Smt. Suchitra S. Dhanani, Indore V. The ACIT, Circle-1(2), Baroda

ITA 3014/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6344 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: D K PARIKH
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Search and seizure; Question of law
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO. 3014/AHD/2014 (ASSESSMENT YEAR: 2011-12) SMT. SUCHITRA S. DHANANI, BF 8/9, SCHEME NO. 74C, VIJAY NAGAR, INDORE 452010 APPEL LANT VS. ACIT, CIRCLE-1(2), BARODA RESPONDENT PAN: ACTPD1159Q /BY ASSESSEE : SHRI D. K. PARIKH, A.R. /BY REVENUE : SHRI V. K. SINGH, SR. D.R. /DATE OF HEARING : 13.12.2017 /DATE OF PRONOUNCEMENT : 04.01.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12, EMANATES FROM THE CIT(A)-I, BARODAS ORDER DATED 02.08.2014, IN CASE NO. CAB-I/106/2013-14, UPHOLDING ASSESSING OFFICERS ACTION MAKING ADDITIO N OF RS.6,71,113/- AS UNEXPLAINED INVESTMENT IN JEWELLERY WEIGHING 410GRA MS FOUND DURING SEARCH CONDUCTED ON 11.02.2011, IN PROCEEDINGS U/S. 153A R .W.S. 143(3) OF THE INCOME TAX ACT, 1961, HEREINAFTER THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. ITA NO. 3014/AHD/2014 (SMT. SUCHITRA S. DHANANI VS. ACIT) A.Y. 2011-12 - 2 - 2. WE COME TO THE RELEVANT FACTS PERTAINING TO THE ABOVE SOLE GROUND. THERE IS NO DISPUTE THAT THE DEPARTMENT FOUND GOLD JEWELLERY OF RS.6,61,917/- ALONGWITH SILVER COINS OF RS.9,196/-; TOTALING TO RS.6,71,113 /- IN ASSESSEES BANK LOCKER DURING SEARCH. THE ASSESSING OFFICER THEREAFTER FR AMED THE IMPUGNED ASSESSMENT ON 31.03.2013 REJECTING HER EXPLANATION PLACING REL IANCE UPON CBDTS CIRCULAR NO.1,916/- DATED 11.05.1994 THAT JEWELLERY AND ORNA MENTS UPTO 500 GRAMS ARE TO BE EXCLUDED FROM SEIZURE. HE WAS OF THE VIEW THAT IT WAS ASSESSEES ONUS TO EXPLAIN SOURCE THEREOF INSTEAD OF MERELY QUOTING THE ABOVE CIRCULAR. ALL THIS RESULTED IN THE IMPUGNED ADDITION BEING MADE IN ASSESSEES HANDS. 3. THE CIT(A) UPHOLDS THE IMPUGNED ADDITION AS FOLL OWS: 2.4 THE REASON FOR MAKING ADDITION OF RS. 6,71,11 3/- AS MENTIONED BY THE AO IN THE ASSESSMENT ORDER U/S 153A R.W.S. 143(3) AS WELL AS ABOVE SUBMISSION OF THE AR OF THE APPELLANT HAVE BEEN CONSIDERED. THE SUBMISSION OF THE AR OF THE APPELLANT IS THAT APPELLANT BEING A MARRIED WOMAN HAD ACCUMULATED THE SAID JEWELLERY OVER A PERIOD OF TIME AND THE SAME WAS PART OF HER STRI-DHAN. THE AR HAS REFERRED TO INSTRUCTION NO. 1916 OF 11.05.1994 OF THE CBDT, AND HAS SUBMITTED T HAT THE SAID JEWELLERY MAY BE CONSIDERED AS EXPLAINED. IT IS ALSO SUBMITTED THAT SILVER ARTICLES FOUND WERE OF NEGLIGIBLE QUANTITY AND WERE RECEIVED FROM TIME TO TIME AS GIFTS ON FESTIVE OCCASIONS. IN MY OPINION, AS PER INSTRUCTION NO. 1916 OF CBDT DATED 11/05/1994, THE JEWELLERY AND ORNAMENTS TO THE EXTENT OF 500 GMS IN THE CASE OF A MARRIED WOMEN MAY BE EXCLUDED FROM SEIZURE. HOWEVER, FACTS INVOLVED IN T HE CASE OF APPELLANT ARE DIFFERENT AND THEREFORE THE APPELLANT IS REQUIRED TO EXPLAIN THE SOURCES OF ABOVE AMOUNTS OF JEWELLERY WHICH WAS FOUND IN HER LOCKER. FIRSTLY TH E SUBMISSION OF THE AR OF THE APPELLANT IS THAT THE APPELLANT BEING A MARRIED WOM AN HAD ACCUMULATED THE SAID JEWELLERY OVER A PERIOD OF TIME. BUT THIS SUBMISSIO N OF THE APPELLANT'S AR IS OF VERY GENERAL NATURE AND NOT SPECIFIC AND THEREFORE THE S AME IS NOT ACCEPTABLE. FURTHER, THE AR HAS PLEADED ON DIFFERENT GROUND THAT IT IS EQUAL LY POSSIBLE THAT A MAJOR PART OF JEWELLERY WOULD HAVE BEEN RECEIVED BY THE APPELLANT DURING HER MARRIAGE AND SOME PART MAY ALSO HAVE BEEN PURCHASED OVER THE PERIOD O F HER MARRIAGE OUT OF HER HOUSEHOLD SAVINGS. BUT AGAIN THIS SUBMISSION OF THE AR OF THE APPELLANT IS OF VERY GENERAL NATURE AND NOT SPECIFIC. THE AR WITHOUT PRE JUDICE TO HIS ABOVE PLEA HAS ALSO STATED THAT THE AO IN AY 2010-11 IN THE CASE OF APP ELLANT HAD MADE AN ADDITION OF RS. 11,54,050/- ON ACCOUNT OF INVOICES OF JEWELLERY REC OVERED DURING THE SEARCH PROCEEDINGS AND IT IS POSSIBLE THAT THE JEWELLERY F OUND IN POSSESSION OF THE APPELLANT WAS A PART OF THE JEWELLERY WHICH WAS EXPLAINED FOR AND PURCHASED IN 2010-11. THUS, AS PER THE AR THE ADDITION MADE BY THE AO IN THE YE AR UNDER CONSIDERATION IS A DOUBLE ADDITION AND HAS RESULTED IN DOUBLE TAXATION OF THE SAME AMOUNT. BUT THIS SUBMISSION OF AR OF THE APPELLANT IS AGAIN NOT ACCE PTABLE. IN MY OPINION, THIS IS THE APPELLANT WHO KNOWS THE SOURCES OF JEWELLERY OF RS. 6,71,113/- WHICH WAS FOUND BY THE DEPARTMENT FROM HER LOCKER. THE APPELLANT HAS N OT FURNISHED ANY EVIDENCES TO ESTABLISH THAT THIS JEWELLERY OF RS. 6,71,113/- WAS PART OF THE JEWELLERY OF RS. 11,54,050/- AS PER THE INVOICES AND WHICH WAS ADDED BY THE AO TO HER TOTAL INCOME BEING UNEXPLAINED INVESTMENT. IN MY OPINION, THE AP PELLANT HERSELF IS NOT SURE THAT THE ITA NO. 3014/AHD/2014 (SMT. SUCHITRA S. DHANANI VS. ACIT) A.Y. 2011-12 - 3 - JEWELLERY OF RS. 6,71,113/- WAS WHETHER ACCUMULATED BY WAY OF GIFTS AND PURCHASES OVER THE PERIOD ARE SUCH JEWELLERY WAS PART OF THE JEWELLERY OF RS. 11,54,050/- WHICH WAS ADDED BY THE AO TO HER TOTAL INCOME. CONSIDERIN G ALL THESE FACTS, IT IS HELD THAT THE AO HAS CORRECTLY MADE ADDITION OF ABOVE AMOUNT OF RS. 6,71,113/- BEING UNEXPLAINED EXPENDITURE AND THEREFORE SUCH ADDITION IS CONFIRMED. THUS, THE GROUNDS OF APPEAL NO. 1 AND 2 OF THE APPELLANT ARE DISMISSE D. 4. WE HAVE HEARD BOTH THE PARTIES REITERATING THEIR RESPECTIVE STANDS. CASE FILE PERUSED. THE SOLE QUESTION THAT ARISES FOR OUR ADJ UDICATION IN THE INSTANT APPEAL IS AS TO WHETHER ASSESSEES JEWELLERY IN QUESTION NOT SEIZED DURING SEARCH COULD BE TAKEN AS EXPLAINED SINCE FALLING WITHIN THE PRESCRI BED QUANTITY UPTO 500 GRAMS AS PER CBDTS ABOVESTATED CIRCULAR DATED 11.05.1994 (S UPRA). WE FIND THAT THIS QUESTION IS NO MORE RES INTEGRA AS PER A CO-ORDINAT E BENCH DECISION IN ACIT VS. SHRI JERAMBHAI B. KHOKHARIYA ITA NO.2613/AHD/2009 D ECIDED IN ASSESSEES FAVOUR ON 05.11.2015 QUOTING HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN CIT VS. RATANLAL VYAPARILAL JAIN (2010) 235 CTR 568 (GU J) AS FOLLOWS: 7.2 THE CBDT INSTRUCTION NO.1916 DATED 11.05.1994 SUGGESTS THAT A FAMILY IS SUPPOSED TO HOLD CERTAIN JEWELLERY RECEIVED AT THE TIME OF MARRIAGES FROM PARENTS AND IN LAWS WITHIN THE LIMIT OF 500 GR. OF JEWELLERY FO R A MARRIED WOMAN, 250 GR. FOR UNMARRIED DAUGHTERS AND 100 GR. WITH UNMARRIED CHIL D. THOUGH, THE INSTRUCTION SPEAKS OF NOT SEIZING THE SAME DURING SEARCH OPERAT ION EXTENDED MEANING OF THE SAME SHOWS EXTENSION THAT THE JEWELLERY SHOULD BE TREATE D AS EXPLAINED ONE AND IS NOT TO BE TREATED AS UNEXPLAINED FOR THE PURPOSE OF INCOME TA X. HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS. RATANLAL VYAPARILAL JAIN ( 2010) 235 CTR 0568 (GUJ) HAS HELD AS UNDER: THOUGH IT IS TRUE THAT THE CBDT CIRCULAR NO. 1916, DT.11TH MAY, 1994 LAYS DOWN GUIDELINES FOR SEIZURE OF JEWELLERY AND ORNAME NTS IN THE COURSE OF SEARCH, THE SAME TAKES INTO ACCOUNT THE QUANTITY OF JEWELLE RY WHICH WOULD GENERALLY BE HELD BY FAMILY MEMBERS OF AN ASSESSEE BELONGING TO AN ORDINARY HINDU HOUSEHOLD. THE APPROACH ADOPTED BY THE TRIBUNAL IN FOLLOWING THE SAID CIRCULAR AND GIVING BENEFIT TO THE ASSESSEE, EVEN FOR EXPLAI NING THE SOURCE IN RESPECT OF THE JEWELLERY BEING HELD BY THE FAMILY IS IN CONSONANCE WITH THE GENERAL PRACTICE IN HINDU FAMILIES WHEREBY JEWELLERY IS GIFTED BY THE R ELATIVES AND FRIENDS AT THE TIME OF SOCIAL FUNCTIONS, VIZ., MARRIAGES, BIRTHDAYS, MA RRIAGE ANNIVERSARY AND OTHER FESTIVALS. THESE GIFTS ARE CUSTOMARY AND CUSTOMS PR EVAILING IN A SOCIETY CANNOT BE IGNORED. THUS ALTHOUGH THE CIRCULAR HAD BEEN ISSUED FOR THE PURPOSE OF NON- SEIZURE OF JEWELLERY DURING THE COURSE OF SEARCH, T HE BASIS FOR THE SAME RECOGNIZES CUSTOMS PREVAILING IN HINDU SOCIETY. IN THE CIRCUMS TANCES, UNLESS THE REVENUE SHOWS ANYTHING TO THE CONTRARY, IT CAN SAFELY BE PR ESUMED THAT THE SOURCE TO THE EXTENT OF THE JEWELLERY STATED IN THE CIRCULAR STAN DS EXPLAINED. THUS, THE APPROACH ADOPTED BY THE TRIBUNAL IN CONSIDERING THE EXTENT O F JEWELLERY SPECIFIED UNDER THE SAID CIRCULAR TOBE A REASONABLE QUANTITY, 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 . ITA NO. 3014/AHD/2014 (SMT. SUCHITRA S. DHANANI VS. ACIT) A.Y. 2011-12 - 4 - FROM GOING THROUGH THE ABOVE JUDICIAL PRONOUNCEMENT , IT IS AMPLE CLEAR THAT GOLD JEWELLERY FOUND TO THE EXTENT OF LIMIT MENTIONED IN THE CIRCULAR IS TREATED AS EXPLAINED AND THIS CAN BE CLEARLY APPLIED ON THE ASSESSEES C ASE, WHEREIN NO SPECIFIC DEDUCTION OF GOLD JEWELLERY POSSESSED BY FAMILY MEMBERS AND G RAND CHILDREN WAS GIVEN BY THE ASSESSING OFFICER FROM THE TOTAL GOLD JEWELLERY FOU ND AT THE TIME OF SEARCH AND SEIZURE OPERATION AND DIFFERENTIAL GOLD JEWELLERY OF 1924.2 2 GR. IS THE GOLD JEWELLERY POSSESSED BY THE FEMALE MEMBERS AND MINOR CHILDREN OF THE ASSESSEES JOINT FAMILY AND THIS QUANTITY OF 1924.22 GR. IS WELL WITHIN THE TOTAL LIMIT OF JEWELLERY AT 2100 GR. AS PER THE CBDT INSTRUCTION NO.1916 DATED 11.05.199 4. THEREFORE BY RESPECTFULLY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN CASE OF CIT VS. RATANLAL VYAPARILAL JAIN (SUPRA) AND IN VIEW OF OUR DISCUSSIONS MADE ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) SO AS TO WA RRANT INTERFERENCE AND ACCORDINGLY, THE GROUNDS TAKEN BY THE REVENUE ARE REJECTED. ACC ORDINGLY APPEAL OF THE REVENUE IS DISMISSED. IT IS THEREFORE CLEAR THAT GOLD JEWELLERY FOUND UPT O THE ABOVESTATED QUANTITY OF 500 GRAMS IS TO BE TREATED AS EXPLAINED AS PER T HE BOARDS CIRCULAR HEREINABOVE. WE THEREFORE DELETE THE IMPUGNED ADDITION OF RS.6,7 1,113/- MADE BY BOTH THE LOWER AUTHORITIES. 5. THIS ASSESSEES APPEAL IS ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 04 TH DAY OF JANUARY, 2018.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD: DATED 04/01/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0