Smt. Hardevi Keshwani, Agra V. Dy. C.I.T., Central Circle, Agra

ITA 205/AGR/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0742 (ITAT-AGRA)
• Duration Of Justice: 5 year(s) 11 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 10-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L MAURYA
• Keywords: Unexplained investment; Unexplained expenditure; Search and seizure; Principle of natural justice; Transactions in derivatives; Additional evidence; Reasonable cause; Set aside
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.205/AGRA/2013 ASSESSMENT YEAR: 2008-09 SMT. HARDEVI KESHWANI, VS. DY. COMMISSIONER OF INCOME TAX, 92, SURYA NAGAR, CENTRAL CIRCLE, AGRA. AGRA. (PAN : AHRPK 7817 K). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ GARGH, ADVOCATE RESPONDENT BY : SHRI S.L. MAURYA, SR. D.R. DATE OF HEARING : 23.07.2013 DATE OF PRONOUNCEMENT : 31.07.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 12.12.2012 PASSED BY THE CIT(A)-I, AGRA FOR THE A.Y. 2008-09. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- GROUND NO.1 BECAUSE THE PROCEEDINGS INITIATED U/S 142(1) OF THE ACT IN CONSEQUENCE TO THE ACTION TAKEN U/S 153C OF THE ACT IN EARLIER YEARS IS 2 ITA NO.205/AGRA/2013 A.Y. 2008-09 WRONG, BAD IN LAW AND AGAINST THE FACTS OF THE CASE . LD. CIT(A) HAS ERRED IN NOT GIVING ANY SPECIFIC FINDING ON THE ISS UE. GROUND NO.2 (I) BECAUSE THE LD. CIT(A) HAS WRONGLY, ILLEGALLY A ND ARBITRARILY CONFIRMED THE ADDITION OF RS.77,433/- MADE BY THE A SSESSING OFFICER U/S 23(4) OF THE ACT. (II) BECAUSE CONSIDERING THE FACTS OF THE CASE THAT THE PROPERTY COULD NOT BE LET OUT AND NO RENT WAS RECEIVED OR RE CEIVABLE, THE NOTIONAL RENT CANNOT BE ASSESSED, THE LD. COMMISSIO NER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION INSTEAD OF DELETING THE SAME. GROUND NO.3 (I) BECAUSE THE LD. CIT(A) HAS WRONGLY, ILLEGALLY A ND ARBITRARILY ASSESSED THE AMOUNT OF RS.52 LACS, SHOWN IN THE RET URN FILED AS UNDISCLOSED INVESTMENT IN JEWELLERY, ON PROTECTIVE BASIS. (II) BECAUSE UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE SINCE THE AMOUNT OF RS.52 LACS WAS SHOWN IN THE RETURN FILED AND ASSESSED BY THE ASSESSING OFFICER, THE LD. CIT(A) HAS ERRED IN HOLDING THE SAME TO BE ASSESSED ON PROTECTIVE BASIS INSTEAD OF THE SAME TO BE ASSESSED ON SUBSTANTIVE BASIS. 4. THAT THE APPELLANT CRAVES LEAVE TO AD, AMEND, AL TER, MODIFY OR DELETE ANY OR ALL OF THE GROUNDS OF APPEAL BEFORE O R AT THE TIME OF HEARING. 3. THE APPEAL IS FILED LATE BY 18 DAYS. AFTER HEAR ING THE LD. REPRESENTATIVES OF THE PARTIES, WE NOTICE THAT IT IS A SEARCH CASE AND THE ASSESSEE HAS TO FILE ALL APPEALS AGAINST THE ORDER OF CIT(A) FOR DIFFERENT YEARS AND SUCH MISTAKE IS A PRIMA FACIE 3 ITA NO.205/AGRA/2013 A.Y. 2008-09 MISTAKE WHICH AMOUNTS TO REASONABLE CAUSE AND IN TH E LIGHT OF THE FACT, THE DELAY OF 18 DAYS IS CONDONED. 4. GROUND NO.1 HAS NOT BEEN PRESSED BY THE LD. AUTH ORISED REPRESENTATIVE, THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 5. GROUND NO.2 IS PERTAINING TO ADDITION OF RS.77,4 33/- MADE BY THE A.O. UNDER SECTION 23(4) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER). 6. THIS ISSUE IS COVERED BY THE ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF SHRI LAXMAN DAS KESHWANI IN ITA NOS.351, 370 & 353/AGRA/ 2012 AND OTHERS, ORDER DATED 28.12.2012. THE RELEVANT FINDING IS REPRODUC ED AS UNDER :- 17. IN THE LIGHT OF THE ABOVE DISCUSSIONS, IF WE C ONSIDER THE FACTS OF THE CASE AS STATED ABOVE THAT NEITHER THE REVENUE A UTHORITIES NOR THE ASSESSEE HAS BROUGHT ON RECORD ANY MATERIAL OR EVID ENCE IN SUPPORT OF THE DETERMINATION OF ANNUAL VALUE OF PROPERTIES, HO WEVER, THE ASSESSEE HAS FURNISHED EVIDENCE IN RESPECT OF ANNUAL VALUE D ETERMINED BY MUNICIPAL/LOCAL AUTHORITY, AGRA NAGAR NIGAM IN SUPP ORT OF ANNUAL VALUE OF CONCERNED PROPERTIES. SUCH MATERIAL IS RE LEVANT AND RELATED TO THE CONCERNED PROPERTIES AS PER DETAILED DISCUSS IONS MADE IN PARAGRAPH NO.15 OF THIS ORDER. THEREFORE, WE ARE O F THE VIEW THAT THE ANNUAL VALUATION TAKEN BY THE LOCAL AUTHORITY IS ON E OF THE BASIS UNDER THE PECULIAR FACTS AND CIRCUMSTANCES OF THESE CASES FOR DETERMINING THE ANNUAL VALUE UNDER SECTION 23(1)(A) OF THE ACT. SINCE ADDITIONAL EVIDENCE IS ADMITTED BY US FIRST TIME, THEREFORE, T HE A.O. IS DIRECTED TO VERIFY THE ANNUAL VALUATION DETERMINED BY THE LOCAL AUTHORITY/AGRA 4 ITA NO.205/AGRA/2013 A.Y. 2008-09 NAGAR NIGAM AND DETERMINE THE ANNUAL VALUE FOR THE PURPOSE OF SECTION 23(1)(A) OF THE ACT IN ACCORDANCE WITH ANNU AL VALUE DETERMINED BY LOCAL AUTHORITIES. 18. BEFORE PARTING FROM THE MATTER, IT IS RELEVANT TO STATE THAT THE ANNUAL VALUE DETERMINED BY THE MUNICIPAL/LOCAL AUTH ORITY HAS BEEN CONSIDERED IN THE CASE UNDER CONSIDERATION IS ONE O F THE BASIS OF DETERMINATION OF ANNUAL VALUE FOR THE PURPOSE OF SE CTION 23(1)(A) OF THE ACT. UNDER THE PECULIAR FACTS AND CIRCUMSTANCE S OF THE CASE UNDER CONSIDERATION, AS NEITHER THE ASSESSEE NOR THE REVE NUE HAS BROUGHT ON RECORD ANY OTHER MATERIAL BASED ON WHICH THE ANNUAL VALUE OF THESE PROPERTIES CAN BE DETERMINED IN ACCORDANCE WITH SEC TION 23(1)(A) OF THE ACT, THEREFORE, THE RATIO OF THIS ORDER IS NOT APPLICABLE TO OTHER CASES AS ANNUAL VALUE UNDER SECTION 23 OF THE ACT I S TO BE DETERMINED IN ACCORDANCE WITH FACTS OF EACH CASE. 19. IN THE LIGHT OF ABOVE DISCUSSION, WE ARE SENDIN G BACK THE MATTER TO THE FILE OF A.O. WITH THE DIRECTION TO VERIFY TH E ADDITIONAL EVIDENCES FILED BY THE ASSESSEE IN THE FORM OF ANNUAL VALUE D ETERMINED BY THE LOCAL AUTHORITY AND RECALCULATE THE ANNUAL VALUE OF THESE PROPERTIES UNDER SECTION 23(1)(A) OF THE ACT ON SUCH ADDITIONA L EVIDENCE AFTER PROVIDING REASONABLE OPPORTUNITIES OF HEARING TO TH E ASSESSEES. 7. THE FACTS ARE IDENTICAL. ADDITIONAL EVIDENCES F ILED. SINCE FACTS ARE IDENTICAL, TO MAINTAIN CONSISTENCY, WE FOLLOW THE ABOVE ORDER OF I.T.A.T. AND IN THE LIGHT OF THAT ADDITIONAL EVIDENCES ARE ADMITTED AND, THEREFO RE, THE MATTER IS BEING SENT BACK TO THE FILE OF A.O. WITH IDENTICAL DIRECTIONS. 8. GROUND NO.3 IS PERTAINING TO RS.52,00,000/- SHOW N IN THE RETURN FILED AS UNDISCLOSED INVESTMENT IN JEWELLERY. 5 ITA NO.205/AGRA/2013 A.Y. 2008-09 9. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTI CED THAT IN THE RETURN FILED FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS S URRENDERED AN AMOUNT OF RS.52,00,000/- ON ACCOUNT OF UNEXPLAINED JEWELLERY AND RS.4,00,000/- ON ACCOUNT OF UNEXPLAINED CASH FOUND DURING THE COURSE OF SEAR CH. THE A.O. NOTICED THAT THE JEWELLERY AND CASH TO THAT EXTENT WERE NOT FOUND FR OM THE POSSESSION OF THE ASSESSEE BUT WAS FOUND FROM THE POSSESSION OF SHRI LAXMAN DAS KESHWANI. ALL THE MEMBERS OF KESHWANI FAMILY LIVE IN ONE HOUSE. ALL THE JEWELLERY AND SILVER FOUND DURING THE SEARCH WERE OF LADIES AND GENTS MI XED. A STATEMENT OF JEWELLERY AND SILVER WARES OWNED BY ALL MEMBERS OF KESHWANI F AMILY HAS BEEN NOTED BY THE A.O. IN HIS ORDER. THE A.O. HAS ALSO NOTED EXPLANA TION FILED BY THE ASSESSEE WHICH IS AS UNDER:- (PAGE NO.9) TOTAL JEWELLERY FOUND DURING SEARCH 13634011 LESS: EXPLAINED AS ABOVE 2933985 5006400 7940385 5693626 LESS: INVESTMENT IN JEWELLERY SHOWN AS INCOME IN TH E RETURN OF SMT. HARDEVI KESHWANI FOR A.Y. 2008-09 5 200000 493626 NOTE: THE DIFFERENCE OF RS.4,93,626 IS COVERED FRO M THE JEWELLERY SHOWN IN THE HANDS OF FOLLOWING LADY MEMBER IN THE LIST OF INVESTMENT FILED WITH THEIR RESPECTIVE RETURNS FOR AY. 2001-02. NAME VALUE TAKEN AS VALUE ON THE DATE ON 31.03.01 OF SEARCH -------- ------------------ --------------------- MADHU KESHWANI 62600 178000 6 ITA NO.205/AGRA/2013 A.Y. 2008-09 LATA KESHWANI 105230 299400 HARDEVI KESHWANI 198309 564200 NISHA KESHWANI 55000 156500 ----------- 1198100 ----------- THE EXCESS JEWELLERY IS TAKEN AS COVERED BY THE VAL UE OF JEWELLERY TAKEN AS EXPLAINED IN THE HANDS OF LADIES TO THE EX TENT OF 500 GM. 10. THE A.O. DID NOT ACCEPT THE SAID SURRENDER OF R S.52,00,000/- ON THE GROUND THAT THE ASSESSEE HAS FAILED TO FURNISH EVIDENCE OF ACQUISITION OF UNEXPLAINED JEWELLERY OF RS.52,00,000/- SURRENDERED IN A.Y. 200 8-09. IT HAS ALSO BEEN NOTED BY THE A.O. THE THE ASSESSEE DID NOT FURNISH DETAILS O F THE JEWELLERY SURRENDERED AND THE SAID JEWELLERY WAS NOT FOUND FROM THE POSSESSIO N OF THE ASSESSEE. THE A.O. FURTHER NOTED THAT THE ASSESSEE DID NOT STATE ANYTH ING IN THE STATEMENT RECORDED AT THE TIME OF SEARCH REGARDING SUCH SURRENDER. THE A .O. FURTHER NOTICED THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF THE JE WELRY. THE A.O., AFTER CONSIDERING THE LAST SIX YEARS INCOME, NOTICED THA T THE ASSESSEE HAS SURRENDERED RS.52,00,000/- ON ACCOUNT OF JEWELLERY TO SET OF TH E UNEXPLAINED INVESTMENT FROM LOSSES FROM SPECULATION TRANSACTION. THE A.O. NOTE D THAT IN FACT JEWELLERY BELONGING TO SMT. HARDEVI HAS BEEN CLAIMED SO THAT HER LOSSES FROM F&O TRANSACTION CAN BE SET OF AGAINST SUCH UNEXP LAINED INVESTMENT AND TAX IN EVIDENCE MAY BE AVOIDED. THE A.O. REJECTED THE ASS ESSEES SURRENDER OF RS.52,00,000/- AND COMPUTED THE INCOME OF THE ASSES SEE AS UNDER :- (PAGE NO.21) 7 ITA NO.205/AGRA/2013 A.Y. 2008-09 IN VIEW OF ABOVE DISCUSSION, INCOME IS COMPUTED AS UNDER :- LOSS AS SHOWN IN THE RETURN (-) RS.1631130/- ADD:- (I) INCOME FROM HOUSE PROPERTY RS.77,433/- (II) UNEXPLAINED EXPENDITURE IN PROPERTY AS DISCUSSED ABOVE. RS.9,60,403/- (III) UNEXPLAINED EXPENDITURE AS DISCUSSED ABOVE RS.59,900/- RS.1097736/- ------------------- TOTAL LOSS (-) RS.5,33,394/- 11. THE CIT(A) HAS HELD AS UNDER :- (PARAGRAPH NO.8 .2, PAGE NOS. 29 & 30) 8.2 THE ABOVE ISSUE RELATING TO SURRENDER OF JEWEL LERY OF RS.52 LAC HAS ALSO BEEN CONSIDERED BY ME IN APPELLATE ORDER O F SHRI LAXMAN DASS KESHWANI DATED 30.11.2011 AS MENTIONED ABOVE A ND IN THIS ORDER AND IN THAT ORDER, I HAVE HELD THAT THE JEWEL LERY OF RS.52 LAC SHOULD BE TAXED IN THE HANDS OF SHRI LAXMAN DASS KE SHWANI AFTER CONSIDERING ALL THE EVIDENCES AVAILABLE ON RECORD A S WELL AS COLLECTED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION A S DISCUSSED BY ME IN DETAIL IN PARA NO.8 OF THE SAID ORDER. AFTER GO ING THROUGH THE IMPUGNED ASSESSMENT ORDER OF THE ASSESSEE (APPELLAN T), I HAVE FOUND THAT DESPITE HOLDING THAT JEWELLERY OF RS.52 LAC DO ES NOT BELONG TO ASSESSEE (APPELLANT), THE AO RETAINED THIS AMOUNT I N THE COMPUTATION OF INCOME OF THE ASSESSEE (APPELLANT) IN HER ASSESS MENT ORDER WITHOUT MENTIONING WHETHER SUCH AMOUNT IS RETAINED ON SUBST ANTIVE BASIS OR PROTECTIVE BASIS. AS I HAVE CONFIRMED THE AMOUNT O F JEWELLERY IN THE HANDS OF SHRI LAXMAN DASS KESHWANI ON SUBSTANTIVE B ASIS IN MY APPELLATE ORDER DATED 30.11.2011 PASSED IN CASE OF SHRI LAMAN DASS KESHWANI, SUCH AMOUNT OF UNEXPLAINED JEWELLERY OF R S.52 LAC SHOULD BE RETAINED TO BE PART OF THE INCOME OF THE ASSESSE E (APPELLANT) ON PROTECTIVE BASIS ONLY TILL THE ORDER OF SHRI LAXMAN DAS KESHWANI IS FINALIZED AT HIGHER JUDICIAL FORUM. IN VIEW OF MY ABOVE DECISION, GROUND NO.8 IS DECIDED ACCORDINGLY. 8 ITA NO.205/AGRA/2013 A.Y. 2008-09 12. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT THE ASSESSE E WAS LIVING WITH HER FAMILY JOINTLY. THE JEWELLERY WAS FOUND FROM THE ROOM OF SHRI LAXMAN DAS KESHWANI AND SMT. HARDEVI KESHWANI. THE ASSESSEE HAS SURREN DERED RS.52,00,000/- AND THE SAME HAS BEEN DECLARED IN THE RETURN OF INCOME FILE D BY THE ASSESSEE. THE SAID FACT IS EVIDENT FROM THE COMPUTATION OF TOTAL INCOME FUR NISHED BY THE ASSESSEE ALONG WITH RETURN OF INCOME. THE RELEVANT ABSTRACT OF CO MPUTATION OF TOTAL INCOME IS REPRODUCED AS UNDER :- (PAGE 9 OF A.O.) TOTAL JEWELLERY FOUND DURING SEARCH 13634011 LESS: EXPLAINED AS ABOVE 2933985 5006400 7940385 5693626 LESS: INVESTMENT IN JEWELLERY SHOWN AS INCOME IN TH E RETURN OF SMT. HARDEVI KESHWANI FOR A.Y. 2008-09 5 200000 493626 NOTE: THE DIFFERENCE OF RS.4,93,626 IS COVERED FRO M THE JEWELLERY SHOWN IN THE HANDS OF FOLLOWING LADY MEMBER IN THE LIST OF INVESTMENT FILED WITH THEIR RESPECTIVE RETURNS FOR AY. 2001-02. NAME VALUE TAKEN AS VALUE ON THE DATE ON 31.03.01 OF SEARCH -------- ------------------ --------------------- MADHU KESHWANI 62600 178000 LATA KESHWANI 105230 299400 HARDEVI KESHWANI 198309 564200 NISHA KESHWANI 55000 156500 ----------- 1198100 THE EXCESS JEWELLERY IS TAKEN AS COVERED BY THE VAL UE OF JEWELLERY TAKEN AS EXPLAINED IN THE HANDS OF LADIES TO THE EX TENT OF 500 GM. 9 ITA NO.205/AGRA/2013 A.Y. 2008-09 13. THE A.O. WHILE COMPUTING THE TOTAL INCOME HAS T AKEN NET LOSS OF RS.16,31,130/- AS SHOWN IN THE RETURN OF INCOME. I N OTHER WORDS, THE A.O. WHILE COMPUTING THE TOTAL INCOME HAS CONSIDERED THE SURRE NDER OF RS.52,00,000/- WHICH HAS BEEN DECLARED BY THE ASSESSEE IN COMPUTATION OF TOTAL INCOME FURNISHED ALONG WITH RETURN OF INCOME. WE NOTICED THAT THE A.O. HA S ASKED ABOUT THE SOURCE OF THE INCOME OF RS.52,00,000/- WHEREAS THE ASSESSEE HAS M ADE SURRENDER OF THE AMOUNT OF RS.52,00,000/-. IT IS ACCEPTED PRACTICE THAT WH EN THE ASSESSEE IS SURRENDERING SOMETHING AT THE TIME OF SEARCH THE ADMITTED IMPLIE D FACT IS THAT THE ASSESSEE HAS GOT NO EXPLANATION FOR THE SOURCE OF SUCH INCOME. UNDER SUCH CIRCUMSTANCES WHEN THE ASSESSEE IS MAKING SURRENDER DURING THE COURSE OF SEARCH AND, THEREFORE, ASKING FOR SOURCE OF SUCH INCOME FROM THE PART OF A.O. IS NOT REQUIRED. THEREFORE, MERELY ON THAT BASIS THE SURRENDER MADE BY THE ASSESSEE CA NNOT BE REJECTED. BECAUSE, IF THE ASSESSEE IS ABLE TO EXPLAIN THE SOURCE OF INCOME, T HEN SUCH INCOME CANNOT BE SAID TO BE UNDISCLOSED INCOME WHICH NEED NOT TO BE SURRE NDERED. THE FINDING OF THE A.O. THAT THE SURRENDER WILL BE SET OF AGAINST THE LOSSES OF F&O TRANSACTION IS MERELY ON THE BASIS OF PRESUMPTION WITHOUT PUTTING ANY MATERIAL/EVIDENCE ON RECORD. THIS FINDING OF THE A.O. IS ON PRESUMPTION BASIS BECAUSE THE A.O DID NOT DISTURB THE TOTAL LOSS DECLARED BY THE ASSESSEE FRO M THE TRANSACTION. THE LOSS DISCLOSED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE A.O. THE A.O. DID NOT MAKE 10 ITA NO.205/AGRA/2013 A.Y. 2008-09 ANY OBSERVATION OR GIVEN ANY FINDING THAT SUCH LOSS WAS BOGUS. THE FINDING OF THE A.O. IS ON PRESUMPTIVE BASIS WHICH CANNOT BE SUSTAI NED. 14. THE CIT(A) DID NOT ACCEPT THE SAID SURRENDER OF RS.52,00,000/- ON THE GROUND THAT THE JEWELLERY WAS NOT FOUND FROM THE PO SSESSION OF THE ASSESSEE. THE JEWELLERY WAS FOUND FROM THE POSSESSION OF SHRI LAX MAN DAS KESHWANI. THEREFORE, ADDITION IS REQUIRED TO BE MADE IN THE H ANDS OF SHRI LAXMAN DAS KSHWANI. HOWEVER, THE CIT(A) DID NOT DISPUTE THE F ACT THAT THE ASSESSEE HAS MADE SURRENDER OF R.52,00,000/-. THIS FINDING OF CIT(A) IS SUPPORTED BY THE FACT RECORDED BY THE CIT(A) THAT DESPITE HOLDING THAT TH E JEWELLERY OF RS.52,00,000/- DOES NOT BELONG TO THE ASSESSEE, THE A.O. RETAINED THIS AMOUNT IN THE COMPUTATION OF INCOME OF HER ASSESSMENT ORDER WITHOUT MENTIONIN G WHETHER THE SAID AMOUNT IS RETAINED ON SUBSTANTIVE BASIS OR ON PROTECTIVE BASI S. THE CIT(A) CAME TO THE CONCLUSION THAT SINCE HE HAS CONFIRMED THE ADDITION IN THE HANDS OF SHRI LAXMAN DAS KESHWANI, SUCH AMOUNT IS UNEXPLAINED JEWELLERY AND, THEREFORE, IT SHOULD BE RETAINED TO BE PART OF INCOME OF THE ASSESSEE ON PR OTECTIVE BASIS ONLY TILL THE ORDER OF SHRI LAXMAN DAS KESHWANI IS FINALISED. AS STATE D THAT DURING THE COURSE OF SEARCH IT WAS FOUND THAT THE ASSESSEE AND SHRI LAXM AN DAS KESHWANI WERE LIVING IN ONE HOUSE WITH THEIR FAMILY MEMBERS. WHEN THE J EWELLERY WAS FOND FROM THE HEAD OF THE FAMILY, THEN THERE IS ACCEPTED PRESUMPT ION THAT THE JEWELLERY BELONGS TO 11 ITA NO.205/AGRA/2013 A.Y. 2008-09 VARIOUS FAMILY MEMBERS. WHEN THE JEWELLERY IS KEPT , MAY BE ON THE BASIS OF CUSTOM OR PREVAILING PRACTICE OF THE FAMILY OR FOR ANY OTHER REASONS AND ONE OF THE ASSESSEE IS SURRENDERING SOME AMOUNT, KEEPING IN VI EW THE PRINCIPLE OF NATURAL JUSTICE AND ON ACCOUNT OF FAIRNESS AND REASONABLENE SS, THE SURRENDER MADE IS REQUIRED TO BE ACCEPTED AND ADJUSTED AGAINST THE JE WELLERY FOUND AT THE TIME OF SEARCH. WHEN THE ASSESSEE HERSELF HAS CLAIMED THAT SHE WAS HOLDING JEWELLERY OF RS.52,00,000/-, SUCH SURRENDER IS REQUIRED TO BE A DJUSTED AGAINST THE TOTAL JEWELLERY FOUND. WHEN THE ASSESSEE IS THE OWNER OF JEWELRY O F RS.52,00,000/-, WHATEVER IS THE CONSEQUENTIAL EFFECT, WHICH IS REQUIRED TO BE G IVEN IN THE HANDS OF THE ASSESSEE WHILE COMPUTING AND MAKING ASSESSMENT OF THE ASSESS EE. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE CIT(A) IS NOT CORRECT IN SAYING THAT THIS SURRENDER OF RS.52,00,000/- IS TO BE KEPT AS PROTEC TIVE ADDITION IN THE HANDS OF THE ASSESSEE AND SUBSTANTIVE ADDITION IN THE HANDS OF S HRI LAXMANA DAS KSHWANI. RATHER IT REQUIRED TO BE HELD CONTRARY THAT SUBSTAN TIVE ADDITION OF RS.52,00,000/- IS REQUIRED TO BE CONSIDERED IN THE HANDS OF THE ASSES SEE AND PROTECTIVE ADDITION IS REQUIRED TO BE CONSIDERED IN THE HANDS OF SRI LAXMA N DAS KESHWANI. WE, THEREFORE, SET ASIDE THE ORDER OF CIT(A) AND HOLD T HAT THE AMOUNT OF RS.52,00,000/- SURRENDERED BY THE ASSESSEE ON ACCOUNT OF JEWELLERY IS ADJUSTABLE AGAINST THE TOTAL JEWELLERY FOUND FROM THE FAMILY OF THE ASSESSEE. S INCE THE A.O. HAS ACCEPTED THE COMPUTATION OF INCOME MADE BY THE ASSESSEE WHEREIN SURRENDER WAS MADE AND THE 12 ITA NO.205/AGRA/2013 A.Y. 2008-09 A.O. DID NOT MAKE SEPARATE ADDITION, IN THE LIGHT O F THE FACT, INSTEAD OF DELETING THE ADDITION, WE HOLD THAT THE ASSESSEE HAS MADE THE SU RRENDER OF RS.52,00,000/- ON ACCOUNT OF JEWELLERY AND THE SAME HAS BEEN DECLARED IN THE RETURN OF INCOME FILED AT THE TIME OF SEARCH. 15. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY