DCIT, CHENNAI V. Shanmugapriya, CHENNAI

ITA 357/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8831 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 21-06-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 16-02-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: K M MOHANDASS
• Keywords: Valuation report

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.357/MDS/2016 / ASSESSMENT YEAR : 2012-13 THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE I(2) CHENNAI VS. SMT. SHANMUGAPRIYA NO.14, RANGANATHAN STREET T. NAGAR, CHENNAI 600 017 [PAN AKMPP 3591 K ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI SUPRIYO PAL JCIT /RESPONDENT BY : SHRI K.M.MOHANDASS, CA / DATE OF HEARING : 21 - 0 6 - 2016 ! / DATE OF PRONOUNCEMENT : 15 - 0 7 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-18, CHENN AI, DATED 23.9.2015 AND PERTAINS TO ASSESSMENT YEAR 2012-13 . 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDITION OF ` 53,63,591/- TOWARDS UNDISCLOSED INVESTMENT IN JEWE LLERY. ITA NO.357/16 :- 2 -: 3. SHRI SUPRIYO PAL, LD. DEPARTMENTAL REPRESENTATIVE S UBMITTED THAT DURING THE COURSE OF SEARCH OPERATION IN THE P REMISES OF THE ASSESSEE, UNACCOUNTED GOLD JEWELLERY OF 6136.900 GM S WAS SEIZED. THE GOVERNMENT APPROVED VALUER VALUED THE COST OF T HE JEWELLERY AT ` 1,69,36,121/-. IN THE VALUATION REPORT, IT WAS SHO WN THAT JEWELLERY VALUING ` 16,55,092/- AND ` 37,08,499/- BELONGS TO THE ASSESSEE. DURING THE COURSE OF SEARCH OPERATION A STATEMENT W AS RECORDED FROM SHRI SARAVANA ARUL SELVARATHINAM, HUSBAND OF THE A SSESSEE. ACCORDING TO THE LD. DR, NO WEALTH TAX RETURN WAS F ILED BY THE ASSESSEE AND HER HUSBAND. THE ONLY EXPLANATION OF THE ASSESSEE WAS THAT HER HUSBAND SHRI SARAVANA ARUL SELVARATHINAM I NHERITED JEWELLERY FROM HIS MOTHER LATE SMT. PREMA. THE LD. DR FURTHE R SUBMITTED THAT THE ASSESSEES MOTHER-IN-LAW LATE SMT. PREMA DISCL OSED THE JEWELLERY IN THE VOLUNTARY DISCLOSURE OF INCOME SCHEME, 1997 (VDIS). HOWEVER, THE JEWELLERY DISCLOSED IN THE VDIS AND TH E JEWELLERY ACTUALLY FOUND DURING THE COURSE OF SEARCH OPERATIOO ARE TOT ALLY DIFFERENT. ACCORDING TO THE LD. DR, THE ITEM OF JEWELLERY MENT IONED IN THE VDIS DECLARATION DOES NOT MATCH WITH THE JEWELLERY SEIZE D DURING THE COURSE OF SEARCH OPERATION. THEREFORE, THE ASSESSING OFFI CER CAME TO THE CONCLUSION THAT THE JEWELLERY FOUND DURING THE COUR SE OF SEARCH OPERATION AND SEIZED BY THE REVENUE AUTHORITIES ARE NOT THE SAME JEWELLERY WHICH WAS DISCLOSED BY THE ASSESSEES MO THER-IN-LAW LATE ITA NO.357/16 :- 3 -: SMT. PREMA UNDER THE VDIS. ACCORDINGLY, THE ASSESS ING OFFICER BROUGHT TO TAX A SUM OF ` 53,63,591/-. HOWEVER, ON APPEAL BY THE ASSESSEE, THE CIT(A) FOUND THAT 3650 GMS OF JEWELLE RY WAS DECLARED UNDER VDIS, THEREFORE, TO THAT EXTENT NO ADDITION C OULD BE MADE. REFERRING TO THE MISMATCH OF THE ITEM OF JEWELLERY FOUND DURING THE COURSE OF SEARCH OPERATION AND THE ONE WHICH WAS DE CLARED IN THE VDIS, THE ASSESSEE CONTENDED BEFORE THE CIT(A) THA T THE JEWELLERY INHERITED WAS CONVERTED INTO NEW ITEM AND PART OF J EWELLERY WAS MELTED INTO 24 CARAT GOLD BAR AND IT WAS KEPT IN TH E RESIDENCE TO BE INTRODUCED IN THE JEWELLERY BUSINESS. ACCORDINGLY, THE CIT(A) DIRECTED THE ASSESSING OFFICER TO GIVE CREDIT FOR THE QUANTU M OF JEWELLERY DISCLOSED UNDER VDIS. ACCORDING TO THE LD. DR, SIN CE THE ASSESSEE CLAIMED THAT THE BULLION FOUND AT THE RESIDENCE WAS STOCK-IN-TRADE OF THE JEWELLERY BUSINESS, THE SAME HAS TO BE REFLECT ED IN THE BOOKS OF ACCOUNT OF THE JEWELLERY BUSINESS. THEREFORE, THE GOLD BAR FOUND DURING THE COURSE OF SEARCH OPERATION AT THE RESIDE NTIAL PREMISES CANNOT BE PART OF THE JEWELLERY DECLARED BY THE AS SESSEES MOTHER-IN- LAW UNDER VDIS. THE LD. DR FURTHER SUBMITTED THAT T HE VALUE OF THE JEWELLERY SAID TO BE DECLARED BY THE ASSESSEES MO THER-IN-LAW IS AN AFTERTHOUGHT. THE LD. DR FURTHER SUBMITTED THAT TH E ASSESSEE HERSELF CLAIMED BEFORE THE ASSESSING OFFICER THAT THE JEWEL LERY BELONGS TO HER MOTHER-IN-LAW TO THE EXTENT OF 2083.80GMS WAS MELTE D AND UTILIZED FOR ITA NO.357/16 :- 4 -: BUSINESS OF GOLD JEWELLERY. THEREFORE, THE CIT(A) OUGHT NOT TO HAVE DIRECTED THE ASSESSING OFFICER TO GIVE CREDIT TO TH E JEWELLERY DECLARED UNDER THE VDIS BY THE ASSESSEES MOTHER-IN-LAW. 4. ON THE CONTRARY, SHRI K.M.MOHANDASS, LD. REPRESENTA TIVE FOR THE ASSESSEE SUBMITTED THAT ADMITTEDLY, THERE WAS A SEARCH OPERATION IN THE PREMISES OF THE ASSESSEE AND THE REVENUE A UTHORITIES FOUND GOLD JEWELLERY TO THE EXTENT OF 6136.900 GMS. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT HER HUSBAND SHRI SARAVANA ARUL SELVARATHINAM INHERITED THE PART OF THE JEWELLERY F ROM HIS MOTHER LATE SMT. PREMA. ACCORDING TO THE ASSESSEE, HER MOTHER -IN-LAW LATE SMT. PREMA DISCLOSED 3650 GMS OF GOLD JEWELLERY UNDER VD IS, THEREFORE, THE JEWELLERY DECLARED UNDER THE VDIS BY THE ASSESSEE S MOTHER-IN-LAW LATE SMT. PREMA HAS TO BE GIVEN CREDIT WHILE COMPUT ING THE INVESTMENT IN THE GOLD JEWELLERY. THIS WAS EXACTLY DIRECTED BY THE CIT(A). THEREFORE, NO INTERFERENCE S CALLED FOR IN THE ORDER OF THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. DURI NG THE COURSE OF SEARCH OPERATION IN THE PREMISES OF THE ASSESSEE, REVENUE AUTHORITIES FOUND 6136.900 GMS OF GOLD JEWELLERY. THE REVENUE AUTHORITIES FOUND THAT WEALTH TAX RETURN WAS NOT FILED EITHER BY THE ASSESSEE OR HER ITA NO.357/16 :- 5 -: HUSBAND SHRI SARAVANA ARUL SELVARATHINAM OR BY HER MOTHER-IN-LAW, LATE SMT. PREMA. HOWEVER, THE FACT REMAINS THAT LA TE SMT. PREMA, MOTHER-IN-LAW OF THE ASSESSEE DECLARED 3650 GMS OF GOLD JEWELLERY UNDER VDIS. THE ASSESSING OFFICER REJECTED THIS CL AIM OF THE ASSESSEE ON THE GROUND THAT THE ITEM OF JEWELLERY MENTIONED IN THE VDIS DOES NOT MATCH WITH THE INVENTORY OF THE JEWELLERY SEIZE D DURING THE COURSE OF SEARCH OPERATION. THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT FASHION IN JEWELLERY IS CHANGING DAY BY DAY AND IT IS THE PRACTICE OF EVERY LADY TO CHANGE THE PATTERN OF JEWELLERY IN AC CORDANCE WITH THE LATEST TREND. THEREFORE, WHAT IS TO BE SEEN IS WHE THER THE QUANTUM OF JEWELLERY DECLARED MATCHES WITH THE JEWELLERY FOUND DURING THE COURSE OF SEARCH OPERATION. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEES MOTHER-IN-LAW LAT E SMT. PREMA DECLARED 3650 GMS OF GOLD JEWELLERY UNDER VDIS, THE ASSESSING OFFICER IS EXPECTED TO GIVE CREDIT TO THE JEWELLERY TO THE EXTENT OF 3650 GMS. IN OTHER WORDS, THE JEWELLERY DECLARED BY THE ASSE SSEES MOTHER-IN- LAW LATE SMT. PREMA IS VERY MUCH AVAILABLE AT THE R ESIDENCE OF THE ASSESSEE. THEREFORE, THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT THE CIT(A) HAS RIGHTLY DIRECTED THE ASSESSING OFFIC ER TO GIVE CREDIT TO THE JEWELLERY DECLARED UNDER THE VDIS BY THE ASSES SEES MOTHER-IN- LAW LATE SMT. PREMA. THEREFORE, THIS TRIBUNAL DO N OT FIND ANY REASON ITA NO.357/16 :- 6 -: TO INTERFERE WITH THE ORDER OF THE CIT(A) AND ACCOR DINGLY THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 15 TH JULY, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF