DCIT, CENTRAL CIR-1, COIMBATORE V. D SUNDARARAJAN, COIMBATORE

ITA 3431/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5041 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 17-12-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gift; Search and seizure; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , , [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ] ./I.T.A. NO.3431/CHNY/2018 ! / ASSESSMENT YEAR : 2016-2017. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, COIMBATORE VS. SHRI. D. SUNDARARAJAN, NO.2, SREE ANNAPOORNA FARM HOUSE, THONDAMUTHUR MAIN ROAD, VEDAPATTI, COIMBATORE 641 007. [PAN AUBPS 5061L] ( / APPELLANT) ( /RESPONDENT) '# $ % / APPELLANT BY : SHRI. R. CLEMENT RAMESH KUMAR, ADDL. CIT. &' '# $ % /RESPONDENT BY : NONE ( ) $ * /DATE OF HEARING : 16-04-2019 +,! $ * /DATE OF PRONOUNCEMENT : 20-05-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-18, CHE NNAI (CIT(A) FOR SHORT) DATED 02.08.2018 FOR THE ASSESSMENT YEAR (AY ) 2016-2017. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS ON FACTS OF THE CASE AND IN LAW. ITA NO. 3431/CHNY/2018 :- 2 -: 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN DIRECTING THE AO TO DELETE THE ADDITION OR UNEXPLAINED GOLD/DIAMOND JEWELLERY WORTH RS.L,20,80,986 /- 2.1 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH E FACT THAT THE AO HAD HELD THAT THE JEWELLERY WAS NOT THE SAME AFTER DUE VERIFICATION. 2.2 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED T HE FACT THAT THE ASSESSEE HAD NOT FILED THE WEALTH TAX RETURN D ESPITE HAVING JEWELLERY WORTH RS.1,16,90,084/- A PER THE APPROVED VALUER. 2.3 THE ID. CIT(A) ERRED IN NOT CONSIDERING THAT TH E ASSESSEE HAD NOT FURNISHED THE BILLS & VOUCHERS EVIDENCING T HE PURCHASE OF JEWELLERY. 2.4 THE ID.CIT(A) HAS ERRED IN ACCEPTING THE CONTENTION OF THE ASSESSEE THAT THE JEWELLERY WAS PURCHASE FROM CASH WITHDRAWALS, WITHOUT HAVING THE VERACITY OF THE CLA IM CHECKED Y THE AO BY CALLING FOR PROOF OF THE NEXUS BETWEEN THE CASH WITHDRAWN AND THE DATE OF PURCHASE OF JEWELLERY 2.5 THE ID CIT(A) HAS ERRED IN NOT CALLING FOR A RE MAND REPORT THOUGH THE ASSESSEE HAS NOT FURNISHED BEFORE THE AO THE BILLS OR VOUCHERS EVIDENCING PURCHASE OF THE JEWEL . 3. THE LEARNED CIT(A) E RED IN ALLOWING TELESCOPING AND DIRECTING THE AO TO DELETE THE ADDITION OF UNEXPLAI NED SILVER ARTICLES WORTH 8,03,684/- . 3.1 THE ID.CIT(A) HAS ERRED IN ACCEPTING THE CONTEN TION OF THE ASSESSEE THAT THE SILVER ARTICLES WERE INHERITED BY HIM FROM HIS MOTHER WITHOUT CONSIDERING THAT THE SEARCH WAS COND UCTED ON 08.09.2015 AND ALL THE AFFIDAVITS SUBMITTED BY THE ASSESSEE AR E PREPARED DURING THE MONTH OF OCTOBER 2015 CLEARLY ESTABLISHING IT WAS AS AN AFTERTHOUGHT BY THE ASSESSEE TO REITERATE HIS STANCE. 4 THE LEARNED CIT(A) ERRED IN ALLOWING TELESCOPING AND DIRECTING THE AO TO DELETE THE ADDITION OF U EXPLAI NED CASH AMOUNTING TO 7,34,500/- 4.1 THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FA CT THAT THE ASSESSEE HAD STATED IN THE SWORN STATEMENT THAT THE CASH FOUND IN THE RESIDENCE BELONGED TO HIS WIFE, HIS SON AND HIMSELF AND HAD BEEN WITHDRAWN FROM THEIR RESPECTIVE BANK ACCOU NTS BUT SUBSEQUENTLY COULD NOT FURNISH PROOF OF WITHDRAWAL AND CHANGED HIS STANCE CLAIMING THE CASH WAS AS PER HIS SOURCED INCOME/RECEIPTS. ITA NO. 3431/CHNY/2018 :- 3 -: 5. FOR THESE GROUNDS AND ANY OTHER GROUND INCLUDING AMENDMENT OF GROUNDS THAT MAY BE RAISED DURING THE COURSE OF THE APPEAL PROCEEDINGS, THE ORDER OF LEARNED CIT(AP PEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER:- THE RESPONDENT- ASSESSEE IS AN INDIVIDUAL. THERE WA S SEARCH AND SEIZURE OPERATION IN THE CASE OF M/S.SREE ANNAPOOR NA SREE GOWRISHANKAR HOTELS PVT. LTD AND GROUP COMPANIES O N 08.09.2015 RESPECTIVELY, ASSESSEE IS ONE OF THE DIRECTOR OF TH E SAID COMPANIES. THE SEARCH AND SEIZURE OPERATION WAS TAKEN PLACE EV EN IN THE RESIDENTIAL PREMISES OF THE ASSESSEE. DURING THE CO URSE OF SEARCH AND SEIZURE OPERATION FOLLOWING INCRIMINATING MATERIALS WERE FOUND. (I) PHYSICAL CASH OF D3,16,500/- VIDE ANN/BL/C/S-1, DATED 8.9.2015 (II) PHYSICAL CASH OF D4,18,000/- VIDE ANN/PS/SAL/S /CASH-1, DATED 8.9.2015 (III) 2321.800 GRAMS OF GOLD JEWELLERY VALUED AT D48,86,2 84/- BY THE APPROVED VLAUER AND 575.52 CARATS OF DIAMOND JEWELLERY VALUED AT D68,03,800/- BY THE APPROVED VA LUER VIDE ANN/BD/DS/JEWEL-F-1 &2, DATED 8.9.2015 (IV) 28.700 KGS OF SILVER ARTICLES VALUED AT D8,03,684/- VIDE ANN/BR/DS/SILVER/F/PAGE-1, DATED 4.11.2015 (TYPO ER ROR IN PAGE 8 OF ASSESSING OFFICER ORDER AS 98.100 KGS) (V) LOOSE SHEETS BEARING SL.NOS.3,4,5,7,9,11,16,25, 26 100 RELATING TO THE LIST OF LOAN CREDITORS AMOUNTING TO D1,02,00,000/- VIDE ANN/PS/SAL/S/ SL-1, DATED 08.09.2015. ITA NO. 3431/CHNY/2018 :- 4 -: BASED ON THESE INCRIMINATING MATERIALS ASSESSMENT W AS COMPLETED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL C IRCLE 1, COIMBATORE, (HEREINAFTER CALLED AO') VIDE ORDER DATED 31.12.2017 PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AT TOTAL INCOME OF D2,71,11,170/- AFTER MAKING THE FOL LOWING ADDITIONS. (I) UNEXPLAINED CASH U/S.69A RS.7,34,500 (II) UNEXPLAINED VALUE OF JEWELLERY U/S69A RS.1,20, 80,986 (III) UNEXPLAINED VALUE OF SILVER ARTICLES U/S.69A RS.8,03,684 (IV) UNEXPLAINED INCOME FROM UNIDENTIFIABLE SUNDRY CREDITORS. RS.1,02,00,000 4. BEING AGGRIEVED BY THE ABOVE ADDITIONS, AN APPEAL W AS PREFERRED BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDE R ALLOWED THE APPEAL BY DIRECTING THE LD. ASSESSING OFFICER TO DE LETE THE ADDITIONS ON ACCOUNT OF CASH FOUND GIVING HIM BENEFIT OF TELESC OPING ADDITION AGAINST THE INCOME DISCLOSED OF D1,02,00,000/-. EVE N IN RESPECT OF ADDITION MADE ON ACCOUNT OF UNEXPLAINED JEWELLERY, SILVER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GRANTED RELIE F ACCEPTING THE EXPLANATION FROM THE RESPONDENT- ASSESSEE THAT JEW ELLERY AND SILVER ARTICLES ARE GIFTS RECEIVED FROM THE FAMILY MEMBERS AND ALSO TELESCOPING AGAINST THE UNDISCLOSED INCOME IN RESPE CT OF D1,02,00,000/-. THUS, ADDITION ON ACCOUNT OF UNEX PLAINED JEWELLERY ITA NO. 3431/CHNY/2018 :- 5 -: OF D1,02,80,986/- WAS DELETED BY COMMISSIONER OF I NCOME TAX (APPEALS). 5. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE U S IN THE PRESENT APPEAL. LD. SR. DEPARTMENTAL REPRESENTATIV E SUBMITTED THAT ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) IS WITHOUT APPRECIATING THE FACTS AND EVIDENCE OF THE CASE AND LD. COMMISSIONER OF INCOME TAX (APPEALS) OUGHT NOT HAVE ACCEPTED THE EXPLANATION OF THE ASSESSEE THAT GOLD, DIAMOND, SILVER ARTICLES WERE RECEIVED FROM THE FAMILY MEMBERS ON ACCOUNT OF MARRIAGE, SINCE NO WEALTH TAX RETURN WERE FILED. FURTHER, LD. SR. DEPARTMENTAL R EPRESENTATIVE CONTENTED THAT LD. COMMISSIONER OF INCOME TAX (APPE ALS) OUGHT NOT HAVE GRANTED BENEFIT OF TELESCOPING OF UNDISCLOSED INCOME AGAINST SILVER ARTICLES AND CASH FOUND, IN AS MUCH AS, INCO ME SUSTAINED IN RESPECT OF UNPROVED SUNDRY CREDITORS. 6. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE DUE SERVICE OF NOTICE OF HEARING. 7. WE HEARD THE LD. SR. DEPARTMENTAL REPRESENTATIVE AN D PERUSED THE MATERIAL ON RECORD. FROM THE PERUSAL OF THE ORDERS OF LOWER AUTHORITIES, IT IS CLEAR THAT RESPONDENT ASS ESSEE HAD SURRENDERED A SUM OF D1,02,00,000/- AGAINST UNPRO VED SUNDRY CREDITORS APPEARING IN THE BOOKS OF ACCOUNTS. THER EFORE LD. ITA NO. 3431/CHNY/2018 :- 6 -: COMMISSIONER OF INCOME TAX (APPEALS) HAD FELL IN ER ROR IN GRANTING BENEFIT OF TELESCOPING SURRENDER OF UNDISCLOSED IN COME AGAINST ADDITION ON ACCOUNT OF EXPLAINED CASH, JEWELLERY A ND SILVER ARTICLES. THUS, THE ORDER OF THE LD. COMMISSIONER OF INCOME T AX (APPEALS) IS NOT BASED ON THE PROPER APPRECIATION OF EVIDENCES. THEREFORE WE REVERSE THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND RESTORE THE ASSESSMENT ORDER. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS A LLOWED. ORDER PRONOUNCED ON 20TH DAY OF MAY, 2019, AT CHEN NAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER - ) / CHENNAI . / DATED: 20TH MAY, 2019. KV $ &*01 21!* / COPY TO: 1 . '# / APPELLANT 3. ( 3* () / CIT(A) 5. 16 &*7 / DR 2. &' '# / RESPONDENT 4. ( 3* / CIT 6. 8 9) / GF