Smt. Susan Sureshchandra Tilwa, RAJKOT-GUJARAT V. The Dy. Commr. of Income Tax, Cen. Cir.-1, RAJKOT-GUJARAT

ITA 270/RJT/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0477 (ITAT-RAJKOT)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 09-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARISH RANPURA
• Keywords: Unexplained investment; Gift; Question of law
• Section: 143(3)

Judgement Text

ITA NO. 270 / RJT/201 5 ASSESSMENT YEAR: 20 12 - 13 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, SMC , RAJKOT (CONDUCTED THROUGH E - COURT AT AHMEDABAD) [CORAM: PRAMOD KUMAR AM ] ITA NO. 270 / R JT / 2 0 1 5 ASSESSMENT YEAR: 20 12 - 13 SUSAN SUREHCHANDRA TILWA ....... .. . ..... APPELLANT 4 TH FLOOR, S IT A APARTMENT, KASHI VISHWANATH PLOT, RAJKOT . [PAN A DSPT 6685 K ] VS. DY. COMMISSIONER OF INCOME TAX ....... ..................RESPONDENT CENTRAL CIRCLE - 1, RAJKOT. APPEARANCES BY: HARISH RANPURA FOR THE A PPELLANT YOGESH PANDEY FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : NOVEMBER 30 TH , 201 5 DATE OF PRONOUNCING THE ORDER : NOVEMBER 30 TH , 2015 O R D E R PER PRAMOD KUMAR AM: 1. BY WAY OF THIS APPEAL , THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE O RDER DATED 24 TH MACH 2015 PASSED BY THE LD . CIT(A) IN THE MATTER OF ASSESSMENT U N DER SEC TION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT FOR SHORT) FOR THE ASSESSMENT Y EAR 2012 - 13 ON THE F O LLOWING GROUND : - THE LEARNED COMMISSIONER OF INCOME TAX (APPLES) - 11, AHMEDABAD E R RED ON FACTS AS ALSO IN LAW IN RETAINING A DDITION OF RS.7,56,105/ - MADE BY AO ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN GOLD AND DIAMOND JEWELLERIES. THE ADDITION MA D E BY THE AO AND AS RE T AINED BY THE LD. CIT(A ) IS TO6ALLY UNJUSTIFIED ON FACTS A S ALSO IN LAW AND M AY KINDLY BE DELETED. ITA NO. 270 / RJT/201 5 ASSESSMENT YEAR: 20 12 - 13 PAGE 2 OF 5 2. TO ADJUDICATE ON THIS APPEAL O N LY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. ON 8 TH SEPTEMBER, 2011 SEARCH ACTION WAS CARRIED OUT ON THE PREMISES OF THE ASSESSEE AND CERTAIN GOLD JEWELLERY WAS FOUND AS DETAILED BELOW : - DES CRIPTION OF JEWELLERY VALUE AS PER INVENTORY VALUE 18 K GOLD JEWELLERY 44.990 GRAMS RS.2115/GRAM RS.95153/ - 22 K GOLD JEWELLERY 180.79 GRAMS RS.2585/GRAM RS.467342/ - 24 K GOLD JEWELLERY 48.000 GRAMS RS.2820/GRAM RS.135360/ - DIAMOND 2.33 CTS RS. 25000/CT (AVERAGE) RS. 58250/ - TOTAL RS.756105/ - 3. DURING THE ASSESSMENT PROCEEDINGS IT WAS EXPLAINED TO THE A SSESSING OFFICER THAT THESE ORNAMENTS WERE RECEIVED BY HER FROM TIME TO TIME FROM DIFFERENT FAMILY MEMBERS. THE PLEA OF THE ASSESS E E WAS , HO WEVER , REJECTED BY OBSERVING AS FOLLOWS : - 6. THE REPLY OF T HE ASSESS E E IS NOT ACCEPTABLE. EXCEPT SATING THAT S HE HAD RECEIVED THESE JEWELLERY PRIOR TO HER MARRIAGE FROM HER PARENTS AND OTHER RELATIVES, NO EVIDENCE HAS BEEN PRODUCED. THE CONTENTION THA T THEY WERE RECEIVED DURING VARIOUS SOCIAL OCCASIONS , IS A VERY GENERAL REPLY. IN FACT, THE CONTENTION OF THE ASSESSEE THAT SHE HAD RECEIVED 8 GRAMS AS GIFT FROM HER HUSBAND IS ALSO FAR FROM TRUTH, AS THE SAME IS SHOWN TO HAVE RECEIVED IN 19.04.2007, WHER EAS THEIR MARRIAGE TOOK PL A CE ON 01.01.2011. THEREFORE, IT IS HIGHLY IMPROBABLE T HAT HER HUSBAND WOULD HAVE GIF T ED HER GOLD COIN WEIGHING 8 GRAMS. THEREFORE, IN THE ABSENCE OF ANY EVIDENCE TO SUPPORT HER CONTENTION, THE CLAIM OF THE ASSESSEE I S NOT ACCEP TABLE AND THE ENTIRE DIFFERENCE OF 225.78 + 48 GRAMS GOLD JEWELLERY (273.78 GRAMS ) AND 2.33 CTS . OF DIAMOND JEWELLERY IS T REATED AS UNEXPLAINED IN THE HANDS OF T HE ASSESSEE. THE VALUE OF THE SAME IS WORKED OUT A S UNDER : - ITA NO. 270 / RJT/201 5 ASSESSMENT YEAR: 20 12 - 13 PAGE 3 OF 5 DESCRIPTION OF JEWELLERY VALUE AS PER INVENTORY VALUE 18 K GOLD JEWELLERY 44.990 GRAMS RS.2115/GRAM RS.95153/ - 22 K GOLD JEWELLERY 180.79 GRAMS RS.2585/GRAM RS.467342/ - 24 K GOLD JEWELLERY 48.000 GRAMS RS.2820/GRAM RS.135360/ - DIAMOND 2.33 CTS RS.25000/CT (AVERAGE) RS.58250 / - TOTAL RS.756105/ - 4. ACCORDINGLY , ADDITION OF RS.7,56,105/ - WAS MADE ON ACCOUNT OF UNEXPLAINED JEWELLERY. A GGRIEVED BY THE STAND SO TAKEN BY THE A SSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) . LD . CIT ( A ), HOWE VER , IN A VERY CRYPTIC ORDER SUMMARILY REJECTED THE ARGUMENTS OF THE ASSESSEE BY OBSERVING THAT THE EXPLANATION WHICH THE ASSESSE E SUBMITTED BEFORE THE A SSESSING OFFICER WAS ALMOST REPEATED IN THE APPEAL PROCEEDINGS AND NO FURTHER EVIDENCE TO REBUT THE FI NDING OF THE A SSESSING OFFICER WAS FURNISHED THE ASSESSEE IS AGGRIEVED AND IS IN FUR THER APPEAL BEFORE ME . 5. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 6. I HAVE NOTED THAT THE TOTAL JEWELLERY FOUND DURING SEARCH BELONGING TO THE ASSESSEE WAS LESS THAN 500 GMS. CONSIDERING HER STATUS AND THE NORMAL PRACTICE IN HINDU FAMILIES AS SUCH , AND AS PER THE CBDT C IRCULAR NO. 1916 DAT E D 11. 0 5. 19 94 SUCH JEWEL LERY CANNOT BE TREATED AS UNEXPLAINED JEWELLERY AND ADDED TO THE INCOME OF THE ASSESSEE. IN THIS RE G ARD , I MAY RE F ER TO THE FOLLOWING OB SERVATIONS MADE BY THE HON BLE ITA NO. 270 / RJT/201 5 ASSESSMENT YEAR: 20 12 - 13 PAGE 4 OF 5 JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RATAN LAL VYAPARILAL JAIN, 339 ITR 351 (GUJ) . 9. AS CAN BE SEEN FROM THE IMPUGNED ORDER OF THE TRIBUNAL, THE TRIBUNAL HAS REFERRED TO THE CBDT CIRCULAR NO. 1916 AND OBSERVED THAT IN AN EARLIER DECISION OF THE TRIBUNAL, THE TRIBUNAL HAS ACCEPTED THE APPLICABILITY OF THE CIRCULAR AND HAS HELD THAT HAVING REGARD TO THE CIRCULAR AND SIZE OF THE FAMILY, THE ORNAMENTS TO THE EXTENT SPECIFIED IN THE CIRCULAR SHOULD BE ACCEPTED AS REASONABLE. THE TRIBUNAL, ACCORDINGLY, FOUND THAT THE JEWELLERY HELD BY THE ASSESSEE AND HIS FAMILY MEMBERS WAS WELL WIT HIN THE LIMIT LAID DOWN UNDER THE CBDT CIRCULAR AND ACCORDINGLY, DELETED THE WHOLE ADDITION ON THE GROUND THAT THE JEWELLERY HELD BY EACH OF THE FAMILY MEMBERS WAS BELOW THE LIMITS SPECIFIED IN THE SAID CIRCULAR. 10. THOUGH IT IS TRUE THAT THE CBDT CIRCULA R NO. 1916, DT. 11TH MAY, 1994 LAYS DOWN GUIDELINES FOR SEIZURE OF JEWELLERY AND ORNAMENTS IN THE COURSE OF SEARCH, THE SAME TAKES INTO ACCOUNT THE QUANTITY OF JEWELLERY WHICH WOULD GENERALLY BE HELD BY FAMILY MEMBERS OF AN ASSESSEE BELONGING TO AN ORDINAR Y HINDU HOUSEHOLD. THE APPROACH ADOPTED BY THE TRIBUNAL IN FOLLOWING THE SAID CIRCULAR AND GIVING BENEFIT TO THE ASSESSEE, EVEN FOR EXPLAINING THE SOURCE IN RESPECT OF THE JEWELLERY BEING HELD BY THE FAMILY IS IN CONSONANCE WITH THE GENERAL PRACTICE IN HIN DU FAMILIES WHEREBY JEWELLERY IS GIFTED BY THE RELATIVES AND FRIENDS AT THE TIME OF SOCIAL FUNCTIONS, VIZ., MARRIAGES, BIRTHDAYS, MARRIAGE ANNIVERSARY AND OTHER FESTIVALS. THESE GIFTS ARE CUSTOMARY AND CUSTOMS PREVAILING IN A SOCIETY CANNOT BE IGNORED. THU S ALTHOUGH THE CIRCULAR HAD BEEN ISSUED FOR THE PURPOSE OF NON - SEIZURE OF JEWELLERY DURING THE COURSE OF SEARCH, THE BASIS FOR THE SAME RECOGNIZES CUSTOMS PREVAILING IN HINDU SOCIETY. IN THE CIRCUMSTANCES, UNLESS THE REVENUE SHOWS ANYTHING TO THE CONTRARY, IT CAN SAFELY BE PRESUMED THAT THE SOURCE TO THE EXTENT OF THE JEWELLERY STATED IN THE CIRCULAR STANDS EXPLAINED. THUS, THE APPROACH ADOPTED BY THE TRIBUNAL IN CONSIDERING THE EXTENT OF JEWELLERY SPECIFIED UNDER THE SAID CIRCULAR TO BE A REASONABLE QUANTI TY, CANNOT BE FAULTED WITH. IN THE CIRCUMSTANCES, IT IS NOT POSSIBLE TO STATE THAT THE TRIBUNAL HAS COMMITTED ANY LEGAL ERROR SO AS TO GIVE RISE TO A QUESTION OF LAW. 6. IN VIEW OF THE ABOVE DISCUS SION, AS ALSO FINANCIAL POSITION OF THE ASSESSEE AND THE S URROUNDING CIRCUMSTANCES , I UPHOLD THE G RIEVANCE OF THE ASSESSEE AND DIRECT T HE ASSESSING OFFICER TO DEL ETE THE IMPUGNED AD D ITION OF RS.7,56,105. 7. IN THE RESULT, APPEAL IS ALLOWED. DICTATED AND PRONOUNCED IN THE OPEN COURT TODAY ON 30 TH NOVEMBER, 2015. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) ITA NO. 270 / RJT/201 5 ASSESSMENT YEAR: 20 12 - 13 PAGE 5 OF 5 AHMEDABAD , THE 30 TH DAY OF NOVEMBER , 2015 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT (A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT