 9 days, 5 days and 7 days respectively. The Ld. AO estimated the foreign trip expenditure @ Rs. 19,50,000/- by estimating expenditure in respect of each trip as per details given in the assessment order vide page No.11 and 12. During the course of the assessment proceedings, it was explained to the Ld. AO that the foreign tour undertaken by the assessee and her family members to Dubai in June, 2013, Europe July, 2013, Dubai, January, 2014, Dubai, February, 2014, China, March, 2014 were sponsored in full including boarding, cost of tickets and stay abroad by M/s Paradise Avenue in which the assessee was one of the partner and therefore, the question of estimation of expenditure in the hands of the assessee does not arise. M/s Paradise Avenue through its letter dated 15.03.2014 undertaken before the Visa Officer; Embassy of the United State of America, Chankyapuri, New Delhi vindicates the stand of the assessee. The working partner of M/s Paradise Avenue, Shri Hilal Ahmad Rather made this undertaking to Visa Officer. (Paper book page No.5, enclosed). It is further submitted that the expenses of the entire trip has been borne by M/s Paradise Avenue and the genuineness of the expenses is to be seen in the hands of the M/s Paradise Avenue from which the expenses of foreign trip have been incurred. The Ld. AO arbitrarily estimated expenditure of Rs.19,50,000/- in the hands of the assessee even when he has admitted that the expenses on the foreign trip were incurred by M/s Paradise Avenue and accordingly made addition by invoking the provisions of section 28(iv) of the Act. Further, the Ld. AO has admitted in his order that the tour was sponsored in full by the Managing Partner Mr. Hilal Ahmad Rather of M/s Paradise Avenue. ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 9 During the course of appellate proceedings, the Ld. CIT(A) confirmed the addition by holding that the assessee and her family members had undertaken foreign tour, the expenses of which was claimed to be met by M/s Paradise Avenue and as such, it was benefit or perquisites arising from the business and thus, chargeable to income tax under the head 'Profit & gains of business and profession' as per the provisions of section 28(iv) of the Income tax Act, 1961. While confirming the addition made by the Ld. AO, the Ld. CIT(A) has not appreciated the fact that as far as the provisions of section 28(iv) of the Act is concerned, the income falling under clause (iv) of section 28 shall be charged to Income tax under the head "Profits and gains" of business or profession; the value of any benefit or perquisite whether convertible into money or not arising from business or the exercise of a profession". In order to invoke the provisions of section 28(iv) of the Act, the benefit which is received has to be in some other form rather than in the shape of money. In the present case, that the expenditure incurred by M/s Paradise Avenue is directly or indirectly in the shape of cash benefit, therefore, the condition is not satisfied. Therefore, the provisions of section 28(iv) does not apply to the case of the assessee since the expenditure are in the form of nature of monitory benefit. The reliance is placed on the:- (i) Hon'ble Supreme Court judgment in the case of CIT v/s Mahindra and Mahindra Ltd. in Civil Appeal No.6949 and 6950 of 2004 dated 24.04.2018 ( Paper Book Page No.6 to 12) (ii) Hon'ble Gujarat High Court in the case of CIT v/s Alchemic Pvt. Ltd. 130 ITR 168 (Guj.). Paper book Page No. 13 to 19 and (ii) Hon'ble High Court of Delhi in the case of Ravinder Singh V/s CIT- (1994)- 205 ITR 353. Paper book page No.20 to 24 In view of the merits of the case, it is prayed that the estimated addition made by the Ld. AO and confirmed by the Ld. CIT(A) on account of foreign trip by invoking the provisions of section 28(iv) of the $ct, may kindly be deleted.” ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 10 ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 11 5.5 Per contra, the Ld DR although supported the impugned order, however, he failed to rebut the contention of the counsel. 5.6 We have heard the rival contentions, perused the material on record, impugned order, written submission and case law cited. Admittedly, the expenditure on foreign trip was incurred by M/s Paradise Avenue but the AO has estimated the foreign trip expenditure @ Rs. 19,50,000/- by estimating expenditure in the hands of appellant as perquisites from the partnership firm. During the course of the assessment proceedings, it was explained to the Ld. AO that the foreign tour undertaken by the assessee and her family members to Dubai in June, 2013, Europe July, 2013, Dubai, January, 2014, Dubai, February, 2014, China, March, 2014 were sponsored in full including boarding, cost of tickets and stay abroad by M/s Paradise Avenue in which the assessee was one of the partner and therefore, the question of estimation of expenditure in the hands of the assessee does not arise. M/s Paradise Avenue through its letter dated 15.03.2014 undertaken before the Visa Officer; Embassy of the United State of America, Chankyapuri, New Delhi vindicates the stand of the assessee. The working partner of M/s Paradise Avenue, Shri Hilal Ahmad Rather made this undertaking to Visa Officer. (Paper book page No.5, ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 12 enclosed as above). In our view, since, the expenses of the entire trip have been borne by M/s Paradise Avenue and hence, the genuineness of the expenses is to be seen in the hands of the M/s Paradise Avenue from which account the expenses on foreign trip have been incurred. 5.7 From the above, it is evident that the Ld. AO has arbitrarily estimated expenditure of Rs.19,50,000/- in the hands of the assessee even when he has admitted that the expenses on the foreign trip were incurred by M/s Paradise Avenue and accordingly made addition by invoking the provisions of section 28(iv) of the Act. Without prejudice to above, the Ld. AO has admitted in his order that the tour was sponsored in full by the Managing Partner Mr. Hilal Ahmad Rather working partner of M/s Paradise Avenue. 5.8 The Ld. CIT(A) has discussed that the assessee and her family members had undertaken foreign tour, although the expenses of which was claimed to be met by M/s Paradise Avenue but, it was benefit or perquisites arising from the business and thus, chargeable to income tax under the head 'Profit & gains of business and profession' as per the provisions of section 28(iv) of the Income Tax Act, 1961. In our view, the Ld. CIT(A) has failed to appreciate the fact that as far as the provisions of section 28(iv) of the Act is concerned, the income falling under clause (iv) of section 28 shall ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 13 be charged to Income tax under the head "Profits and gains" of business or profession; the value of any benefit or perquisite whether convertible into money or not arising from business or the exercise of a profession". In order to invoke the provisions of section 28(iv) of the Act, the benefit which is received has to be in some other form rather than in the shape of money. In the present case, that the expenditure incurred by M/s Paradise Avenue is directly or indirectly in the shape of cash benefit, therefore, the said condition is not satisfied. Accordingly, the provisions of section 28(iv) does not apply to the present case of the assessee since the expenditure are in the form of nature of monitory benefit. 5.9 The Hon'ble Supreme Court judgment in the case of “CIT v/s Mahindra and Mahindra Ltd. ((Supra) Paper Book Page No.6 to 12) held that 5.10 The Hon’ble High Court of Delhi in the “case of Ravinder Singh V/s CIT”, (Supra) held that Paper book page No.20 to 24- 5.11 Considering the factual matrix and judicial pronouncement, we accept the grievance of the assessee as genuine and therefore, we hold the decision of the ld. CIT(A) as infirm and perverse to the facts on record on ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 14 the issue of confirming addition made on account of estimated foreign trip expenditure and the same is as such deleted. ITA No. 178/Asr/2022 6. Next is the appeal in ITA No. 178/Asr/2022 in respect of the Assessment Year 2016-17. 6.1 The appellant challenged the order of the CIT(A) in confirming the addition of Rs.13,00,000/- on account of capital contribution in the firm M/s Paradise Avenue without appreciating the merits of the case and the explanation put forth by the assessee and that the Ld. CIT(A)-5, Ludhiana has erred in confirming the addition of Rs.13,20,000/- by invoking the provisions of section u/s 28(iv) of the Act without appreciating the merits of the case and the explanation put forth by the assessee and that on the facts and in the circumstances of the case, the Ld. CIT(A)-5, Ludhiana has erred in confirming the addition of Rs.99,240/- on account of capital gain in respect of sale of immovable property u/s 45 without appreciating the merits of the case. 6.2 The assessment was completed u/s 143(3) r.w.s.153A of the Income tax Act, 1961 vide order dated 27.09.2021 with the addition on account of ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 15 capital account - Rs.13,00,000/-; business income u/s 28(iv) - Rs.13,20,000/- and undisclosed capital gain u/s 45 - Rs.99,240/-. 6.3 The Ld. Commissioner of Income tax (Appeals)-5, Ludhiana has confirmed the addition made by the Ld. AO without taking cognizance and appreciating the full facts of the case. 6.4 The Ld. DR placed reliance on the revenue orders. 6.5 Having heard the rival contention and perusal of material on record we find that the AO has made the addition merely on surmises or conjectures. Admittedly, an addition of Rs.13,00,000/- was made on account of unexplained capital contribution during the Assessment Year 2016-17. It is seen that the AO vide show cause notice dated 19.09.2021, had asked the appellant to explain as to why addition of Rs.13 lakhs on account of unexplained investment u/s 69 of the I.T. Act, 1961 may not be made. In response to the said show cause, the Ld. AR explained vide reply dated 22.09.2021 (copy of which enclosed for ready reference) that no such investment has been made towards capital of the firm of M/s Paradise Avenue as mentioned in the financial statements. He contended that it was also submitted before the Ld. AO that during the course of search ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 16 operations at the premises of the assessee as well as business premises of M/s Paradise Avenue and other related premises that no evidence, books of account, documents were found in which it has been recorded that the assessee has made such investment in the said partnership firm. The fact of having made any such investment was completely denied. However, while passing the assessment order, the explanation of the assessee was not accepted by the Ld. AO and made the addition without bringing in any correlated incriminating material evidence. 6.6 The Ld AR contended that the matter was also explained before the CIT(A) that even during the course of search operation either from the residence of the assessee or from the office of M/s Paradise Avenue or anywhere concerns associated with Hilal Group, department did not found any incriminating document, material, books of account etc. which corroborate the capital contribution made by the assessee. The only document available with the department on which the Ld. AO is relied upon is unaudited Balance sheet not signed by the assessee prepared by Chartered Accountant to justify the bank loan as matching margin contribution towards loan. It was further explained that the capital shown in the compiled Balance sheet is nothing but bogus and fictitious and was ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 17 made in order to justify the bank loan by the Managing partner Shri Hilal Ahmed Rather. In support of the same, an affidavit on oath to completely deny having made any capital contribution was also submitted. The copy of the said reply along with a copy of the affidavit is placed on record. 6.7 Considering the peculiar facts of the case, absence of incriminating material found during the search and duly supported with affidavit of the Managing Partner of Shri Hilal Ahmed Rather in rebuttal to the fictitious compiled Balance sheet for bank loan being remained unsubstantiated by the department, we hold that such fictitious document cannot be used against the assessee as valid evidence until or unless corroborated with material evidence being with the support of stock hypothecation or otherwise. Accordingly, we hold the order of the CIT(A) perverse to facts on record and bad in law on the issue of addition of partner capital contribution u/s 69A of the Act. Therefore, the addition of 13,00,000/- lacs is deleted. 7. In the next issue the appellant challenged the addition of Rs.13,20,000/- by invoking the provisions of section u/s 28(iv) of the Act without appreciating the merits of the case on account of perquisites against foreign trip. ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 18 7.1 The facts on the issue in present appeal are exactly similar to that of the issue dealt with in ITA No. 177/Asr/2022 and therefore, our observation and finding given in ITA No 177/Asr/2022 in respect of the Assessment Year 2014-15 shall be applicable in ITA No 178/Asr/2022 in respect of the Assessment Year 2016-17 in mutatis mutandis. 8. The last issue in ITA No 178/Asr/2022 the addition of Rs. 99,240/- on account of capital gain in respect of sale of immovable property u/s 45 is dismissed as not pressed. ITA No 179/Asr/2022 9. In this appeal, the appellant has objected to the decision of the Ld. CIT(A)-5, Ludhiana in confirming the addition of Rs.2,00,000/ -out of total cash of Rs.2,77,100/- on account of cash found at residence during the course of search, Rs.7,76,500/- on account of cash deposits and Rs.6,27,772/- on account of investment made in purchase of jewellery without appreciating the merits of the case and the explanation of the assessee. 9.1 Since, in the case of the appellant, search was carried out on 27.06.2019, hence the case was selected under compulsory scrutiny. Accordingly notice u/s 143(2) was issued and the assessment was completed vide order passed u/s 143(3) of the Income ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 19 tax Act, 1961 vide order dated 25.03.2021 thereby assessing income at Rs.20,11,372/- as against the returned income of Rs.3,30,000/- with the additions made on account of (i) unexplained cash found at the time of search u/s 69A amounting to Rs.2,77,100/-(ii) unexplained investment in purchase of jewellery- Rs.6,27,772/- and (iii) unexplained cash deposits of Rs.7,76,500/-. 9.2 Aggrieved with the said order, the assessee filed appeal before the Ld. Commissioner of Income tax (Appeals)-5, Ludhiana who has confirmed the addition made by the Ld. AO without taking cognizance of merits and appreciating the facts of the case by observing as under: 4.2 Ground of Appeal No. 2 relates to addition of Rs. 2,77,100/- on account of cash found during the course of search. The AO has mentioned that during the search, cash of Rs. 2,77,100/- was found, out of which an amount of Rs. 2,50,000/- was seized. During the search, the assessee was asked to explain the source of cash in her statement recorded u/s 132(4) on 27.06.2019 where the assessee stated that at present there is no documentary evidence available and she will produce the evidence regarding withdrawal later on. Again, during the assessment proceedings, the assessee was asked to give detail of source of cash found along with the documentary evidence, in response to which in reply the assessee stated that the said cash was collectively belonged to all the adult family members. As per the AO, since no proper and complete information was furnished in respect of source of cash and no documentary evidence whatsoever was furnished, therefore the assessee was show-caused as to why the addition of Rs. 2,77,100/- may not be made for the year under consideration. As per the AO, the assessee did not furnish any explanation/ reply to the final show-cause notice dated 19.09.2021 and neither anybody attend nor any request for adjournment was received. The AO mentioned that sub-section (4A) of Section 132 shifts the burden of proof about the ownership from the department to the assessee and failure of the assessee to rebut the presumption by giving plausible explanation, may result in drawing adverse inference against the assessee leading to the addition. It is also mentioned that moreover, it has been held in decided cases ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 20 that possession is the best evidence of ownership. Therefore, unless cogent explanation is given by the person in possession of cash/jewellery that someone else is the owner, it is reasonable to presume that the cash/jewellery belongs to the person in whose possession it is found. Therefore, keeping in view the facts & circumstances of the case and failure on the part of the assessee to explain the source of cash, the amount of Rs. 2,77,100/- was added u/s 69A, on account of unexplained cash, to be taxed u/s 115BBE of the Income Tax Act, 1961. The facts of the case, basis of addition made by the AO and the arguments of the AR during the course of appellate proceedings have been considered. The AR has submitted that the assessee is residing in joint family consisting of mother-in-law, husband and two children and cash found at the time of search is family savings kept for household use which was generated out of withdrawals from bank at different dates and past savings. The AR also submitted that the family of the assessee has agricultural land also and cash has also accumulated on account of agricultural savings and family pension of her mother-in-law. It is further submitted that the mother-in-law of the assessee is senior citizen and she keep cash for her social security in order to meet any eventuality like medical emergency. The AR referred to the Hon'ble Prime Minister's comments made during the course of demonetization Scheme, 2016 and CBDT Instruction No. 3/2017 dated 21.02.2017 issued u/s 119 of the Act for verification of the cash deposits during demonetization. The AR further placed reliance on the Hon'ble Supreme Court's decision in the matter of Kirti v/s OIC (2021) 2SCC 166. The AR submitted that during the course of search proceedings it was explained to the search party that the cash found was family money saved by lady members in last many years and was kept at home for use by the family in case of any emergency need. The AR further submitted that the assessee has income from tuition and pointed out that the AO has not brought on record any document/ evidence to show that the assessee has having any income from sources other than the various activities mentioned above. The above argument of the AR are not found fully acceptable and as mentioned by the AO, the presumption under the Income Tax Act is that the assessee is the owner of the cash found in her possession and onus was on the assessee to substantiate the source of the same and the AO is not required to prove the reverse. Also, the AO is not required to point out the source from which the cash may have come, it is however also a fact that some cash is always kept in the household which represent accumulated savings and for emergency use. It is also relevant to mention that at the time ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 21 of search, the assessee admitted that there was no documentary evidence available with her regarding the cash and it was only submitted that it belongs to family members but no documents was ever filed either before the AO or during the course of appellate proceedings to substantiate the source of cash found at the time of search. Therefore, it is observed that addition of the whole amount of cash found was not called for. Under the facts & circumstances of the case, the ends of justice would be met, if the assessee is allowed the benefit of cash balance to the extent of Rs. 77,100/- and the addition is restricted to the balance amount of Rs. 2,00,000/-. Therefore, to sum-up, out of total addition of Rs. 2,77,100/-, the addition to the extent of Rs. 2,00,000/- is sustained and the appellant gets relief of the balance amount. Accordingly, this ground of appeal is partly allowed. 4.3 Ground of Appeal No. 3 relate to addition of Rs. 7,76,500/- on account of cash deposits in bank accounts. The AO mentioned that as per information, it was seen that the assessee has made cash deposit of Rs. 7,76,500/- during the Financial Year 2019-20 and was asked to reconcile the same with the ITR. In reply, it was mentioned by the assessee that there are deposits of Rs. 7,76,600/- in cash in assessee's bank account as against gross receipts of Rs. 4,80,000/- as per the ITR and the balance deposit of Rs. 2,96,500/- is out of cash withdrawal and cash- in-hand. The reply was considered but not found convincing as no supported documentary evidence was produced during the assessment proceedings. The AO mentioned that during the investigation, no evidence regarding holding tuition classes was found besides no details/register of such tuition was produced by the assessee, thus the argument/claim of cash deposit out of tuition income was found to be non- genuine. Accordingly, the assessee was show-caused as to why the cash deposits may not be treated as unexplained. As per the AO, the assessee did not furnish any explanation/reply to the final show-cause notice dated 19.09.2021 and neither anybody attend nor any request for adjournment was received. The AO mentioned that the assessee has not furnished any explanation regarding the source of cash deposit of Rs. 7,76,500/- made during the previous year and accordingly the same remained unexplained. As such addition of Rs. 7,76,500/- was made to the income of the assessee u/s 69A of the Income Tax Act, 1961 to be taxed as per rates u/s 115BBE. The facts of the case, basis of addition made by the AO and the arguments of the AR during the course of appellate proceedings have been considered. The AR has submitted that an amount of Rs. 7,76,500/- has been ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 22 deposited on various dates against the gross receipts of Rs. 4,80,000/- on account of tuition fee and the balance out of cash-in-hand. The AR further submitted that the assessee is qualified B.Sc B.Ed and had experience of teaching, as she was enrolled as teacher in New Era Environmental High School from 1995 to 1997 till her marriage, subsequently, after her marriage tuition was started from her residence and accordingly income from tuition receipts have been shown regularly since assessment year 2006-07 and the department had admitted her source of income on account of tuition fee even in assessments made u/s 153A of the I. T. Act, 1961 in the preceding assessment years. The AR further filed copy of the bank account, cash account mentioning each cash withdrawal/ cash deposits/ tuition fee to justify the source of cash deposited into the bank. The above arguments of the AR are not found acceptable as the assessee has total credits in all the bank accounts amounting to Rs. 13,12,986/- out of which the cash deposit were Rs. 7,76,500/-, against which the gross total income shown by the assessee is only Rs. 3,30,000/-. The assessee has shown tuition receipts which were sufficient only to meet the personal/household expenses of the assessee and the investment which have been claimed as deduction u/s 80C amounting to Rs. 1,50,000/-, the education expenses of children etc. Therefore, the AO was right in making the addition to the extent of Rs. 7,76,500/- out of total credits of Rs. 13,12,986/- in the bank accounts of the assessee because the assessee has not furnished any explanation regarding the source of cash deposit of Rs. 7,76,500/- at the time of assessment before the AO and during the appellate proceedings. The source of such cash deposits remained unexplained/ unsubstantiated, hence, the addition made by the AO deserves to be upheld and therefore, confirmed. Accordingly, this ground of appeal is dismissed. 4.4 Ground of Appeal No. 4 relate to addition of Rs. 6,27,772/- u/s 69A on account of 186 grams gold/ jewellery found. The AO has mentioned that during the search u/s 132 jewellery weighing 463.50 grams was found at the residence, besides jewellery found in locker and tabulated the same in the assessment order. It is also mentioned that during the search/post search proceedings, the assessee stated that the jewellery is ancestral and received at the time of marriage. During the assessment, vide notice u/s 142(1), the assessee was asked to give details of source of jewellery, in response to which the assessee submitted that during the course of search the total quantity of jewellery found was 901.44 grams which belongs to the family members and they have either inherited or jewellery was gifted to them at the ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 23 time of marriage. However, as per the AO, the seized documents shows purchase of jewellery by the assessee on various dates as mentioned in the assessment order and the assessee has not been able to explain the source of jewellery found from the residence as well as from bank locker with the documentary evidence. In view of the above, the assessee was show-caused as to why the above jewellery may not be treated as unexplained in the hands of the assessee for the year under consideration. As per the AO, the assessee did not furnish any explanation/ reply to the final show-cause notice dated 19.09.2021 and neither anybody attend nor any request for adjournment was received. As per the AO, the assessee has failed to explain the source of the jewellery/gold found, however in view of the CBDT Instruction No. 1916 dated 11.05.1994, the assessee was allowed benefit for holding gold jewellery and therefore, the gold/jewellery within limits as per the CBDT Instruction No. 1916, was worked out to the extent of 950 grams which was treated as explained in the hands of the assessee leaving balance gold/jewellery weighing 186 grams valued at Rs. 6,27,772/-. The AO mentioned that sub- section-(4A) of Section .132 shifts the burden of proof about the ownership from the department to the assessee and failure of the assessee to rebut the presumption by giving plausible explanation may result in drawing adverse inference against the assessee leading to the addition and moreover, it has been held in decided cases that possession is the best evidence of ownership. Therefore, as per the AO, unless cogent explanation is given by the person in possession of cash/jewellery that someone else is the owner, it is reasonable to presume that the cash/jewellery belongs to the person in whose possession it is found. Keeping in view the facts & circumstances of the case and failure on the part of the assessee to explain the source of jewellery to the extent of Rs. 6,27,772/-, the same was treated as unexplained jewellery u/s 69 and added to the income of the assessee, to be taxed u/s 115BBE. The facts of the case, basis of addition made by the AO and the arguments of the AR during the course of appellate proceedings have been considered. The AR has submitted that the entire jewellery does not belong to the assessee, but it belongs to family consisting of assessee, her mother-in- law, her husband, daughter and son. The AR submitted that the AO has not allowed the credit for holding jewellery in respect of her mother-in-law. The AR further submitted that at the time of search action, statement of the assessee was recorded on oath where she was categorically asked to explain the source of jewellery found from her possession and in her reply the assessee had clarified that the entire jewellery pertains to her and her family members and the jewellery is ancestral and has been received at the time of their marriage. ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 24 It was also explained that her mother-in-law is also residing with them. The AR further submitted that during the course of assessment proceedings an affidavit of mother-in-law was also submitted before the AO and in the said affidavit she had deposed that after the death of her husband in the year 2009, she is residing with her son and that she is in possession of jewellery of more than 400 grams which has been kept in the bank locker jointly maintained by her son and daughter-in-law. The AR further submitted that the husband of the assessee who is government employee has also intimated to the PDD Department, Government of J&K the list of the family members who are dependent on him, as per which the dependent shown by him includes mother of the husband of the assessee, Smt. Lajwanti Devi, assessee, son and daughter. The above arguments of the AR have been considered and it is relevant to mention here that during the course of search, various documents were found & seized which shows purchase of jewellery by the assessee and the relevant para of the assessment order is reproduced below: “However, it is seen from the seized documents that as per page No. 15 of annexure A-l the assessee has purchased jewellery from M/s. Silvers lines, K C Plaza, Jammu for Rs.53,570/-. Similarly, as per page No. 16 of annexure A-l jewellery for Rs. 121273/- was purchased by the assessee from M/s Meenakshi Gems, Gandhi Nagar, Jammu on 14.05.2016. The assessee has also admitted to have purchased jewellery from M/s Lotus Jewels, C-36, Friends Colony, New Delhi for Rs.57858/- on 12.02.2013 & Rs. 56582/- dated 26.08.2013 respectively. Also as per page No. 198 20 of Annexure A-l the assessee has purchased jewellery from M/s Enn-Dee Gems & Jewels Ltd for Rs. 136512/- dated 13.04.2011 & Rs. 72314/- dated 05.10.2005. As per page No. 21 of annexure A-l there is jewellery bill purchased from M/s Meenakshi Gems, Gandhi Nagar, Jammu for Rs. 19129/- on 14.02.2007. Also page No. 23 of annexure A-l is rough estimate of jewellery purchased for Rs. 35,000/- on 05.03.201 /.There is another document in seized document marked as page No. 24 of annexure A-l which is regarding jewellery purchased for Rs. 22,800/- (Nickname of Ms. Deepshikha Jamwal is Nishu Jamwal) ” From the above, the claim that the jewellery was ancestral jewellery received at the time of marriage is not found fully acceptable and in fact, the documents seized at the time of search, shows that the assessee was in the habit of purchasing jewellery but the source of such purchases has not been explained. It is also relevant to mention that the AO has duly allowed the benefit as per CBDT Instruction No. 1916 dated 11.05.1994 for the family members found present at the time of search. Under the facts & circumstances ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 25 of the case and coupled with the seized documents showing purchase of jewellery by the assessee as reproduced above, the addition of Rs. 6,27,772/- made by the AO is found sustainable and hence upheld. 9.3 After hearing the rival contentions, perused the material on record, impugned order, written submission and case law cited before us we find that small additions were made and confirmed by the CIT(A) without being corroborated with incriminating material or documentary evidence on record. 9.3.1 During the course of the assessment proceedings, the AO has made an addition of Rs.2,77,100/- on a/c of cash found during search from residence of the assessee although the submitted that the cash represent family savings kept for household use which generated out of the cash withdrawals from the bank at different dates and past savings from the assessee and her mother-in-law. The AO made the addition on the ground that no proper and complete explanation has been furnished. The Ld. CIT(A) granted relief of the credit of Rs.77,100/- as explained cash on adhoc basis without citing any justification for confirming the balance addition to the extent of Rs.2,00,000/-. The CIT(A) was justified in rejecting the claim of the assessee on the basis that no explanation has been submitted before AO. ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 26 9.3.2 Admittedly, the appellant assessee is residing in joint family consisting of mother-in-law, husband who is JE in PDD Department along with two children. The Ld. AR contended that the mother in-law of the assessee is also drawing family pension. Assessee is also declaring tuition income since long which has been accepted by the department. It was also submitted that the mother-n-law of the assessee is Senior Citizen and she keeps cash at home for social security in order to meet any eventuality like medical emergency. In our view, the disputed the amount of Rs.2,00,000/- stands explained in the light of the demonetization scheme, announced by the Hon'ble PM with clarification that revenue will not probe the accounts of individuals, house wives if deposits made in the bank account were below Rs.2.50 lakhs and followed by CBDT guidelines vide Instruction No.3/2017, issued u/s 119 of the Act. Accordingly, addition confirmed of Rs. 2,00,000/- is deleted. 9.3.3 The Ld. AR argued that the cash amounting to Rs.7,76,500/- has been deposited on various dates against the gross receipts of Rs.4,80,000/- on account of tuition fee and balance out of time to time being cash in hand; that the assessee is qualified BSC. B. Ed and had experience in teaching as she was enrolled as teacher in New Era ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 27 Environmental High School from 1995-97 till her marriage and subsequently, started tuition from her residence and accordingly income from tuition receipts have been shown regularly since assessment year 2006-07 and the department had admitted her source of income on account of tuition fee even in the assessment made u/s 153A in the preceding assessment year. It is seen that the bank statement, cash flow statement, cash account with narration of each debit/ credit entry which were already furnished before the lower authorities (APB, Pgs.9,10,11,12 and 13). From the cash flow statement, it is self -explanatory that the cash has been deposited out of cash withdrawals from time to time and cash in hand and thus, the disputed cash of Rs.7,76,500/- stands explained. Accordingly, we accept the grievance of the assessee as genuine and the addition of Rs.7,76,500/- is deleted. 9.3.4 Next and last issue is regarding jewellery weighing 1136.29 grams were found and out of the said jewellery, the Ld. AO allowed the benefit of CBDT Instruction No.1916 dated 11.05.1994 in respect of the person found during the course of search. It was explained before the lower authorities that some of the jewellery were pertains to the mother in law of the assessee who was also residing with us. On the date of search, she was ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 28 not in the residence as she had gone to see her daughter. During the course of assessment proceedings, the mother in law of the assessee and the assessee has furnished affidavit that some of the jewellery belongs to mother-in-law of the assessee which is placed on paper book page No.14 & 15. Further, in the affidavits of mother in law, she had also confirmed that after the death of her husband in the year 2009, she is residing with her son and daughter-in-law and she is in possession of jewellery approximately 400 grams which has been kept in joint locker of her son and daughter- in-law (APB, Pgs.16 & 17). It is seen that the husband of the assessee being a government employee have intimated the list of dependent family members to the PDD department of J&K UT and as per the said information her mother is dependent family member (APB, Pge. 18 to 30). The Ld. DR or revenue authorities failed to rebut the contentions and the evidences filed by the appellant in support of its claim. Under the circumstances, accordingly, the appellant assessee would get the benefit of jewellery worth more than 400 grams belongs to mother in law as being kept in the bank locker jointly by her son and daughter-in-law. Accordingly, addition of Rs.6,27,772/- on account of disputed jewellery is deleted. ITA Nos. 177 to 179/Asr/2022 Deepshikha Jamwal v. Dy.CIT 29 10. In the backdrop of the aforesaid discussion, the captioned three appeals of the assessee are disposed of in the terms indicated as above. Order pronounced in the open court on 12.07.2023 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T. True Copy By Order