Jitendra Tirthani, Udaipur V. ACIT, Central Circle-2, Udaipur

ITA 347/JODH/2023

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 4936 (ITAT-JODHPUR)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-02-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 12-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR MAHAR
• Assessee Lawyers: P.C. PARWAL
• Section: 69; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE SH. SANDEEP GOSAIN, JUDICIAL MEMBER AND DR. M. L. MEENA, ACCOUNTANT MEMBER I.T.A. No.347/Jodh/2023 Assessment Year: 2017-18 Jitendra Tirthani 101, Vardhman Complex Bhupalpura Udaipur, Rajasthan. [PAN:ACXPT2320F] (Appellant) Vs. ACIT, Central Circle-2, Udaipur. (Respondent) Appellant by Sh. P. C. Parwal, CA. Respondent by Sh. Manoj Kumar Mahar, CIT DR Date of Hearing 21.02.2024 Date of Pronouncement 12.03.2024 ORDER Per: Dr. M. L. Meena, AM: The captioned appeal is filed by the assessee against the order of the Commissioner of Income (Appeal) [in brevity the CIT(A)],Udaipur-2, order dated 27.08.2023for A.Y. 2017-18. Challenging therein the addition confirmed by the ld. CIT(A) and taxing the income u/s 115BBE of the Act, 1961. 2. Ground No. 1 is not pressed and so, dismissed as not pressed. 3. In ground no. 2, the assessee has challenged the ld. CIT(A)’s order in confirming the addition of Rs.1,52,192/- on account of jewellery found and I.T.A. No.347/Jodh/2023 Assessment Year: 2017-18 2 seized during the course of search and being treated the same as unaccounted unexplained income u/s 69 of the Act. 4. The assessee is one of the AOP members of Mahendra Tak Group where a search was carried out on 21.03.2017. In search, jewellery weighing 1002.84 gms was found claimed to be belonging to the assessee family comprises of one married lady, one unmarried lady and two male members. The AO has accepted 950 gms of jewellery as explained as per the CBDT instructions, and made addition of balance 52.84 gms of jewellery valued at Rs.1,52,I92/- u/s 69 of the Act which has been confirmed by the Ld. CIT(A). 5. The ld. AR reiterated the submissions filed before the Ld. CIT (A) as per record. The ld. AR argued that the ld. CIT (A) has erred in confirming the addition of Rs.1,52,192/-on account of jewellery found and seized during the course of search and treated the same as unaccounted unexplained money u/s69 of the IT Act, 1961 and added to the total income of the assessee u/s115BBE of the IT Act, 1961 without any basis. He further submitted that during search no documentary evidence was found regarding purchase of any jewellery by the assessee or his family members. In fact, all the jewellery found in search were acquired at the time of marriage or on other social functions. This fact was stated by the assessee in his statement u/s131 where in reply to question no 6, 17 &19 as reproduced at page 11 of CIT (A) order, he categorically stated that most of the jewellery was received in marriage, birth of child and few from the I.T.A. No.347/Jodh/2023 Assessment Year: 2017-18 3 savings. The jewellery found was only 1002.84 gms which is marginally higher than 950 gms as considered reasonable as per the CBDT Instruction No. 1916. The Ld. AR argued that because assessee and his wife are regularly assessed to tax and no evidence of purchase of jewellery was found in search, the entire jewellery be treated as explained. 6. In this connection, he placed reliance on the decision of Hon'ble Delhi Court in case of Ashok Chaddha Vs. ITO 69 DTR 82 where gold jewellery weighing 906 gms found in search was held to be not substantial as being `Stri Dhan' of the assessee's wife and accordingly addition u/s 69A was deleted. Again, the Hon'ble ITAT Delhi Bench in case of Vibhu Aggarwal Vs. DCIT (2018) 170 ITD 580 where jewellery of 2531.50 gms was found at the assessee's residential premises, considered the same as reasonable by holding that in view of CBDT Instruction No. 1916 dt. 11th May, 1994, the excess jewellery found in the case of assessee, his parents, his wife, their children and the HUF was very nominal and was very much reasonable keeping in mind the riches and high status and more customary practices. Therefore, only considering 950 gms of jewellery as reasonable possession in view of CBDT Instruction No.1916 dt. 11.05.1994 is not justified and therefore, the addition confirmed by CIT (A) be deleted. 7. Per contra, the Ld. DR relied on the Impugned order. I.T.A. No.347/Jodh/2023 Assessment Year: 2017-18 4 8. We heard the rival contention, perused the material available on the record, impugned order, and case laws. Admittedly, the jewellery found during search was only 1002.84 gms which was marginally higher than 950 gms as considered reasonable vide CBDT Instruction No. 1916. In our view, considering the peculiar facts of the case, and status of the appellant that he and his wife are regularly assessed to tax and again no evidence of purchase of jewellery was found in search, the the marginally balance/extra 52.84 gms of jewellery valued at Rs.1,52,I92/- could be treated as explained in the interest of justice in absence of any adverse material evidence on record bought by the department authorities. Our view gets support from the view of the ITAT Delhi Bench in case of Vibhu Aggarwal Vs. DCIT (2018) 170 ITD 580 where jewellery of 2531.50 gms was found at the assessee's residential premises, considered the same as reasonable by holding that in view of CBDT Instruction No. 1916 dt. 11th May, 1994, the excess jewellery found in the case of assessee, his parents, his wife, their children and the HUF was very nominal. 9. Accordingly, we hold that the Ld. CIT(A) was not justified in confirming the addition of Rs.1,52,192/- on account of jewellery and as such, the same is deleted. Thus, ground no. 2 of the appeal is allowed. 10. In ground no. 3, the appellant challenged that the Ld. CIT (A), has erred in confirming the addition of Rs.1,00,000/- made on account of cash found & seized during the course of search and treated the same as unaccounted I.T.A. No.347/Jodh/2023 Assessment Year: 2017-18 5 unexplained money U/s 69A of the IT Act, 1961 and taxing the same U/s 115BBE of the IT Act, 1961. 11. In search cash of Rs.10,27,945/- was found. In reply to question no.14 of the statement recorded u/sI31 of the Act, assessee stated that Rs.30,000/- is out of past saving but for remaining amount he failed to explain the source. Thereafter, in reply to question no. 16 he stated that Rs.10,00,000/- is his undisclosed income which will be offered under PM GKY scheme. In the assessment proceedings it was explained that cash of Rs.9,00,000/ belongs to AOP M/s Saurabh Tak & Party for which affidavit of the party was filed. Accordingly, A.O made addition of Rs.9,00,000/- u/s 69A in the hands of M/s Saurabh Tak & Party on protective basis. However, in case of assessee, A.O made addition of Rs. 10,00,000/- u/s 69A of the Act. 12. The Ld. CIT (A) after referring to the decision oh Hon'ble Supreme Court in case of Pullangode Rubber Produce Co. Ltd. vs State of Kerala 91ITR at Page 18 held that it is open to the assessee who made the admission to show that it is incorrect. Since A.O has considered Rs.9,00,000/- in hands of AOP which is as per the audited books of AOP, the addition of Rs.9,00,000/- was deleted. However, for remaining Rs.1,00,000/- it was held that it is part of disclosure made in the statement and assessee has not furnished any cogent evidence that it belongs to other family members and therefore addition of Rs.1,00,000/- was confirmed. I.T.A. No.347/Jodh/2023 Assessment Year: 2017-18 6 13. It noted that the stand of Ld. CIT (A) is contradictory in itself. On the one hand he accepts that it is open to the assessee who made the addition to show that it is incorrect but in confirming the addition reliance was placed on the statement ignoring the fact that assessee has explained that he and his wife have declared cash income of Rs.15,12,170/- between A.Y 2014-15 to 2016-17 as reproduced at page 16 of the CIT(A) order and assessee has declared total income of Rs.5,16,810/- in the year under consideration. Therefore, the cash savings of Rs.1,27,945/- out of such income cannot be considered unreasonable Ld. CIT (A) and therefore the addition of Rs.1,00,000/-sustained by the ld. CIT(A) is unjustified. The ld. AR placed that the addition of Rs.1,00,000/- confirmed by CIT(A) be deleted. 14. The ld. DR relied on the impugned order. 15. We have heard the rival contention and perused the material available on record. It is not disputed that the assessee has explained that he and his wife have declared cash income of Rs.15,12,170/- between A.Y 2014-15 to 2016-17 as reproduced on page 16 of the CIT(A) order and further, the assessee has declared total income of Rs.5,16,810/- in the year under consideration. Under the facts and circumstances, the cash savings of Rs.1,27,945/- out of such income cannot be considered unreasonable and therefore, in our view, the addition of Rs.1,00,000/- confirmed by the CIT(A) is unjustified. I.T.A. No.347/Jodh/2023 Assessment Year: 2017-18 7 16. Accordingly, we accept the grievance of the appellant genuine and as such, the addition of Rs.1,00,000/- is deleted. 17. In the result, the appeal of the assessee bearing ITA No. 347/Jodh/2023 is allowed. Order pronounced in the open court on 12.03.2024 Sd/- Sd/- (SANDEEP GOSAIN) (Dr. M. L. Meena) Judicial Member Accountant Member AKV (On Tour) Copy of the order forwarded to: (1) The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order