Sri.Sinkaram Muthuswamy Chettiar, Ernakulam V. The DCIT, Cochin

ITA 367/COCH/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96835 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 14-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 26-06-2015
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR; TRIPTHI BISWAS
• Assessee Lawyers: K K CHANDRASEKHARAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM I.T.A. NO.367/COCH/2015 ASSESSMENT YEAR : 2007-08 SHRI SINKARAM MUTHUSWAMY CHETTIAR, ARUN NIVAS, AYYAPPANKAVU, ERNAKULAM, KOCHI-682 018. [PAN: AHEPM 6323R] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI K.K.CHANDRASEKHARAN, ADV. REVENUE BY SMT. TRIPTHI BISWAS, CIT(DR) & SHRI K.P. GOPAKUMAR, SR. DR DATE OF HEARING 14/12/2015 DATE OF PRONOUNCEMENT 22/12/2015 O R D E R PER B.P.JAIN, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE LD. CIT(A)-IV, KOCHI DATED 30-03-2015 FOR THE ASSESSMENT YEAR 2007 -08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS)-II COCHIN IN SO FAR AS IT IS PREJUDICIAL TO THE APPELLANT IS OPPOSE D TO LAW, FACTS, WEIGHT OF EVIDENCE AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX(APPEALS)-II OUGHT TO HAVE HELD THAT IN FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION OF RS.4,35,540.00 BEING ALLEGED SALE VALUE OF GOLD IS UNJUST AND UNREASONAB LE. I.T.A. NO.367/COCH/2015 2 3. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE HONBLE TRIBUNAL MAY BE P LEASED TO ALLOW ALL THE GROUNDS AND GRANT SUCH OTHER APPROPRIATE RELIEFS WH ICH ARE DEEMED NECESSARY FOR THE INTEREST OF JUSTICE. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER AS PER PARA 8.1 OF THE ORDER OF THE LD. CIT (A) ARE REPRODUCED HEREINBELOW: 8.1 DISPOSAL OF GOLD ASSESSEE IN HIS BALANCE SH EET, CAPITAL ACCOUNTS HAD CLAIMED THAT HE WAS OWNING GOLD WEIGHING 1020 GRAM SINCE 17.7.1996 AND THE SAME HE SHOWN AS PART OF ASSETS IN AY 2005-06 AND A .Y. 2006-07 BUT IN THIS YEAR HE HAD NOT SHOWN THE SAME AS PART OF HIS ASSET S AND BALANCE SHEET, SO ONLY CONCLUSION IS HE SOLD THE SAME IN THIS YEAR BU T HE HAD NOT SHOWN ANY CAPITAL GAIN ON THE SAME, WHILE HE PURCHASED GOLD A T RATE OF RS.524 PER GRAM HE SOLD THE SAME AT RATE OF RS.951 SO THERE IS CAPI TAL GAIN OF RS.427 ON EACH GRAM WHICH IN TOTAL COME TO RS.435540/-. THE SAME I S ADDED BACK IN HIS TOTAL INCOME UNDER THE HEAD LONG TERM CAPITAL GAIN. ADDITION = RS.435540/-. 4. THE LD. CIT(A) CONFIRMED THE ACTION OF THE AS SESSING OFFICER. 5. THE LD. COUNSEL FOR THE ASSESSEE, MR. K.K. C HANDRASEKHARAN, ADVOCATE ARGUED THAT THE ASSESSEE IS OWNING THE GOLD WEIGHIN G 1020 GRAMS SINCE 17.07.1996 WHICH WAS INCLUDED IN THE WEALTH TAX STA TEMENT UPTO 31-03-2006. THERE IS NO DISPUTE IN THIS REGARD. IN THE SUBSEQUE NT YEARS, THE ASSESSEE DID NOT FILE WEALTH TAX RETURN AND ACCORDINGLY, HE FILED ON LY THE BALANCE SHEET OF HIS BUSINESS IN WHICH HE IS NOT REQUIRED TO DECLARE PER SONAL ASSETS WHICH, IN FACT, ARE I.T.A. NO.367/COCH/2015 3 A MATTER OF PERSONAL BALANCE SHEET. ACCORDINGLY, THE ASSESSEE FILED THE WEALTH TAX STATEMENT FOR THE YEAR ENDING 31-03-2007 RELATI NG TO ASSESSMENT YEAR 2008- 09 TILL ASSESSMENT YEAR 2010-11 WHEREIN GOLD ORNAME NTS WEIGHING 1020 GRAMS WERE INCLUDED AND NO DEFECT IN THE SAME HAS BEEN PO INTED OUT. MOREOVER, THE DEPARTMENT HAS SEIZED 1920.55 GRAMS OF GOLD JEWELLE RY WHICH INCLUDES 1020 GRAMS OF GOLD JEWELLERY AS MENTIONED HEREINABOVE. ACCORDINGLY, WHEN THE DEPARTMENT HAS ALREADY SEIZED THE GOLD JEWELLERY AN D IS IN THE POSSESSION OF THE DEPARTMENT, HOW CAN ONE SELL THE JEWELLERY. THE BR EAK-UP OF GOLD IN DIFFERENT HANDS OF THE FAMILY MEMBERS WAS ALSO GIVEN TO DIT A ND IS A MATTER OF RECORD. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE LD. CI T(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER AND THE SAME MAY BE DIRECTED TO BE DELETED. 6. THE LD. DR ON THE OTHER HAND RELIED UPON TH E ORDER OF BOTH THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT THE A SSESSEE HAS DECLARED GOLD JEWELLERY OF 1020 GRAMS IN HIS WEALTH TAX STATEMENT WITH EFFECT FROM 17/07/1996 TILL 31-03-2006. THE WEALTH TAX STATEMENTS ARE A M ATTER OF RECORD IS NOT A DISPUTE. THEREFORE, THE ASSESSEE HAS FILED THE WEAL TH TAX RETURN AND ACCORDINGLY, HE DID NOT FILE HIS PERSONAL BALANCE SHEET IN WHICH THE GOLD JEWELLERY IS NORMALLY I.T.A. NO.367/COCH/2015 4 DECLARED. THE GOLD JEWELLERY BEING PERSONAL ASSETS , CANNOT BE DECLARED IN THE BUSINESS BALANCE SHEET WHICH HAS BEEN FILED BEFORE BOTH THE AUTHORITIES BELOW. THE ONLY OBJECTION OF BOTH THE AUTHORITIES BELOW IS THAT THE GOLD JEWELLERY BEING PERSONAL ASSETS HAS NOT BEEN DECLARED IN THE BUSINE SS BALANCE SHEET OF THE ASSESSEE. THIS KIND OF APPROACH OF THE LD. CIT(A) AS WELL AS THAT OF THE ASSESSING OFFICER IS NOT CORRECT APPROACH SINCE PER SONAL ASSETS CAN NEVER BE DECLARED IN THE BUSINESS BALANCE SHEET. MOREOVER, THE ASSESSEE HAS FILED THE WEALTH TAX STATEMENT FOR THE IMPUGNED ASSESSMENT YE AR TILL THE ASSESSMENT YEAR 2010-11 IN WHICH GOLD JEWELLERY OF 1020 GRAMS. HAVE BEEN DECLARED. IT IS ALSO NOT IN DISPUTE THAT GOLD JEWELLERY WEIGHING 1020 GR AMS HAS BEEN SEIZED AND IS POSSESSED BY THE INCOME TAX DEPARTMENT WHICH IS ONL Y A PART OF 1920.55 GRAMS OF GOLD JEWELLERY AS MENTIONED IN THE ORDER OF THE LD. CIT(A) IN PARA 8.3.1 AND THEREFORE, IN THE CIRCUMSTANCES AND FACTS OF THE CA SE, THE GOLD JEWELLERY SEIZED AND POSSESSED BY THE INCOME TAX DEPARTMENT CANNOT B E SOLD BY THE ASSESSEE. ACCORDINGLY, THE LD. CIT(A) IS NOT AT ALL JUSTIFIED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER AND ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS REVERSED AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITIO N SO MADE. THUS ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED. I.T.A. NO.367/COCH/2015 5 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I.T.A. NO. 367/COCH/2015 IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 22-12-2015. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 22 ND DECEMBER, 2015 GJ COPY TO: 1. SHRI SINKARAM MUTHUSWAMY CHETTIAR, ARUN NIVAS, A YYAPPANKAVU, ERNAKULAM, KOCHI-682 018. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE-2, ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T.,COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN