Mr.Amith Kumar Bethala , Bangalore V. Deputy Commissioner of Income Tax Central Circle-1(4), Bangalore

ITA 2026/BANG/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6859 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-01-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 14-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUZAFFAR HUSSAIN
• Assessee Lawyers: G S PRASHANTH
• Keywords: Unexplained investment; Search and seizure; Accommodation entries; Set aside
• Section: 250; 132

Judgement Text

ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: BANGALORE BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO. 2026/BANG/2018 ASSESSMENT YEAR: 2013-14 AMITH KUMAR BETHALA NO.815, 8 TH BLOCK, NEAR KORAMANGALA POLICE STATION KORAMANGALA BENGALURU-560 095 PAN NO : AECPB8659N VS. DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1(4) BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI G.S. PRASHANTH, A.R. RESPONDENT BY : SHRI MUZAFFAR HUSSAIN, D.R. DATE OF HEARING : 12.01.2021 DATE OF PRONOUNCEMENT : 28.01.2021 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 13-04-2018 PASSED BY LD CIT(A)-11, BANGALORE AND IT RELATES TO THE ASSESSMENT YEAR 2013-14. 2. THE GROUNDS NUMBERED AS 1, 2, 7 TO 11 ARE G ENERAL IN NATURE. AT THE TIME OF HEARING, THE LD A.R DID NOT PRESS GR OUND NO.6. THE REMAINING GROUND RELATES TO THE FOLLOWING ISSUES:- ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 2 OF 12 (A) ADDITION OF RS.43,08,000/- RELATING TO 1500 GR AMS OF BULLION FOUND DURING THE COURSE OF SEARCH. (B) ADDITION OF RS.69,91,181/- RELATING TO 2668.3 9 GRAMS OF JEWELLERY FOUND DURING THE COURSE OF SEARCH. (C) ADDITION OF RS.38,19,960/- RELATING TO 2308 GR AMS RELATING TO UNDISCLOSED INVESTMENT IN JEWELLERY SUSTAINED BY LD CIT(A). 3. THE FACTS RELATING TO THE ABOVE SAID ISSUES A RE DISCUSSED IN BRIEF. THE REVENUE CARRIED OUT SEARCH AND SEIZURE OPERATIO NS U/S 132 OF THE ACT IN THE HANDS OF THE ASSESSEE ON 08-12-2013. DU RING THE COURSE OF SEARCH, THE GOLD ORNAMENTS WEIGHING 7442.30 GRAM S WAS FOUND, WHICH INCLUDED BULLION OF 1500 GRAMS. AFTER CONSID ERING THE EXPLANATIONS GIVEN BY THE ASSESSEE, THE AO ASSESSED VALUE OF FOLLOWING JEWELLERY/BULLION AS UNEXPLAINED INVESTME NT IN THE HANDS OF THE ASSESSEE:- VALUE OF BULLION (1500 GRMS X RS.2872/- PER GRAM) - RS. 43,08,000 VALUE OF ORNAMENTS (2668.390 GMS X RS.2620/GM) - RS. 69,91,181 VALUE OF JEWELLERY NOT SEIZED(2308 GMS XRS.2620/GM )-RS. 60,46,960 ------------------- TOTAL VALUE RS.1,73,46,141 ============= 4. THE LD CIT(A) CONFIRMED THE ADDITION OF RS.43 ,08,000/- AND RS.69,91,181/- RELATING TO FIRST TWO ITEMS STATED A BOVE. WITH REGARD TO THE THIRD ITEM, THE LD CIT(A) GRANTED RELIEF OF RS.22,27,000/-,BEING THE VALUE OF 850 GRAMS. IN THIS REGARD, THE LD CI T(A) HAS GIVEN CREDIT OF 500 GRAMS FOR MARRIED LADY (WIFE OF ASSESSEE), 2 50 GRAMS FOR UNMARRIED LADY (DAUGHTER OF ASSESSEE) AND 100 GRAMS (FOR THE ASSESSEE) BY CONSIDERING THE INSTRUCTION NO.1916 DA TED 11.05.1994 ISSUED BY CBDT FOR NOT SEIZING THE JEWELLERY. AGGR IEVED BY THE ORDER PASSED BY LD CIT(A), THE ASSESSEE HAS FILED THIS AP PEAL BEFORE US. ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 3 OF 12 5. THE FIRST ISSUE RELATES TO THE ADDITION OF RS.43,08,000/-, BEING THE VALUE OF GOLD BULLION OF 1500 GRAMS. IN THIS R EGARD, THE ASSESSEE EXPLAINED THAT THE BULLION DOES NOT BELONG TO HIM A ND IT BELONGS TO M/S B & B JEWELLERS AND FINANCE LTD, WHEREIN THE AS SESSEE IS A DIRECTOR. IT WAS SUBMITTED THAT THE ABOVE SAID BUL LION WAS BROUGHT TO HIS HOME PRIOR TO THE DATE OF SEARCH FOR SAFE CU STODY. THE ASSESSEE ALSO FURNISHED A COPY OF STOCK REGISTER OF M/S B & B JEWELLERS AND FINANCE LTD BEFORE THE AO IN SUPPORT HIS SUBMISSION S. HOWEVER, THE AO NOTICED THAT THE REVENUE HAD OBTAINED A COPY OF STOCK REGISTER ON THE DATE OF SEARCH AND ACCORDINGLY, THE AO COMPARED THE SAME WITH THE STOCK REGISTER FURNISHED BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ACCORDING TO THE AO, THE S TOCK REGISTER HAS BEEN MODIFIED BY INFLATING THE PURCHASE OF GOLD ON 20-6-2012 (100 GRAMS), 14-09,2012 (1000 GRAMS) AND 25.09.2012 (179 .89 GRAMS). THEREAFTER THE ASSESSEE HAS ACCOUNTED FOR THE 1500 GRAMS SEIZED BY THE DEPARTMENT ON THE DATE OF SEARCH IN ORDER TO SH OW THAT IT BELONGS TO THE ABOVE SAID COMPANY. SINCE THERE WAS MODIFIC ATION OF STOCK REGISTER, THE AO TOOK THE VIEW THAT THE STOCK REGIS TER HAS BEEN MANIPULATED. ACCORDINGLY HE REJECTED THE EXPLANATI ONS OF THE ASSESSEE AND ACCORDINGLY ASSESSED THE ABOVE SAID AM OUNT OF RS.43,08,000/- AS UNEXPLAINED INVESTMENT OF THE ASS ESSEE. THE LD CIT(A) ALSO UPHELD THE VIEW TAKEN BY THE AO ON THIS ISSUE. 6. THE LD A.R SUBMITTED THAT THE ASSESSEE IS A DIRECTOR OF M/S B & B JEWELLERS AND FINANCE LTD ALONG WITH HIS BROTHE R SHRI DEEPAK BETHALA. HE SUBMITTED THAT THE ASSESSEE HAS EXPLAI NED THAT HE HAS BROUGHT 1500 GRAMS OF BULLION TO HOME FOR SAFE CUST ODY PRIOR TO THE DATE OF SEARCH. HE SUBMITTED THAT A STATEMENT OF M R. DEEPAK BETHALA WAS TAKEN ON THE DATE OF SEARCH AND HE HAS FURNISHE D STOCK STATEMENT ON THE DATE OF SEARCH. HOWEVER, HE HAS C LEARLY MENTIONED THAT THE STOCK REGISTER HAS NOT BEEN COMPLETED UPDA TED AND FURTHER THE COPY OF SALES REGISTER AS ON 13.01.2013 WAS ONL Y FURNISHED. HE ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 4 OF 12 FURTHER SUBMITTED THAT M/S B & B JEWELLERS AND FINA NCE LTD HAS DULY DISCLOSED THE ABOVE SAID 1500 GRAMS IN ITS STO CK REGISTER AS SEIZURE MADE BY THE INCOME TAX DEPARTMENT. THE LD A.R INVITED OUR ATTENTION TO THE COPY OF FINANCIAL STATEMENTS OF M/ S B & B JEWELLERS AND FINANCE LTD FOR THE YEAR ENDING 31-02-2013 PLAC ED AT 47 99 OF THE PAPER, MORE PARTICULARLY PAGE 57 OF THE PAPER B OOK, WHEREIN IT HAS BEEN REPORTED THAT THE CLOSING STOCK OF GOLD BU LLION INCLUDES 1500 GRAMS HELD WITH THE INCOME TAX DEPARTMENT. TH E LD A.R SUBMITTED THAT THE ACCOUNTS OF THE ABOVE SAID COMPA NY HAS BEEN AUDITED AND THE STOCK DETAILS HAS BEEN ACCEPTED BY VAT AUTHORITIES ALSO. ACCORDINGLY, HE SUBMITTED THAT THERE IS NO RE ASON TO REJECT THE EXPLANATIONS OF THE ASSESSEE THAT THE GOLD BULLION DOES NOT BELONG TO HIM. ACCORDINGLY, THE LD A.R SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN ASSESSING THE 1500 GRAMS OF GOLD BULLION, SINCE IT DOES NOT BELONG TO THE ASSESSEE. 7. THE LD D.R, ON THE CONTRARY, REITERATED THE OPINION EXPRESSED BY THE AO BY ADVERTING OUR ATTENTION TO THE RELEVAN T PAGES OF THE ASSESSMENT ORDER. 8. WE HEARD RIVAL CONTENTIONS ON THIS ISSUE AND PERUSED THE RECORD. WE NOTICED THAT THE ASSESSEE HAS DISOWNED THE GOLD BULLION OF 1500 GRAMS AND IN SUPPORT OF THE SAME, HE HAS FURNISHED A COPY OF STOCK REGISTER OF M/S B & B JEWELLERS AND FINANCE LTD. T HE AO HAS REJECTED THE SAID EXPLANATION ON THE REASONING THAT THERE IS VARIATION BETWEEN THE STOCK REGISTER OBTAINED AT THE TIME OF SEARCH A ND THE STOCK REGISTER FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. IT IS THE CONTENTION OF THE ASSESSEE THAT THE STOCK REGISTER TAKEN BY THE REVENUE DURING THE COURSE OF SEARCH PROCEEDINGS WAS NOT UPDATED COMPLETED. SUBSEQUENTLY, IT HAS BEEN UPDATED AND F URNISHED. IT IS THE SUBMISSION OF THE ASSESSEE ALL THE PURCHASES HA VE BEEN DULY ACCOUNTED FOR AND THEY HAVE BEEN ACCEPTED BY THE VA T DEPARTMENT ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 5 OF 12 ALSO. IT WAS ALSO STATED THAT THE BOOKS OF ACCOUNTS OF M/S B & B JEWELLERS AND FINANCE LTD HAVE BEEN AUDITED. FURTH ER, THE FACT OF SEIZURE OF BULLION BY INCOME TAX DEPARTMENT HAS BEE N DULY MENTIONED IN THE ANNUAL REPORT OF THE ABOVE SAID COMPANY. AC CORDINGLY, IT WAS CONTENDED BY LD A.R THAT THE ASSESSEE HAS SUFFICIEN TLY PROVED THAT THE GOLD BULLION DOES NOT BELONG TO HIM, BUT TO M/S B & B JEWELLERS AND FINANCE LTD. 9. ON THE CONTRARY, IT IS THE CASE OF THE REVEN UE THAT THE STOCK REGISTER HAS BEEN MANIPULATED BY M/S B & B JEWELLER S AND FINANCE LTD AND HENCE THE EXPLANATIONS OF THE ASSESSEE CANN OT BE ACCEPTED. 10. HOWEVER, THE FACT REMAINS THAT M/S B & B JE WELLERS AND FINANCE LTD IS A LIMITED COMPANY AND ITS ACCOUNTS H AVE BEEN DULY AUDITED. IT IS ALSO STATED THAT THE BOOKS OF ACCOU NTS HAVE BEEN ACCEPTED BY THE VAT DEPARTMENT. THESE FACTS SHOW T HAT THE ENTRIES MADE IN THE BOOKS OF ACCOUNTS AND STOCK REGISTER HA VE BEEN ACCEPTED BY THE AUDITOR AND VAT DEPARTMENT. WHEN A SPECIFIC QUERY AS TO WHETHER ANY ADJUSTMENT WAS MADE BY THE AO IN THE AS SESSMENT OF M/S B & B JEWELLERS AND FINANCE LTD WITH REGARD TO THE IMPUGNED 1500 GRAMS, THE LD A.R SUBMITTED THAT NO ADJUSTMENT HAS BEEN MADE. IN THIS VIEW OF THE MATTER, NORMALLY, THE EX PLANATIONS OF THE ASSESSEE SHOULD HAVE BEEN ACCEPTED. HOWEVER, SINCE THERE WAS VARIATION BETWEEN THE COPY OF STOCK REGISTER TAKEN DURING THE COURSE OF SEARCH AND THE COPY SUBMITTED DURING THE COURSE OF SEARCH, THE AO HAS REJECTED THE ABOVE SAID EXPLANATIONS. IN OU R VIEW, BEFORE REJECTING THE EXPLANATIONS OF THE ASSESSEE, THE AO SHOULD HAVE CONDUCTED NECESSARY WITH REGARD TO THE VERACITY OF THE SUSPECTED ENTRIES MADE IN THE STOCK REGISTER. HOWEVER, THE A O DID NOT CONDUCT ANY ENQUIRY TO FIND OUT THE VERACITY OF ALLEGED MOD IFICATIONS MADE IN THE STOCK REGISTER. ACCORDINGLY, WE ARE OF THE VIE W THAT THE AO WAS ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 6 OF 12 NOT JUSTIFIED IN MAKING THIS ADDITION AND THE LD CI T(A) WAS ALSO NOT JUSTIFIED IN CONFIRMING THE SAME. 11. IF THE STOCK REGISTER OF M/S B & B JEWELLER S AND FINANCE LTD HAS BEEN ACCEPTED IN ITS ASSESSMENT BY THE CONCERNE D ASSESSING OFFICER AND FURTHER, IN THE ABSENCE OF ANY OTHER CR EDIBLE MATERIAL TO SUPPORT THE VIEW OF THE AO, WE ARE OF THE OPINION T HAT THERE IS NO REASON TO TAKE A DIFFERENT VIEW IN THE HANDS OF THE ASSESSEE. HOWEVER, SINCE THIS FACT REQUIRES VERIFICATION, WE RESTORE THIS ISSUE TO THE FILE OF THE AO FOR THE LIMITED PURPOSE OF EXAMI NING THE VIEW TAKEN BY THE AO IN THE HANDS OF M/S B & B JEWELLERS AND F INANCE LTD. IF THE AO OF THE ABOVE SAID COMPANY HAS ACCEPTED THE S TOCK REGISTER, THEN WE DIRECT THAT THE PRESENT ADDITION SHOULD BE DELETED. ACCORDINGLY, THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE STANDS SET ASIDE. 12. THE NEXT ISSUE RELATES TO THE ADDITION OF RS .69,91,181/- RELATING TO 2668.390 GRAMS OF JEWELLERY FOUND DURING THE COU RSE OF SEARCH. WITH REGARD TO THESE JEWELLERIES, THE ASSESSEE EXPL AINED THAT THEY BELONG TO HIS WIFE SMT. TEENA BETHALA AND THEY WERE PURCHASED IN 2004. IN SUPPORT OF THE SAME, THE ASSESSEE FURNISH ED A COPY OF PURCHASE BILL DATED 03-10-2004. THE AO NOTICED THA T THE ABOVE SAID PURCHASE BILL HAS BEEN ISSUED BY M/S B B JEWELLERS & FINANCE (P) LTD AND IT DID NOT CONTAIN THE DESCRIPTIONS OF GOLD JEWELLERY. ACCORDINGLY, THE AO TOOK THE VIEW THAT THE SAME COU LD BE AN ACCOMMODATIVE ENTRY GIVEN BY B B JEWELLERS & FINANC E (P) LTD, SINCE IT IS THEIR OWN FAMILY CONCERN. THE AO ALSO NOTICE D THAT SMT. TEENA BETHALA HAD DECLARED INCOME OF AROUND 1.08 LAKHS IN AY 2004-05 AND SHE DID NOT FILE RETURN OF INCOME IN SUBSEQUENT YEARS. ACCORDINGLY, THE AO REJECTED THE EXPLANATIONS OF TH E ASSESSEE AND ASSESSED THE ABOVE SAID SUM OF RS.69,91,181/- IN TH E HANDS OF THE ASSESSEE. THE LD CIT(A) ALSO CONFIRMED THE SAME. ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 7 OF 12 13. THE LD A.R SUBMITTED THAT THESE JEWELLERI ES BELONG TO THE WIFE OF THE ASSESSEE AND IN SUPPORT OF THE SAME, THE ASS ESSEE HAS PRODUCED A COPY OF PURCHASE BILLS. THE AO HAS SCAN NED THE SAME AT PAGE 14 OF THE ASSESSMENT ORDER. THE JEWELLERIES H AVE BEEN PURCHASED BY PAYING VAT ALSO. SINCE THE JEWELLERIE S WERE PURCHASED FROM RELATED CONCERN, VIZ., M/S B B JEWELLERS & FIN ANCE (P) LTD, THE AO HAS REJECTED THE EXPLANATIONS ON SURMISES AND CO NJECTURES. HE SUBMITTED THAT THE ASSESSEE HAS PROVED THAT THE JEW ELLERIES WERE PURCHASED BY HIS WIFE AND HENCE THE AO/CIT(A) WAS N OT JUSTIFIED IN MAKING THIS ADDITION IN THE HANDS OF THE ASSESSEE. 14. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE INCOME OF THE WIFE OF THE ASSESSEE SMT TEENA BETHALA WAS NOT COMM ENSURATE WITH THE AMOUNT OF INVESTMENT MADE IN THE ALLEGED PURCHA SES. FURTHER, THE BILL HAS BEEN GIVEN BY THE RELATED CONCERN, WHE REIN THE ASSESSEE IS A DIRECTOR AND HENCE IT COULD BE AN ACCOMMODATIV E ENTRY. 15. WE HEARD RIVAL CONTENTIONS ON THIS ISSUE A ND PERUSED THE RECORD. THE UNDISPUTED FACT REMAINS THAT THE PURCH ASE BILL DATED 03- 10-2004 ISSUED BY M/S B B JEWELLERS & FINANCE (P) L TD WAS ISSUED IN THE NAME OF SMT. TEENA BETHALA AND IT SHOWS THAT GOLD JEWELLERIES WEIGHING 3006.46 GRAMS HAVE BEEN SOLD TO SMT. TEENA BETHALA. WE NOTICE THAT THE AO HAS REJECTED THIS EVIDENCE FOR T HE REASONS THAT THERE WAS NO DESCRIPTION OF THE JEWELLERIES AND FUR THER IT COULD BE AN ACCOMMODATIVE ENTRY, SINCE THE BILL HAS BEEN ISSUED BY A RELATED CONCERN. WE HAVE NOTICED EARLIER THAT THE BILL ALS O SHOWS THAT A VAT OF RS.51,350/- HAS BEEN COLLECTED. THERE IS NO FIN DING THAT THIS BILL WAS A BOGUS BILL AND THE SAME HAS NOT BEEN ACCOUNTE D FOR BY M/S B B JEWELLERS & FINANCE (P) LTD. THE FACTS ARE THAT (A) THE SALES BILL ISSUED BY THE ABOVE SAID CONCERN HAS NOT BEEN PROVED TO BE BOGUS (B) BOTH THE SELLER AND BUYER HAVE ACCEPTED THE TR ANSACTIONS. ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 8 OF 12 (C) THE TRANSACTION IS EVIDENCED BY THE AVAILABIL ITY OF JEWELLERY IT IS A KNOWN FACT THAT IN THE CASE OF BOGUS BILLS OR ACCOMMODATION ENTRIES, THERE WILL NOT BE ANY ACTUAL TRANSFER OF G OODS/MONEY. HOWEVER, IN THE INSTANT CASE, THE JEWELLERIES HAVE BEEN FOUND DURING THE COURSE OF SEARCH. HENCE IT CANNOT BE CONSIDERE D AS A CASE OF ACCOMMODATION ENTRY, AS PRESUMED BY THE AO. IN ANY CASE, AS RIGHTLY POINTED OUT BY LD A.R, THE AO HAS ENTERTAIN ED THIS PRESUMPTION ONLY ON SURMISES AND CONJECTURES. THE EVIDENCE FURNISHED BY THE ASSESSEE PROVES THE FACTUM OF PURC HASE OF JEWELLERY. ABSENCE OF DESCRIPTION OF JEWELLERIES, IN OUR VIEW, CANNOT BE GROUND TO SUSPECT THE NATURE OF TRANSACTION, SINCE THE BIL L COULD HAVE BEEN PREPARED ON THE BASIS OF UNDERSTANDING OF THE PARTI ES AND FURTHER OTHER FACTORS SUPPORT THE GENUINENESS OF THE TRANSA CTIONS. WE NOTICE THAT THE AO HAS NOT CONDUCTED ANY ENQUIRY WITH SMT TEENA BETHALA AND HENCE HE COULD NOT HAVE DRAWN ANY CONCLUSION ON THE BASIS OF RETURN OF INCOME FILED BY HER. 16. ACCORDINGLY, WE ARE OF THE VIEW THAT THE AO HAS NOT BROUGHT ON RECORD ANY CREDIBLE MATERIAL TO DISPROVE THE EXPLAN ATIONS OF THE ASSESSEE AND ACCORDINGLY WE ARE OF THE VIEW THAT TH IS ADDITION COULD NOT BE MADE IN THE HANDS OF THE ASSESSEE. ACCORDIN GLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIR ECT THE AO TO DELETE THIS ADDITION. 17. THE LAST ISSUE RELATES TO THE ADDITION OF R S.38,19,960/- RELATING TO 2308 GRAMS RELATING TO UNDISCLOSED INVESTMENT IN JEWELLERY SUSTAINED BY LD CIT(A). THE ASSESSEE SUBMITTED THA T THESE JEWELLERIES BELONG TO VARIOUS MEMBERS OF THE FAMILY . HE SUBMITTED THAT THE INSTRUCTION NO.1916 DATED 11.05.1994 ISSUE D BY CBDT PERMITS ACCEPTANCE OF 500 GRAMS OF JEWELLERY IN THE CASE OF MARRIED WOMAN, 250 GRAMS IN THE CASE OF UNMARRIED WOMAN AND 100 GRAMS IN THE CASE OF MALE MEMBER. ACCORDINGLY, IT WAS SU BMITTED THAT THE ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 9 OF 12 NO ADDITION IS WARRANTED, IF THE CREDIT IS GIVEN FO R ALL THE FAMILY MEMBERS AT THE ABOVE RATE. THE AO, HOWEVER, EXPRES SED THE VIEW THAT THE ABOVE SAID INSTRUCTION ISSUED BY CBDT GIVE S CERTAIN DISCRETIONARY POWER TO THE AUTHORISED OFFICER NOT T O SEIZE JEWELLERY AND HENCE, IT DOES NOT MEAN THAT THE SOURCE OF INVE STMENT SHALL STAND EXPLAINED TO THAT EXTENT. 18. BEFORE LD CIT(A), THE ASSESSEE PLACED HIS R ELIANCE ON THE DECISION RENDERED BY HONBLE RAJASTHAN HIGH COURT I N THE CASE OF CIT VS. SATYA NARAIN PATNI (366 ITR 325), WHEREIN IT WA S HELD THAT WHEN THE JEWELLERIES FOUND DURING THE COURSE OF SEARCH W ERE WITHIN THE TOLERABLE LIMITS PRESCRIBED BY THE CBDT IN ITS INST RUCTIONS, NO ADDITION WAS JUSTIFIABLE. ACCORDINGLY, THE ASSESSE E PLEADED THAT THE CREDIT @ QUANTITY PRESCRIBED BY THE CBDT SHOULD BE GIVEN TO ALL THE FAMILY MEMBERS, I.E., PARENTS, BROTHERS FAMILY AND ASSESSEES FAMILY. THE LD CIT(A), HOWEVER, PARTIALLY ACCEPTED THE CONT ENTIONS OF THE ASSESSEE, I.E., HE RESTRICTED THE CREDIT TO THE MEM BERS OF ASSESSEES FAMILY ONLY AND ACCORDINGLY GIVE RELIEF TO THE EXTE NT OF 850 GRAMS. WITH REGARD TO THE CLAIM FOR CREDIT OF PARENTS AND FAMILY MEMBERS OF HIS BROTHER, THE LD CIT(A) DID NOT ACCEPT THE CLAIM FOR THE REASON THAT THE JEWELLERIES WERE FOUND IN THE BED ROOM OF THE A SSESSEE. 19. THE LD A.R SUBMITTED THAT THE PARENTS OF T HE ASSESSEE, HIS BROTHER AND BROTHERS WIFE ARE ASSESSED TO INCOME T AX. THEIR PAN DETAILS WERE GIVEN TO THE AO DURING THE COURSE OF A SSESSMENT PROCEEDINGS. THE LETTER FURNISHED TO THE AO IS PLA CED AT PAGES 39 TO 46 OF THE PAPER BOOK. AT PAGE 43, THE ASSESSEE HAS STATED THAT HE HAS FILED WEALTH TAX COMPUTATION AND AT PAGE 44 THE PAN DETAILS OF ALL FAMILY MEMBERS ARE GIVEN. THE LD A.R SUBMITTED THAT THE ASSESSEES FAMILY IS CARRYING ON JEWELLERY BUSINESS AND THE AO SHOULD NOT HAVE PRESUMED THAT THE FAMILY MEMBERS COULD NOT HAVE POSSESSED ANY JEWELLERY. IN ANY CASE, THE LIMITS O F JEWELLERY ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 10 OF 12 PRESCRIBED IN THE CBDT INSTRUCTION IS THE MINIMUM A MOUNT OF JEWELLERY THAT SHOULD BE LEFT UNSEIZED AND IT DOES NOT MEAN THAT THE ENTIRE JEWELLERY FOUND DURING THE COURSE OF SEARCH SHOULD BE CONSIDERED AS UNEXPLAINED. HE SUBMITTED THAT THE A O SHOULD HAVE MADE REASONABLE ESTIMATE OF JEWELLERY THAT SHOULD B E BELONGING TO EACH OF THE FAMILY MEMBERS, BY CONSIDERING THE STAT US OF THE FAMILY OF THE ASSESSEE, IF HE IS NOT ACCEPTING THE EXPLANA TIONS OF THE ASSESSEE. 20. ON THE CONTRARY, THE LD D.R SUPPORTED THE O RDER PASSED BY LD CIT(A). 21. WE HEARD THE PARTIES ON THIS ISSUE AND PERU SED THE RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT TH E FAMILY OF THE ASSESSEE IS ENGAGED IN JEWELLERY BUSINESS. HENCE I T IS INCONCEIVABLE THAT THE FAMILY MEMBERS COULD NOT HAVE POSSESSED AN Y JEWELLERY. THE QUANTITY OF 500 GRAMS, 250 GRAMS AND 100 GRAMS MENT IONED IN THE CBDT INSTRUCTION IS NOT THE UPPER LIMIT FOR GIVING CREDIT. HENCE, AS CONTENDED BY THE LD A.R, A REASONABLE ESTIMATE SHOU LD HAVE BEEN MADE CONSIDERING THE FAMILY STATUS OF THE ASSESSEE. IN ANY CASE, THE LD CIT(A) HAS GIVEN CREDIT OF 850 GRAMS ON THE BASI S OF CBDT INSTRUCTION IN RESPECT OF FAMILY MEMBERS OF THE ASS ESSEE ONLY. WHEN THE ASSESSEE, HIS PARENTS AND BROTHER ARE LIVING IN JOINT FAMILY, IN OUR VIEW, THE CREDIT SHOULD BE GIVEN FOR ALL THE MEMBER S OF THE JOINT FAMILY. THE HONBLE RAJASTHAN HIGH COURT, IN THE CASE OF SA TYA NARAIN PATNI (SUPRA) HAS EXPRESSED THE FOLLOWING VIEW WITH REGAR D TO THE CBDT INSTRUCTION (REFERRED ABOVE):- IT IS TRUE THAT THE CIRCULAR OF THE CENTRAL BOARD OF DIRECT TAXES, REFERRED TO SUPRA DATED MAY 11, 1994, ONLY REFERS TO THE JEWELL ERY TO THE EXTENT OF 500 GMS. PER MARRIED LADY, 250 GMS. PER UNMARRIED LADY AND 100 GMS. PER MALE MEMBER OF THE FAMILY, NEED NOT BE SEIZED AND IT DOE S NOT SPEAK ABOUT THE QUESTIONING OF THE SAID JEWELLERY FROM THE PERSON W HO HAS BEEN FOUND WITH POSSESSION OF THE SAID JEWELLERY. HOWEVER, THE BOAR D, LOOKING TO THE INDIAN CUSTOMS AND TRADITIONS, HAS FAIRLY EXPRESSED THAT J EWELLERY TO THE SAID EXTENT ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 11 OF 12 WILL NOT BE SEIZED AND ONCE THE BOARD IS ALSO OF TH E EXPRESS OPINION THAT THE SAID JEWELLERY CANNOT BE SEIZED, IT SHOULD NORMALLY MEAN THAT ANY JEWELLERY, FOUND IN POSSESSION OF A MARRIED LADY TO THE EXTENT OF 500 GMS., 250 GMS. PER UNMARRIED LADY AND 100 GMS. PER MALE MEMBER OF THE FAMILY WILL ALSO NOT BE QUESTIONED ABOUT ITS SOURCE AND ACQUISITION. WE CAN TAKE NOTICE OF THE FACT THAT AT THE TIME OF WEDDING, THE DAUGHTER/ DAUGHTER-IN-LAW RECEIVES GOLD ORNAMENTS JEWELLERY AND OTHER GOODS NOT ONLY F ROM PARENTAL SIDE BUT IN-LAWS SIDE AS WELL AT THE TIME OF VIDAI (FAREWE LL) OR/AND AT THE TIME WHEN THE DAUGHTER-IN-LAW ENTERS THE HOUSE OF HER HUSBAND . WE CAN ALSO TAKE NOTICE OF THE FACT THAT THEREAFTER ALSO, SHE CONTINUES TO RECEIVE SOME SMALL ITEMS BY VARIOUS OTHER CLOSE FRIENDS AND RELATIVES OF BOTH T HE SIDES AS WELL AS ON THE AUSPICIOUS OCCASION OF BIRTH OF A CHILD WHETHER MAL E OR FEMALE AND THE CENTRAL BOARD OF DIRECT TAXES, LOOKING TO SUCH CUTO MS PREVAILING THROUGHOUT INDIA, IN ONE WAY OR THE ANOTHER, CAME OUT WITH THI S CIRCULAR AND WE ACCORDINGLY ARE OF THE FIRM OPINION THAT IT SHOULD ALSO MEAN THAT TO THE EXTENT OF THE AFORESAID JEWELLERY, FOUND IN POSSESSION OF THE VARIOUS PERSONS, EVEN SOURCE CANNOT BE QUESTIONED. IT IS CERTAINLY STRID HAN OF THE WOMAN AND NORMALLY NO QUESTION AT LEAST TO THE SAID EXTENT CA N BE MADE. HOWEVER, IF THE AUTHORIZED OFFICERS OR/AND THE ASSESSING OFFICERS, FIND JEWELLERY BEYOND THE SAID WEIGHT, THEN CERTAINLY THEY CAN QUESTION THE S OURCE OF ACQUISITION OF THE JEWELLERY AND ALSO IN APPROPRIATE CASES, IF NO PROP ER EXPLANATION HAS BEEN OFFERED, CAN TREAT THE JEWELLERY BEYOND THE SAID LI MIT AS UNEXPLAINED INVESTMENT OF THE PERSON WITH WHOM THE SAID JEWELLE RY HAS BEEN FOUND. ACCORDINGLY, WE ARE OF THE VIEW THAT THE LD CIT(A) SHOULD HAVE GIVEN CREDIT FOR ALL THE FAMILY MEMBERS (INCLUDING PARENT S AND BROTHERS FAMILY) AS PER THE CBDT INSTRUCTIONS. ACCORDINGLY, WE DIRECT THE AO TO GIVE CREDIT FOR THE PARENTS AND FAMILY MEMBERS O F ASSESSEES BROTHER ALSO. IN CASE, ANY JEWELLERY STILL REMAINS , THE AO MAY CONSIDER GIVING FURTHER CREDIT ON THE BASIS OF FAMI LY STATUS OF THE ASSESSEE. WITH THESE DIRECTIONS, WE MODIFY THE ORD ER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FI LE OF THE AO TO FOLLOW THE DISCUSSIONS MADE SUPRA. ITA NO.2026 /BANG/2018 MR. AMITH KUMAR BETHALA, BANGALORE PAGE 12 OF 12 22. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JAN, 2021 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 28 TH JAN, 2021. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.