M.Ramalingam, CHENNAI V. ACIT, Trichy

ITA 2601/CHNY/2014

• Counselvise Citation: 260121714 RSA 2014
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 15-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Section: 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL S M C BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.2601/MDS/2014 ' #$' / ASSESSMENT YEAR : 2007-08 SHRI M. RAMALINGAM, C/O SHRI S. SRIDHAR, ADVOCATE, NEW NO.14, OLD NO.82,FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI - 600 020. PAN : AAEPR 2206 D V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II, TIRUCHIRAPALLI. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ()&' * + / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT , # * -. / DATE OF HEARING : 21.08.2015 /0$ * -. / DATE OF PRONOUNCEMENT : 04.09.2015 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), TIRUCHIRA PALLI, DATED 21.08.2014 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THERE WAS A SEARCH UNDER SECTION 132 OF THE IN COME-TAX ACT, 1961 (IN SHORT 'THE ACT') IN THE PREMISES OF THE AS SESSEE ON 2 I.T.A. NO.2601/MDS/14 09.11.2006. ACCORDING TO THE LD. COUNSEL, THE ASSE SSEE IS ONE OF THE PARTNERS IN M/S RABBIT JEWELLERY, RABBIT FINANC E AND RABBIT MARK RICE MILL. ACCORDING TO THE LD. COUNSEL, THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO ADDITION OF ` 7,51,610/- BEING THE VALUE OF THE GOLD JEWELLERY FOUND DURING THE COURSE OF SEARCH OPERATION. THE LD.COUNSEL FURTHER SUBMITTED THAT D URING THE COURSE OF SEARCH PROCEEDINGS, 2665 GMS OF GOLD JEWELLERY W AS FOUND. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE AND FAMI LY MEMBERS DISCLOSED 1710 GMS OF GOLD JEWELLERY. THEREFORE, E XCESS JEWELLERY OF 955 GMS WAS FOUND. THE ASSESSEE EXPLAINED BEFOR E THE ASSESSING OFFICER THAT 888 GMS OF JEWELLERY BELONGS TO SMT. RAJALAKSHMI, WIFE OF THE ASSESSEE AND SHRI MANIVANN AN IN HIS INDIVIDUAL CAPACITY OWNS 150 GMS OF JEWELLERY AND I N HUF CAPACITY HE OWNS 420 GMS OF JEWELLERY. SIMILARLY, SMT. SHAR MILA OWNS 640 GMS OF JEWELLERY, THUS THE TOTAL COMES TO 2864 GMS OF GOLD JEWELLERY. THEREFORE, THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THERE WAS NO EXCESS JEWELLERY. HOWEVE R, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT FURNISHED A NY PURCHASE BILL FOR THE JEWELLERY PURCHASED. SINCE THE PURCHASE BI LL WAS NOT PRODUCED, THE ASSESSING OFFICER DISBELIEVED THE CLA IM OF THE ASSESSEE AND MADE AN ADDITION OF UNDISCLOSED INVEST MENT TO THE 3 I.T.A. NO.2601/MDS/14 EXTENT OF ` 10,13,660/-. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) FOUND THAT THE ASSESSEE FILED THE RETU RN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 BELATEDLY AFTER THE DAT E OF SEARCH. THE CIT(APPEALS) HAS FOUND THAT THE ASSESSING OFFIC ER ADMITTED THAT IN THE STATUS OF HUF, THE ASSESSEE HAS SHOWN T HE PURCHASE OF GOLD JEWELLERY TO THE EXTENT OF 410 GMS. HOWEVER, THE PURCHASE BILL WAS NOT PRODUCED. IN THE ABSENCE OF PROOF OF PURCH ASE OF GOLD JEWELLERY IN THE HUF STATUS, THE CIT(APPEALS) REJEC TED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ADDITI ON TO THE EXTENT OF ` 7,51,610/- MADE BY THE ASSESSING OFFICER. REFERRIN G TO PAGE 3 OF THE ASSESSMENT ORDER, THE LD.COUNSEL SUBMITTED T HAT THE ASSESSEE HAS DISCLOSED THE DETAILS OF GOLD JEWELLER Y BELONGING TO VARIOUS FAMILY MEMBERS TO THE EXTENT OF 2864 GMS AN D THE PURCHASE OF JEWELLERY TO THE EXTENT OF 410 GMS IN THE HUF ST ATUS CANNOT BE A REASON TO MAKE ADDITION IN THE HANDS OF THE PRESENT ASSESSEE. ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) IS N OT JUSTIFIED IN CONFIRMING THE ADDITION IN THE HANDS OF THE PRESENT ASSESSEE. 3. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT DURING THE COURSE OF SEARCH OPERATION, REVENUE AUTHORITIES FOUND 2665 GMS OF GO LD JEWELLERY. THE ASSESSEE AND HIS FAMILY DISCLOSED ONLY 1801.800 GMS TO THE 4 I.T.A. NO.2601/MDS/14 DEPARTMENT, THEREFORE, EXCESS GOLD JEWELLERY OF 955 GMS WAS SEIZED BY THE DEPARTMENT. AFTER CONSIDERING THE EX PLANATION OF THE ASSESSEE, THE ASSESSING OFFICER FOUND THAT THE ASSE SSEE COULD NOT PRODUCE PURCHASE BILL FOR PURCHASE OF 410 GMS OF GO LD JEWELLERY IN FEBRUARY, 2006. THEREFORE, THE ASSESSING OFFICER M ADE AN ADDITION OF ` 7,51,610/-. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDL Y, THERE WAS A SEARCH IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 09.11.2006 AND THE REVENUE AUTHORITIES FOUND 2665 GMS OF GOLD JEWELLERY. AFTER CONSIDERING THE DISCLOSURE MADE BY THE ASSESS EE, THE REVENUE FOUND THAT 955 GMS OF JEWELLERY WAS IN EXCE SS. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THA T 2864 GMS OF JEWELLERY BELONGS TO VARIOUS FAMILY MEMBERS, THEREF ORE, THERE WAS NO EXCESS. THE ASSESSING OFFICER, AFTER VERIFYING THE DISCLOSURE MADE BY THE FAMILY MEMBERS OF THE ASSESSEE TO THE E XTENT OF 1801.800 GMS, FOUND THAT THE BALANCE JEWELLERY TO T HE EXTENT OF 863.920 GMS WAS NOT EXPLAINED. REFERRING TO THE CL AIM OF THE ASSESSEE THAT 410 GMS OF GOLD JEWELLERY WAS PURCHAS ED IN HUF CAPACITY, THE ASSESSING OFFICER FOUND THAT IN THE A BSENCE OF ANY PURCHASE BILL, THE SAME CANNOT BE ACCEPTED. ACCORD INGLY, THE 5 I.T.A. NO.2601/MDS/14 UNACCOUNTED GOLD JEWELLERY FOUND TO THE EXTENT OF 8 63.920 GMS WAS TREATED AS UNDISCLOSED INVESTMENT AND AN ADDITION O F ` 7,51,610/- WAS MADE IN THE ASSESSMENT ORDER. 5. THE ASSESSEE HAS DISCLOSED 1801.800 GMS OF GOLD JEWELLERY IN THE NAME OF SHRI M. RAMALINGAM, THE ASSESSEE, SM T. RAJALAKSHMI, WIFE OF THE ASSESSEE AND SHRI R. MANIV ANNAN. IN ADDITION TO THIS, THE ASSESSEE HAS ALSO DISCLOSED I N THE RETURN FOR THE ASSESSMENT YEAR 2005-06 REGARDING PURCHASE OF 91.00 0 GMS OF GOLD JEWELLERY. THE ASSESSEE APPEARS TO HAVE CLAIM ED BEFORE THE LOWER AUTHORITIES THAT THE HUF OF THE ASSESSEE OWNS 501 GMS OF GOLD JEWELLERY. HUF OF SHRI MANIVANNAN OWNS 420 GM S OF GOLD JEWELLERY AND SMT. SHARMILA OWNS 640 GMS OF JEWELLE RY. IT IS NOT IN DISPUTE THAT THE ASSESSEE, OTHER THAN IN HIS INDIVI DUAL CAPACITY, HAS ALSO ACQUIRED IN HUF CAPACITY. LIKEWISE, SHRI MANI VANNAN ALSO ACQUIRED APART FROM INDIVIDUAL CAPACITY, IN THE HUF CAPACITY. THE JEWELLERY BELONGING TO SMT. SHARMILA WAS NOT CONSID ERED BY THE ASSESSING OFFICER TO THE EXTENT OF 640 GMS. THEREF ORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT BY TAKING INTO CO NSIDERATION OF THE STATUS OF THE ASSESSEE AND OTHER FAMILY MEMBERS, TH E GOLD JEWELLERY OWNED BY SMT. SHARMILA, SHRI MANIVANNAN (HUF), SHRI M. RAMALINGAM (HUF) CANNOT BE TOTALLY RULED OUT. WHEN THE 6 I.T.A. NO.2601/MDS/14 ASSESSING OFFICER ACCEPTED THE JEWELLERY TO THE EXT ENT OF 1801.800 GMS IN THE HANDS OF THREE PERSONS, AS DISCLOSED IN PAGE 3 OF THE ASSESSMENT ORDER, HE SHOULD HAVE TAKEN NOTE OF THE STATUS OF THE ASSESSEE AS HUF, THE STATUS OF SHRI MANIVANNAN (HUF ) AND THE JEWELLERY OWNED BY SMT. SHARMILA. SINCE THEY ARE F AMILY MEMBERS, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE Y MIGHT HAVE OWNED GOLD JEWELLERY TO THE EXTENT OF 863.920 GMS O F GOLD JEWELLERY. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE FILED RETURN OF INCOME IN HIS HUF CAPACITY FOR THE ASSESSMENT YEAR 2006-07 AN D DISCLOSED 410 GMS OF JEWELLERY. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE HUF PURCHASED 410 GMS OF GOLD JEWE LLERY IN THE MONTH OF FEBRUARY, 2006. IN THE ABSENCE OF PURCHAS E BILL, THE ASSESSING OFFICER MADE ADDITION IN THE HANDS OF THE INDIVIDUAL ASSESSEE. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT WHEN THE ASSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07 CLAIMING THAT 410 GMS OF JEWELLERY WAS PURCHASED BY HUF, THE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSE E IN HIS INDIVIDUAL CAPACITY. AT THE BEST, THE ADDITION COU LD HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE IN HUF CAPACITY. FOR THE FAILURE OF THE ASSESSEE-HUF TO SUBSTANTIATE THE PURCHASE OF 410 GM S OF JEWELLERY IN THE MONTH OF FEBRUARY, 2006, THIS TRIBUNAL IS OF THE CONSIDERED 7 I.T.A. NO.2601/MDS/14 OPINION THAT THERE CANNOT BE ANY ADDITION IN THE HA NDS OF THE INDIVIDUAL ASSESSMENT OF THE ASSESSEE. 6. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF ` 7,51,610/-. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 4 TH SEPTEMBER, 2015 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 4 TH SEPTEMBER, 2015. KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A), TIRUCHIRAPPALLI 4. , 6- /CIT, CENTRAL-II, CHENNAI 5. 4#7 (- /DR 6. 8' 9 /GF.