DCIT, CHENNAI V. Smt. Leelabai, CHENNAI

ITA 1790/CHNY/2008

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8162 (ITAT-CHENNAI)
• Duration Of Justice: 7 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 25-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MILIND MADHUKAR BHUSARI
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Unexplained investment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1790/MDS/2008 ' (' / ASSESSMENT YEARS : 2006-07 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE IV(2), CHENNAI - 600 034. V. SMT. LEELABAI, NO.70, GNT ROAD, RED HILLS, CHENNAI - 600 052. PAN : AAAPL 8365 K (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : DR. MILIND MADHUKAR BHUSARI, CIT ,-*+ . / / RESPONDENT BY : DR. ANITA SUMANTH, ADVOCATE 0 . 1$ / DATE OF HEARING : 31.12.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 22.01.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) I, CHENN AI, DATED 14.05.2008 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. DR. MILIND MADHUKAR BHUSARI, THE LD. DEPARTMENTA L REPRESENTATIVE, SUBMITTED THAT THE ONLY ISSUE ARISE S FOR 2 I.T.A. NO.1790/MDS/08 CONSIDERATION IS WITH REGARD TO ADDITION MADE UNDER SECTION 69B OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). ACC ORDING TO THE LD. D.R., THE ASSESSING OFFICER MADE AN ADDITION OF ` 33,65,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY AND ANOTHER SUM OF ` 75,597/- TOWARDS UNEXPLAINED INVESTMENT IN SILVER A RTICLES. THE LD. D.R. FURTHER SUBMITTED THAT THERE WAS SEARCH IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 03.08.2005. IN THE COU RSE OF SEARCH OPERATION, SEVERAL INCRIMINATING MATERIAL, INCLUDIN G GOLD JEWELLERY AND SILVER ARTICLES, WERE FOUND. DURING THE COURSE OF EXAMINATION, THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT SHE HAS NO EXPLANATION TO OFFER WITH REGARD TO INVESTMENT M ADE IN THE JEWELLERY AND SILVER ARTICLES. THEREFORE, THE ASSE SSING OFFICER FOUND THAT 468.05 GMS OF JEWELLERY BELONGING TO ASSESSEE S DECEASED MOTHER AND ANOTHER 836.98 GMS OF JEWELLERY FOUND IN THE SAFE DEPOSIT LOCKER WERE TREATED AS UNEXPLAINED INVESTME NT. IN THE ABSENCE OF ANY DETAILS OF PURCHASE OF JEWELLERY, TH E ASSESSING OFFICER ESTIMATED THE COST OF INVESTMENT ON THE BAS IS OF THE RATE PROVIDED BY MADRAS JEWELLERS AND DIAMOND MERCHANTS S ASSOCIATION. SIMILARLY, 20,504.71 GMS OF SILVER AR TICLES WERE FOUND. IN THE WEALTH-TAX RETURN, THE ASSESSEE HAS DISCLOSE D 14,015 GMS OF SILVER ARTICLES. THE BALANCE OF 6489 GMS REMAINED UNEXPLAINED. 3 I.T.A. NO.1790/MDS/08 THEREFORE, THE ASSESSING OFFICER MADE AN ADDITION O F ` 33,65,000/- ON THE BASIS OF THE RATE PROVIDED ON THE DATE OF SE ARCH OPERATION. 3. ON THE CONTRARY, DR. ANITA SUMANTH, THE LD.COUNS EL FOR THE ASSESSEE, SUBMITTED THAT THE ENTIRE ADDITION WAS MA DE ON THE BASIS OF THE STATEMENT RECORDED FROM THE ASSESSEES HUSBA ND ON 13.09.2005. DURING THE COURSE OF ASSESSMENT PROCEE DING, THE ASSESSEE EXPLAINED THAT THE ENTIRE JEWELLERY WAS DE CLARED IN THE WEALTH-TAX RETURN AND ALSO UNDER VOLUNTARY DISCLOSU RE OF INCOME SCHEME, 1997 BY DIFFERENT MEMBERS OF THE ASSESSEES FAMILY. THE ASSESSING OFFICER CONSIDERED THE JEWELLERY DECLARED IN THE WEALTH- TAX RETURN FOR THE ASSESSMENT YEAR 1993-94. WITH R EGARD TO JEWELLERY DECLARED UNDER VOLUNTARY DISCLOSURE OF IN COME SCHEME, 1997, THE ASSESSING OFFICER FOUND THAT THE JEWELLER Y WAS CONVERTED INTO STOCK-IN-TRADE OF THE FAMILY JEWELLERY BUSINES S AND THEREFORE, IT CANNOT BE CONSIDERED AS AVAILABLE AT THE TIME OF SE ARCH. REFERRING TO THE ORDER OF THE CIT(APPEALS), THE LD.COUNSEL SU BMITTED THAT WHETHER IT IS STOCK-IN-TRADE OR PERSONAL JEWELLERY, IT IS A FACT THAT THE JEWELLERY WAS FOUND DURING THE COURSE OF SEARCH OPE RATION. ACCORDING TO THE LD. COUNSEL, THE JEWELLERY IN FACT BELONGED TO VARIOUS MEMBERS OF FAMILY AND WAS CONVERTED INTO ST OCK-IN-TRADE. 4 I.T.A. NO.1790/MDS/08 THE LD.COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS DECLARED 1140 GMS OF JEWELLERY AND 2 KGS OF SILVER IN THE WE ALTH-TAX RETURN. 1749.050 GMS OF GOLD JEWELLERY WAS DECLARED UNDER V OLUNTARY DISCLOSURE OF INCOME SCHEME. THE ASSESSEE HAS FILE D MATERIAL EVIDENCE TO SUPPORT THE CLAIM BEFORE THE LOWER AUTH ORITIES. THE JEWELLERY AND THE SILVER ARTICLES DECLARED UNDER VO LUNTARY DISCLOSURE OF INCOME SCHEME WERE CREDITED TO THE ASSESSEES CA PITAL ACCOUNT AS ON 31.03.1998 AND THE SAME WAS FILED ALONG WITH RETURN OF INCOME FOR THE ASSESSMENT YEAR 1998-99. THE ASSESS EE HAS ALSO RECEIVED 740 GMS OF GOLD JEWELLERY AND 3.8 KGS OF S ILVER ARTICLES FROM HER LATE FATHER. THE SAME WAS DISCLOSED IN TH E WEALTH-TAX RETURN FOR THE ASSESSMENT YEARS 2004-05 TO 2006-07. THEREFORE,ACCORDING TO THE LD. COUNSEL, THE CIT(APP EALS) FOUND THAT THE ASSESSEE HAS EXPLAINED THE SOURCE OF THE JEWELL ERY. THEREFORE, THE CIT(APPEALS) FOUND THAT THE JEWELLERY DECLARED IN VDIS AND IN THE WEALTH-TAX RETURN FROM THE ASSESSMENT YEARS 200 3-04 HAS TO BE EXCLUDED. THUS, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) HAS RIGHTLY DELETED THE ADDITION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN 5 I.T.A. NO.1790/MDS/08 DISPUTE THAT THE ASSESSEE HAS DISCLOSED THE GOLD JE WELLERY AND SILVER ARTICLES IN THE WEALTH-TAX RETURN. THE JEWE LLERY WAS ALSO DISCLOSED UNDER VDIS, 1997. THE ASSESSEE ALSO CLAI MED THAT 740 GMS OF GOLD JEWELLERY AND 3.8 KGS OF SILVER ARTICLE S WERE RECEIVED FROM HER LATE FATHER. THE JEWELLERY BELONGED TO VA RIOUS MEMBERS OF THE FAMILY WAS CONVERTED INTO STOCK-IN-TRADE ON VAR IOUS DATES. THE CIT(APPEALS), AFTER CONSIDERING THE DISCLOSURE MADE BY THE ASSESSEE IN THE VDIS AND IN THE WEALTH-TAX RETURN, FOUND THAT THE JEWELLERY DISCLOSED UNDER THE VDIS AND GOLD REDEEME D UNDER THE BOND SCHEME WERE CREDITED BY RAJESH KUMAR TO HIS CA PITAL ACCOUNT AND THE SAME WAS DISCLOSED IN THE INCOME-TAX RETURN FOR THE ASSESSMENT YEAR 1998-99. WHEN THE ASSESSEE HAS DIS CLOSED THE JEWELLERY AND SILVER ARTICLES IN THE WEALTH-TAX RET URN AND FOR THE JEWELLERY DISCLOSED IN THE VDIS, THIS TRIBUNAL IS O F THE CONSIDERED OPINION THAT THERE IS NO NEED FOR MAKING ANY ADDITI ON. THE CLAIM OF THE ASSESSEE THAT SHE RECEIVED 740 GMS OF GOLD JEWE LLERY AND 3.8KGS OF SILVER ARTICLES FROM HER LATE FATHER CANN OT BE DOUBTED. IN THOSE CIRCUMSTANCES, AS RIGHTLY FOUND BY THE CIT(AP PEALS), THERE IS NO JUSTIFICATION TO IGNORE THE JEWELLERY AND SILVER ARTICLES DISCLOSED IN THE WEALTH-TAX RETURN AND THE JEWELLERY DISCLOSED I N THE VOLUNTARY DISCLOSURE OF INCOME SCHEME. THEREFORE, THIS TRIBU NAL IS OF THE 6 I.T.A. NO.1790/MDS/08 CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTL Y DELETED THE ADDITION. HENCE, THIS TRIBUNAL HAS NO REASON TO IN TERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SA ME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON 22 ND JANUARY, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 22 ND JANUARY, 2016. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-I, CHENNAI 4. 0 81 /CIT, CENTRAL-I, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.