Yogesh Kumar Gupta, Noida V. Deputy Commissioner of Income-tax, New Delhi

ITA 3119/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4531 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 28-07-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 18-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES SINGSONG
• Keywords: Unexplained investment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3119/DEL/2015 ASSESSMENT YEAR: 2011-12 YOGESH KUMAR GUPTA, D-85, SECTOR-26, NOIDA. PAN: AFHPG9585Q VS. DCIT, 1E/5, JHANDEWALAN EXTN., NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SMT. RANO JAIN, ADVOCATE & PRANSHU SINGHAL, CA REVENUE BY : SHRI JAMES SINGSONG, SR.DR DATE OF HEARING : 25.10.2018 DATE OF PRONOUNCEMENT : 29.10.2018 ORDER PER R.K. PANDA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 9 TH JULY, 2014 OF THE CIT(A)-33, NEW DELHI RELATING TO ASSESSMENT YEA R 2011-12. 2. THE FIRST ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL RELATES TO THE ORDER OF THE CIT(A) IN SUSTAINING THE ADDITION ON ACCOUNT OF INVESTMENT IN JEWELLERY WEIGHING 249.6 GMS. OUT OF THE TOTAL JEWELLERY WEIGHING 849. 6 GMS. VALUED AT RS.20,89,762/- AS ON 21.01.2011 I.E., THE DATE OF SEARCH. ITA NO.3119/DEL/2015 2 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS AN INDIVIDUAL AND IS ENGAGED IN PROPRIETORSHIP BUSINESS OF CONFECTIONARY ITEMS UNDER THE NAME AND STYLE OF M/S NAUTY FOODS. A SEARCH OPERATION U/S 132 OF THE IT ACT WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF THE ASSESSEE. IN RESPONSE TO NOTICE U/S 153A, THE ASSESSEE FILED ITS RETURN OF INCOME ON 24 TH SEPTEMBER, 2011 DECLARING TOTAL TAXABLE INCOME OF RS.8,56,660/-. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER OBSERVED THAT AT THE TIME OF SEARCH, JEWELLERY VALU ED AT RS.20,89,762/- WAS FOUND FROM THE PREMISES OF THE ASSESSEE. HE FURTHER NOTED THA T THE ASSESSEE IN HIS STATEMENT RECORDED U/S 132(4) HAD SUBMITTED THAT HE HAD NEVER FILED ANY WEALTH-TAX RETURN. ON BEING ASKED BY THE ASSESSING OFFICER TO EXPLAIN THE SOURCE OF ACQUISITION OF SUCH JEWELLERY, THE ASSESSEE SUBMITTED THAT SAID JEWELLE RY WAS RECEIVED BY HIM FROM HIS IN- LAWS AND RELATIVES IN MARRIAGE AND FAMILY FUNCTIONS SUCH AS ANNIVERSARY, BIRTH DAY, ETC. THE CBDT INSTRUCTION NO.1916 DATED 11 TH MAY, 1994 WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER REJECTED THE EXPLANATION GIVEN BY THE ASSESSEE AND MADE ADDITION OF RS.20,89,762/- U/ S 69A OF THE IT ACT. 3.1. IN APPEAL, THE ASSESSEE REITERATED THE SAME SU BMISSIONS AS MADE BEFORE THE ASSESSING OFFICER. HOWEVER, THE LD.CIT(A) ACCEPTED JEWELLERY TO THE EXTENT OF 100 GMS IN THE HAND OF THE ASSESSEE AND 500 GMS. IN THE HAND OF HIS WIFE MRS. MEENA GUPTA AS EXPLAINED. HE, HOWEVER, SUSTAINED THE ADD ITION ON ACCOUNT OF THE BALANCE JEWELLERY ON THE GROUND THAT THE ASSESSEE HAS NOT G IVEN THE NAME OF SON AND DAUGHTER IN THE WRITTEN SUBMISSION AND IT IS NOT CLEAR AS TO WHETHER THEY ARE LIVING AT THE SAME ITA NO.3119/DEL/2015 3 PLACE WITH PARENTS. HE, THEREFORE, DID NOT ALLOW C REDIT FOR THE SON AND THE DAUGHTER. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE FILED COPY OF A ADHAAR CARD OF THE SON AND DAUGHTER OF THE ASSESSEE AND SUBMITTED THAT BOTH OF THEM WERE MINORS AT THE TIME OF SEARCH AND WERE LIVING WITH THE PARENTS AT THE TIME OF SEARCH. THEREFORE, IF THE CBDT INSTRUCTION NO.1916 DATED 11 TH MAY, 1994 IS FOLLOWED BOTH IN LETTER AND SPIRIT, T HEN, NO ADDITION IS CALLED FOR ON ACCOUNT OF JEWELLERY FOUN D AT THE TIME OF SEARCH SINCE THE TOTAL JEWELLERY FOUND WAS 849 GMS, WHEREAS AS PER THE CBD T INSTRUCTION NO.1916 DATED 11 TH MAY, 1994 THE ASSESSEE IS ENTITLED TO CREDIT FOR 9 50 GMS ON ACCOUNT OF SELF, HIS WIFE AND UNMARRIED DAUGHTER AND SON. SHE ACCORDINGL Y SUBMITTED THAT THE BALANCE ADDITION SUSTAINED BY THE CIT(A) SHOULD BE DELETED. 5. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDER OF THE CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THE ASSE SSING OFFICER, ON THE BASIS OF JEWELLERY FOUND AT THE TIME OF SEARCH WEIGHING 849. 6 GMS VALUED AT RS.20,89,762/- MADE ADDITION OF THE SAME U/S 69A OF THE IT ACT. WE FIND, IN APPEAL, THE LD.CIT(A) GAVE RELIEF TO THE EXTENT OF 600 GMS OF JEWELLERY T O THE ASSESSEE AS PER CBDT INSTRUCTION NO.1916 DATED 11 TH MAY, 1994 FOR WHICH THE REVENUE IS NOT IN APPEAL. HOWEVER, HE DID NOT GIVE CREDIT FOR THE JEWELLERY A TTRIBUTABLE TO THE UNMARRIED DAUGHTER AND SON OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE DID NOT GIVE THE NAME ITA NO.3119/DEL/2015 4 OF THE SON AND DAUGHTER AND IT WAS NOT CLEAR AS TO WHETHER THEY WERE STAYING WITH THE ASSESSEE OR NOT. THE LD. COUNSEL, AT THE TIME OF H EARING, FILED COPIES OF PAN CARD AND AADHAAR CARD IN THE NAME OF THE CHILDREN AND DREW T HE ATTENTION OF THE BENCH THAT THEY WERE MINORS AT THE TIME OF SEARCH AND WERE STAYING WITH THEIR PARENTS, THEREFORE, THERE WAS NO JUSTIFICATION ON THE PART OF THE CIT(A) TO M AKE THE ADDITION. WE FIND MERIT IN THE ABOVE ARGUMENT OF THE LD. COUNSEL FOR THE ASSES SEE. BEFORE THE ASSESSING OFFICER AS WELL AS THE CIT(A) THE ASSESSEE HAD REQUESTED FOR G IVING CREDIT OF JEWELLERY BELONGING TO THE ASSESSEE, HIS WIFE, UNMARRIED SON AND DAUGHT ER AS PER THE CBDT INSTRUCTION NO.1916 DATED 11 TH MAY, 1994. EVEN IF THE ASSESSEE HAD NOT GIVEN THE NAME OF THE SON AND DAUGHTER, THE ASSESSING OFFICER OR THE CIT(A) C OULD HAVE ASKED FOR THE SAME WHICH THEY HAVE NOT DONE. SINCE THERE IS NO DISPUT E TO THE FACT THAT THE ASSESSEE HAS A SON AND UNMARRIED DAUGHTER AT THE TIME OF SEARCH, T HEREFORE, THEY ARE ENTITLED TO THE CREDIT AS PER CBDT INSTRUCTION NO.1916 DATED 11 TH MAY, 1994. IT IS IMMATERIAL WHETHER THEY WERE STAYING WITH THEIR PARENTS OR NOT . THE REVENUE HAS ALSO NOT CHALLENGED THE RELIEF GRANTED BY THE CIT(A) TO THE EXTENT OF 600 GMS. FOR THE ASSESSEE AND HIS WIFE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT BENEFIT OF JEWELLERY BELONGING TO THE UNMARRIED DAUGHTER AN D SON SHOULD NOT HAVE BEEN DENIED. IF THIS CREDIT IS GIVEN, THEN, NO ADDITION IS CALLED FOR SINCE THE ASSESSEE IS ENTITLED FOR CREDIT TO THE TUNE OF 950 GMS WHEREAS THE JEWELLERY FOUND AT THE TIME OF SEARCH WAS 849 GMS ONLY. WE, THEREFORE, SET ASIDE T HE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION. ITA NO.3119/DEL/2015 5 7. SO FAR AS THE SECOND ISSUE RAISED BY THE ASSESSE E IN THE GROUNDS OF APPEAL IS CONCERNED, THE SAME RELATES TO THE ORDER OF THE CIT (A) IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF FOREIGN CURR ENCY FOUND AT THE TIME OF SEARCH AND TREATED BY THE ASSESSING OFFICER AS UNEXPLAINED INVESTMENT. 8. AFTER HEARING BOTH THE SIDES AND PERUSING THE MA TERIAL AVAILABLE ON RECORD, WE FIND DURING THE COURSE OF SEARCH THE ASSESSEE WAS F OUND IN POSSESSION OF VARIOUS FOREIGN CURRENCIES VALUED AT RS.2,23,036/-. SINCE THESE INVESTMENTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE AND CONSIDERING THE STATEMENT OF THE ASSESSEE RECORDED U/S 132(4) OF THE IT ACT THAT SUCH FOREIGN CURRENCY WAS PURCHASED BY HIM FROM HIS PERSONAL SAVING BANK ACCO UNT AND THE ASSESSEE DID NOT FURNISH ANY EXPLANATION DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER MADE ADDITION OF RS.2,23,036/- AS UNEXPLAIN ED INVESTMENT U/S 69A OF THE IT ACT. WE FIND, IN APPEAL, THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER IN THE ABSENCE OF ANY PLAUSIBLE EXPLANATION. HE, HOWEV ER, DIRECTED THE ASSESSING OFFICER TO APPLY THE CORRECT RATE OF FOREIGN CURRENCY AS ON THE DATE OF SEARCH TO ARRIVE AT THE UNACCOUNTED MONEY IN FOREIGN CURRENCY. IT IS THE S UBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT DESPITE SUCH DIRECTION GIVEN BY THE C IT(A), THE ASSESSING OFFICER HAS NOT DONE THE CORRECT VALUATION. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO ADOPT THE CORRECT VALUATION OF THE FOREIGN CURRENCIES FOUND O N THE DATE OF SEARCH. THE SECOND ISSUE RAISED IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.3119/DEL/2015 6 9. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 9.10.2018. SD/- SD/- (KULDIP SINGH) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMF BER DATED: 29 TH OCTOBER, 2018 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI