ACIT,Cir-27(1), Kolkata, Purba Medinipur V. Vivekananda Bera Sankarara, Kolkata

ITA 2357/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6365 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 15-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADEN A DDL CIT LD
• Keywords: Gift
• Section: 142(1); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : A BE NCH, KOLKATA BEFORE : SHRI J. SUDHAKAR REDDY, ACCOUNTAN T MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 2357/KOL/2016 A.Y 2009-10 ASSTT. COMMISSIONER OF VS. SRI VIVEKANDA BERA INCOME-TAX, CIR-27(1), PAN: ADCPB2529A HALDIA [APPELLANT ] [RESPONDENT ] APPELLANT/DEPARTMENT BY : SHRI SALLONG YADEN, A DDL.CIT, LD.SR.DR RESPONDENT/ASSESSEE BY : NONE APPEARED. DATE OF HEARING : 19-03-2018 DATE OF PRONOUNCEMENT : 15-06-2018 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THE ABOVE APPEAL BY THE REVENUE IS AGAINST THE ORDER DT. 16- 09-2016 OF THE CIT-A, 7, KOLKATA FOR THE A.Y 2009-1 0. 2. AT THE TIME OF HEARING BEFORE US, IT IS NOTICED THAT NEITHER ANY ONE APPEARED NOR FILED ANY ADJOURNMENT PETITION ON BEHALF OF ASSESSEE INSPITE OF SERVICE OF NOTICE ISSUED BY THE REGISTRY. THEREFORE, AFTER PERUSING THE CASE RECORD AND HEARING THE LD.D R, WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. GROUND NO. 1 IS RELATION TO DELETION OF ADDITION OF RS. 28,76,25/- ON ACCOUNT OF GIFTS RECEIVED FROM SIS SISTERS. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED HIS RETURN FOR THE A.Y UNDER CONSIDERATION ON 19-08-2009 DECLARIN G TOTAL INCOME OF RS. 5,72,020/-.THE ASSESSEE IS ENGAGED IN THE PROP RIETORSHIP BUSINESS OF JEWELLERY UNDER THE NAME & STYLE M/S. N ILIMA JEWELLERY WORKS. A SURVEY WAS CONDUCTED ON 05-03-09 AT THE BU SINESS ITA NO. 2357//KOL/2016 2 PREMISES, M/S. NILIMA JEWELLERY WORKS. NOTICES U/S. 143(2) AND 142(1) OF THE ACT WERE ISSUED REQUESTING THE ASSESS EE TO FURNISH DETAILS AND EVIDENCES. IN RESPONSE TO WHICH, THE AR REPRESENTING THE ASSESSEE APPEARED. THE AO SUMMONED THE ASSESSEE TO APPEAR ALONG WITH BOOKS OF ACCOUNT. ACCORDING TO AO, THE ASSESSE E FAILED TO PRODUCE AND ADMITTED THAT NO PROPER BOOKS OF ACCOUN T WERE MAINTAINED AND AS SUCH REQUESTED THE AO, THE ASSESS MENT MAY BE FRAMED ON THE BASIS OF DOCUMENTS AS AVAILABLE ON RE CORD. 5. ON PERUSAL OF TWO BALANCE SHEETS, ONE IN RESPECT OF SELF AND ANOTHER IN RESPECT OF HIS PROPRIETARY CONCERN, M/S. NILIMA JEWELLERY WORKS, THE AO FOUND THAT THE ASSESSEE RECEIVED GIFT OF 1950 GMS OF GOLD FROM HIS SISTERS. AT THE TIME OF HEARING THE ASSESSEE SUBMITTED GIFT DEED U/S.131 OF THE ACT ON 21-05-09. ON 12-12- 11 THE ASSESSEE WAS ASKED BY AO, TO CLARIFY THE NON INCLUSION OF GI FTS IN STOCK AT THE TIME OF SURVEY. AS THE ASSESSEE FAILED TO GIVE EXPL ANATION, THE AO ADDED AN AMOUNT OF RS. 28,76,250/- ( 1950 X @ RS.147 5/GM) AS UNDISCLOSED STOCK OF ASSESSEE U/S. 69 OF THE ACT. 6. AGGRIEVED BY SUCH ACTION OF AO, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE CIT-A. BEFORE HIM THE ASSESSEE CO NTENDED THAT AO DID NOT BELIEVE THE SAID GIFTS ON THE GROUND THAT A SSESSEE DID NOT MENTION ABOUT RECEIPT OF THESE GIFTS IN THE STATEME NT RECORDED DURING THE COURSE OF SURVEY. IN SUPPORT OF THE CONTENTION/ SUBMISSIONS, HE RELIED ON THE FOLLOWING CASE LAWS:- PAUL MATHEWS & SONS VS.CIT (2003) 263 ITR 101 (KER ) K. MOHON VS. DCIT (1995) 215ITR 275, 285 AJIT CHINTAMAN KARVE VS. ITO (2009) 311 ITR (AT) 66(PUNE) CIT VS. DHINGRA METAL WORKS (2010) 328 ITR 384(D EL) CIT VS. KHADER KHAN SON (2012) 25 TAXMANN. COM 413(SC)/ 210 TAXMAN 248(SC) CIT VS. KHADAR KAHN SON (2008) 300 IT R 157 7. THE ASSESSEE FURTHER SUBMITTED THAT DUE TO FAMIL Y SITUATION AND OUT OF NATURAL LOVE AND AFFECTION ALL THE MARRIED SISTERS GIFTED THEIR JEWELLERIES (INCLUDING MARRIAGE) TO THE ASSESSEE AS PER FOLLOWING DETAILS :- ITA NO. 2357//KOL/2016 3 SL. NO. NAME OF THE SISTERS OF THE ASSESSEE QUANTITY OF GOLD ORNAMENTS GIFTED TO ASSESSEE VALUE OF GOLD ORNAMENTS GIFTED (RS.) 1. SMT. PADMA GHOROI (BERA) 350 GMS 5,25,000/- 2. SMT. REKHA KHARA (BERA) 350 GMS 5,25,000/- 3. SMT. SULEKHA DAS (BERA) 325 GMS 4,87,500/- 4. SMT. SAMPATI ROUTH (BERA) 325 GMS 4,87,500/- 5. SMT. RINA PARTA (BERA) 300 GMS 4,50,000/- 6. SMT. KRISHNA PARTA (BERA) 300 GMS 4,50,000/- 8. THE ASSESSEE FURTHER RELIED ON BOARDS INSTRUCTI ON NO. 1916 DT. 11-05-1994, WHEREIN POSSESSION OF 500 GMS OF GOLD J EWELLERY PER MARRIED LADY IS ACCEPTABLE WITHOUT ANY QUERY REGARD ING THE SOURCE. THE BOARD FURTHER CLARIFIES THAT IN VIEW OF FAMILY STATUS AND CUSTOM AND PRACTICES OF THE COMMUNITY TO WHICH THE FAMILY BELONG, LARGER QUANTITIES OF GOLD AND JEWELLERIES MAY BE ACCEPTED. CONSIDERING THE ABOVE SUBMISSIONS OF ASSESSEE THE CIT-A DELETED THE IMPUGNED ADDITION OF RS.28,76,250/- MADE BY THE AO. 9. THE LD. DR RELIED ON THE ORDER OF THE AO. HE SUB MITS THAT THE CIT-A HAS ERRED IN DELETING THE SAID ADDITION WITHO UT PROPER JUSTIFICATION AS THERE WAS NO EVIDENCE REGARDING RE CEIPTS OF GIFTS AT THE TIME OF SURVEY FROM THE SAID SIX SISTERS OF ASS ESSEE AND PRAYED TO ALLOW THE GROUND NO. 1 RAISED BY THE REVENUE. 10. HEARD THE LD. DR AND PERUSED THE RECORD. WE FIN D THAT THE ASSESSEE HAS FILED ALL THE DETAILS REGARDING RECEI PTS OF GIFTS OF RS. 28,76,250/- BEFORE THE AO & CIT-A. THE CIT-A EXAMIN ED THE RECORD, CASE LAWS AND BOARDS INSTRUCTION NO. 1916 DT. 11-0 5-1994 AS RELIED ON BY THE ASSESSEE AND FOUND ARE RELEVANT TO THE PR ESENT FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FORCE IN THE SUB MISSIONS OF ASSESSEE BEFORE CIT-A. WE FIND THAT, BEFORE THE AO ALL THE SISTERS STATED THAT THE JEWELLERIES RECEIVED FROM PARENTAL RELATIVES DURING THEIR MARRIAGE AND WERE GIFTED TO ASSESSEE. ALL THE SIX SISTERS DULY DEPOSED UNDER AFFIDAVITS AND CONFIRMED THE SAME. TH E RELEVANT PORTION OF ORDER OF CIT-A IS REPRODUCED HEREIN BELO W:- 4.1.2 OBSERVATION AND DECISION ITA NO. 2357//KOL/2016 4 A) AS ADMITTED BY THE A.O, ALL THE SIX SISTERS OF T HE APPELLANT HAVE FILED AFFIDAVITS BEFORE THE ASSESSING OFFICER AND IN THE AFFIDAVITS ALL THE SISTERS HAVE STATED THAT THEY HAVE MADE THE GIFT OF SUCH JEWELLERIES TO THE APPELLANT WHO I S THEIR ONLY BROTHER. B) AS STATED BY THE A.R THE APPELLANT BELONGS TO A FAMILY OF TRADITIONAL JEWELERS IN A RURAL AREA OF THE DISTRICT OF EAST MEDINIPUR. IN SUCH A F AMILY, SUCH GIFTS OF JEWELLERY BY MARRIED WOMEN TO THEIR BROTHER (PARTICULARLY THE ONLY BROTH ER IN THIS CASE) FOR STRENGTHENING THE OLD FAMILY BUSINESS OF JEWELLERIES ARE NOT UNCOMMON AT ALL. C) I FIND THAT NOTICES US 131(3) WERE ISSUED BY THE A.O TO THREE SISTERS OUT OF SIX. ALL OF THE SAID THREE SISTERS APPEARED BEFORE THE ASSESSIN G OFFICER AND THEIR STATEMENTS ON OATH WERE RECORDED BY THE ASSESSING OFFICE ON 22.12.2011 . ALL THE SISTERS STATED THAT THE JEWELLERIES RECEIVED FROM PARENTAL RELATIVES DURING THEIR MARRIAGE (AS PER QUANTITIES CONFIRMED BY THEM) WERE GIFTED AWAY TO THE JEWELLER Y SHOP OF THEIR ONLY BROTHER I.E. THE APPELLANT. ALL THE SIX SISTERS OF THE APPELLANT FIL ED DULY SWORN AFFIDAVITS CONFIRMING THEIR GIFTS OF GOLD ORNAMENTS TO THE JEWELLERY SHOP OF TH EIR ONLY BROTHER. D) IN PARA 2 OF THE ORDER OF ASSESSMENT THE ASSESSI NG OFFICE COMMENTED THAT IN A STATEMENT RECORDED ON 12.12.2011 THE APPELLANT WAS ASKED AS TO WHY HE DID NOT MENTION ABOUT THE GOLD JEWELLERIES RECEIVED FROM HI S SIX SISTERS IN THE STATEMENT RECORDED DURING SURVEY. BUT AS PR THE APPELLANT'S R EPLY TO QUESTION NO; 14 OF THE STATEMENT RECORDED DURING SURVEY, THE APPELLANT STA TED THAT HE IS NOT IN A POSITION TO RECONCILE THE DIFFERENCE IN THE STOCK OF GOLD ORNAM ENTS AT THE MOMENT BUT HE WILL EXPLAIN THE SAME LATER ON. C) IN VIEW OF ALL THE AFORESAID FACTS AND CIRCUMST ANCES INVOLVED IN THE ISSUE OF GIFT OF GOLD JEWELLERIES BY THE MARRIED SISTERS OF THE APPE LLANT AND THE CASE-LAWS CITED BY THE A.R IN RESPECT OF THE VERACITY OF STATEMENTS RECORD ED DURING THE COURSE OF SURVEY AS WELL AS THE BOARD'S INSTRUCTION REFERRED TO BY THE AIR, I AM OF THE OPINION THAT RECEIPT OF GOLD ORNAMENTS BY THE APPELLANT FORM HIS SIX MARRIED SIS TERS (AS PER AFFIDAVITS SWORN IN BY THEM AND CONFIRMED BEFORE THE ASSESSING OFFICER) IS BELIEVABLE. HENCE, THE CONCERNED ADDITION MADE BY THE A.O OF RS.28,76,250 IS DELETED . 11. IN VIEW OF ABOVE, WE FIND THE CIT-A WAS JUSTIFI ED IN DELETING THE IMPUGNED ADDITION AND WE UPHOLD THE SAME. THUS, GRO UND NO. 1 RAISED BY THE REVENUE IS DISMISSED. 12. GROUND NO. 2 IS RELATING TO DELETION OF ADDITIO N OF RS.14,75,000/- OUT OF RS.45,64,402/-. 13. DURING THE ASSESSMENT PROCEEDING THE AO FOUND T HAT THE ASSESSEE HAS OWN ANCESTRAL PROPERTY RECEIVED FROM HIS FATHER FOR 3094.510 GMS OF GOLD OF RS. 7,42,682/-. ON 12-12-20 01 BY A STATEMENT THE ASSESSEE WAS ASKED TO CLARIFY WHY HE DID NOT SAY THAT HIS STOCK INCLUDES THE ANCESTRAL PROPERTY AS RECEIV ED FROM HIS DECEASED FATHER AT THE TIME OF SURVEY. THE ASSESSE E FAILED TO GIVE HIS ANSWER AND THE ASSESSEE DID NOT COME FORWARD WITH H IS EXPLANATION ON THE DATE OF STATEMENT/SURVEY, THE AO WAS OF THE VIEW THAT IT IS AN AFTERTHOUGHT AND THE AMOUNT OF GOLD OF 3094.510 GMS OF GOLD BROUGHT TO THE BOOKS IN THE GUISE OF ANCESTRAL PRO PERTY. THE AO VIEWED THAT THE SAID GOLD IS NOTHING BUT ASSESSEES OWN STOCK OF GOLD, ITA NO. 2357//KOL/2016 5 WHICH WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS. THE AO VALUED THE STOCK AT RS.45,64,402/- ( 3094.510 GM X RS. 1475) A ND ADDED THE SAME TO THE TOTAL INCOME U/S. 69A OF THE ACT. 14. BEFORE THE CIT-A THE ASSESSEE SUBMITTED THAT O LD ANCESTRAL GOLD WAS LYING IN THE SHOP TO THE EXTENT OF 3094.51 GMS AND THE SHOP ORIGINALLY WAS ESTABLISHED BY HIS FATHER. 15. THE CIT-A CONSIDERING THE SUBMISSIONS DELETED THE ADDITION BY OBSERVING AS UNDER:- 4.2.3 OBSERVATION AND DECISION A) I HAVE CAREFULLY CONSIDERED THE RIVAL ARGUMENTS ON THE SUBJECT OF AVAILABILITY OF ANCESTRAL GOLD JEWELLERIES IN THE SHOP OF THE APPEL LANT. B) THE ASSESSING OFFICER HAS REJECTED THE APPELLANT 'S CLAIM IN AN OUTRIGHT MANNER. BUT THE APPELLANT HAS PROVED WITH DOCUMENTARY EVIDE NCE (SHOWN BEFORE THE SURVEY TEAM) THAT THE CONCERNED SHOP IS AN ANCESTRAL BUSIN ESS OF THE APPELLANT AND IT HAD THE REQUISITE LICENSE SINCE 1963 WHEN THE APPELLANT'S F ATHER WAS RUNNING THE SHOP. THE APPELLANT IS THE ONLY SON OF HIS PARENTS WHO HAS IN HERITED THE SHOP FROM HIS LATE FATHER. C) HOWEVER IT IS ALSO A FACT THAT THE ASSESSEE FAIL ED TO DISCLOSE THIS FACT AT THE TIME OF SURVEY. FURTHER HE FAILED TO DISCLOSE THIS STOCK IN HIS STOCK REGISTER. D) CONSIDERING THESE ASPECTS OF THE CASE, I AM OF T HE VIEW THAT EXISTENCE OF SOME INHERITED GOLD AFTER ROLLING AND RE-ROLLING FOR SO MANY YEARS IS BELIEVABLE. IT IS LIKELY THAT THE ASSESSEE'S FATHER WAS DOING GOLD BUSINESS AT A VERY SMALL SCALE WITH SMALL QUANTITY OF STOCK. IF THE INHERITED GOLD WAS 3.09 KG AS CLAI MED BY THE ASSESSEE, THE ASSESSEE WOULD HAVE DEFINITELY MAINTAINED SOME KIND OF EVIDE NCE TO SUBSTANTIATE THE CLAIM. THEREFORE, THE A.O IS DIRECTED TO ALLOW 1000.00 GRA MS OF GOLD AS BEING INHERITED. BALANCE GOLD CLAIMED TO BE INHERITED MAY BE TREATED AS UNEXPLAINED. HENCE, THE CONCERNED ADDITION OF RS.45,64,402 IN RE SPECT OF ANCESTRAL GOLD IS PARTLY ALLOWED. 16. HEARD THE LD. DR AND PERUSED THE RECORD. WE FIN D THAT THE CIT- A HELD THAT EXISTENCE OF SOME INHERITED GOLD AFTER ROLLING AND RE- ROLLING FOR SO MANY YEARS IS BELIEVABLE. WE FURTHER FIND THAT BEFORE THE CIT-A THE ASSESSEE FURNISHED COPY OF LICENSE ISSUED ON 10/07/1986 IN LIEU OF OLD LICENSE ISSUED IN 1963 BEARING NO. 932 /GOLD/63 AND LICENSE ISSUED ON 12/10/1969 DULY SIGNED BY DEPUTY COLLECTOR (TECH), CENTRAL EXCISE, CALCUTTA AND ASSTT. COLLECTOR OF CE NTRAL EXCISE, GOLD CONTROL, CALCUTTA, WHICH WERE SHOWN TO THE SURVEY T EAM. THE ASSESSEE HAS PROVED WITH DOCUMENTARY EVIDENCE AND S HOWN THE SAME TO THE SURVEY TEAM THAT THE CONCERNED SHOP IS AN AN CESTRAL BUSINESS OF THE ASSESSEE AND IT HAD REQUISITE LICENSE SINCE 1963. THUS, THE CIT- A WAS JUSTIFIED IN DIRECTING THE AO TO ALLOW 1000.0 0 GMS. OF GOLD ITA NO. 2357//KOL/2016 6 BEING INHERITED. BALANCE GOLD AS CLAIMED AS INHERIT ED BE TREATED AS UNEXPLAINED. WE FIND NO INFIRMITY IN THE ORDER OF C IT-A AND IT IS JUSTIFIED. GROUND NO. 2 RAISED BY THE REVENUE IS DI SMISSED. 17. GROUND NO. 3 IS RELATING TO DELETION OF ADDITIO N OF RS. 1,50,000/- OUT OF RS.3,00,000/-. 18. THE AO FOUND THAT THE ASSESSEE SHOWN IN ITS ACC OUNT THAT HE RECEIVED GIFT OF RS. 3,00,000/- FROM HIS MOTHER. TH E ASSESSEE WAS ASKED BY THE AO TO PRODUCE THE DETAILS AND EVIDENCE S IN RESPECT OF SUCH GIFT. THE ASSESSEE FAILED TO DO SO AND IN HIS STATEMENT DT. 22-12- 11 STATED THAT HE HAS NOTHING TO SAY IN THIS REGARD AND IN VIEW OF ABOVE, THE AO ADDED AN AMOUNT OF GIFT OF RS. 3,00,0 00/- TO THE TOTAL INCOME OF ASSESSEE. 19. BEFORE THE CIT-A THE ASSESSEE SUBMITTED THAT HI S MOTHER VIRTUALLY WAS HEAD OF FAMILY SINCE DEMISE OF HIS F ATHER. HE ALSO SUBMITTED THAT WOMEN OF TAMLUK, EAST MEDINIPUR ARE VERY INDUSTRIOUS AND THEY ENGAGE THEMSELVES IN PRIVATE TRADE IN GROW ING CASH CROPS I.E BETEL NUTS, BETEL LEAVES, COCONUTS AND PRAWN SE EDS, WHICH ARE ABUNDANT IN THAT AREA. IT IS DIFFICULT TO MAINTAIN ANY KIND OF DOCUMENTARY EVIDENCE REGARDING SUCH ACTIVITIES FOR A VILLAGE WOMAN. FUNDS SAVED FROM THESE ACTIVITIES CONDUCTED BY HIS MOTHER SINCE LAST THIRTY YEARS AND GIVEN TO HIM FOR RUNNING THE OLD F AMILY SHOP DUE TO SPIRAL RISE IN GOLD PRICES. 20. THE CIT-A GAVE PART RELIEF TO AN AMOUNT OF RS.1 ,50,000/- BY STATING AS UNDER:- 4.3.3 OBSERVATION AND DECISION I FIND THAT IT IS NOT ABSOLUTELY ILLOGICAL OR IMPR ACTICABLE FOR A MOTHER TO HANDOVER HER PERSONAL AND DOMESTIC SAVINGS TO HER SON FOR PROPER LY RUNNING THE FAMILY SHOP PREVIOUSLY RUN BY HER DECEASED HUSBAND. IN THE SAME TIME, I ALSO NOTICE THAT THE APPELLANT COULD NOT PROVIDE ANY HARD EVIDENCE IN SUPPORT OF HIS CLAIM. CONSIDERING THE PROS AND CONS INVOLVED IN THIS ISSUE, I AM OF THE VIEW THAT RESTRICTING THE ADDITION TO 50% OF THE DI SALLOWANCE WILL MEET THE ENDS OF JUSTICE. THE APPELLANT GETS A RELIEF OF RS. 1,50,00 0/- ITA NO. 2357//KOL/2016 7 21. THE LD. DR RELIED ON THE ORDER OF THE AO. 22. HEARD THE LD. DR AND PERUSED THE RECORD. ON PER USAL OF THE ORDER OF THE CIT-A, WE FIND THE CIT-A EXAMINED REC ORD AND CONSIDERED THE SUBMISSIONS OF ASSESSEE. WE FIND THE RELIEF GIVEN BY THE CIT-A IS REASONABLE, WHICH WE UPHOLD AND IT IS JUSTIFIED. GROUND NO. 3 RAISED BY THE REVENUE IS DISMISSED. 23. IN THE RESULT, THE APPEAL FILED BY THE REVE NUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-06-2018 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :15-06-2018 **PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPLICANT/DEPARTMENT : THE ACIT, CIRCLE-27(1), HALD IA, BASUDEVPUR, KHANJANCHAK, HALDIA, DIST PURBA MEDINIPUR, PIN 7216 02. 2 RESPONDENT/ASSESSEE: SRI VIVEKANANDA BERA, SANKARAR A, TAMLUK, DIST PURBA MEDINIPUR, PIN 721636. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER SR.P.S,H.O.O, ITAT .KOL