MUNMUN KISHOR PARUI, MUMBAI V. ITO 14(2)(3), MUMBAI

ITA 1858/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92726 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 19-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIALDR
• Assessee Lawyers: DEVANG DIVECHA
• Keywords: Gift; Cost of acquisition; Fair market value

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI ,!' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.1858/MUM/2014 ASSESSMENT YEAR:2009-10 MUNMUN KISHOR PARUI, B-405, LANDMARK TOWER, OPP. WADALA, TELEPHONE, EXCHANGE, G.D.AMBEKAR ROAD, DADAR(E), MUMBAI-400014 / VS. ITO,14(2)-3 ROOM NO.306, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021 / ASSESSEE / REVENUE P.A. NO. AIYPP9295J $%& / ASSESSEE BY SHRI DEVANG DIVECHA $%& / REVENUE BY SHRI A.K.DHONDIAL-DR / DATE OF HEARING 11/06/2015 & / DATE OF ORDER: 15/06/2015 &/ O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 29/06/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, BROADLY ON THE GROUND THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE TOTAL INCOME OF ASSESSEE AT RS.9,14,640/- AS AGAINST THE RETURNED INCOME OF RS.3,80,790/-, MAKING THE ADDITION OF RS.5,33,845/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN TREATING THE SAM E AS UNDISCLOSED CAPITAL GAIN AND FURTHER CHARGING OF IN TEREST U/S ITA NO.1858/MUM/2014 MUNMUN KISHOR PARUI 2 234A, 234B, 234C AND 234D OF THE INCOME TAX ACT, 19 61 (HEREINAFTER THE ACT). 2. DURING HEARING OF THIS APPEAL, SHRI DIVANG DIVECHA, LD. COUNSEL FOR THE ASSESSEE ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED BY CONTEND ING THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AS WEL L AS THE LD. ASSESSING OFFICER DID NOT APPRECIATE THE FACT T HAT THE ORNAMENTS, ACQUIRED BY HER WERE PURCHASED BY HER P ARENTS. ON THE OTHER HAND, SHRI A.K.DHONDIAL, LD. DR, DEFEN DED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SELLING GOLD ORNAMENTS/IMITATION JEWELLERY ON COMMISSION BA SIS. THE ASSESSEE DECLARED INCOME OF RS.3,80,790/- IN HE R RETURN FILED ON 21 ST OCTOBER, 2009. THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY, THEREFORE, NOTICES U/S 143( 2)/142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE . THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS FROM T IME TO TIME AND FURNISHED THE NECESSARY DETAILS AS CALLED FOR BY THE ASSESSING OFFICER AS IS EVIDENT FROM PARA 2 (PAGE-2 ) OF THE ASSESSMENT ORDER. THE ASSESSEE SHOWED BUSINESS INCO ME, CAPITAL GAIN AND INCOME FROM OTHER SOURCES. THE ASS ESSEE CLAIMED TO HAVE SOLD THE GOLD ORNAMENTS FOR RS.5,97 ,980/- AND DECLARED LONG TERM CAPITAL GAIN OF RS.64,135/- ON SALE OF JEWELLERY. WHILE COMPUTING THE LONG TERM CAPITAL GA IN FROM THE SALE OF JEWELLERY, THE ASSESSEE TOOK THE FAIR M ARKET VALUE ITA NO.1858/MUM/2014 MUNMUN KISHOR PARUI 3 OF THE GOLD JEWELLY AS THE DATE OF HER MARRIAGE I.E . 31 ST JULY, 1995, AS THE COST OF ACQUISITION OF THE JEWELLERY. AS PER THE REVENUE, THE ASSESSEE DID NOT FURNISH ANY BILL/EXPL ANATION FOR ACQUISITION OF THE GOLD JEWELLERY AND FURTHER T HE BASIS FOR TAKING THE COST OF ACQUISITION AT RS.2,57,750/-. T HE STAND OF THE ASSESSEE WAS THAT THE FAIR MARKET VALUE AS ON T HE DATE OF MARRIAGE OF THE ASSESSEE IS THE BASIS AS THE JEWELL ERY WAS RECEIVED AS A GIFT FROM HER PARENTS AT THE TIME OF MARRIAGE. THE LD. ASSESSING OFFICER REJECTED THE CONTENTION O F THE ASSESSEE WITH RESPECT TO ACQUISITION OF ORNAMENTS. THE ASSESSING OFFICER TREATED THE SHORT TERM CAPITAL GA IN AT RS.5,97,980/-, THEREFORE, HE ADDED RS.5,38,845/- AS INCOME OF THE ASSESSEE. THE ASSESSEE FELT AGGRIEVED AND F IELD APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) . THERE ALSO THE APPEAL OF THE ASSESSEE WAS DISMISSED. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, I FIND THAT FROM ASSESS MENT STAGE ITSELF, UNCONTROVERTEDLY, THE ASSESSEE HAD BEEN TAK ING THE STAND, THE JEWELLERY IN QUESTION WAS OBTAINED BY TH E ASSESSEE AS A GIFT, AT THE TIME OF HER MARRIAGE, FROM HER PA RENTS. THE ASSESSING OFFICER, IF WAS HAVING AN APPREHENSION, W ITH RESPECT TO THE POSSESSION OF THE GOLD JEWELLERY, NO THING PREVENTED HIM EITHER TOWARDS THE ASSESSEE TO PRODUC E THE PARENTS OR TO SURVEY NOTICE UPON PARENTS TO EXAMINE THEM. ITA NO.1858/MUM/2014 MUNMUN KISHOR PARUI 4 ON THE CONTRARY, AS IS EVIDENT FROM PARA 2 (PAGE-2) OF THE ASSESSMENT ORDER ITSELF, THE ASSESSEE FURNISHED THE DETAILS CALLED FOR AND THE CASE WAS DISCUSSED WITH THE REPR ESENTATIVE OF THE ASSESSEE. EVEN IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED TO HAVE SOLD THE JEWELLERY FOR RS.5,97,980/ - AND DECLARED LONG TERM CAPITAL GAIN OF RS.64,135/- FROM THE SALE OF GOLD ORNAMENTS BY TAKING THE FAIR MARKET VALUE O F THE GOLD JEWELLERY AS THE DATE OF HER MARRIAGE I.E. 31/07/19 95. IT IS NOT THE AFTERTHOUGHT OF THE ASSESSEE. AS PER THE R EVENUE, THE ACTUAL COST OF ACQUISITION IS THE PRICE PAID BY THE ASSESSEE. AS MENTIONED EARLIER, THE ACTUAL COST, IN MY VIEW, IS THE COST, WHICH WAS PAID BY THE PARENTS OF THE ASSESSEE AS TH E ASSESSEE RECEIVED THE GOLD JEWELLERY AS A GIFT FROM HER PARENTS AT THE TIME OF MARRIAGE I.E. 31/07/1995. THERE IS N O MENTION IN THE ASSESSMENT ORDER AS WELL AS IN THE IMPUGNED ORDER THAT THE ASSESSEE DECLARED THE INCOME IN HER RETURN CLAIMING THE JEWELLERY AS A GIFT OR NOT, RATHER, AS MENTIONE D EARLIER, IN THE ASSESSMENT ORDER, IT HAS BEEN SPECIFICALLY MENT IONED THAT THE ASSESSEE FILED THE NECESSARY DETAILS. NOTHING PREVENTED THE ASSESSING OFFICER TO EXAMINE THE EARLIER RETURN S FILED BY THE ASSESSEE, MENTIONING OF THE DETAILS OF SUCH GOL D JEWELLERY, AS HAS BEEN CLAIMED BY THE ASSESSEE. EVEN IN THE I MPUGNED ORDER, IT HAS BEEN MENTIONED THAT THE FATHER FILED A DECLARATION WITH RESPECT TO SUCH ORNAMENTS AT THE S TAGE OF FIRST APPELLATE PROCEEDINGS. THE ASSESSEE ALSO FILE D A SALE BILL MENTIONING OLD GOLD ORNAMENTS. THE LD.CIT(A) NEITH ER SOUGHT THE REMAND REPORT NOR GAVE ANY FINDING DISREGARDING THE BILL/DECLARATION, FILED BY THE ASSESSEE. THE LD. C OMMISSIONER OF INCOME TAX (APPEALS) EVEN DID NOT EXAMINE THE PU RCHASER ITA NO.1858/MUM/2014 MUNMUN KISHOR PARUI 5 OF THE GOLD ORNAMENTS. THE ONUS, AT THAT TIME, SHI FTED TO THE REVENUE, THUS, I FIND MERIT IN THE CONTENTION OF TH E ASSESSEE, CONSEQUENTLY, ALLOW THIS GROUND OF THE ASSESSEE. 3. SO FAR AS, ISSUE OF SHORT TERM CAPITAL GAIN AND CHARGING OF INTEREST ARE CONCERNED, SINCE, THIS TRI BUNAL HAS ALLOWED THE FIRST GROUND OF THE ASSESSEE, THE REMAI NING GROUNDS ARE CONSEQUENTIAL IN NATURE, THEREFORE, ALL OWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN T HE PRESENCE OF LEARNED REPRESENTATIVE FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 11 TH JUNE 2015. SD/- (JOGINDER SINGH) !' / JUDICIAL MEMBER MUMBAI; DATED : 15/06/2015 F{X~{T? P.S / ! &$)!*+,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI