SHRI RAKESH GUPTA, Bhopal V. THE ACIT 1(2), Bhopal

ITA 278/IND/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5325 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 28-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure; Valuation report

Judgement Text

ITA NO.,278/IND/2015 RAKESH GUPTA 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JM & SHRI O.P. MEENA, AM ITA NO. 278/IND/2015 A.Y.2011-12 RAKESH GUPTA BHOPAL PAN AAXPG 9477C ::: APPELLANT VS ACIT 1(2)( BHOPAL ::: RESPONDENT APPELLANT BY SHRI ANIL KHABYA RESPONDENT BY SHRI LALCHAND DATE OF HEARING 22.11.2016 DATE OF PRONOUNCEMENT 1 5 .1 2 .2016 O R D E R THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, BHOPAL, DATED 6.2.2015 . 2. THE ONLY ISSUE INVOLVED IN THIS CASE IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN MAINTAINING THE ADDITION OF ITA NO.,278/IND/2015 RAKESH GUPTA 2 RS.33,24,968/- TOWARDS UNEXPLAINED INVESTMENT IN PURCHASE OF JEWELLERY. 2. THE ASSESSEE IS A MEMBER OF GUPTASONS GROUP OF BHOPAL. THE GROUP IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF TRANSFORMERS AND ALLIED PRODUCTS AND SUB-CONTRACTORSHIP BUSINESS OF MANUFACTURING OF TRANSFORMERS. THEY ARE ALSO IN BUSINESS OF JEWELLERY AN D HOTELS AND HOSPITALITY. THERE WAS SEARCH AND SEIZURE OPERATION AND THE FOLLOWING JEWELLERY WAS FOUND AND SEI ZED AT THE VARIOUS PREMISES BELONGING TO THE ASSESSEE AND H IS WIFE SMT. ARCHANA GUPTA :- S.NO. PLACE FOUND (IN R S.) SEIZED (IN RS.) 1 RESIDENCE OF THE ASSESSEE LOCATED AT E- 1/161, ARERA COLONY, BHOPAL 47,44,268 17,91,634 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF ACQUISITION OF ITA NO.,278/IND/2015 RAKESH GUPTA 3 SUCH JEWELLERY FOUND DURING THE COURSE OF SEARCH. TH E ASSESSEE REPLIED THAT THE ENTIRE JEWELLERY BELONGS TO MY FAMILY, SMT. ARCHANA GUPTA, MY WIFE, MY SON ARCHIT GUPT A AND MY DAUGHTER, TUSHRIKA GUPTA. AFTER EXCLUDING THE JEWELLERY OWNED BY HIS FAMILY, SMT. ARCHANA GUPTA IS TH E WEALTH TAX ASSESSEE AND HAS DISCLOSED 2193 GMS OF JEWELLERY AND 7.5 CENT DIAMONDS IN HER WEALTH TAX RETU RN. THE ASSESSING OFFICER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE WAS OF THE VIEW THAT THE ASSESSEE HAS NOT SUBMITTED ANY ITEMWISE DETAILS OF JEWELLERY AND ALSO JEWELLERY FOUND DURING THE COURSE OF SEARCH WHICH DI D NOT TALLY WITH THE ITEMS SHOWN IN THE WEALTH TAX RETURN. THE ASSESSEE HAS NOT SUBMITTED ANY PROOF THAT THE JEWELLERY FOUND DURING THE COURSE OF SEARCH IS THE SAME WHICH IS DECLARED IN THE WEALTH TAX RETURN. THEREFORE, THE ASS ESSING OFFICER ADDED THE ENTIRE AMOUNT OF RS. 4744268/- TO T HE TOTAL INCOME OF THE ASSESSEE. THE MATTER WAS CARRIED IN ITA NO.,278/IND/2015 RAKESH GUPTA 4 APPEAL TO THE LEARNED CIT(A) AND THE LEARNED CIT(A) RE LYING ON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT AND THE CBDT CIRCULAR GRANTED RELIEF OFRS.14,19,300/- AND THE ADDITION TO THE EXTENT OF RS.33,24,968/- WAS CONFIRME D. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. DURING THE COURSE OF HEARING BEFORE US, THE LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE CO URSE OF SEARCH A PANCHNAMA WAS DRAWN WHEREIN THE VALUATION REPORT OF JEWELLERY WAS DONE ON 29.10.2010 WHICH IS AT PAGES 4, 5 AND 6 OF THE PAPER BOOK. THE LEARNED COUNS EL FOR THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF SEARCH, THE STATEMENT OF THE ASSESSEE WAS TAKEN WHEREIN THE ASSESSEE HAS SPECIFICALLY STATED THAT ARCHANA GUPTA AND MANJULA GUPTA HAD DECLARED 205 GMS AND 100 GMS OF JEWELLERY IN VDIS DECLARATION FORM. THEREFORE, THE LE ARNED COUNSEL FOR THE ASSESSEE SUBMITTD THAT THIS JEWELLERY IS THE JEWELLERY BELONGING TO ARCHANA GUPTA AND MANJULA GUPTA ITA NO.,278/IND/2015 RAKESH GUPTA 5 AND IT IS STRIDHAN. THEREFORE, IT IS NOT SUBJECT TO ATTACHMENT AS DECIDED BY THE HON'BLE SUPREME COURT IN THE CASE OF PRATIBHA RANI VS. SANJAYKUMAR. THEREFORE, THI S JEWELLERY IS NOT SUBJECT TO ATTACHMENT. HE ALSO RELIED ON THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. ASHOKKUMAR; 286 ITR 541 AND SUBMITTED THAT IF THE WIFE OWNS THE OWNERSHIP OF JEWELLERY AND IF IT I S STRIDHAN, IT IS NOT SUBJECT TO ATTACHMENT. THEREFORE, THE ADDITION MAY BE DELETED. 5. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT TH E ASSESSEES WIFE HAD DECLARED JEWELLERY IN VDIS AND COPY OF THE WEALTH TAX RETURN WAS FILED BUT THE WEALTH TAX RET URN WAS FILED IN THE ASSESSMENT YEAR 2000-01 AND THE SEARCH WAS CONDUCTED ON 28.10.2010. THEREFORE, THE SAME JEWELLERY WAS FOUND AND THE SAME JEWELLERY WAS DECLARED AND THERE IS NO PROOF THAT THE SAME JEWELLERY HAS BEEN RECOVERED. THEREFORE, THE LEARNED CIT(A) WAS JUSTIFI ED IN ITA NO.,278/IND/2015 RAKESH GUPTA 6 CONFIRMING THE ADDITION. MOREOVER, THE COPY OF CERT IFICATE OF VDIS DOES NOT INDICATE THE SAME JEWELLERY. THEREFORE, THE APPEAL MAY BE DISMISSED. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SI DES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS DECLARED JEWELLERY IN VDIS AT PAGES 19 TO 24 OF THE PAPER BOOK WHEREIN THE JEWELLERY HAS BEEN DECLARED. MOREOVER, THE ASSESSEE HAS ALSO FILED WEALTH TAX RETURN IN ASSESSMENT YEAR 2000-01 . WHILE FILING THE WEALTH TAX RETURN THE ASSESSEE HAS T O FILE THE DESCRIPTION OF THE JEWELLERY ALONG WITH WEALTH TA X RETURN. MOREOVER, IN THE WEALTH TAX RETURN, SMT. ARC HANA GUPTA HAS DISCLOSED 2193 GMS OF JEWELLERY AND 7.5 CEN T OF DIAMOND IN HER WEALTH TAX RETURN. THEREFORE, THIS RE QUIRES VERIFICATION AT THE LEVEL OF THE ASSESSING OFFICER. M OREOVER, THE ASSESSEE HAS ALSO SUBMITTED THAT SHE HAS INVESTED RS . 10 LACS FOR REMAKING OF JEWELLERY FROM NEHA INDUSTRIE S. ITA NO.,278/IND/2015 RAKESH GUPTA 7 THEREFORE, THIS ALSO REQUIRES VERIFICATION AND IF THE AS SESSEE PROVES THAT SHE HAS INVESTED RS. 10 LACS FOR REMAKING O F JEWELERY, THE ASSESSING OFFICER SHOULD ALLOW THE SAME AS PER LAW. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 15 DECEMBER, 2016 SD/- SD/- (O.P. MEENA) (D.T. G ARASIA) ACCOUNTANTMEMBER JUDICIAL MEMB ER DECEMBER 15, 2016 DN/-