Sh. Laxman Das Keshwani, Agra V. A.C.I.T., Central Circle, Agra

ITA 231/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0528 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 11 month(s) 29 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: 19-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 18-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L MAURYA
• Assessee Lawyers: SHRI
• Keywords: Unexplained investment; Gift; Document seized; Additional evidence; Corroborative evidences; Valuation report; Assessment record; Documents seized
• Section: 132; 11

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. 214/AGRA/ 2012 ASSESSMENT YEAR: 2008-09 ASSTT./DY. COMMISSIONER OF INCOME TAX, VS. SHRI LAX MAN DAS KESHWANI, CENTRAL CIRCLE, AGRA. 92, SURYA NAGAR, AG RA. (PAN ACWPK 4019 R) ITA NO. 231/AGRA/2012 ASSESSMENT YEAR: 2008-09 SHRI LAXMAN DAS KESHWANI, VS. ASSTT. COMMISSIO NER OF INCOME TAX, 92, SURYA NAGAR, AGRA. CENTRAL CIRCLE, AGRA. AGRA. (PAN ACWPK 4019 R) (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI S.L. MAURYA, SR. D.R. ASSESSEE BY : SHRI PANKAJ GARGH, ADVOCATE DATE OF HEARING : 19.07.2013 DATE OF PRONOUNCEMENT : 31.07.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THESE ARE CROSS APPEALS FILED BY THE REVENUE AND A SSESSEE AGAINST THE ORDER DATED 30.11.2011 PASSED BY THE LEARNED CIT(A)-I, AG RA FOR A.Y. 2008-09. 2. THE GROUNDS RAISED IN THESE CROSS APPEALS ARE R EPRODUCED AS BELOW:- ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 2 ITA NO. 214/AGRA/2012 - BY THE REVENUE 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DIRECTING THE A.O. TO TAKE UNEXPLAINED INVESTMENT IN STOCK OF PERFUMES AT RS.23,41,638/- INSTEAD OF RS.26,52,298/- TAKEN BY T HE A.O., IGNORING THE FACT THAT THE AO HAD TAKEN THE VALUE O F UNEXPLAINED STOCK OF PERFUMES ON THE BASIS OF AVERA GE RATES OF ITEMS AS PER SEIZED DOCUMENTS. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW ON FACTS IN DELETING THE ADDITION OF RS.40,000/- MADE BY THE AO ON ACCOUNT O F UNEXPLAINED INVESTMENT IN AIR CONDITIONERS IGNORING THE FACT THAT THE ASSESSEE COULD NOT GIVE ANY SATISFACTORY E XPLANATION BEFORE THE AO AND LD. CIT(A) IN THIS REGARD. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW ON FACTS IN DIRECTING THE AO TO TAKE UNEXPLAINED JEWELLERY IN THE HANDS OF TH E ASSESSEE AT AN AMOUNT OF RS.82,94,073/- AS AGAINST VALUE COMPAR ED BY THE AO AT RS.87,33,573/- IGNORING THE FACT THAT THE AO HAD COMPUTED THE VALUE OF UNEXPLAINED JEWELLERY ON THE BASIS OF SEIZED DOCUMENTS. 4. THAT THE LD. CIT(A) HAS ERRED IN LAW ON FACTS IN DIRECTING THE AO TO TAKE UNEXPLAINED INVESTMENT IN THE SILVER ITE MS IN THE HANDS OF ASSESSEE AT RS.2,20,480/- INSTEAD OF RS.9, 27,077/- IGNORING THE FACT THAT THE AO HAS CONSIDERED ALL RE LEVANT FACTS AND CIRCUMSTANCES WHILE MAKING THE ADDITION. 5. THAT THE LD. CIT(A) HAS ERRED IN LAW ON FACTS IN DIRECTING THE AO TO MAKE ADDITION OF RS.13,00,000/- ONLY ON ACCOU NT OF UNEXPLAINED CASH INSTEAD OF RS.32,41,500/- IGNORING THE FACT THAT THE AO HAD ALREADY CONSIDERED ALL SURROUNDING FACTS WHILE MAKING THE ADDITION. 6. THAT THE LD. CIT(A) HAS ERRED IN LAW ON FACTS IN RESTRICTING THE ADDITION ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWAL TO RS.27,000/- AS AGAINST RS.44,142/- MADE BY THE AO I GNORING THE FACTS OF THE CASE AS DISCUSSED BY THE AO IN ASSESSM ENT ORDER. 7. THAT THE APPELLANT CRAVES LEAVE TO AMEND ANY ONE OR MORE OF THE GROUNDS OF THE APPEAL AS STATED ABOVE AS AND WH EN NEED FOR DOING SO MAY ARISE. 8. THAT THE ORDER OF THE LD. CIT(A) DESERVES TO BE VACATED AND THE ASSESSMENT ORDER PASSED BY THE A.O. BE RESTORED. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 3 ITA NO. 231/AGRA/2012 - BY THE ASSESSEE 1(I). BECAUSE THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) HAS WRONGLY AND ILLEGALLY CONFIRMED THE ADDITION OF RS. 52,174/- MADE BY THE ASSESSING OFFICER U/S 23(4) OF THE ACT. (II) BECAUSE THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) HAS FURTHER ERRED IN HOLDING THAT THE ANNUAL LETTING VA LUE OF THE PROPERTIES WOULD BE DETERMINED AS PER CLAUSE (A) OF SECTION 231(1) OF THE ACT. 2. BECAUSE THE LD. COMMISSIONER OF INCOME TAX (APP EALS) HAS WRONGLY AND ILLEGALLY CONFIRMED THE ADDITION AT RS. 8,11,972/- OUT OF THE ADDITION OF RS.11,22,632/- MADE BY THE A SSESSING OFFICER BY APPLYING ARBITRARY FIGURES IN THE VALUAT ION OF PERFUME FOUND DURING SEARCH. THE VALUATION OF PERFU ME MADE BY THE ASSESSING OFFICER IS PURELY ON ESTIMATE AND THE LD. CIT(A) HAS ERRED IN REJECTING THE APPELLANTS SUBMI SSION AND THE DETAILS FILED. 3(I) BECAUSE THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) HAS WRONGLY AND ILLEGALLY CONFIRMED THE ADDITION AT RS. 82,94,073/- OUT OF THE ADDITION OF RS.87,33,573/- MADE BY THE A SSESSING OFFICER AS UNEXPLAINED JEWELLERY IN THE HANDS OF TH E APPELLANT. (II) BECAUSE THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) HAS ALSO WRONGLY, ILLEGALLY AND ARBITRARILY REJECTED TH E APPELLANTS GROUND AND SUBMISSION THAT BENEFIT OF RS.52,00,000/ -, BEING THE AMOUNT SURRENDERED AS UNDISCLOSED INVESTMENT IN JEW ELLERY BY DAUGHTER IN LAW SMT. HARDEVI KESHWANI, SHOULD BE GI VEN WHILE WORKING OUT THE UNEXPLAINED JEWELLERY IN THE APPELL ANTS HAND. (III) BECAUSE THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) WHILE CONFIRMING THE ADDITION AT RS.82,94,073/- HAS FURTH ER ERRED IN REJECTING THE APPELLANTS SUBMISSION AND THE DETAIL S FILED. 4. BECAUSE THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) HAS WRONGLY AND ILLEGALLY CONFIRMED THE ADDITION OF RS. 2,20,480/- OUT OF ADDITION OF RS.8,27,077/- MADE BY THE ASSESS ING OFFICER AS UNEXPLAINED SILVER WARES/COINS. THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN REJECTING THE APPELLANTS SUBMISSION. 5. BECAUSE THE ADDITION OF RS.27,000/- CONFIRMED BY LD. COMMISSIONER OF INCOME TAX (APPEALS) OUT OF ADDITIO N OF RS.44,142/- MADE BY THE ASSESSING OFFICER FOR SO CA LLED LOW ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 4 HOUSE HOLD WITHDRAWALS IS WRONG, ILLEGAL, ARBITRARY AND AGAINST THE FACTS OF THE CASE. 3. FIRST WE TAKE UP ITA NO.231/AGRA/2012 FILED BY THE ASSESSEE . 4. THE FIRST GROUND OF ASSESSEES APPEAL IS PERTAINING TO ADDITION OF RS.52,174/- MADE BY THE A.O. UNDER SECTION 23(4) OF THE ACT. 5. THE BRIEF FACTS OF THE ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE DID NOT SHOW INCOME FROM HOUSE PROPERTY. THE A.O. CALCULATED THE NET INCOME AFTER DEDUCTION UNDE R SECTION 24A OF RS.52,174/- IN RESPECT OF RESIDENTIAL PROPERTY AT 96, SURYA NAGAR, AGRA, RESIDENTIAL PROPERTY AT 97 SURYA NAGAR, AGRA AND SHOP AT DARESI NO.1, AGRA. T HE CONTENTION OF THE ASSESSEE WAS THAT THESE PROPERTIES WERE VACANT. THE ADDITIO N MADE BY THE A.O. HAS BEEN CONFIRMED BY THE CIT(A) HOLDING THAT THE ANNUAL LET TING VALUE OF THE PROPERTY OF THE ASSESSEE WOULD BE DETERMINED AS PER CLAUSE-A OF SECTION 23(1) BEING A SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE MADE FROM YE AR TO YEAR FOR THE PURPOSE OF DETERMINING THE ANNUAL LETTING VALUE OF THESE PROPE RTIES UNDER THE PROVISIONS OF SECTION 23(4)(B) AND CLAUSE 2 NO EVIDENCE FOR CALCU LATION OF ALV OF THIS PROPERTY. THEREFORE, THE A.O. HAS CORRECTLY CALCULATED THE AN NUAL LETTING VALUE @ 7% OF INVESTMENT. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 5 6. AT THE OUTSET, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THIS ISSUE IS COVERED BY THE ORDER OF I.T.A.T. IN ASSESSEES OWN CASE IN ITA NOS.351, 370 & 353/AGRA/2012 FOR THE A.YS. 2004-05, 2005-06 & 2007 -08 AND OTHERS, ORDER DATED 28.12.2012. THE LD. AUTHORISED REPRESENTATIVE ALSO FILED ADDITIONAL EVIDENCES WHICH ARE ON RECORD. THE I.T.A.T. HAS DECIDED THE ISSUE IN ABOVE ORDER 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 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. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 6 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. SINCE THE FACTS ARE IDENTICAL, TO MAINTAIN CONSI STENCY, WE FOLLOW THE ABOVE ORDER OF I.T.A.T. AND ADDITIONAL EVIDENCES FILED AR E ADMITTED AS REASONS GIVEN IN ABOVE ORDER WHICH ARE SIMILAR TO THE CASE UNDER CON SIDERATION. ACCORDINGLY, THE MATTER IS BEING SENT BACK TO THE FILE OF A.O. WITH IDENTICAL DIRECTIONS. 8. THE SECOND GROUND OF ASSESSEES APPEAL IS IN RESPECT OF SUSTENANCE OF ADDITION OF RS.8,11,972/- OUT OF ADDITION OF RS.11, 22,632/- MADE BY THE A.O. THIS GROUND OF ASSESSEES APPEAL IS COMMON A GROUND IN C ROSS APPEAL. AS THE CIT(A) HAS ALLOWED PART RELIEF, THEREFORE, THE REVENUE IS ALSO IN APPEAL THROUGH GROUND NO.1. 9. THE BRIEF FACTS OF THE ISSUE ARE THAT SEARCH UND ER SECTION 132 OF THE ACT WAS CONDUCTED ON 30.01.2008. DURING THE COURSE OF SEAR CH AT THE RESIDENTIAL PREMISES NO.92, SURYA NAGAR, AGRA OF THE ASSESSEE SHRI LAXMA N DAS KESHWANI WHO IS THE MAIN PERSON OF SHANKER GUTKA GROUP CASES. SOME ITE MS OF PERFUME AND FRAGRANCE FOUND DURING THE COURSE OF SEARCH HAVE BEEN NOTED B Y THE A.O. IN HIS ORDER AT PAGE ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 7 NO.3 & 4. THE ASSESSEE WAS REQUIRED TO EXPLAIN AND JUSTIFY THE RATE AND VALUE OF EACH ITEM. IT WAS EXPLAINED BY THE ASSESSEE THAT T HE ASSESSEE HAS ADOPTED THE RATE OF THESE ITEMS FROM RS.2,100/- TO RS.1,500/- PER K G. THE A.O. AFTER CONSIDERING THE ASSESSEES SUBMISSION VALUED THE STOCK OF PERFU ME AT RS.26,52,298/-. A DETAILED CALCULATION IS GIVEN BY THE A.O. AT PAGE N OS.7 & 8 OF HIS ORDER. THE CIT(A) ALLOWED PART RELIEF. 10. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T THE ASSESSEE HIMSELF HAS SURRENDERED THE VALUE OF THE PERFUME FOUND AT THE T IME OF SEARCH FOR RS.15,29,666/. THE DETAILED CALCULATION IN THIS REGARD POINTED OUT BY THE LD. AUTHORISED REPRESENTATIVE IS REPRODUCED FROM PAGE NOS.12 & 13 OF ASSESSEES PAPER BOOK AS UNDER :- STOCK OF FRAGANCE FOUND AT 92 SURYA NAGAR, AGRA ANNEXURE S P-1 S.NO. NOMENCLATURE DESCRIPTION QUANTITY RATE PER KG VALUE 1. A 4 X 5 KG S. BASE 20 KG 2. B 8 X 5 KG. HINA BASE 40 KG 3. C 14 X 5 KG AL TIN WITH CORRUGATES BOX 70 KG 4. D 15 X 5 KG AL TIN 75 KG 5. E 2 X 10 KG 4 X15 KG AL TIN 2 X 25 KG. STEEL TIN 80 KG 50 KG ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 8 6. F 6 X 25 KG RED TIN 150 KG 7. G 4 X 20 KG BLUE TIN 80 KG TOTAL 565 KG 1500/- 847500/- IN SUPPORT OF THE VALUATION OF ABOVE FRAGRANCES WE ARE ENCLOSING COPY OF INVOICE DATED 21.04.2007 OF SPAC AROMAS 29/3B, MANG ALDASS ROAD, MUMBAI 400 002. S.NO. NOMENCLATURE DESCRIPTION QUANTITY RATE PER K G VALUE 8 H 1 X 20 KG 5 X 30 KG KH SPLP PLASTIC JERRY 170 KG 2446/- 415820/- 9. I 2 X 30 KG 1 X 10 KG CAM NQ SPLAM PLASTIC JERRY 70 KG 1281/- 89670/- 10 J 2 X 23 KG CAM MSPL PLASTIC JERRY CAM 46 KG 1281 58926/- TOTAL 286 KG 564416/- IN SUPPORT OF THE VALUATION OF ABOVE FRAGRANCES WE ARE ENCLOSING COPY OF INVOICE DATED 07.05.2007 OF SHREE PAR FRAGRANCE PRI VATE LIMITED SILVASSA. TOTAL 565 KG + 286 KG = 851 KG TOTAL AMOUNT 847500/- + 564416/- =1411916/- STOCK OF FRAGANCE FOUND AT 92 SURYA NAGAR, AGRA ANNEXURE S P-2 S.NO. NOMENCLATURE DESCRIPTION QUANTITY RATE PER KG VALUE 1. ONE KG GULAB 2 3 ONE KG MUSH KG JAI DV DEO INDUSTRIES ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 9 4 2 KG HARABOT FRAGRANCE & FLAVOURS LTD MADE IN FRANCE 5 6 8 KG UNIQUE GULAB 2 KG GULAB ATAR ARORA CHEMICALS 7 1 KG NUTMED DV DEO INDUSTRIES 8 8 KG GULAB 9 13 KG HINA BASE 10 12 KG FRAGRANCE 11 25 KG S. BASE 12 5 KG KEVDA FRAGRANCE 13 KG ROOH ALOOD TOTAL 78.5 KG 1500/- 117750/- 11. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T THERE IS NO DISPUTE REGARDING THE QUANTITY FOUND AT THE TIME OF SEARCH. THE ONLY DISPUTE IS IN RESPECT OF VALUATION. THE LD. AUTHORISED REPRESENTATIVE SUBMI TTED THAT THE ASSESSEE HAS CALCULATED THE VALUE OF PERFUME AND FRAGRANCE ON TH E BASIS OF BILLS OF RESPECTIVE ITEMS. LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T THE ITEMS AT SL. NOS.1 TO 7 WERE VALUED BY THE ASSESSEE APPLYING RATE OF RS.1,5 00/- PER KG. WHEREAS THE A.O. HAS CALCULATED THE SAME AT RS.1,864/-. THE CIT(A) ACCEPTED THE VALUE DETERMINED BY THE ASSESSEE AGAINST WHICH THE REVENUE IS IN APP EAL. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 10 12. THE LD. AUTHORISED REPRESENTATIVE FURTHER SUBMI TTED THAT THE A.O. IS NOT CORRECT IN APPLYING AVERAGE RATE OF ITEMS WHEREAS T HE ASSESSEE HAS VALUED THE ITEM NOS.1 TO 7 ON THE BASIS OF LAST PURCHASE BILL. 13. LD. AUTHORISED REPRESENTATIVE FURTHER SUBMITTED THAT IN RESPECT OF ITEM NOS.8, 9 & 10 AND ANNEXURE SP-1 THERE IS NO DISPUTE AS THE A.O. HIMSELF HAS ACCEPTED THE VALUE DETERMINED BY THE ASSESSEE. 14. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T THE CIT(A) HAS WRONGLY CONFIRMED THE VIEW OF THE A.O. IN RESPECT OF ITEM N OS.1 TO 13 OF ANNEXURE SP-2. 15. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT THERE IS NO DISPUTE REGARDING THE QUANTITY OF PERFUME. ONLY DISPUTE IS IN RESPECT OF VALUATION O F PERFUME. THERE IS NO DISPUTE REGARDING SL. NO.8, 9, & 10 OF ANNEXURE SP-1 AS VAL UE TAKEN BY THE ASSESSEE FOR 286 KGS. VALUED AT RS.5,64,416/- HAS BEEN ACCEPTED BY THE A.O. HIMSELF. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 11 16. THE DISPUTE IS IN RESPECT OF ITEM SL. NO.1 TO 7 FOR 565 KGS. THE ASSESSEE HAS CALCULATED THE VALUE OF PERFUME APPLYING RS.1,500/- PER KG. RATE AGAINST WHICH THE A.O. VALUED AT RS.1,864/- PER KG. 17. THE CIT(A) ACCEPTED THE VALUE DETERMINED BY THE ASSESSEE. THE RELEVANT FINDING OF THE CIT(A) IS REPRODUCED FROM PARAGRAPH NO.6.8, PAGE NOS.26 & 27 AS UNDER :- 6.8 AFTER CONSIDERING THE FINDINGS OF THE AO IN TH E ASSESSMENT ORDER WITH REGARD TO VALUATION OF THE STOCK OF FRAGRANCE/ PERFUMES FOUND DURING SEARCH AND ARGUMENTS TAKEN BY THE LD. AR AGA INST SUCH VLUATIONA S DISCUSSED ABOVE, I FIND THAT FOR ITEMS FROM SL. NO.1 TO 10, NO JUSTIFICATION HAS BEEN GIVEN BY THE AO HAS TAKEN THE SAME RATES AS DISCLOSED BY THE APPELLANT ON THE BASIS OF BILLS OF M/S SHREE PAR FRAGRANCE PVT. LTD. AND HENCE, THERE IS NO DISPUTE ON THE RATES ADOPTED FOR THESE THREE ITEMS. HOWEVER, FOR BALANCE ITEMS FROM SL. NO.1 TO 7, THE AO HAS ADOPTED AVERAGE RATE FOR THE ITEMS AT SL. NO.8,9 & 10 COMPUTING IT AT RS.1864/- BUT NO JUSTIFICATION HAS BEEN GIVEN BY HIM FOR TAKING AVERAGE OF THESE RATES EXCEPT DISCUS SING IN GENERAL MANNER IN THE ASSESSMENT ORDER THAT IT HAS BEEN DON E ON THE BASIS OF MARKET ENQUIRIES AND HOLDING THAT THESE ITEMS ARE M IXTURE OF ESSENCES WITH SOME BASE MATERIALS. SUCH JUSTIFICATION GIVEN BY THE AO IN THE ASSESSMENT ORDER HAS BEEN FOUND TO BE BASED ON ONLY PRESUMPTION AND GUESS WORK WITHOUT HAVING ANY SUPPORTING EVIDENCE. AGAINST THE DECISION OF THE AO TAKING THESE MATERIALS AS MIXTUR E ON PRESUMPTION, THE LD. AR HAS POINTED OUT THAT THE SAMPLE OF ALL T HE ITEMS FROM SL. NO.1 TO 10 WERE TAKEN BY THE SEARCH OFFICER AND THI S FACT HAS BEEN MENTIONED IN THE INVENTORY ITSELF. THE LD. A.R. HAS FURTHER POINTED OUT THAT BEFORE DECIDING THE RATE OF THESE ITEMS, NO EN QUIRY HAS BEEN MADE BY THE AO AS REGARDS TO THE VALUE OF SAMPLE ITEMS. IN ABSENCE OF ANY SUPPORTING EVIDENCE BROUGHT OUT BY THE AO IN THE AS SESSMENT RECORD IN SUPPORT OF HIS DECISION THAT THESE ITEMS ARE MIX TURE TO TAKE AVERAGE OF THE RATES OF THE ITEMS MENTIONED AT SL. NO. 8, 9 & 10, I FIND THAT THE AO IS NOT JUSTIFIED IN TAKING AVERAGE RATE OF RS.18 64/- PER KG. AS COMPUTED BY HIM IN THE ASSESSMENT ORDER. EVEN THERE IS NO DISCUSSION ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 12 ON THE TESTING OF THE SAMPLE OF THESE ITEMS TAKEN D URING SEARCH BEFORE GIVING THE FINDING THAT THESE ITEMS ARE MIXTURE. IT HAS BEEN CLAIMED BY THE LD. A.R. THAT THE RATE OF RS.1500/- PER KG ADOP TED BY THE APPELLANT FOR VALUING THESE ITEMS WAS BASED ON THE RATE SHOWN IN THE INVOICES OF M/S SPAC AROMAS BECAUSE AS EXPLAINED BY HIM THESE I TEMS WERE RECEIVED FROM M/S SPAC AROMAS. THE AO HAS NOT BROUG HT ANY EVIDENCE ON RECORD TO CONTRADICT THE CLAIM OF THE A PPELLANT AS REGARDS TO PURCHASE OF THESE MATERIALS FROM M/S SPAC AROMAS AND ADOPTING THE SAME RATE FOR VALUATION AS SHOWN IN THE INVOICE S OF THIS CONCERN. ON GOING THROUGH THE ASSESSMENT ORDER, I FIND THAT IN THE INVOICES OF M/S SPAC AROMAS AND ADOPTING THE SAME RATE FOR VALU ATION AS SHOWN IN THE INVOICES OF THIS CONCERN. ON GOING THROUGH T HE ASSESSMENT ORDER, I FIND THAT IN THE INVOICES OF M/S SPAC AROM AS, RATES OF ITEMS MENTIONED ARE IN THE RANGE OF RS.1400 TO RS.1500/- PER KG. AND THEREFORE, IN ABSENCE OF ANY CONTRARY EVIDENCE AVAI LABLE IN THE ASSESSMENT RECORD TO ESTABLISH THAT THOSE ITEMS SHO WN AT SL. NO. 1 TO 7 ARE DIFFERENT THAN THE ITEMS CLAIMED TO HAVE BEEN R ECEIVED FROM M/S SPAC AROMAS, I DO NOT FIND ANY JUSTIFICATION IN REJ ECTING THE RATE OF RS.1500/- PER KG. ADOPTED BY THE APPELLANT FOR VALU ATION OF THESE ITEMS, ESPECIALLY IN THE LIGHT OF THE FACT THAT DES CRIPTION OF THE ITEMS RECORDED AT SL. NO.1 TO 7 HAVE NOT BEEN WRITTEN IN THE INVENTORY PREPARED BY THE SEARCH PARTY. THEREFORE, THE AO IS DIRECTED TO TAKE THE RATE OF RS.1500/- PER KG AS DISCLOSED BY THE APPELL ANT FOR VALUATION OF ITEMS MENTIONED AT SL. NO.1 TO 7. 18. THE CIT(A) WHILE ACCEPTING THE ASSESSEES VALUA TION OBSERVED THAT THE A.O. WAS NOT JUSTIFIED IN TAKING THE AVERAGE RATE OF RS. 1,864/- PER KG. HE FURTHER OBSERVED THAT THERE IS NO DISCUSSION BY THE A.O. ON THE TESTING OF THE SAMPLE OF THESE ITEMS TAKEN DURING THE SEARCH BEFORE GIVING F INDING THAT THESE ITEMS WERE MIXTURE. THE VALUE TAKEN BY THE ASSESSEE BY APPLYI NG RATE OF RS.1,500/- PER KG. WAS BASED ON THE RATES SHOWN IN THE INVOICE OF SPAC AROMAS, THE ITEMS WERE RECEIVED FROM THIS PARTY. THE A.O. DID NOT BRING A NY EVIDENCE ON RECORD TO CONTRADICT THE CLAIM OF THE ASSESSEE AS REGARDS PUR CHASE OF THESE MATERIALS FROM ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 13 SPAC AROMAS. THE CIT(A) AFTER EXAMINING THE INVOIC E OF SPAC AROMAS FOUND THAT THE RATES OF THE ITEMS MENTIONED ARE IN THE RANGE O F RS.1,400/- TO RS.1,500/- PER KG. WE FIND THAT THE FINDING OF CIT(A) IS BASED ON MATE RIAL AND SUPPORTED BY THE INVOICE FOR VALUING THE PERFUME BY APPLYING RS.1,50 0/- PER KG. AND REVENUE HAS FAILED TO POINT OUT ANY CONTRARY MATERIAL TO THE FI NDING OF CIT(A). IN THE LIGHT OF THE FACT, ORDER OF THE CIT(A) TO THAT EXTENT IS CON FIRMED. GROUND NO.1 RAISED BY THE REVENUE IS THUS DISMISSED. 19. AS REGARDS THE VALUE OF ITEM NOS.1 TO 13 OF ANN EXURE SP-2 OF 78.5 KGS. AT THE RATE OF RS.1,500/- PER KG. APPLIED BY THE ASSES SEE AND VALUED AT RS.1,17,750/-, THE CIT(A) CONFIRMED THE ORDER OF THE A.O. AS UNDER :- (PARAGRAPH NO.6.9) 6.9 AS REGARDS TO ITEM NO.11 TO 23, THE MAIN DISPU TE IS WHETHER THESE ITEMS ARE SIMILAR TO THE ITEMS SHOWN IN THE S EIZED DOCUMENTS AND THEY SHOULD BE VALUED AT THE SAME RATES AS GIVEN IN THE SEIZED DOCUMENTS. I FIND THAT THERE IS MINOR VARIATION IN THE NAME OF THE ITEMS WRITTEN IN THE SEIZED DOCUMENTS AND THAT RECORDED B Y THE SEARCH PARTY IN THE INVENTORY. IT COULD BE POSSIBLE THAT SUCH VA RIATION MIGHT HAVE OCCURRED DUE TO MISTAKE BY THE SEARCH PARTY IN RECO RDING THE NAME OF THESE ITEMS IN THE INVENTORY. AS THE SEIZED DOCUMEN TS GIVING THE RATES OF VARIOUS PERFUMES ITEMS WERE FOUND IN THE PREMISE S OF THE APPELLANT, PRESENCE OF THESE ITEMS IN THE PREMISES OF THE APPE LLANT CANNOT BE DENIED AND JUST BECAUSE OF MINOR VARIATION IN THE N AME OF THESE ITEMS RECORDED IN THE INVENTORY, IT CANNOT BE SAID THAT T HOSE ITEMS WHICH WERE RECORDED IN THE INVENTORY ARE NOT THE SAME AS MENTIONED IN THE SEIZED DOCUMENTS. EVEN THE APPELLANT HAS NOT GIVEN ANY JUSTIFICATION FOR ADOPTING SUCH A LOW RATE OF RS.1500/- PER KG FO R VARIOUS PERFUMES ITEMS. AS PER INVENTORY PREPARED AND STATEMENT OF S HRI KAMAL KESHWANI REORDING DURING SEARCH, ALL THESE ITEMS WE RE COSTLY PERFUMES ITEMS AND RATES OF THESE ITEMS CANNOT BE A S LOW AS RS.1500/- PER KG. THE LD. AR HAS RELIED ON THE STATEMENT OF S HRI KAMAL KUMAR ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 14 KESHWANI ABOUT THE VALUE OF THESE ITEMS TOLD BY HIM BEING BETWEEN RS.25,000/- TO RS.50,000/- BUT THIS VALUE TOLD BY H IM WAS ONLY APPROXIMATE VALUE. IN FACT LOOKING TO THE QUESTION NO.16 RAISED IN THE STATEMENT, IT BECOMES CLEAR THAT RATES OF THESE ITE MS CANNOT BE AS LOW AS RS.1500/- PER KG. BECAUSE IN QUESTION NO.16, THE CONCERNED SEARCH OFFICER HAS ASKED ABOUT THE VALUE OF THESE ITEMS PO INTING OUT THAT THESE ITEMS WERE FOUND IN A STEEL ALMIRAH AND TOTAL WEIGHT OF THESE ITEMS WAS FOUND TO BE 78 KG TO THE RATE OF RS.16,10 0/- PER KG WAS MENTIONED. AFTER GIVING THE TOTAL WEIGHT OF THESE I TEMS AND THE RATE MENTIONED ON THE BOTTLES OF THESE ITEMS, SHRI KAMAL KUMAR KESHWANI WAS ASKED TO TELL THE TOTAL VALUE OF THESE ITEMS. I N ANSWER TO THIS QUESTION, SHRI KESHWANI GAVE AN EVASIVE ANSWER STAT ING THE APPROXIMATE VALUE BEING BETWEEN RS.25,000/- TO RS.5 0,000/- WITHOUT MAKING ANY CALCULATION ON THE BASIS OF THE WEIGHT O F THESE ITEMS RECORDED BY THE SEARCH PARTY IN THE INVENTORY AND A PPLYING THE CORRECT RATE OF THESE ITEMS MENTIONED ON THE BOTTLES IN WHI CH THEY WERE KEPT. EVEN THE APPELLANT WHILE VALUING THESE ITEMS IN THE TOTAL VALUE OF STOCK DISCLOSED IN THE RETURN OF INCOME AT RS.15,29,666/- , HAS NOT TAKEN THE VALUE OF THESE ITEMS BETWEEN RS.25,000/- TO RS.50,0 00/- AND COMPUTED THE VALUE OF THESE ITEMS BY TAKING THE AVERAGE RATE OF RS.1500/- PER KG. AND AFTER MULTIPLYING THIS RATE WITH THE TOTAL WEIGHT OF THESE ITEMS AT 78.5 KG. RECORDED IN THE INVENTORY PREPARED BY T HE SEARCH PARTY, THE VALUE OF THESE ITEMS HAVE BEEN COMPUTED AT RS.1 ,17,750/- BUT NO JUSTIFICATION WAS GIVEN FOR ADOPTING THIS RATE AS T HE RATES FOR ITEM NO.1 TO 10 WERE JUSTIFIED ON THE BASIS OF INVOICES OF M/ S SPAC AROMAS AND M/S SHREE PAR FRAGRANCE PVT. LTD. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND LOOKING TO THE FACT MENTIONED IN QUESTION NO.16 OF THE STATEMENT OF KAMAL KUMAR KESHWANI ABOUT THE RAN GE OF THE RATES FOUND TO BE MENTIONED ON THE BOTTLES IN WHICH THE I TEMS AT SL. NO.11 TO 23 WERE KEPT BEING RS.6000/- TO RS.16100/- PER KG A ND NO EVIDENCE BEING PRODUCED BY THE APPELLANT TO JUSTIFY THE AVER AGE RATE OF RS.1500/- PER KG TAKEN BY HIM FOR THESE ITEMS, I FI ND THAT THE AO IS JUSTIFIED IN TAKING THE RATES OF THESE ITEMS ON THE BASIS OF SEIZED DOCUMENTS AS MENTIONED IN THE ASSESSMENT ORDER. 20. THE CIT(A) WHILE CONFIRMING THE ORDER OF THE A. O. HELD THAT THE A..O WAS JUSTIFIED IN TAKING THE RATES OF THESE ITEMS ON THE BASIS OF SEIZED DOCUMENTS. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 15 21. THE LD. AUTHORISED REPRESENTATIVE DEMONSTRATED BEFORE US THAT PAGE NOS. 4 & 5 OF ANNEXURE B-8 FOUND DURING THE COURSE OF SEARCH ARE NOT MATCHING WITH THE ITEMS MENTIONED IN PAGE NOS.4 & 5 OF ANNEXURE B-2. THE RATES OF WHICH HAVE BEEN RELIED UPON BY THE A.O. FOR VALUING THESE PERF UMES. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THESE WERE SAMPLE ITE MS WHEREAS THE A.O. WHILE VALUING THE ITEMS TAKEN THE VALUE OF SPECIAL ITEM. THE DETAILS OF THESE ITEMS POINTED OUT BY THE LD. AUTHORISED REPRESENTATIVE AR E AS UNDER :- S.NO. OF THE A.O. ORDER ITEM FOUND DURING SEARCH AS PER A.O. ORDER ITEM AS PER ANNEXURE B-8 PAGE 4 AND 5 FOR WHICH THE RATE HAS BEEN TAKEN 11 GULAB GULAB SPECIAL 12 MESH MUST SPECIAL 14 BASBOOT RAMASANDAL 16 GULAB ATAR GULAB SPECIAL 18 GULAB GULAB SPECIAL 21 S-BASE RAMASANDAL 22. IT IS ALSO SUBMISSION OF THE ASSESSEE THAT WHIL E PREPARING THE INVENTORY OF WHICH COPY HAS BEEN PLACED AT PAGE NOS.27 & 28 OF P APER BOOK, IT HAS BEEN CLEARLY NOTED THAT THESE ARE THE SAMPLE ITEMS. FURTHER THE ASSESSEES SON SHRI KAMAL KISHORE KESHWANI, WHOSE STATEMENT WAS RECORDED, MEN TIONED THAT ALL THESE ITEMS WERE SAMPLE ITEMS. THE ASSESSEE HAS VALUED THE ITE MS AS SAMPLE ITEMS WHEREAS THE A.O. HAS VALUED BY APPLYING THE RATE OF SPECIAL ITE MS. WE NOTICE THAT THE A.O. AND CIT(A) BOTH HAVE FAILED TO APPRECIATE THE FACT THAT THESE ITEMS WERE SAMPLE ITEMS ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 16 AND THIS FACT IS EVIDENT FROM THE MATERIAL AND DOCU MENTS FOUND AND SEIZED AT THE TIME OF SEARCH. WE FIND THAT THE A.O. IS NOT CORRE CT IN APPLYING THE RATE OF SPECIAL ITEMS. THE ASSESSEE HAS DEMONSTRATED BY SUPPORTING EVIDENCE THAT THESE WERE SAMPLE ITEMS AND WERE RIGHTLY VALUED AT 78.5 KGS. B Y APPLYING RS.1,500/- PER KG. IN THE LIGHT OF THE ABOVE DISCUSSION, WE FIND THAT THE CIT(A) IS NOT CORRECT IN SUSTAINING THE ADDITION OF RS.8,11,972/-. WE ACCOR DINGLY DELETE THE ADDITION OF RS.8,11,972/- SUSTAINED BY HE CIT(A). THUS, THE TO TAL ADDITION OF RS.26,52,298/- MADE BY THE A.O. IS DELETED. ACCORDINGLY, GROUND N O.2 OF THE ASSESSEE IS ALLOWED. 23. THE THIRD GROUND OF ASSESSEES APPEAL IS PERTAINING TO ADDITION ON ACCOUNT OF JEWELLERY. DURING THE COURSE OF SEARCH IN THE PREM ISES OF KESHWANI FAMILY TOTAL JEWELLERY OF RS.1,46,09,942/- WAS FOUND. THE CIT(A ) RECORDED THAT AS PER THE DETAILS AND THE VALUE ON RECORD, THE CORRECT FIGURE IS RS.1,36,82,840/- INSTEAD OF RS.1,46,09,924/-. OUT OF THE SAID TOTAL JEWELLERY AND SILVER ITEMS FOUND, JEWELLERY OF RS.1,03,2360/- WAS FOUND IN THE POSSESSION OF TH E ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. DID NOT ACCEPT THE ASSESSEES SUBMISSIONS AND EXPLANATION ON THE GROUND THAT THE ITEMS WERE FOUND FROM THE POSSESSION OF THE ASSESSEE SHRI LAXMAN DAS KESHWANI. THE A.O., AFTER CONSIDERING THE ASSESSEES EXPLANATION AND SUBMISSION, WORKED OUT THE UNEXPLAI NED JEWELLERY AND SILVER ITEMS AS UNDER :- (PAGE NOS.22 TO 24) REGARDING JEWELLERY ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 17 NAME JEWELLERY FOUND GROSS WEIGHT (GM) VALUE AS ON DATE OF SEARCH ON 30.01.2008 (RS.) A.Y. VALUE OF SHOWN IN THE RETURN(S) (RS.) APPRECI ATED VALUE OF DISCLOSE D JEWELLER Y ON 30.01.20 08 (RS.) DIFFERENCE I.E. UNEXPLAINED VALUE OF JEWELLERY (RS.) VALUE OF JEWELLERY FOUND LESS THAN DISCLOSED JEWELLERY RS. 1 2 3 4 5 6 7 8 SHRI LAXMAN DAS KESHWANI 9159.400 1,03,00,260 2001-02 NIL NIL 1,03,00,260 BUT IT IS SUBJECT TO COMMENTS GIVEN BELOW - SHRI KAMAL KUMAR KESHWANI 144.500 1,74,887 2001-02 96,000 2,73,100 - 98,213 SHRI JAGDISH KESHWANI 779.500 8,64,353 2001-02 2,98,720 8,49,820 14,553 - SHRI JITENDRA KUMAR KESHWANI - - 2001-02 22,070 62,786 - 62,786 SHRI NARENDRA KUMAR KESHWANI 750 7,84,168 2001-02 2002-03 2,99,740 58,760 3,58,500 9,91,756 - 2,07,588 SHRI MAHENDRA KUMAR KESHWANI 646 5,99,860 2001-02 2002-03 45,380 1,22,785 1,68,165 4,00,105 1,99,755 - SHRI SHYAM SUNDER KESHWANI 700.200 9,59,312 2001-02 1,25,320 3,56,418 6,02,894 - SMT. MADHU KESHWANI 2001-02 62,600 1,78,000 - 1,78,000 SMT. LATA KESHWANI 2001 1,05,230 2,99,400 - 2,99,400 SMT. HARDEVI KESHWANI 2001 1,98,309 5,64,200 - 5,64,200 SMT. NISHA KESHWANI 2001 55,000 1,56,500 - 1,56,500 ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 18 REGARDING SILVER ITEMS NAME SILVER FOUND GROSS WEIGHT (GM.) VALUE AS ON DATE OF SEARCH ON 30.01.2008 (RS.) A.Y. VALUE OF SHOWN IN THE RETURN(S) (RS.) APPRECIATED VALUE OF DISCLOSED ITEM ON 30.01.2008 (RS.) DIFFERENCE I.E. UNEXPLAINED VALUE OF SILVER (RS.) 1 2 3 4 5 6 7 SHRI LAXMAN DAS KESHWANI 57308.5 9,27,077 2001-02 NIL NIL 9,27,077 SHRI KAMAL KUMAR KESHWANI 144.500 1,338 2001-02 TO 2007-08 NIL NIL 2,338 SHRI JAGDISH KESHWANI 544 8,801 2001-02 1602 4995 3846 SHRI JITENDRA KUAMR KESHWANI NIL - 2001-02 6335 19592 - SHRI NARENDRA KUAMR KESHWANI 356 5760 2001-02 14530 44937 - SHRI MAHENDRA KUMAR KESHWANI 636 10290 2001-02 2750 8500 15290 SHRI SHYAM SUNDER KESHWANI 1162 18801 2001-02 24330 75245 - SMT. LATA KESHWANI NIL NIL 2001-02 19770 61143 - SMT. HARDEVI KESHWANI NIL NIL 2001-02 2424 7497 - 24. THE A.O. IN SUPPORT OF HIS ABOVE WORKING NOTED THAT DURING THE COURSE OF SEARCH ON 30.01.2008 SHRI KAMAL KUMAR KESHWANI IN T HE STATEMENT RECORDED ON ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 19 OATH UNDER SECTION 132(4) HAS CATEGORICALLY ACCEPTE D THE UNEXPLAINED INVESTMENT OF RS.1.20 CRORES IN JEWELRY AND HAD OFFERED TO TAX ON SUCH UNEXPLAINED INVESTMENT IN JEWELLERY. IT HAS ALSO BEEN NOTED BY THE A.O. THAT AFTER CONSIDERING THE ENTIRE FAMILY LIVING JOINTLY AND IN THE PRELIMINARY STATEM ENT RECORDED DURING THE COURSE OF SEARCH WHEREIN IT HAS BEEN STATED BY THE LADIES OF THE FAMILY THAT THEIR JEWELLERY WERE KEPT WITH MOTHER-IN-LAW. THE A.O. FURTHER NOT ED THAT IT WOULD BE IN THE INTEREST OF JUSTICE AND REASONABLENESS TO ACCEPT TH AT THE DISCLOSED JEWELLERY AND SILVER ITEMS WHICH HAVE NOT BEEN FOUND FROM THE POS SESSION OF THE SONS/DAUGHTER- IN-LAWS OF THE ASSESSEE WAS KEPT WITH THE ASSESSEE AND HIS WIFE SMT. NIRMALA KESHWANI AND, THEREFORE, THE VALUE OF DISCLOSED JEW ELLERY OF THE LADIES AND SONS OF THE ASSESSEE WHICH HAVE NOT BEEN FOUND FROM THEIR P OSSESSION WAS REDUCED FROM THE VALUE OF THE JEWELLERY FOUND FROM FAMILY MEMBER S. THE VALUE OF JEWELLERY WHICH WAS DISCLOSED BUT NOT FOUND FROM THE MEMBERS OF THE FAMILY COMES TO RS.15,66,687/-. A DETAILED WORKING HAS BEEN GIVEN IN COLUMN NO.8 OF THE ABOVE CHART. THE A.O. MADE THE ADDITION OF RS.87,33,573/ - ON ACCOUNT OF UNEXPLAINED JEWELLERY AND RS.9,27,077/- ON ACCOUNT OF UNEXPLAIN ED SILVER COINS AS UNDER :- (PAGE NO.24) AFTER REDUCING THIS VALUE, THE VALUE OF UNEXPLAINE D JEWELLERY IN THE HANDS OF LAXMAN DAS KESHWANI WORKS OUT TO RS.1,03,0 0,260- 15,66,687=87,33,573 AND SILVERWARE AT RS.927077/- (UNEXPLAINED JEWELLERY RS.87,33,573/- & UNEXPLAINED SILVER COINS RS.9,27,077/-). ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 20 25. THE CIT(A) ON SUBMISSION OF THE ASSESSEE CALLED THE REMAND REPORT FROM THE A.O. IN THE REMAND REPORT, THE A.O. SUBMITTED THAT THE SUBMISSION OF THE ASSESSEE HAS ALREADY BEEN CONSIDERED DURING THE ASSESSMENT P ROCEEDING. NO OTHER NEW FACT HAS BEEN BROUGHT BY THE ASSESSEE. THE CIT(A) NOTED THAT IN THE REMAND REPORT THE A.O. DID NOT OFFER ANY COMMENT ON SUBMISSION OF THE LD. AUTHORISED REPRESENTATIVE ABOUT THE TAXATION OF JEWELLERY OF R S.52,00,000/- IN THE HANDS OF BOTH THE PERSONS I.E. SMT. HARDEVI AS DECLARED BY H ER IN HER RETURN OF INCOME ON BEING SURRENDERED BY HER AND ALSO IN THE HANDS OF T HE ASSESSEE SHRI LAXMAN DAS KSHWANI DUE TO BEING FOUND IN HIS POSSESSION, RESUL TING INTO DOUBLE TAXATION OF THE SAME AMOUNT OF JEWELLERY. THE A.O. DID NOT OFFER A NY COMMENT ON THE ARGUMENT TAKEN BY THE LD. AUTHORISED REPRESENTATIVE AGAINST THE DECISION OF THE A.O. FOR NOT GIVING BENEFIT OF POSSESSION OF 500 GRAMS OF JEWELL ERY BY EACH LADY MEMBER OF THE FAMILY AND 100 GRAMS OF JEWELLERY BY EACH MALE MEMB ER OF THE FAMILY CONSIDERING THE SOCIAL CUSTOM IN THE INDIAN SOCIETY. 26. THE CIT(A) DID NOT ADMIT THE ADDITIONAL EVIDENC E FILED IN RESPECT OF JEWELLERY DECLARED IN VDIS SCHEME OF 1987 AS UNDER :- (PARAGRAPH NO.8.7) 8.7 DURING DISCUSSION, IT HAS ALSO BEEN POINTED OU T BY THE LD. AR THAT THE JEWELLERY SHOWN BY VARIOUS FAMILY MEMBERS OF APPELLANT IN THEIR RETURN FOR A.Y. 2001-02 FOR WHICH BENEFIT WAS GIVEN BY THE AO IN THE ASSESSMENT ORDER, WERE IN FACT ACQUIRED BY THEM IN THE YEAR 1985- 86 AS DECLARED IN THE VDIS SCHEME OF 1997 AND ACCEP TED BY THE CONCERNED COMMISSION OF INCOME-TAX AT THAT TIME IN JANUARY 1998. THIS CONTENTION OF THE APPELLANT WAS VERIFIED BY TH E AO AND FOUND THAT ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 21 THE FAMILY MEMBERS OF THE APPELLANT HAVE MADE DECLA RATION IN VDIS SCHEME. HOWEVER, ON GOING THROUGH THE SAID SCHEME, IT HAS BEEN FOUND THAT BENEFIT FOR THIS SCHEME CAN BE GIVEN TO A PERSON ONLY AFTER FULFILLING OF CERTAIN CONDITIONS AS GIVEN BELOW:- 1. THE AMOUNT OF THE VOLUNTARILY DISCLOSED INCOME SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE DECLARANT FO R ANY ASSESSMENT YEAR UNDER THE IT ACT, IF THE FOLLOWING CONDITIONS ARE FULFILLED, NAMELY: I THE DECLARANT CREDITS SUCH AMOUNT IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE O F INCOME OR IN ANY OTHER RECORD, AND INTIMATES THE CR EDIT SO MADE TO THE ASSESSING OFFICER, AND II THE I.T. IN RESPECT OF THE VOLUNTARILY DISCLOSED INCOME IS PAID BY THE DECLARANT WITHIN THE TIME SPECIFIED IN SECTION 66 OR 67. ON EXAMINATION OF RECORD, I FIND THAT THE ABOVE CL AIM OF MAKING DECLARATION OF JEWELLERY BY THE FAMILY MEMBERS OF T HE APPELLANT UNDER VDIS SCHEME OF 1997 SHOWN IN AY 2001-02. AS DISCUSS ED BY THE AO IN THE ASSESSMENT ORDER, WAS NOT MADE DURING THE CO URSE OF ASSESSMENT PROCEEDING AND ALSO, IT COULD NOT BE VER IFIED WHETHER ALL THE ABOVE CONDITIONS FOR GIVING THE BENEFIT OF VDIS SCHEME 1997 COULD BE FULFILLED BY THESE PERSONS OR NOT I.E. WHE THER THE AMOUNT OF JEWELLERY DISCLOSED WAS SHOWN IN THE BOOKS OF ACCOU NT OR ANY OTHER RECORD MAINTAINED BY THESE PERSONS FOR AY 1998-99 A ND INTIMATION OF THE SCHEME WAS GIVEN TO THE ASSESSING OFFICER OR NO T. WHAT IS PRESENTLY AVAILABLE IN THE RECORD IS THAT THE JEWEL LERY CLAIMED TO HAVE BEEN DECLARED UNDER VDIS SCHEME WERE SHOWN IN THE B ALANCE SHEET OF 2001-02 AS DISCUSSED BY THE AO IN THE ASSESSMENT ORDER AND THEREFORE, THIS CLAIM BEING MADE BEFORE ME IS IN TH E FORM OF ADDITIONAL EVIDENCE CANNOT BE ADMITTED UNDER RULE 46A BECAUSE OF NON VERIFICATION OF REQUISITE CONDITIONS REQUIRED TO FU LFILLED FOR SUCH CLAIM. 27. THE CIT(A), AFTER DETAILED DISCUSSION, ALLOWED THE BENEFIT OF JEWELLERY OF OTHER MEMBERS FOUND IN THE POSSESSION OF THE ASSESS EE TO THE EXTENT OF ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 22 RS.20,06,187/- OUT OF WHICH TOTAL JEWELLERY FOUND D URING THE COURSE OF SEARCH WAS RS.1,03,260/-. 28. AS REGARDS ALLOWING CREDIT OF RS.52,00,000/-, J EWELLERY SURRENDERED BY SMT. SMT. HADEVI, THE CIT(A) DISMISSED THE ASSESSEES SU BMISSION. THE RELEVANT FINDING OF CIT(A) IN THIS REGARD IS REPRODUCED AS U NDER FROM PAGE NOS.52 & 53 OF THE ORDER OF CIT(A) :- (II) COMPUTATION OF THE AMOUNT OF UNEXPLAINED JEWE LLERY IN THE HAND OF SHRI LAXMAN DAS KESHWANI (APPELLANT) FOUND IN HIS CONTROL AND POSSESSION DURING SEARCH (I) TOTAL JEWELLERY FOUND DURING SEARCH RS.1,03,00 ,260/- LESS : JEWELLERY OF OTHER MEMBERS FOUND IN THE RS. 20,06,187/- IN THE POSSESSION OF THE APPELLANT AS -------------------- COMPUTED IN (I) ABOVE RS. 82,94,073/- IN VIEW OF THE ABOVE COMPUTATION AS MADE IN THIS OR DER ON THE BASIS OF MY DECISION FROM PARA NO.8.8 TO 8.11, THE TOTAL VALUE OF THE JEWELLERY FOUND TO BE UNEXPLAINED IN THE HAND OF TH E APPELLANT OUT OF THE JEWELLERY FOND IN HIS CONTROL AND POSSESSION DU RING THE COURSE OF SEARCH OPERATION COMES TO RS.82,34,073/- AS AGAINST THE VALUE COMPUTED BY THE AO AT RS.87,33,573/-. THEREFORE, TH E AO IS DIRECTED TO ADD RS.82,94,073/- ON ACCOUNT OF UNEXPLAINED INV ESTMENT IN JEWELLERY BY THE APPELLANT INSTEAD OF RS.87,33,573/ - MADE BY HIM IN THE ASSESSMENT ORDER AND THUS, THE APPELLANT GETS A RELIEF OF RS.4,39,500/- AND ACCORDINGLY GROUND NO.5 (I) & 5(I I) ARE PARTLY ALLOWED. AS REGARDS TO GROUND NO.5(II) TAKEN AGAINS T THE DECISION OF THE AO FOR NOT ALLOWING CREDIT FOR RS.52,00,000/- O F JEWELLERY SURRENDERED BY SMT. HARDEVI OUT OF THE JEWELLERY FO UND WITH THE APPELLANT, THIS GROUND IS DISMISSED BECAUSE ON THE BASIS OF EVIDENCE AVAILABLE ON RECORD AND CONSIDERING ALL THE CIRCUMS TANTIAL EVIDENCES ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 23 AS I HAVE DISCUSSED IN PARA NO.8.9, THIS JEWELLERY SHOULD BE TAXED IN THE HAND OF APPELLANT. 29. IN RESPECT OF UNEXPLAINED INVESTMENT IN JEWELLE RY, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED AS UNDER :- (PAGE NOS.5, 6 , & 7 OF PAPER BOOK) 4. RE: ADDITION OF RS.87,33,573/- MADE BY THE ASSESSIN G OFFICER AS UNEXPLAINED INVESTMENT IN JEWELLERY. --------------------------------------------------- --------------------------------- 4.1 THE FAMILY OF THE ASSESSEE CONSIST OF HIMSELF, WIFE, SIX SONS, SIX DAUGHTER-IN-LAW AND 12 GRAND CHILDREN AND ONE MARRI ED DAUGHTER. 4.2 THE ASSESSEE WITH HIS FAMILY LIVES IN ONE HOUSE 92- SURYA NAGAR, AGRA. DURING SEARCH THE JEWELLERY FOUND WAS GOT VA LUED BY THE APPROVED VALUER AND THE FOLLOWING VALUATION REPORT WERE MADE :- VALUATION REPORT IN THE NAME OF VALUE ---------------------------------------- --- ------ I) LAXMAN DAS KESHWANI 1,03,00,260/- II) MRS. HARDEVI KESHWANI W/O KAMAL KESHWANI 1 ,74,887/- III) MRS. NISHA KESHWANI W/O MAHENDRA KESHWANI 5,99,860/- IV) MS. PRIYA KESHWANI (KNOWN AS MADHU KESHWANI) W/O NARENDRA KESHWANI 7,84,168/- V) MR. SHYAM KESHWANI AND WIFE VANDNA KESHWANI 9,59,312/- VI) JAGDISH KESHWANI & WIFE NEELAM KESHWANI 8 ,64,353/- 1,36,82,840/- 4.3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE STATEMENT GIVING THE BREAK UP OF THE FAMILY OWNED BY EACH AND EVERY MEMBER OF THE FAMILY WAS FILED, COPY OF WHICH IS ENCLOSED FOR REFERENCE AND ALSO REPRODUCE BY THE ASSESSING OFFICER IN THE ASSESSMEN T ORDER. RS.52,00,000/- WAS SURRENDERED AND SHOWN IN THE INC OME OF SMT. HARDEVI KESHWANI AS INVESTMENT IN PURCHASE OF JEWEL LERY WHICH HAS ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 24 BEEN ACCEPTED BY THE ASSESSING OFFICER AS THE TAXAB LE INCOME OF HARDEVI KESHWANI HAS BEEN COMPUTED BY THE ASSESSING OFFICER BY TAKING INCOME RETURNED. 4.4 THAT AS PER THE VALUATION REPORT THE TOTAL JEWE LLERY FOUND IS OF RS.1,36,82,840/- WHEREAS AS PER THE ASSESSMENT MADE BY THE ASSESSING OFFICER OF ALL THE FAMILY MEMBERS THE TOTAL VALUE O F THE JEWELLERY CONSIDERED IS RS.1,88,82,860/-. STATEMENT ENCLOSED GIVING THE DETAILS OF JEWELLERY SHOWN AS OWNED AND POSSESSED BY EACH AND EVERY FAMILY MEMBERS AND THE VALUE AS ASSESSED BY THE ASSESSING OFFICER. 4.5 DURING THE COURSE OF SEARCH MAJOR PART OF THE J EWELLERY WAS VALUED BY THE APPROVED VALUER AND INVENTORISED IN O NE REPORT IN THE NAME OF LAXMAN DAS KESHWANI. 4.6 THE ASSESSING OFFICER AS PER THE WORKING GIVEN IN ASSESSMENT ORDER HAS TAKEN THE VALUE OF JEWELLERY AS PER VALUA TION REPORT IN THE NAME OF ASSESSEE AND MADE AN ADDITION OF RS.87,33,5 73/-. THE ADDITION MADE BY THE ASSESSING OFFICER IS APPARENTLY WRONG A ND BAD IN LAW CONSIDERING THE FACTS AS SUBMITTED HERE UNDER:- I) THE ASSESSEES FAMILY CONSIST OF SELF, WIFE, SIX SONS AND THEIR DAUGHTER-IN-LAW AND 12 GRAND CHILDREN AND ONE MARRI ED DAUGHTER. II) ALL LIVES IN ONE HOUSE 92-SURYA NAGAR, AGRA HAV ING COMMON KITCHEN. III) MAKE AND DESIGN OF MOST OF THE JEWELLERY IS TH AT WHICH IS WORN BY THE FEMALES. IV) THIS WAS THE PRACTICE OF THE FAMILY THAT LEAVIN G SOME JEWELLERY OF DAILY USE, ALL THE JEWELLERY WAS KEPT THE MOTHER -IN-LAW SMT. NIRMALA DEVI KESHWANI W/O LAXMAN DASS KESHWANI. V) THAT THE ASSESSING OFFICER HAS IGNORED THE FACT AND HAS NOT CONSIDERED ANY JEWELLERY IN THE NAME OF SMT. NIRMAL A DEVI KESHWANI AGED LADY OF ABOUT 60 YEARS (HEAD OF THE FAMILY) AND HAS ALSO NOT CONSIDERED ANY JEWELLERY IN THE NAME O F 3 DAUGHTER IN-LAW SMT. NEELAM KESHWANI, POOJA KESHWANI AND VA NDNA ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 25 KEHSWANI. IT IS NOT PRACTICALLY POSSIBLE THAT THESE LADIES DO NOT OWNED ANY JEWELLERY. VI) ALL THE ADDITIONS HAVE BEEN MADE IN THE ASSESSM ENT OF MALE MEMBERS. NO ADDITION HAS BEEN MADE TO FEMALE MEMBER S WHEREAS MOST OF THE JEWELLERY FOUND CAN BE WORN ONL Y BY THE FEMALES. THE VALUATION REPORTS PREPARED AT THE TIME OF SEARCH ARE IN THE JOINT NAMES OF BOTH HUSBAND AND WIFE HOW EVER THIS FACT HAS BEEN COMPLETELY IGNORED AND THE ADDITION H AS BEEN MADE IN THE HANDS OF MALE MEMBERS. VII) THE A. O. HAS COMPLETELY IGNORED THE FACT THAT NO JEWELLERY HAS BEEN FOUND DURING THE COURSE OF SEARCH FROM THE ROO M OF ONE SON AND DAUGHTER-IN-LAW I.E JITENDRA KUMAR KESHWANI AND MRS. POOJA KESHWANI. HE HAS ASSUMED THAT THEY HAD NO JEW ELLERY. HOWEVER THERE JEWELLERY WAS ALSO FOUND FROM THE ROO M OF LAXMAN DAS KESHWANI FOR WHICH NO DEDUCTION HAS BEEN ALLOWED TO LAXMAN DAS KESHWANI. VIII) JEWELLERY FOUND FROM THE POSSESSION OF SOME M EMBERS OF THE FAMILY IS VERY LESS. THIS WAS THE JEWELLERY WHICH W AS EITHER OF DAILY USE OR WAS LYING WITH THEM DUE TO USE DURING THE MARRIAGE SEASON. THE FEMALES OF THE FAMILY USED TO KEEP THER E JEWELLERY WITH SMT. NIRMALA DEVI KEHSWANI W/O LAXMAN DAS KESH WANI AND IT WAS ONLY TAKEN AS AND WHEN IT WAS REQUIRED F OR USE. IX) THAT THE ASSESSING OFFICER HAS ONLY ACCEPTED TH E JEWELLERY AS EXPLAINED AS SHOWN BY FAMILY MEMBER AS PER STATEME NT OF ASSETS AND LIABILITIES AS ON 31.03.2001 FILED WITH RETURN FOR A.Y. 2001-02. THE ASSESSING OFFICER HAS TOTALLY IGN ORED THAT THE FACT THAT MOST OF THE MARRIAGE AND BIRTH OF THE CHI LDREN IN THE FAMILY WERE AFTER 31.03.2001. INDIAN CUSTOM AND TRA DITION REQUIRES POSSESSION OF SOME JEWELLERY ACCORDING TO THE CUSTOM IN THE COMMUNITY AND STATUS OF THE FAMILY MEMBER. N ORMALLY FOR AN INDIAN FAMILY, ACQUISITION OF JEWELLERY ON IMPOR TANT OCCASION LIKE BIRTHDAY, MARRIAGE, FESTIVALS, ETC. A RE COMMON. JEWELLERY IS ALSO RECEIVED BY WAY OF PRESENT FROM R ELATION OR FRIEND ON IMPORTANT OCCASION LIKE MARRIAGE, BIRTHDA Y, ANNIVERSARY OR FESTIVALS. IT MAY NOT BE REASONABLE TO ASPECT PROOF OF EVIDENCE OF SUCH PRESENT. CONSIDERING THE SOCIAL STATUS OF THE FAMILY AND THE PREVALENT CUSTOMARY PRACTICE OF RECEIVING ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 26 JEWELLERY AS GIFT AT THE TIME OF MARRIAGE AND BIRTH OF CHILD, IT CANNOT BE SAID THAT NO JEWELLERY HAS BEEN RECEIVED BY THE DAUGHTER IN LAWS OF LAXMAN DAS KESHWANI ON THESE OC CASIONS; HENCE BENEFIT OF 600 GRAMS OF JEWELLERY PER FAMILY SHOULD BE GIVEN. 30. THE LD. AUTHORISED REPRESENTATIVE RELIED UPON T HE FOLLOWING DECISIONS:- 1) ITAT, MUMBAI BENCH IN THE CASE OF HARAKCHAND N. JAIN VS. ACIT, 61 TTJ 223. 2) RAJASTHAN HIGH COURT IN THE CASE OF RADHA KISHAN SONI VS. CIT & ANOTHER, 197 CTR 34. 3) ITAT, CHANDIGARH BENCH (THIRD MEMBER) IN THE CAS E OF DR (MRS.) KAMLESH DUTTA VS. ACIT, 69 ITD 218. 4) ITAT, AHMEDABAD BENCH IN THE CASE OF ITO VS. MAN ILAL S. DAVE, 70 TTJ 801. 31. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T SMT. HARDEVI KESHWANI HAS ALREADY SURRENDERED IN HER RETURN OF INCOME JEW ELLERY WORTH RS.52,00,000/-. HOWEVER, NO DEDUCTION OF SUCH JEWELLERY HAS BEEN GI VEN BY BOTH THE A.O. AND CIT(A). LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T SMT. HARDEVI KESHWANI HAS FURNISHED SEPARATE RETURN DECLARING JEWELLERY OF RS .52,00,000/- WHICH WAS SURRENDERED. LD. AUTHORISED REPRESENTATIVE SUBMITT ED THAT THE ADDITION IN THE HANDS OF THE ASSESSEE AMOUNTS TO DOUBLE TAXATION OF THE SAME ITEM AND SAME INCOME. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 27 32. IN RESPECT OF UNEXPLAINED INVESTMENT IN SILVER, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED AS UNDER :- (PAGE NO.8 OF PB) 5.1 THE SILVER WARES WERE FOUND FROM RESIDENTIAL H OUSE 92-SURYA NAGAR, AGRA WHERE ASSESSEE WITH THE FAMILY OF HIS S IX SONS RESIDES. 5.2 AS PER THE VALUATION REPORT MADE IN THE NAME OF ASSESSEE THE VALUE OF SILVER WARES FOUND FROM THE RESIDENCE IS R S. 9,27,077/- AND THE ASSESSING OFFICER HAS MADE AN ADDITION OF THE ENTIR E AMOUNT IGNORING THE FACT THAT RS. 1,00,000/- EACH BY ASSESSEE AND H IS SIX SONS WERE SURRENDERED AND SHOWN IN INCOME FOR A.Y. 2008-09 AS INVESTMENT IN SILVER WARES. THESE SURRENDERED AMOUNT HAVE BEEN AS SESSED IN THE RESPECTIVE ASSESSMENT OF THE ASSESSEE AND HIS SONS. THE ASSESSING OFFICER HAS ERRED IN NOT GIVING BENEFIT OF THE SAME . 5.3 AS REGARDS THE SILVER WARES FOR THE REMAINING V ALUE IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE SAM E WERE RECEIVED ON DIFFERENT OCCASION LIKE MARRIAGE ETC. IN THE FAMILY FROM THE PATERNAL AND MATERNAL SITE. 5.4 CONSIDERING THE SUBMISSION MADE ABOVE AND LOOKI NG TO THE SIZE OF THE FAMILY, SOCIAL STATUS AND PREVALENT CUSTOM, THE ADDITION MADE BY THE ASSESSING OFFICER IS WRONG, BAD IN LAW AND DESE RVES TO BE DELETED. 33. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T THE JEWELLERY BELONGED TO DIFFERENT FAMILY MEMBERS, THEREFORE, THE ADDITION C ANNOT BE MADE IN THE HANDS OF THE ASSESSEE FOR ENTIRE JEWELLERY. LD. AUTHORISED REPRESENTATIVE ALSO SUBMITTED THAT THE A.O. AND CIT(A) BOTH DID NOT PROVIDE BENEF IT OF CBDT CIRCULAR AS THE JEWELLERY BELONGED TO DIFFERENT FAMILY MEMBERS. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 28 34. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTH ER HAND, RELIED UPON THE ORDER OF A.O. 35. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT THE ASSESSE E FAMILY CONSISTS OF SELF, WIFE, 6 SONS AND THEIR DAUGHTER-IN-LAWS, 12 GRAND CHILDREN AND ONE MARRIED DAUGHTER. MOST OF THE JEWELLERY WAS FOUND FROM THE POSSESSION OF THE ASSESSEE BUT IT IS RELEVANT TO NOTE THAT THE DESIGN OF MOST OF THE JEW ELLERY ITEMS PERTAINED TO LADIES WEARING JEWELLERY. THE ASSESSEE HAS EXPLAINED THE JEWELLERY IN A CHART WHICH IS REPRODUCED AS UNDER :- (PAGE NO.3 OF PB). JEWELLERY CAHRT OF KESHWANI FAMILY NAME VALUE AS ON DATE OF SEARCH (30.01.2008) AS PER VALUATION REPORT GOT PREPARED BY SEARCH OFFICER VALUE ON THE DATE OF SEARCH ON THE BASIS OF STATEMENT OF AFFAIRS FILED ALONGWITH RETURN OF INCOME FOR A Y 2001-02/2002- 03 (AS ACCEPTED BY A O) ACTUAL VALUE BASED ON CHART ON THE BASIS OF VDIS DECLARATIONS DISCLOSED IN ITR 2008-09 TOTAL VALUE OF DECLARED JEWELLERY BALANCE VALUE OF JEWELLERY TO BE TAKEN CONSIDERING WT. 500 GRAMS OF FEMALE AND 100 GRAMS OF MALE TOTAL VALUE OF JEWELLERY TO BE TAKEN AS EXPLAINED [1] [2] [3] [4] [5] [3+4+5]=6 [7] [6+7]=8 LAXMAN DAS KESHWANI 10,300,260.00 - - - - 119200.00 119,200.00 NIRMALA DEVI KESHWANI - - - - - 596000.00 596,000.0 0 KAMAL KUMAR KESHWANI - 273,100.00 273,100 - 273,100 .00 - 273,100.00 HARDEVI KESHWANI 174,887.00 564,200.00 1,081,948 5, 200,000.00 6,281,947.00 - 6,281,947.00 JAGDISH KUMAR KESHWANI 864,353.00 849,820.00 1,397,713 - 1,397,712.00 - 1, 397,712.00 NEELAM KESHWANI - - - - - 596,000.00 596,000.00 NARENDRA KUMAR KESHWANI - 991,756.00 1,770,166 - 1770166 - 1,770,166.00 MADHU KESHWANI 784,168.00 178,000.00 178,000 - 1780 00 - 178,,000.00 ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 29 MAHENDRA KUMAR KESHWANI - 400,105.00 531,238 - 531,237.00 - 531,23 7.00 NISHA KESHWANI 599,860.00 156,500.00 156,500 - 1565 00 - 156,500.00 SHYAM SUNDER KESHWANI 959312.00 356418 680,534 - 680,534.00 - 680,534.00 VANDNA KESHWANI - - - - - 596,000.00 596,000.00 JITENDRA KUMAR KESHWANI - 62786.000 120411.000 - 120,411.00 - 120,411.00 POOJA KESHWANI - - - - - 596,000.00 596,000.00 LATA KESHWANI - 299400.000 571438.000 - 571,438.00 - 571,438.00 13,682,840.00 4,132,085.00 6,761,048.00 5,200,000 .00 11,961,045.00 2,503,200.00 14,464,245.00 TOTAL VALUE OF JEWELLERY AS PER VALUATION REPORT GO T PREPARED BY SEARCH OFFICER RS. 1,36,82,840/- TOTAL VALUE OF JEWELLERY TO BE TAKEN AS EXPLAINED RS. 14,464,245/- 36. IT IS CLEAR FROM THE ABOVE CHART THAT RS.52,00, 000/- HAS BEEN SURRENDERED BY SMT. HARDEVI KESHWANI IN HER INDIVIDUAL RETURN. SM T. HARDEVI KESHWANI IS SEPARATELY ASSESSED TO TAX AND ASSESSMENT HAS ALSO BEEN COMPLETED. HOWEVER, IN CASE OF SMT. HARDEVI KESHWANI, THE CIT(A) HELD THAT THE JEWELLERY OF RS.52,00,000/- SHOULD BE TAXED IN THE HANDS OF THE ASSESSEE SHRI LAXMAN DAS KESHWANI. THE CIT(A) HELD THAT SINCE HE HAS CONFIR MED THE AMOUNT OF JEWELLERY RS.52,00,000/- IN THE HANDS OF THE ASSESSEE SHRI LA XMAN DAS KESHWANI AS SUBSTANTIVE ADDITION, HOWEVER, PROTECTIVE ADDITION WAS MADE IN THE HANDS OF SMT. HARDEVI KESHWARNI TILL THE ORDER OF HE ASSESSEE SHR I LAXMAN DAS KESHWANI IS FINALISED. AFTER DETAILED DISCUSSION WHILE DECIDIN G THE APPEAL OF SMT. HARDEVI KESHWANI IN ITA NO.205/AGRA/2013, ORDER EVEN DATED, WE HAVE GIVEN THE FINDING THAT THE JEWELLERY BELONGED TO SMT. HARDEVI KESHWAN I AND THE SAME HAS BEEN SURRENDERED AND OFFERED TO TAX IN THE RETURN OF INC OME. IT WAS HELD THAT JEWELLERY BELONGED TO SMT. HARDEVI KESHWANI AND SINCE THE ASS ESSEE HAS DECLARED AND ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 30 SURRENDERED JEWELLERY OF RS.52,00,000/-, THEREFORE, NO ADDITION IS WARRANTED. SINCE ON SUBSTANTIVE BASIS THIS ISSUE HAS BEEN CONS IDERED IN THE CASE OF SMT. HARDEVI KESHWANI, THEREFORE, ADDITION TO THAT EXTEN T IN THE HANDS OF THE ASSESSEE IS NOT WARRANTED. THEREFORE, THE SAME IS LIABLE TO BE DELETED. 37. WE HAVE ALSO NOTICED AS PER COLUMN NO.3 OF THE CHART THAT THE INDIVIDUAL FAMILY MEMBERS HAVE DISCLOSED THE JEWELLERY IN THEI R RESPECTIVE RETURN FOR A.YS. 2001-02 & 2002-03 AND THE SAME HAS BEEN ACCEPTED BY THE A.O. THEREFORE, THE JEWELLERY TO THAT EXTENT, I.E. TOTAL AMOUNTING TO R S.41,32,085/- HAS BEEN EXPLAINED BY THE ASSESSEE AND TO THAT EXTENT ADDITION IS NOT WARRANTED IN THE HANDS OF THE ASSESSEE. 38. IT HAS ALSO BEEN NOTICED THAT THE REVENUE AUTHO RITIES DID NOT ALLOW BENEFIT OF V.D.I.S. DECLARATION AMOUNTING TO RS.67,61,048/- DE TAILS OF WHICH IS GIVEN IN COLUMN NO.4 OF THE CHART. THE CIT(A) IS NOT CORREC T IN NOT ADMITTING ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. IN FACT, THESE ARE NOT ADDITIONAL EVIDENCES BUT PART OF ARGUMENTS ON THE ISSUE SUPPORTED BY DOCUMENTS. SUCH DOCUMENTS ARE NECESSARY FOR DECIDING THE ISSUE. WHEN JEWELLERY HAS BEEN AC QUIRED IN THE YEAR 85-86, THE VALUATION IS REQUIRED TO BE TAKEN AS VALUE OF THE Y EAR 85-86. SINCE THE VALUE OF ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 31 JEWELLERY HAS BEEN DECLARED IN V.D.I.S., THEREFORE, TO THAT EXTENT ADDITION IS NOT WARRANTED IN THE HANDS OF THE ASSESSEE. 39. THE ASSESSEE IS ALSO ENTITLED FOR BENEFIT OF C. B.D.T. CIRCULAR AS DETAILS GIVEN IN COLUMN NO.7 OF THE CHART. IF WE CONSIDER THE EX PLANATION OF THE ASSESSEE, WE FIND THAT THE TOTAL JEWELLERY OF RS.1,44,64,245/- H AS BEEN EXPLAINED WHEREAS THE JEWELLERY FOUND AT THE TIME OF SEARCH WAS RS.1,36,8 2,840/-. AFTER CONSIDERING THE TOTALITY OF THE FACTS AND THE DETAILED EXPLANATION FURNISHED BY THE ASSESSEE, WE ARE OF THE VIEW THAT THE ADDITION IS NOT WARRANTED. TH EREFORE, ADDITION OF RS.82,94,073/- SUSTAINED BY THE CIT(A) IS DELETED. 40. THE FOURTH GROUND OF ASSESSEES APPEAL IS PERTAINING TO CONFIRMING ADDITION OF RS.2,20,480/- OUT ADDITION OF RS.8,27,077/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED SILVER-WEARS/COINS. 41. DURING THE COURSE OF SEARCH SILVER WAS FOUND FR OM THE POSSESSION OF THE ASSESSEE 57308.5 GRAMS OF WHICH VALUE AS ON DATE OF SEARCH WAS RS.9,27,077/-. THE A.O. MADE ADDITION OF RS.9,27,077/- AS THE ASSE SSEE HAS FAILED TO EXPLAIN THE SAID SILVER ITEMS. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 32 42. THE CIT(A) RESTRICTED THE ADDITION TO THE EXTEN T OF RS.2,20,480/- AS UNDER :- (PARAGRAPH NO.9.3, PAGE NOS.55 & 56) 9.3 I HAVE CONSIDERED ALL THE FACTS DISCUSSED IN T HE ASSESSMENT ORDER WITH REGARD TO THIS ISSUE AND THE SUBMISSIONS MADE BEFORE ME DURING APPEAL PROCEEDING AND I FIND THAT THE MAIN R EASON GIVEN BY THE AO IN THE ASSESSMENT ORDER FOR NOT ACCEPTING THE EX PLANATION OF THE APPELLANT REGARDING DISCLOSURE OF RS.1,00,000/- EAC H IN THE HANDS OF 7 FAMILY MEMBERS IS THAT AS PER HIS FINDING, ONLY SIL VER COINS WERE FOUND IN THE POSSESSION OF THE APPELLANT WHICH WERE VALUE D AT RS.9,27,077/- BUT THE DECLARATION MADE BY ALL THESE FAMILY MEMBER S WAS IN SILVER WARES AND THEREFORE, HE CONSIDERED THE VALUE OF SIL VER COINS FOUND IN THE POSSESSION OF THE APPELLANT AS UNEXPLAINED AND ADDED THE WHOLE AMOUNT OF RS.9,27,077/- IN HIS HAND. DURING THE CO URSE OF THE DISCUSSION IN APPEAL, IT HAS BEEN CLARIFIED BY THE LD. AR THAT THE SILVER ITEMS FOUND DURING SEARCH FROM THE POSSESSION OF SR I LAXMAN DAS KESHWANI WERE NOT ONLY SILVER COINS BUT THERE ARE L ARGE QUANTITY OF SILVER WEARS ALSO INCLUDING SILVER GLASSES, SILVER PLATES ETC. HE HAS ALSO SHOWN TO ME FROM THE INVENTORY OF SILVER ITEMS PREPARED ON THE DATE OF SEARCH IN THE NAME OF SRI LAXMAN DAS KESHWA NI IN WHICH ONLY 123 SILVER COINS OF RS.27,675/- WERE INCLUDED AND O THER ITEMS WERE SILVER WARES. BY SHOWING THIS INVENTORY OF SILVER ITEMS, THE LD. AR ARGUED THAT THE FINDING GIVEN BY THE AO IN THE ASSE SSMENT ORDER FOR ADDING RS.9,27,077/- THAT THESE ITEMS ARE SILVER CO INS IS NOT CORRECT. AFTER GOING THROUGH THE INVENTORY OF THE SILVER ITE MS PREPARED DURING SEARCH, I FIND THAT THE FINDING OF AO THAT ALL THE SILVER ITEMS FOUND IN THE CONTROL AND POSSESSION OF SRI LAXMAN DAS KESHWA NI WAS SILVER COINS IS NOT CORRECT. THE AO HAS ALSO NOT DOUBTED ABOUT THE CORRECTNESS OF DECLARATION OF INVESTMENT IN SILVER WARES MADE BY EACH MALE MEMBER OF THE FAMILY OF THE APPELLANT. THEREF ORE, OUT OF TOTAL VALUE OF SILVER ITEMS FOUND DURING SEARCH VALUED AT RS.9,73,067/-, THE AMOUNT OF RS.7,00,000/- CAN BE CONSIDERED AS EXPLAI NED. FOR BALANCE ITEM OF RS.2,73,067/-, IT HAS BEEN EXPLAINED THAT T HESE ITEMS WERE RECEIVED BY VARIOUS FAMILY MEMBERS AS GIFT DURING M ARRIAGE AND OTHER CEREMONIES. IN ORDER TO EXAMINE THE REASONABLENESS OF THIS EXPLANATION, I HAVE APPLIED THE AVERAGE RATE OF SIL VER TAKEN IN THE INVENTORY WHICH COMES TO RS.16,248/- PER KG. IF TH IS RATE IS APPLIED ON THE BALANCE AMOUNT OF SILVER ITEMS OF RS.2,73,067/- , THE WEIGHT OF SUCH SILVER ITEM WOULD COME TO ABOUT 16.8 KG. WHICH APPE ARS TO BE QUITE HUGE QUANTITY TO BE CONSIDERED TO HAVE BEEN RECEIVE D AS GIFT. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 33 HOWEVER, IT IS ALSO A FACT THAT IN INDIAN SOCIETY, GETTING THE GIFT OF SMALL SILVER ITEMS ON THE OCCASION OF MARRIAGE ETC. IS QUITE COMMON. CONSIDERING SUCH TRADITIONS IN INDIAN SOCIETY, SILV ER ITEMS OF 10 KG. MAY BE TAKEN AS RECEIVED AS GIFT ON ESTIMATE BASIS BECAUSE NO SUPPORTING EVIDENCE COULD BE PRODUCED BY THE LD. AR IN APPEAL GIVING THE DETAILS OF SILVER ITEMS RECEIVED AS GIFT. AFTE R CONSIDERING THE ABOVE FACT AND CIRCUMSTANCES, I FIND THAT SILVER ITEMS OF 6.8 KG. CAN BE CONSIDERED AS UNEXPLAINED. SINCE DURING SEARCH, TH E MAXIMUM QUANTITY OF SILVER ITEMS WERE FOUND IN POSSESSION O F THE APPELLANT BEING THE SILVER ITEMS OF RS.9,27,077/- OUT OF TOTA L AMOUNT OF RS.9,73,067/- FOUND IN THE WHOLE PREMISES, IT WOULD BE LOGICAL TO CONSIDER THE SILVER ITEMS OF 6.8 KG. IN THE HANDS O F THE APPELLANT FOR WHICH THE EXPLANATION BY THE APPELLANT COULD NOT BE FOUND TO BE REASONABLE EVEN AFTER GIVING CREDIT FOR THE RECEIPT OF SILVER ITEMS IN GIFT DURING MARRIAGE AND OTHER CEREMONIES. IN VIEW OF MY ABOVE DECISION, I COMPUTE THE VALUE OF 6.8 KG. OF SILVER ITEMS BY APPLYING THE AVERAGE RATE OF RS.16,247/- PER KG. WHICH COMES TO RS.1,10,480/-. THIS AMOUNT SHOULD BE CONSIDERED IN THE HAND OF THE APPELLANT IN ADDITION TO RS.1,00,000/- DECLARED BY HIM BEING PAR T OF RS.7,00,000/- (THE AMOUNT OF RS.1,00,000/- DECLARED BY THE APPELL ANT IS ALSO INCLUDED IN THIS FIGURE) FOR WHICH EXPLANATION WAS FILED BY THE APPELLANT AND HAS ALREADY BEEN ACCEPTED BY ME. THE REFORE, THE TOTAL AMOUNT OF RS.2,20,480/- SHOULD BE CONSIDERED ON ACC OUNT OF INVESTMENT IN SILVER ITEMS BY THE APPELLANT INSTEAD OF RS.9,27,077/- CONSIDERED BY THE AO AND ACCORDINGLY, ADDITION OF R S.2,20,480/- SHOULD BE MADE IN THE INCOME OF THE APPELLANT INSTE AD OF RS.9,27,077/- MADE IN THE ASSESSMENT ORDER. THEREFORE, GROUND NO .6 IS PARTLY ALLOWED. 43. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. IT IS ADMITTED FACT THAT THE ASSESSEE WAS LIVING IN JO INT FAMILY. RS.7,00,000/- HAS BEEN DECLARED BY THE MEMBERS OF THE FAMILY AND THE SAME HAS BEEN ACCEPTED BY THE CIT(A). THIS FINDING IS GIVEN BY THE CIT(A) IN HIS ORDER AT PARAGRAPH NO.9.3, PAGE NO.56. THE REVENUE DID NOT DISPUTE ABOUT THIS FACT RECORDED BY THE CIT(A). THE AMOUNT REMAINING TO BE UNEXPLAINED WAS RS.2,73,067/ -. THE CIT(A) ALSO ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 34 CONSIDERED THE ITEMS RECEIVED AS GIFT DURING MARRIA GE AND OTHERS AND AFTER CONSIDERING THE TOTALITY OF THE FACTS, THE CIT(A) F OUND THAT THE ADDITION TO THE EXTENT OF RS.2,20,480/- SHOULD BE ADDED IN THE HANDS OF TH E ASSESSEE. WE NOTICE THAT THE CIT(A) HAS CONSIDERED ALL THE ASPECTS AND SUBMISSIO N OF BOTH THE PARTIES. BOTH PARTIES HAVE FAILED TO POINT OUT ANY CONTRARY MATER IAL TO THE FINDING OF CIT(A). IN THE LIGHT OF THE FACT, ORDER OF THE CIT(A) IS CONFI RMED. 44. THE FIFTH GROUND OF ASSESSEES APPEAL IS PERTAINING TO ADDITION OF RS.27,000/- CONFIRMED BY THE CIT(A) ON ACCOUNT OF HOUSE HOLD EX PENSES. 45. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THA T THIS ISSUE IS COVERED BY THE ORDER OF I.T.A.T. IN ASSESSEES OWN CASE IN ITA NOS .351, 370 & 353/AGRA/2012 FOR THE A.YS. 2004-05, 2005-06 & 2007-08 AND OTHERS, OR DER DATED 28.12.2012. THE RELEVANT FINDING IS REPRODUCED AS UNDER :- 21. AFTER HEARING THE LD. REPRESENTATIVES OF THE P ARTIES, WE NOTICE THAT THE A.O. MADE ADDITION ON ACCOUNT OF HOUSE HOL D EXPENSES ON PRESUMPTION BASIS. IT IS ADMITTED FACT THAT DURING THE COURSE OF SEARCH NO INCRIMINATING MATERIAL WAS FOUND IN RESPECT OF H OUSE HOLD EXPENSE BASED ON WHICH ADDITION CAN BE MADE. THE CIT(A) AL SO, ON THE BASIS OF PRESUMPTION, FOUND THAT THE A.O. HAS ESTIMATED E XCESS HOUSE HOLD EXPENDITURE. HE, THEREFORE, ALLOWED THE PART RELIE F. THE CIT(A) FOUND THAT THE A.O. HAS MADE EXCESS ESTIMATION OF HOUSE H OLD EXPENSES. THE ASSESSEE FURNISHED THE FOLLOWING CHART IN SUPPORT O F THE CONTENTION THAT REASONABLE HOUSE HOLD EXPENSES HAVE BEEN SHOWN IN ALL THE YEARS:- ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 35 DETAILS OF HOUSE HOLD EXPENSES/WITHDRAWALS NAME OF PERSONS 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 200 8-09 1 JITENDRA KUMAR KESHWANI 18000 (NARENDRA PRODUCTS) 19500 (NARENDRA PRODUCTS) 29000 (NARENDRA PROD) RENT 220000 BANK 25000 BANK 40000 (NARENDA PRODUCT) 14000 BANK 2 JAGDISH KESHWANI 12000 SUR. INCOME 50000 RENT 89000 RENT 30000 RENT 25000 BANK 120000 K.S.60000 SSF 60000 180000 VT 120000 SSF 60000 3 SHYAM SUNDER KESHWANI 26000 SALARY NARENDRA PROD. 22000 SALARY NARENDRA PROD 37000 SALARY NARENDRA/RENT 30000 RENT 290000 BANK 68000 SSF 96000 SSF 4 MAHENDA KUMAR KESHWANI 71000 (NARENDRA PRODUCTS) 112000 NP 72000 BANK 40000 180000 NP/RENT 44000 (NARENDRA PRODUCTS) 46000 SALARY NARENDRA PROD 96000 SSF/SALARY 125000 VARSHA TRA 5 NARENDRA KUMAR KESHWANI 81000 NARENDRA PROD 39000 NARENDRA PROD 36000 NARENDRA PROD 60000 NARENDRA PROD 60000 NARENDRA PROD 120000 NARENDRA PROD 180000 NARENDRA/PROP 6 LAXMAN DASS KESHWANI 74000 NARENDRA PROD 65000 NARENDRA PROD 65000 NARENDRA PROD 70000 NARENDRA PROD 55000 NARENDRA PROD 127000 NARENDRA PROD 36000 NARENDTRA PROD 7 KAMAL KUMAR KESHWANI 120000 KAMAL STORE 34000 KS TRADING 120000 K.S. TRADING 120000 KSTRADING 200000 K.S.TRADING 180000 KSTRADING 200000 8 HARDEVI KESHWANI 30000 30000 30000 30000 36000 60000 60000 4,32,000 3,71,500 5,86,000 6,04,000 7,37,000 8,11 ,000 8,91,000 ESTIMATED BY A.O. 6,00,000 6,00,000 9,00,000 9,00,0 00 12,00,000 12,00,000 12,00,000 ESTIMATED BY CIT(A) 4,80,000 4,80,000 6,00,000 7,20 ,000 8,40,000 9,60,000 10,80,000 22. ON A PERUSAL OF THE ABOVE COMPARATIVE POSITION OF DIFFERENT YEARS HOUSE HOLD EXPENSES, WE FIND THAT THE ESTIMA TION MADE BY THE A.O. ON ACCOUNT OF HOUSE HOLD EXPENSES ARE ARBITRAR Y. THE CIT(A) HAS ALSO SUSTAINED THE ADDITION ON THE BASIS OF ARB ITRARY ESTIMATION. IN A.Y. 2003-04 THE ASSESSEE HAS SHOWN HOUSE HOLD E XPENSES OF RS.3,71,500/-, WHEREAS THE CIT(A) HAS ESTIMATED AT RS.4,80,000/-. THE ADDITION OF RS.8,500/- HAS BEEN SUSTAINED IN A. Y. 2003-04. SIMILARLY, IN A.Y. 2008-09 THE CIT(A) HAS ESTIMATED THE HOUSE HOLD EXPENSES AT RS.10,80,000/- AGAINST THE HOUSE HOLD E XPENSES SHOWN BY THE ASSESSEE AT RS.8,91,000/-. THE ADDITION OF RS. 1,89,000/- HAS BEEN SUSTAINED BY THE CIT(A). THE FACTS OF THE CASE REG ARDING FAMILY STATUS AND OTHER FOR A.Y. 2003-04 AND 2008-09 ARE SAME WHE REAS THE ADDITION SUSTAINED IN A.Y. 2003-04 WAS RS.8,500/- A ND IN A.Y. 2008- ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 36 09 IT WAS RS.1,89,000/- WHICH CLEARLY ESTABLISHES T HAT THE ESTIMATION MADE BY THE REVENUE AUTHORITIES ON ACCOUNT OF HOUSE HOLD EXPENSES ARE ARBITRARY WITHOUT ANY BASIS PARTICULARLY UNDER THE CIRCUMSTANCES WHERE DURING THE COURSE OF SEARCH NO SUCH MATERIAL WAS FOUND IN THIS REGARD. FURTHER, WE CONFIRMED THE ADDITIONS IN RES PECT OF BILLS RELATED TO HOUSE HOLD APPLIANCES WHICH WERE FOUND AT THE TI ME OF SEARCH IN ITA NO.103/AGR/2012 FOR A.Y. 2002-03, ITA NO.105/AG R/2012 FOR A.Y.2005-06, ITA NO.355/AGR/2012 FOR A.Y. 2005-06 & ITA NO.347/AGR/2012 FOR A.Y. 2007-08 WHILE DECIDING SEP ARATE GROUNDS OF THOSE APPEALS IN SUBSEQUENT PARAS OF THIS ORDER. I N THE LIGHT OF THE FACTS, THE ARBITRARY ADDITION MADE ON ACCOUNT OF HO USE HOLD EXPENSES ARE NOT SUSTAINABLE. WE, THEREFORE, DELETE THE ADD ITION MADE BY THE A.O. AND SUSTAINED BY THE CIT(A). 46. SINCE THE FACTS ARE IDENTICAL, THEREFORE, TO MA INTAIN CONSISTENCY, WE FOLLOW THE ABOVE ORDER OF I.T.A.T. AND IN THE LIGHT OF THE FACT, ADDITION OF RS.27,000/- CONFIRMED BY THE CIT(A) IS DELETED. 47. NOW WE TAKE UP ITA NO.214/AGRA/2012 FILED BY THE REVENUE . 48. THE FIRST GROUND OF REVENUES APPEAL PERTAINS TO ADDITION ON ACCOUNT OF INVESTMENT IN STOCK OF PERFUME. 49. THIS GROUND IS A COMMON GROUND RAISED IN ASSESS EES APPEAL VIDE GROUND NO.2 WHICH HAS BEEN DECIDED BY US AFTER A DETAILED DISCUSSION MADE IN ASSESSEES APPEAL IN PARAGRAPH NO.22 OF THIS ORDER. SINCE THE ADDITION SUSTAINED BY THE ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 37 CIT(A) HAS BEEN DELETED BY US, IN THE LIGHT OF THE FACT, THE FIRST GROUND OF REVENUES APPEAL IS DISMISSED. 50. THE SECOND GROUND OF REVENUES APPEAL IS IN RESPECT OF ADDITION OF RS.40,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAI NED INVESTMENT IN AIR CONDITIONERS. 51. THE BRIEF FACTS OF THIS GROUND ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT DURING THE COURSE OF SEARCH AT TH E RESIDENTIAL PREMISES OF THE ASSESSEE, SOME HOUSE HOLD APPLIANCES LIKE 3 TELEVIS IONS, DOUBLE BED, 3 FRIDGES, 1 WATER COOLER, 3 SOFAS AND 2 AIR CONDITIONERS WERE F OUND. THE A.O. NOTICED THAT THE ASSESSEE DID NOT FURNISH ANY EXPLANATION, THEREFORE , THE REASONABLE CONCLUSION OF THE A.O. WAS THAT INVESTMENT WAS MADE OUT OF UNDISC LOSED MONEY. THE A.O. CONSIDERED THE RESPECTIVE ASSETS IN THE HANDS OF TH E ASSESSEES FAMILY. THE A.O. NOTICED THAT THE AIR CONDITIONERS WERE PURCHASED BY THE ASSESSEE AND HIS FAMILY MEMBERS OUT OF UNDISCLOSED MONEY AVAILABLE WITH THE M. THE A.O. ESTIMATED UNDISCLOSED INVESTMENT IN AIR CONDITIONERS AT RS.20 ,000/- PER AIR CONDITIONER AND SINCE THREE WAS 2 AIR CONDITIONERS, THEREFORE, THE A.O. MADE ADDITION OF RS.40,000/-. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 38 52. THE CIT(A) DELETED THE SAID ADDITION AFTER CONS IDERING THE ASSESSEES SUBMISSION AND REMAND REPORT OF THE A.O. OBSERVING THAT THERE IS NO EVIDENCE ABOUT ANY PARTICULAR INVESTMENT OF PURCHASE MADE MA DE BY THE ASSESSEE IN A PARTICULAR YEAR. THE CIT(A) FOUND THAT THE A.O. WA S NOT JUSTIFIED IN MAKING ESTIMATED ADDITION OF RS.40,000/- FOR UNEXPLAINED I NVESTMENT IN AIR CONDITIONERS JUST ON PRESUMPTION THAT THESE TWO AIR CONDITIONERS WOULD HAVE BEEN PURCHASED BY THE ASSESSEE. 53. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. WE NOTICE THAT THE CIT(A) HAS GIVEN HIS FINDING THA T THE ADDITION MADE BY THE A.O. WAS ON ESTIMATE AND PRESUMPTION BASIS THAT THE ASSE SSEE HAS PURCHASED THESE TWO AIR CONDITIONERS. HE FURTHER OBSERVED THAT THERE I S NO DEFINITE EVIDENCE FOR ANY PARTICULAR INVESTMENT OR PURCHASE MADE BY THE ASSES SEE IN A PARTICULAR YEAR. SINCE THE A.O. MADE THE ADDITION ON PRESUMPTION BASIS, WH ICH IS NOT SUSTAINABLE IN LAW, IN THE LIGHT OF THE FACT, WE FIND THAT THE CIT(A) H AS RIGHTLY DELETED THE ADDITION OF RS.40,000/-. ORDER OF THE CIT(A) IS CONFIRMED. 54. THE THIRD GROUND OF REVENUES APPEAL IS IN RESPECT OF ADDITION ON ACCOUNT OF JEWELLERY. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 39 55. THIS GROUND IS A COMMON GROUND I.E. GROUND NO.3 RAISED IN ASSESSEES APPEAL WHICH HAS BEEN DECIDED BY US AFTER A DETAILED DISCU SSION IN ASSESSEES APPEAL IN PARAGRAPH NOS. 35 TO 39 OF THIS ORDER. SINCE THE A DDITION SUSTAINED BY THE CIT(A) HAS BEEN DELETED BY US, IN THE LIGHT OF THE FACT, T HIS GROUND OF REVENUES APPEAL IS DISMISSED. 56. THE FOURTH GROUND OF REVENUES APPEAL IS IN RESPECT OF ADDITION ACCOUNT OF SILVER ITEMS. 57. THIS IS ALSO A COMMON GROUND I.E. GROUND NO.4 R AISED IN ASSESSEES APPEAL. THIS GROUND HAS ALSO BEEN DECIDED BY US WHILE DECID ING ASSESSEES APPEAL AFTER A DETAILED DISCUSSION MADE IN PARAGRAPH NO.43 OF THIS ORDER WHEREIN ORDER OF CIT(A) HAS BEEN CONFIRMED BY US. IN THE LIGHT OF THE FACT , THIS GROUND OF REVENUES APPEAL DOES NOT HAVE SUBSTANCE, THEREFORE, THE SAME IS DIS MISSED. 58. THE FIFTH GROUND OF REVENUES APPEAL IS IN RESPECT OF ADDITION ON ACCOUNT OF UNEXPLAINED CASH. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 40 59. THE BRIEF FACTS OF THIS GROUND ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT DURING THE COURSE OF SEARCH CASH OF RS.56,41,500/- WAS FOUND FROM THE POSSESSION OF SHRI LAXMAN DAS KESHWANI, TH E ASSESSEE. THE SONS OF THE ASSESSEE SURRENDERED RS.4,00,000/- EACH IN THEIR IN DIVIDUAL RETURN, TOTALING TO RS.24,00,000/-. AFTER REDUCING RS.24,00,000/- FROM RS.56,41,500/- ,THE A.O. MADE ADDITION OF RS.32,41,500/- IN THE HANDS OF THE ASSE SSEE. 60. THE CIT(A) PARTLY ALLOWED THE GROUND OF THE ASS ESSEE ALLOWING RELIEF OF RS.19,41,500/- AS UNDER :- (PARAGRAPH NO.10.4, PAGE NOS.58 TO 61) 10.4 I HAVE CONSIDERED THE DISCUSSION MADE BY TH E AO IN THE ASSESSMENT ORDER WITH REGARD TO COMPUTATION OF UNEX PLAINED CASH IN THE HAND OF APPELLANT AS WELL AS THE SUBMISSION MAD E BY THE LD. AR BEFORE ME IN THE APPEAL. I HAVE ALSO GONE THROUGH THE ASSESSMENT RECORD TO VERIFY THE FACTS AS DISCUSSED BY THE AO I N THE ASSESSMENT ORDER. AS PER DETAILS AVAILABLE ON RECORD, A TOTAL CASH OF RS.56,41,500/- WAS FOUND IN THE POSSESSION OF THE A PPELLANT OUT OF THE TOTAL CASH AMOUNT OF RS.61,32,540/- FOUND IN THE WH OLE PREMISES WITH DIFFERENT FAMILY MEMBERS. THESE DETAILS ARE ALREADY GIVEN BY THE AO IN A CHART FORM IN THE ASSESSMENT ORDER WHICH IS AL SO REPRODUCED IN PARA NO.10.1. LOOKING TO THIS CHART, IT IS SEEN TH AT THE CASH FOUND WITH OTHER FAMILY MEMBERS WERE OF NOMINAL AMOUNT, HOWEVE R, AGAINST THESE NOMINAL AMOUNT EACH FAMILY MEMBER DECLARED, A CASH AMOUNT OF RS.4,00,000/- IN HIS/HER RETURN OF INCOME. THER EFORE, IT IS CLEAR THAT THE CASH DECLARED BY ALL THE FAMILY MEMBERS WERE SU BSTANTIALLY OUT OF THE CASH FOUND IN THE POSSESSION OF SHRI LAXMAN DAS KESHWANI (APPELLANT). IN THE FAMILY OF APPELLANT, THERE ARE 7 MALE MEMBERS AND 7 FEMALE MEMBERS BEING THEIR WIVES. THE DETAILS OF CASH DECLARED BY ALL THE FAMILY MEMBERS OF THE APPELLANT ARE GIVEN B Y THE LD. AR IN HIS WRITTEN SUBMISSION AS REPRODUCED IN PARA NO.10.2. A S PER THESE DETAILS, APART FROM THE APPELLANT DECLARING RS.13,0 0,000/-, OTHER 12 MEMBERS HAVE DECLARED RS.4,00,000/- EACH COMPRISING OF SIX SONS OF THE APPELLANT AND WIVES OF FIVE OF THE SONS. ONE PE RSON SMT. VANDANA ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 41 KESHWANI WIFE OF SHRI SHYAM SUNDER KESHWANI HAS NOT DECLARED ANY CASH. THE AO HAS ACCEPTED DECLARATION OF CASH MADE BY SIX SONS OF THE APPELLANT TOTALING TO RS.24,00,000/-, CONSIDERI NG THAT THE MALE MEMBERS OF FAMILY WERE ENGAGED IN BUSINESS ACTIVITI ES FROM WHICH POSSIBILITY OF DERIVING OF UNEXPLAINED INCOME WAS T HERE. THEREFORE, HE DEDUCED RS.24,00,000/- FROM THE TOTAL CASH OF RS.56 ,41,500/- FOUND IN THE POSSESSION OF THE APPELLANT AND BALANCE AMOUNT OF RS.32,41,500/- HAS BEEN ADDED AS UNEXPLAINED CASH OF THE APPELLANT AS AGAINST RS.13,00,000/- DECLARED BY HIM. THUS, HE DID NOT G IVE FURTHER DEDUCTION OF RS.19,41,500/- OUT OF THE CASH FOUND I N THE POSSESSION OF THE APPELLANT FROM THE CASH DECLARED BY THE FEMALE MEMBERS. AS PER THE DETAILS AVAILABLE, FOLLOWING FEMALE MEMBERS HAV E DECLARED CASH IN THEIR RETURN OF INCOME. SMT. NIRMALA DEVI KESHWANI RS.4,00,000/- SMT. NIRMALA DEVI KESHWANI RS.4,00,000/- SMT. HARDEVI KESHWANI RS.4,00,000/- SMT. NISHA KESHWANI RS.4,00,000/- SMT. MADHU KESHWANI RS.4,00,000/- SMT. POOJA KESHWANI RS.4,00,000/- ---------------------- RS.24,00,000/- ---------------------- OUT OF ABOVE 24,00,000/-, THE AO HAS NOT CONSIDERE D THE AMOUNT OF RS.19,41,500/- DECLARED BY THE ABOVE MENT IONED SIX FEMALE MEMBERS TO BE THEIR GENUINE INCOME BUT HE HAS NOT G IVEN ANY FINDINGS AS TO BALANCE AMOUNT OF RS.4,58,500/- WOULD BELONG TO WHOM. I HAVE ALSO FOUND THAT EXCEPT IN THE ORDER OF SMT. HARDEVI KESHWANI, THE AO HAS NOT MADE ANY DISCUSSION ABOUT THE GENUINENESS O F CASH DECLARED BY OTHER FAMILY MEMBERS WHETHER IT ACTUALLY BELONGE D TO THEM OR NOT AND IN THE CASE OF SMT. POOJA KESHWANI AND SMT. NIR MALA KESHWANI, HE HAS EVEN COMPLETED ASSESSMENT AT RETUNED INCOME WITHOUT ANY DISCUSSION AND THUS, ACCEPTED THE CASH DECLARED BY THEM. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT APPEARS THAT THE AO HAS SELECTIVELY ACCEPTED SOME OF THE CASH AMOUNT DECLAR ED BY CERTAIN FEMALE MEMBERS AND FOR OTHER FEMALE MEMBERS, THE CA SH DECLARED BY THEM HAVE NOT BEEN ACCEPTED FOR WHICH, NO SOUND REA SONING HAS BEEN GIVEN BY THE AO, EITHER IN THE ASSESSMENT ORDER OF THE APPELLANT OR IN THE ORDERS OF THESE FEMALE MEMBERS. HE HAS ONLY GI VEN GENERAL REASONING THAT THE MALE MEMBERS BEING IN THE ACTIVI TIES OF THE BUSINESS CAN EARN SUCH CASH AMOUNT FOUND TO BE UNEX PLAINED BUT THE FEMALE MEMBERS NOT DOING ANY BUSINESS CANNOT HAVE A NY UNEXPLAINED ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 42 CASH. IN SUCH CIRCUMSTANCES, ALL THE CASH AMOUNT T OTALING TO RS.24,00,000/- DECLARED BY THESE FEMALE MEMBER SHOU LD HAVE BEEN CONSIDERED IN THE HAND OF THE MALE MEMBERS OF THE F AMILY INSTEAD OF CONSIDERING ONLY RS.19,41,500/- IN THE HAND OF THE APPELLANT AND BALANCE AMOUNT OF RS.4,58,500/- BEING ACCEPTED IN T HE HAND OF FEMALE MEMBERS, THROUGH IT HAS NOT BEEN SPECIFIED AS TO IN THE HAND OF WHICH FEMALE MEMBER THIS MUCH CASH AMOUNT WAS ACCEPTED. IF THE AGREEMENT TAKEN BY THE AO FOR CONSIDERING RS.19,41, 500/- IN THE HAND OF THE APPELLANT IS THAT THIS CASH AMOUNT WAS FOUND IN HIS POSSESSION, THEN EVEN RS.24,00,000/- CONSIDERED IN THE HAND OF MALE MEMBERS WAS ALSO FOUND IN THE POSSESSION OF THE APPELLANT. THE REFORE, I FIND THAT THE LD. AR IS VERY MUCH JUSTIFIED IN RAISING A CONT ENTION THAT THERE IS NO VALID REASON FOR THE AO TO HAVE TWO DIFFERENT TH EORIES FOR SURRENDER OF CASH ONE WHICH IS APPLICABLE FOR MALE AND ANOTHE R WHICH IS APPLICABLE FOR FEMALE. THE AO HAS NOT OFFERED ANY COMMENT ON THIS CONTENTION OF THE LD. AR. IF THE ARGUMENT IS TAKEN BY THE AO IS THAT THE FEMALE MEMBERS IS NOT CAPABLE OF POSSESSING UNEXPLA INED CASH BECAUSE OF NOT DOING BUSINESS, THEN THE QUESTION AR ISES AS TO WHY HE ACCEPTED RS.4,58,500/- IN THE HAND OF FEMALE MEMBER S OUT OF TOTAL CASH OF RS.24,00,000/- DECLARED BY THEM. CONSIDERIN G THE ABOVE FACTS AS FOUND BY ME FROM THE RECORDS, IT APPEARS THAT TH E AO WAS NOT SURE WHETHER THESE CASH BELONG TO THE FEMALE MEMBERS OR NOT AND THEREFORE, HE REJECTED THE CLAIM OF THE APPELLANT T O THE EXTENT OF ONLY RS.19,41,500/- FOR PROVIDING DEDUCTION ON ACCOUNT O F CASH DECLARED BY FEMALE MEMBERS IN ORDER TO MAKE ADDITION IN HIS HAND WHICH WAS SUFFICIENT TO TAKE CARE OF THE CASH FOUND IN HIS PO SSESSION. AS REGARDS TO SUFFICIENCY OF CASH OF RS.4,00,000/- DECLARED BY THE FEMALE MEMBERS IN THEIR RETURNS, IN MY OPINION THIS AMOUNT IS NOT SUCH A HUGE AMOUNT WHICH CANNOT BE POSSESSED BY A FEMALE MEMBER EVEN I F SHE IS NOT DOING ANY PARTICULAR BUSINESS. IN BUSINESS FAMILY, GENERALLY, FEMALE MEMBERS ALSO DO PETTY ACTIVITIES FROM WHICH THEY CA N GENERATE CASH AMOUNT AND THE AMOUNT OF RS.4,00,000/- BEING NOT A VERY HIGH FIGURE, THE POSSIBILITY OF HAVING THIS MUCH UNACCOUNTED CAS H WITH FEMALE MEMBERS CANNOT BE OUT RIGHTLY REJECTED AND THAT TOO ONLY IN PART AS DONE BY THE AO BY REJECTING RS.19,41,500/- OUT OF R S.24,00,000/- AND ACCEPTING RS.4,58,500/-. AS FAR AS THIS CASH AMOUN T BEING IN THE POSSESSION OF THE APPELLANT IS CONCERNED, IF RS.24, 00,000/- DECLARED BY SIX MALE MEMBERS CAN BE CONSIDERED TO BE IN POSSESS ION OF THE APPELLANT, THEN THERE IS NO LOGIC TO REJECT THE CLA IM OF FEMALE MEMBERS THAT THE CASH AMOUNT DECLARED BY THEM WERE ALSO IN THE POSSESSION OF THE APPELLANT BEING THEIR FATHER-IN-LAW. CONSIDERI NG ALL THESE FACTS ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 43 AND CIRCUMSTANCES, I DIRECT THE AO TO FOLLOW A CONS ISTENT APPROACH AND IF HE HAS ACCEPTED RS.24,00,000/- DECLARED BY T HE MALE MEMBERS, THE WHOLE AMOUNT OF RS.24,00,000/-DECLARED BY FEMAL E MEMBERS SHOULD ALSO BE ACCEPTED AND HENCE, NO ADDITION IS R EQUIRED TO BE MADE IN THE HAND OF THE APPELLANT FOR UNEXPLAINED CASH I N ADDITION OF RS.13,00,000/- WHICH HE HAS ALREADY DECLARED IN THE RETURN OF INCOME. THEREFORE, THE AO IS DIRECTED TO MAKE THE ADDITION OF ONLY RS.13,00,000/- ON ACCOUNT OF UNEXPLAINED CASH INSTE AD OF RS.32,41,500/- AND HENCE THE APPELLANT GETS A RELIE F OF RS.19,41,500/-. ACCORDINGLY, GROUND NO.7 IS PARTLY ALLOWED. 61. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE CIT(A), AFTER CONSIDERING THE ASSESSEES SUBMIS SION, A.O.S COMMENTS AND THE DECLARATION OF SURRENDER MADE IN THE RETURN BY INDI VIDUAL FAMILY MEMBERS, DIRECTED THE A.O. TO MAKE ADDITION ONLY OF RS.13,00,000/- ON ACCOUNT OF UNEXPLAINED CASH EXPLAINED OF RS.32,41,500/-. THE CIT(A) SATISFIED REGARDING SOURCE OF RS.19,41,500/-. THE CIT(A) HAS ALLOWED RELIEF ONL Y IN RESPECT OF AMOUNT DECLARED BY FAMILY EMBERS IN THEIR RESPECTIVE RETURNS AND HA S CONSIDERED THESE FACTS AND RIGHTLY DIRECTED THE A.O. TO MAKE ADDITION ONLY OF RS.13,00,000/-. THE REVENUE HAS FAILED TO POINT OUT ANY CONTRARY MATERIAL TO TH E FINDING OF THE CIT(A). IN THE LIGHT OF THE FACT, ORDER OF CIT(A) IS CONFIRMED. 62. THE SIXTH GROUND OF REVENUES APPEAL IS IN RESPECT OF HOUSE HOLD EXPENSES. ITA NOS.214 & 231/AGRA/2012 A.Y. 2008-09 44 63. THIS IS ALSO A COMMON GROUND I.E. GROUND NO.5 O F ASSESSEES APPEAL WHICH HAS BEEN DECIDED BY US AFTER A DETAILED DISCUSSION IN PARAGRAPH NO.46 OF THIS ORDER. WHILE DECIDING GROUND NO.5 OF ASSESSEES APPEAL, WE DELETED THE ADDITION MADE BY THE A.O. IN THE LIGHT OF THE FACT, THIS GROUND OF REVENUES APPEAL DO NOT CARRY ANY SUBSTANCE, THEREFORE, THE SAME IS DISMISSED. 64. THE SEVENTH & EIGHTH GROUNDS OF REVENUES APPEA L ARE GENERAL IN NATURE WHICH REQUIRES NO SEPARATE ADJUDICATION. 65. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES AND APPEAL OF THE REVENUE IS D ISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT M EMBER 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