Shivaji R. Mohite, Kolhapur V. Assistant Commissioner Income-tax,

ITA 1823/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7403 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-09-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 07-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Keywords: Gift; Search and seizure; Salary income; Valuation report
• Section: 132

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1823/PUN/2014 [ [ / ASSESSMENT YEAR : 2012-13 MR. SHIVAJI R MOHITE PARVATI KUNJ, 250/B, NAGALA PARK, KOLHAPUR. PAN : ABGPM8687E. . / APPELLANT V/S ASST.COMMISSIONER OF INCOME TAX, (CENTRAL) CIRCLE, KOLHAPUR. . / RESPONDENT ASSESSEE BY : SHRI KISHORE PHADKE REVENUE BY : SMT. NIRUPAMA KOTRU / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) KOLHAPUR DT.21.04.2014 FOR THE ASSESSMENT YEAR 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL STATED TO BE DERIVING INCOME FROM SALARY, BUSINESS AND OTHER SOURCES. A SEARCH OPERATION U/S 132 / DATE OF HEARING : 11.09.2017 / DATE OF PRONOUNCEMENT: 27.09.2017 2 OF THE ACT WAS CARRIED OUT ON 25.08.2011 WHEREIN CASH OF RS.9,45,925/- AND JEWELLERY VALUED AT RS.76,30,269/- WAS FOUND AND OUT OF WHICH JEWELLERY WORTH RS.19,73,184/- WAS SEIZED. DURING THE COURSE OF SEARCH, STATEMENT OF THE ASSESSEE WAS RECORDED U/S 132(4) OF THE ACT WHEREIN HE MADE DECLARATION OF GOLD JEWELLERY OF 500 GRAMS VALUING RS.13,15,000/- AND SILVER ORNAMENTS OF 10 KG., VALUING RS.6,10,000/- AGGREGATING TO RS.19,25,000/- AS ADDITIONAL INCOME FOR AY 2012-13. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE WITH RESPECT TO JEWELLERY AND SILVER ARTICLES, INTER-ALIA SUBMITTED THAT NO ADDITION ON ACCOUNT OF UNEXPLAINED JEWELLERY IS REQUIRED TO BE MADE AS 626 GRAMS OF GOLD WAS REFLECTED IN THE ASSESSEES WEALTH TAX RETURNS, 474.30 GRAMS GOLD BELONGED TO SMT NEELIMA MANDHARE (ASSESSEES MOTHER-IN-LAW), GOLD ORNAMENTS AS PER VDIS 1997 WAS 1031.128 GMS AND STREEDHAN OF 500 GRAMS BELONGED TO MONIKA MOHITE. SIMILAR SUBMISSIONS WERE MADE WITH RESPECT TO SILVER UTENSILS. THE SUBMISSION MADE BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO AO AS HE WAS OF THE VIEW THAT ASSESSEE COULD NOT SUBSTANTIATE THE SUBMISSIONS. HE ACCORDINGLY ADDED RS.19,25,000/- AS INCOME U/S 69A OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO BY HOLDING AS UNDER: ON THE ABOVE FACTS I FIND THAT CONTRARY TO THE CLAIM MADE BY THE ASSESSEE IN APPEAL, THE ASSESSEE'S AVERMENTS IN SUPPORT OF HIS CLAIM ARE NOT SUPPORTED BY DOCUMENTARY EVIDENCES. IN THE COURSE OF SEARCH AND SEIZURE OPERATION ASSESSEE HAS HIMSELF OFFERED 500 GMS. OF GOLD AS UNDISCLOSED INVESTMENT. LATER ON DURING ASSESSMENT PROCEEDINGS HE ATTEMPTED TO RETRACT FROM THE DISCLOSURE. TOTAL GOLD JEWELLERY FOUND WAS, HAVING NET WEIGHT OF 1962.050 GMS. ASSESSEE STATED THAT 626 GMS. HAS BEEN DECLARED IN HIS WEALTH TAX RETURN. HOWEVER, NOTHING IS ON RECORD OR WAS PRODUCED BY THE ASSESSEE TO SHOW WHETHER THESE ARE THE SAME 3 TERMS WHICH HAVE BEEN FOUND IN SEARCH. FURTHER, IT WAS STATED THAT 474.30 GMS. BELONGED TO HIS MOTHER-IN-LAW AND HER CONFIRMATION WAS FILED. HOWEVER, SHE APPEARS TO HAVE NO WEALTH TAX RETURN OR ANY OTHER EVIDENCE. 1031.128 GMS. WAS STATED TO BE OUT OF DISCLOSURE MADE IN VDIS, 1997 BUT NO VALUATION REPORT WHICH WAS FILED WITH THE VDIS HAS BEEN FURNISHED TO SUBSTANTIATE THE CLAIM AND TO ESTABLISH THAT JEWELLERY FOUND ARE THE SAME AS WERE DISCLOSED IN VDIS. IN BRIEF, THERE WAS NO EVIDENCE IN SUPPORT OF ANY OF THE CLAIM OF THE ASSESSEE. AT THE TIME OF SEARCH AND SEIZURE OPERATION ASSESSEE WAS CONSCIOUS OF THIS FACT, THAT IS WHY HE DECLARED 500 GMS. OF JEWELLERY AS UNDISCLOSED. AS PER BOARD CIRCULAR NO. 1916 DATED 11/05/1994, 500 GMS. OF JEWELLERY IN RESPECT OF A MARRIED LADY MEMBER AND 250 GMS. IN RESPECT OF UNMARRIED LADY MEMBER MAY NOT BE SEIZED DURING SEARCH OPERATION. HOWEVER THIS DOES NOT MEAN THAT THE RESPECTIVE QUANTITY SHOULD BE TREATED AS EXPLAINED. THUS, THE THUMB RULE PRESCRIBED VIDE THIS CIRCULAR TO AVOID UNNECESSARY SEIZURE AND HARASSMENT TO THE ASSESSEE CANNOT BE TAKEN AS INSTRUCTION TO TREAT THE QUANTITY AS EXPLAINED. THE CIRCULAR ALSO TALKS OF DUE CREDIT TO BE GIVEN TO THE STATUS OF FAMILY AND LIVING STANDARD OF THE ASSESSEE LOOKING TO ALL THESE FACTS, THE ASSESSING OFFICER HAS MADE ADDITION IN RESPECT OF ONLY 500 GMS. OF JEWELLERY OUT OF TOTAL JEWELLERY OF 1962.050 GMS. WHICH MEANS 1462 GMS. OF JEWELLERY HAS ALREADY BEEN CONSIDERED AS EXPLAINED. THERE IS NO FURTHER JUSTIFICATION TO TREAT ADDITIONAL 500 GMS AS EXPLAINED. THE ASSESSING OFFICERS ACTION IS JUSTIFIED. SIMILARLY, IN RESPECT OF SILVER ARTICLES, THE ADDITION OF VALUE OF 10 KGS. OF SILVER OUT OF TOTAL 24.447 KGS. IS JUSTIFIED. THE ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY CONFIRMED AND THE GROUNDS TAKEN BY THE APPELLANT ARE REJECTED. AGGRIEVED BY THE ORDER OF LD.CIT(A), AASESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUND. THE LD.CIT(A), KOLHAPUR, ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIONS MADE BY THE LEARNED AO ON ACCOUNT OF UNEXPLAINED GOLD JEWELLERY AND SILVER ARTICLES WITHOUT APPRECIATING THE FACT SUCH AS WEALTH TAX RETURN, VDIS DISCLOSURE, STREEDHAN, CBDT CIRCULAR, GIFT ON MARRIAGE APPLICATION AND INHERITED ARTICLES. 3. BEFORE US, LD AR REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED A RECONCILIATION STATEMENT ACCORDING TO WHICH THE JEWELLERY DECLARED IN THE WEALTH TAX RETURN, VDIS STATEMENT AND AFTER CONSIDERING THE CBDT CIRCULAR WAS LESS THAN THE JEWELLERY FOUND DURING THE COURSE OF SEARCH AND THEREFORE NO ADDITION WAS REQUIRED TO BE MADE IN THE HANDS OF THE ASSESSEE. HE FURTHER POINTED TO THE COPY OF THE VDIS 4 DECLARATION MADE BY MRS.MONIKA MOHITE AND THE WEALTH TAX RETURN PLACED IN THE PAPER BOOK. HE THEREFORE PRAYED THAT THE ADDITION BE DELETED. LD DR ON THE OTHER HAND POINTED TO THE OBSERVATIONS OF AO AND LD.CIT(A). HE FURTHER SUBMITTED THAT THE WEALTH TAX RETURN WAS FILED BY THE ASSESSEE SUBSEQUENT TO THE DATE OF SEARCH AND WAS THUS AN AFTERTHOUGHT AND SHOULD BE IGNORED. HE THUS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO ADDITION OF UNACCOUNTED JEWELLERY FOUND AT THE TIME OF SEARCH. BEFORE US, ASSESSEE HAS FILED A RECONCILIATION SHOWING THAT THE JEWELLERY FOUND AT THE TIME OF SEARCH IS LESS AFTER CONSIDERING THE VDIS DECLARATION OF MRS.MONIKA MOHITE, WEALTH TAX RETURN OF THE ASSESSEE AND THE CBDT CIRCULAR. THE AFORESAID WORKING OF RECONCILIATION HAS NOT BEEN CONTROVERTED BY REVENUE. IT IS ALSO A FACT THAT MRS.MONIKA MOHITE HAS DECLARED JEWELLERY IN THE DECLARATION FILED UNDER VOLUNTARY DISCLOSURE OF INCOME SCHEME 1997 AND HAS BEEN ACCEPTED AND A CERTIFICATE TO THAT EFFECT DATED 12.01.1998 HAS BEEN ISSUED BY CIT, KOLHAPUR. FURTHER, IT IS ALSO A FACT THAT ASSESSEE IN THE WEALTH TAX RETURN FILED FOR AY 2012-13 HAD DISCLOSED THE JEWELLERY. THE MERE FACT THAT THE RETURN OF WEALTH HAS BEEN FILED SUBSEQUENT TO THE DATE OF SEARCH CANNOT BE A GROUND FOR DISCARDING THE SAME UNLESS THERE IS SOME CONTRARY MATERIAL OR EVIDENCE ON RECORD. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT IN THE PRESENT CASE, NO ADDITION OF UNACCOUNTED JEWELLERY U/S 69A WAS CALLED FOR AND 5 THEREFORE WE DIRECT ITS DELETION. THUS THE GROUND OF ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 27 TH DAY OF SEPTEMBER, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 27 TH SEPTEMBER, 2017. YAMINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT(A)- KOLHAPUR. CIT-I/II, KOLHAPUR / CIT(CENTRAL), PUNE. , , / DR, ITAT, B PUNE; [ / GUARD FILE. / BY ORDER // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE.