ITO, Nashik V. Shri Nemichand P Modi, Malegaon

ITA 1821/PUN/2012

• Counselvise Citation: 182124514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-12-2013
• Assessment Year: 2010-2011
• Appeal Filed On: 10-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Unexplained investment; Gift; Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1821/PN/2012 ITO, (CENTRAL)-1, NASHIK APPELLANT VS. SHRI NEMICHAND P. MODI, CHANDPUSHPA GURUDATTA NAGAR, SATANA NAKA, MALEGAON PAN: AHGPM1960L RESPONDENT APPELLANT BY : SHRI S.P. W ALIMBE RESPONDENT BY : SHRI NIK HIL PATHAK DATE OF HEARING: 30.12.2013 DATE OF ORDER : 30.12.2013 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, [SHORT C IT(A)-I] NASHIK, DATED 14.06.2012 ON THE FOLLOWING GROUNDS. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDIT ION OF RS. 11,22,974/-, MADE ON ACCOUNT OF UNEXPLAINED INVEST MENT IN JEWELLERY WITHOUT APPRECIATING THAT THE SAID JEW ELLERY WAS UNEXPLAINED JEWELLERY FOUND DURING THE COURSE OF SE ARCH ACTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY AMOUNTING TO RS.11,22,974/- BY WRONGLY INTERPRETING THE CBDT INSTRUCTION NO. 1916. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE A DDITION OF RS. 2,28,315/-, MADE ON ACCOUNT OF UNEXPLAINED INVE STMENT IN SILVER UTENSILS WITHOUT APPRECIATING THAT THE SA ID SILVER UTENSILS WERE UNEXPLAINED AND FOUND DURING THE COUR SE OF SEARCH ACTION. 2 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY, D ELETE AMEND ANY OF THE GROUNDS, AS PER THE CIRCUMSTANCES OF THE CASE. 5. THE APPELLANT PRAYS LEAVE TO ADDUCE SUCH FURTHER EVIDENCE TO SUBSTANTIATE ITS CASE AS OCCASION MAY D EMAND. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, EARNING INCOME FROM SALARY, OTHER SOURCES AND AGRIC ULTURAL INCOME. A SEARCH ACTION U/S.132(1) WAS CONDUCTED IN THE CASE OF LODHA GROUP AND ASSOCIATES ON 21.05.2009 INCLUDI NG THE ASSESSEE. IN RESPONSE TO THE NOTICE U/S.142(1), TH E ASSESSEE HAS FILED A RETURN OF INCOME AND THE ASSESSING OFFICER HAS ASSESSED THE INCOME OF THE ASSESSEE BY MAKING ADDITION ON AC COUNT OF ALLEGED UNEXPLAINED GOLD JEWELLERY AND SILVER UTENS ILS, WHICH ARE AS UNDER: A.Y. INCOME RETURNED ADDITION TOWARDS UNEXPLAINED GOLD JEWELLERY ADDITION TOWARDS UNEXPLAINED SILVER UTENSILS INCOME ASS ESSED 2010 - 11 2,71,140 11,22,974 2,28,315 16,22 , 429 2.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHO HAVING CONSIDERED THE SUBMISSION MADE ON BEHALF OF ASSESSEE, DELETED THE ADDITION IN QUESTION. THE SAID HAS BEE N OPPOSED BEFORE US ON BEHALF OF REVENUE AND INTER ALIA SUBMI TTED THAT THE ADDITION OF RS.11,22,974/- MADE ON ACCOUNT OF UNEXP LAINED INVESTMENT IN JEWELER WAS NOT JUSTIFIED AND CIT(A) WAS ALSO NOT JUSTIFIED IN DELETING THE ADDITION OF RS.2,28,315/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SILVER UTENSIL S. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESENTATIVE H AS SUPPORTED THE ORDER OF CIT(A) ON BOTH THE ISSUES. 2.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITION OF RS.13,51,239/- ON ACCOUNT OF GOLD AND SILVER ARTICL ES DURING THE 3 SEARCH U/S.132 OF I.T. ACT, OUT OF WHICH RS.11,22,9 74/- WAS MADE ON ACCOUNT OF ALLEGED UNEXPLAINED GOLD JEWELER . THE ASSESSING OFFICER STATED THAT THE TOTAL JEWELLERY F OUND WITH MODI FAMILY CONSISTING OF 5 FEMALE MEMBERS AND 5 MALE ME MBERS WAS 2366.700 GMS VALUED AT RS. 34,56,346/-. HE FURTHER STATED THAT OUT OF THIS JEWELLERY, 765.50 GMS JEWELLERY BELONGE D TO THE ASSESSEE AND NOT TO ANY OTHER PERSON IN THE FAMILY AND THE ASSESSEE HAS NOT PROVED THE SOURCE OF ACQUISITION O F THE SAID JEWELLERY. FINALLY, THE ASSESSING OFFICER HAS MADE ADDITION IN QUESTION. 2.3 THE STAND OF THE ASSESSEE HAS BEEN THAT JEWELLE RY HAS BEEN CLAIMED TO BELONG TO HIMSELF, HIS WIFE AND DAUGHTER -IN-LAW DURING SEARCH PROCEEDINGS ITSELF. THE ASSESSEE RELIED ON CBDT CIRCULAR NO.1916 WHICH LAID DOWN QUANTUM OF GOLD JEWELER PER MALE MEMBER, UNMARRIED FEMALE MEMBER AND MARRIED FEMALE MEMBER WHICH SHOULD NOT BE SEIZED AT THE TIME OF SEARCH. FOLLOWING THE ABOVE SAID CIRCULAR, VARIOUS HIGH COURTS AND TRIBUN ALS, CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE. THE SAME HAS B EEN OPPOSED BEFORE US AS STATED ABOVE. IT IS NOT DISPUTED THAT IN CASE OF JEWELLERY OF 765.5 GMS. IS CONSIDERED AS BELONGS TO THE ASSESSEE, HIS WIFE AND DAUGHTER-IN-LAW, ALL TO THE FAMILY MEM BERS OF THE ASSESSEE THAN SAME SHALL MUCH LESS THAN QUANTUM OF JEWELER WHICH COULD BE CONSIDERED AS REASONABLE IN VIEW OF CBDT CIRCULAR NO.1916 AND ABOVE MENTIONED DECISION AND V ARIOUS DECISIONS OF TRIBUNALS, THE CIT(A) WAS JUSTIFIED IN TREATING THE JEWELLERY OF RS.11,22,974/- AS EXPLAINED INVESTMENT IN JEWELLERY. ACCORDINGLY, THE CIT(A) HAS RIGHTLY DELETED THE ADD ITION. THIS REASONED FINDING NEEDS NO INTERFERENCE FROM OUR SID E. WE UPHOLD THE SAME. 2.4 NEXT PART OF ADDITION OF RS.2,28,315/- IS ON AC COUNT OF SILVER ARTICLES. DURING THE SEARCH ACTION, SILVER ARTICLE S WEIGHING 10.331 KGS VALUED AT RS.2,28,315/- WERE FOUND AS STATED AB OVE. THE 4 ASSESSING OFFICER HAS MADE ADDITION ON ACCOUNT OF U NEXPLAINED SILVER UTENSILS OF RS.2,28,315/- STATING THAT NO EV IDENCE REGARDING ACQUISITION OF SUCH UTENSILS ON DIFFERENT OCCASIONS HAS BEEN FILED BY THE ASSESSEE. IN APPEAL, THE CIT(A) HAS DELETED THE SAID ADDITION AND THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE. ON THE OTHER HAND, LEARNED AUTHORIZED REPRESENTATIVE HAS SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 2.5 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THE SILVER UTENSILS WEIGHING 1 0.331 KGS. VALUED AT RS.2,28,315/- WERE FOUND WITH MODI GROUP HAVING 5 FAMILIES. THE AVERAGE SILVER UTENSILS OWNED BY EAC H FAMILY IS ABOUT 2.06 KGS HAVING VALUE OF ABOUT RS.45,663/- AN D THE SAME COULD NOT BE SAID TO BE EXCESSIVE IN VIEW OF HINDU CUSTOMS AND TRADITIONS. THOUGH THE DOCUMENTARY EVIDENCE MAY NO T BE AVAILABLE IN RESPECT OF ANCESTRAL SILVER UTENSILS / ARTICLES AND ALSO IN RESPECT OF SILVER ARTICLES RECEIVED AS GIFT FROM RELATIVES, BUT THE CONTENTION OF THE ASSESSEE IS SUPPORTED BY THE VARI OUS DECISIONS ON THE POINT INCLUDING BOMBAY BENCH TRIBUNAL IN THE CASE OF DY. CIT VS. SUNIL U. RUNGTA 94 TTJ 329. IN VIEW OF ABO VE, CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.2,28,3 15/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SILVER UTENSIL S. THIS REASONED FINDING NEEDS NO INTERFERENCE FROM OUR SID E. WE UPHOLD THE SAME. 3. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 30 TH OF DECEMBER, 2013. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 30 TH DECEMBER 2013 GCVSR 5 COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-I, NASHIK 4) THE CIT-I, NASHIK 5) THE DR, B BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE