Shri Jaswinder Singh Sethi, Baroda V. The Dy.CIT, Central Circle-2, Baroda

ITA 3565/AHD/2015

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 7749 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2005-2006
• Appeal Filed On: 18-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PANKAJ KANT TANDOR
• Keywords: Unexplained investment; Valuation report
• Section: 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 3565/AHD/2015 / ASSESSMENT YEAR: 2005-06 SHRI JASWINDER SINGH SETHI 45, GREEN PARK SOCIETY MAKARPURA, BARODA. PAN : ACBPS 278 J VS DCIT, CENT.CIR.2 BARODA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI PANKAJ KANT TANDOR, AR REVENUE BY : SHRI MUDIT NAGPAL, SR.DR / DATE OF HEARING : 01/08/2018 /DATE OF PRONOUNCEMENT : 27/09/2018 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)- 12, AHMEDABAD DATED 20.8.2015 FOR THE ASSESSMENT YEAR 2005-06. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION OF RS.5,80, 260/- WHICH WAS ADDED BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN J EWELLERY. 3. BRIEF FACTS OF THE CASE ARE THAT SEARCH UNDER SE CTION 132 OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT AT THE RESIDEN TIAL PREMISES OF THE ASSESSEE ON 9.9.2004. DURING THE COURSE OF SEARCH, ORNAMENTS/JEWELLERY ITA NO.3565/AHD/2015 - 2 - VALUING AT RS.47,99,125/- WAS FOUND FROM THE LOCKER OF THE ASSESSEE. OWNERSHIP OF THE JEWELLERY WAS CLAIMED BY THE WIFE OF THE ASSESSEE, SMT. SATWINDER KAUR SETHI, AND THEREFORE, THIS AMOUNT WA S PROTECTIVELY ADDED IN THE HANDS OF THE ASSESSEE. ONE ROUND OF LITIGAT ION HAS ALREADY TRAVELLED UPTO THE TRIBUNAL IN ITA NO.2643/AHD/2009 DATED 31. 1.2014 AND THE TRIBUNAL REMITTED THIS ISSUE FOR RE-ADJUDICATION TO THE FILE OF LD.CIT(A). 4. IN ORDER TO TAKE NOTE OF THE FACTS MORE SCIENTIF ICALLY, WE DEEM IT APPROPRIATE TO TAKE NOTE OF THE FOLLOWING DETAILS S UBMITTED BY THE ASSESSEE IN TABULAR FORM, WHICH READS AS UNDER: NAME GROSS WEIGHT OF GOLD JEWELLERY IN GRAMS VALUED@ RS.571 PER GRAM AS ON 21/09/2004 DIAMOND JEWELLARY SILVER TOTAL RUPEES J.S.SETHI (HUF) 789.00 4,50,419 7,10,000 NIL 11,60,419 SMT. SATWINDER SETHI 1546.07 8,49,060 24,36,396 39,200 33,24,656 SHJ.S.SETHI 150.00 85,650 NIL NIL 85,650 MS.AVNEET KAUR 250.00 1,42,750 NIL NIL 1,42,750 MR. JASHANJIT SETHI 150.00 85,650 NIL NIL 85,650 TOTAL 2885.07 16,13,659 31,46,396 39,200 47,99,125 5. AS OBSERVED EARLIER, JEWELLERY INITIALLY WAS OWN ED AND EXPLAINED IN THE HANDS OF SMT. SATWINDER KAUR SETHI, WHO WENT BE FORE THE SETTLEMENT COMMISSION AND DECLARED OWNERSHIP OF THE JEWELLERY TO THE EXTENT OF ITA NO.3565/AHD/2015 - 3 - RS.33,24,656/- OUT OF TOTAL JEWLLERY. THE VALUATIO N WAS ACCEPTED TO THE EXTENT OF RS.22 LAKHS BY THE SETTLEMENT COMMISSION. DISPUTE BEFORE US ONLY RELATES TO JEWELLERY ATTRIBUTED OR CLAIMED AS BELONGING TO J.S.SETHI (HUF). THE ASSESSEE HAS CLAIMED 789 GRAMS OF JEWEL LERY WAS BELONGING TO J.S. SETHI (HUF). THE LD.CIT(A) HAS EXAMINED TH IS ISSUE IN DETAIL AND OBSERVED THAT HUF HAS FILED ITS RETURN AND ON PERUS AL OF INCOME-TAX RETURN FOR THE ASSESSMENT YEARS 2002-03 TO 2005-06, IT WOU LD REVEAL THAT IT WAS HAVING ORNAMENTS/JEWELLERY WEIGHING 316 GRAMS. THE LD.CIT(A) HAS GIVEN CREDIT OF THIS JEWELLERY AND TREATED THE BALANCE AS UNEXPLAINED. THE FINDING OF THE LD.CIT(A) ON THIS ISSUE IS WORTH TO NOTE. IT READS AS UNDER: 5. I HAVE GIVEN A CAREFUL CONSIDERATION TO THE FA CTS OF THE CASE. IT IS INDEED TRUE THAT THE CHART OF THE CLAIM OF THE O WNERSHIP OF THE GOLD ORNAMENTS SEIZED AS PER THE CHART ABOVE WAS SUBMITT ED BEFORE THE HONBLE SETTLEMENT COMMISSION. IT IS ALSO A FACT TH AT THE ADDITION IS MADE ONLY ON PROTECTIVE BASIS IN THE CASE OF THE PR ESENT ASSESSEE. THE PRIMARY ONUS OF EXPLAINING THE OWNERSHIP OF THE ORNAMENTS AND SUBSTANTIATING THE SOURCE THEREOF WAS THEREFORE, TH AT OF SMT. SATVINDER KAUR SETHI. NEVERTHELESS, IT IS ALSO TRUE THAT SMT. SATVINDER KAUR SETHI, BEFORE THE SETTLEMENT COMMISSION OWNED UP ONLY 33.20 LAKHS WORTH OF ORNAMENTS. BALANCE, AS EXPLAINED BEF ORE THE SETTLEMENT COMMISSION, THOUGH IMPLIEDLY ACCEPTED AS EXPLAINED BY SETTLEMENT COMMISSION, WOULD NEED EXAMINATION WITH RESPECT TO SOURCE THERE.). THEREFORE, LEAVING THE PERMISSIBLE OWNERSHIP CLAIMED BY THE CHILDREN (250 GMS. AND 150 GMS.), THE CLAIM OF OWNERSHIP OF JASWINDER SINGH-, SETHI (HUF) ONLY REMAINS FOR EXAM INATION, VERIFICATION AND DECISION BY ME. IT IS SEEN THAT AN PER THE RETURN OF INCOME FILED FOR A.YS, 2002-03 TO 2005-06 AVAILABLE ON PAGE- 55 TO 65 OF PAPER BOOK, THE HUF WAS HAVING GOLD ORNAMENTS /JEWELLERY WEIGHING 316 GMS. AS PER THE VALUATION REPORT DATED 20TH MAY, 1980 ENCLOSED WITH RETURN OF INCOME. IN VIEW OF THESE FA CTS, I CONSIDER IT FAIR AND REASONABLE TO GRANT A RELIEF OF 315 GMS. R IGHTLY CLAIMABLE AS BELONGING TO JASWINDER SINGH(HUF). ACCORDINGLY, AFT ER CONSIDERING THE POSSIBLE ACCRETION/AUGMENTATION OF HUF ASSETS, I CONSIDER IT ITA NO.3565/AHD/2015 - 4 - REASONABLE TO HOLD HALF OF THE ORNAMENTS/JEWELLERY WORTH RS.5,80,260/- AS REASONABLY EXPLAINED IN THE HANDS OF THE HUF. IN OVERALL CIRCUMSTANCES OF THE CASE, I THEREFORE, ALS O FIND IT REASONABLE TO HOLD THAT BALANCE HALF, CLAIMED NEITHER BY SMT. SATVINDER KAUR SETHI NOR REASONABLY CLAIMABLE BY THE CHILDREN OR H UF, WOULD NEED TO BE CONFIRMED IN THE HANDS OF THE ASSESSEE. IT IS THEREFORE, HELD THAT GOLD JEWELLERY AND DIAMOND, VALUED AT RS.5,80,260/- IS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AND IS HEREBY CONFIRME D. THE BALANCE PROTECTIVE ADDITION OF RS.42,18,865/-(RS.47,99,125/ - - RS.5,80,260/-) IS HELD TO BE EXPLAINED IN THE HANDS OF SMT. SATVIN DER SETHI OR CHILDREN OR IN THE HANDS OF THE HUF AND THEREFORE, NOT REQUIRED TO BE CONSIDERED IN THE HANDS OF THE ASSESSEE. 6. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. THE LD.COUNSEL FOR THE ASSES SEE HAS TAKEN VARIOUS ARGUMENTS INCLUDING VALUATION IN HANDS OF HUF WAS O F 10.5.1980. THEREAFTER A LOT OF JEWLLERY MUST HAVE BEEN ACCUMUL ATED. HE ALSO CONTENDED THAT ONCE THE JEWLLERY CLAIMED BY THE WIF E WAS EXPLAINED TO THE SETTLEMENT COMMISSION WHO HAS CONFIRMED THE ADDITIO N TO THE EXTENT OF RS.22 LAKHS, THE REMAINING COULD BE CONSTRUED AS EX PLAINED BY THE ASSESSEE. ON DUE CONSIDERATION OF THESE FACTS, WE ARE OF THE VIEW THAT THE ADDITION HAS NOT BEEN CONFIRMED BY THE LD.CIT(A) ON ACCOUNT OF VALUATION OF JEWELLERY IN THE HANDS OF THE ASSESSEE. THE HAR D FACT IS THAT 786 GRAMS OF JEWELLERY WAS BELONGING TO THE HUF. THE LD.CIT( A) PERUSED RETURNS OF INCOME FILED BY THE HUF UPTO THE ASSTT.YEAR 2005-06 AND OBSERVED THAT ONLY JEWELLERY REFLECTED IN THE RETURNS OF THIS HUF WAS 316 GRAMS. THE LD.CIT(A) HAS FURTHER GRANTED RELIEF TO THE ASSESSE E BY TREATING HALF OF 789 GRAMS AS EXPLAINED IN THE HANDS OF HUF. THE BALANC E WAS NOT BELONGED ANY FAMILY MEMBERS OR WIFE. IT REMAINED UNEXPLAINE D. THE LD.CIT(A) HAS ANALYZED THE FACTS IN DETAILS AND THEREAFTER CONFIR MED THE ADDITION. WE DO ITA NO.3565/AHD/2015 - 5 - NOT FIND ANY ERROR IN THIS ORDER OF THE LD.CIT(A) O N THIS ISSUE, WHICH IS CONFIRMED AND THE APPEAL OF THE ASSESSEE IS DISMISS ED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER, 2018. SD/- (WASEEM AHMED) ACCOUNTANT MEMBER SD/- (RAJPAL YADAV) JUDICIAL MEMBER