SHRI KUNDALIK RAO SAIT MANOJ KUMAR, CHIDAMBARAM V. INCOME TAX OFFICER WRD 3, CUDDALORE

ITA 427/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7450 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 06-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N QUADIR HOSEYN
• Keywords: Gift; Set aside

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NOS.426 & 427/CHNY/2018 ' #$' / ASSESSMENT YEARS : 2012-13 & 2013-14 SHRI KUNDALIK RAO SAIT MANOJ KUMAR, 167, BAZAAR STREET, CHIDAMBARAM 608 001. PAN : AEWPM 8087 P V. THE INCOME TAX OFFICER, WARD 3, CUDDALORE. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI N. QUADIR HOSEYN, ADVOCATE ()&' * + / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT , # * -. / DATE OF HEARING : 18.07.2019 /0$ * -. / DATE OF PRONOUNCEMENT : 24.07.2019 / O R D E R BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY, FOR THE ASSESSMENT YEARS 2012-13 AND 20 13-14. THEREFORE, WE HEARD BOTH THE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2 I.T.A. NOS.426 & 427/CHNY/18 2. LET US FIRST TAKE THE ASSESSEES APPEAL FOR ASSE SSMENT YEAR 2013- 14. 3. SHRI N. QUADIR HOSEYN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERA TION IS ADDITION OF 21,51,120/- TOWARDS UNACCOUNTED PURCHASE OF JEWELLE RY. THE LD.COUNSEL SUBMITTED THAT THE ASSESSEE IS NOT PRESS ING THIS GROUND OF APPEAL. THE LD.COUNSEL FURTHER SUBMITTED THAT EXCE PT GROUND NO.3 WITH REGARD TO ADDITION OF 8,97,820/- TOWARDS UNACCOUNTED PURCHASE OF SILVER, ALL OTHER GROUNDS ARE NOT PRESSED. THE LD.COUNSEL HAS ALSO MADE AN ENDORSEMENT TO THAT EFFECT IN THE FILE. ACCORDINGL Y, OTHER THAN THE GROUND, WHICH RELATES TO ADDITION OF 8,97,820/- TOWARDS UNACCOUNTED PURCHASE OF SILVER, ALL OTHER GROUNDS ARE DISMISSED AS NOT PRES SED. 4. NOW COMING TO GROUND NO.3 WITH REGARD TO ADDITIO N OF 8,97,820/- . SHRI N. QUADIR HOSEYN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT DURING THE COURSE OF SURVEY OPERATION, THE REVENUE AUTHORITIES FOUND STOCK OF 18559.53 GRAMS OF SILVER JEWELLERY WHICH W ERE VALUED AT 8,79,820/-. ACCORDING TO THE LD. COUNSEL, THE ASSE SSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE SILVER JEWELL ERY BELONGS TO THE ASSESSEES WIFE, WHICH WAS RECEIVED AT THE TIME OF MARRIAGE AND THE SAME WAS KEPT IN SAFETY IN THE LOCKERS OF THE BUSIN ESS PREMISES. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER DISBELIEVED THE CLAIM OF THE ASSESSEE ONLY ON THE GROUND THAT THIS WAS NO T STATED DURING THE 3 I.T.A. NOS.426 & 427/CHNY/18 COURSE OF SURVEY OPERATION. ACCORDING TO THE LD. C OUNSEL, THE PERSONAL JEWELLERY OF THE ASSESSEE CANNOT BE TREATED AS STOC K-IN-TRADE OF BUSINESS, THEREFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN CON FIRMING THE DISALLOWANCE. 5. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT EVEN THOUGH THE ASSE SSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE JEWELLERIES ARE PER SONAL JEWELLERIES OF THE ASSESSEES WIFE AND NO SUCH STATEMENT WAS MADE DURI NG THE COURSE OF SURVEY OPERATION. MOREOVER, NO EVIDENCE WAS FILED BEFORE THE ASSESSING OFFICER SAYING THAT THE SILVER JEWELLERY BELONGS TO THE ASSESSEES WIFE. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEA LS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMS THAT THE SILVER JEWELLERY BELONGS TO HIS WIFE. THE ASSESSEE IS IN THE BUSINESS OF JEWELLERY. GIVING JEWELLERY TO THE RES PECTIVE GIRL CHILD BY THE PARENTS IS AN USUAL PRACTICE IN THIS PART OF COUNTR Y. THEREFORE, THE ASSESSING OFFICER CANNOT DENY THE CLAIM OF THE ASSE SSEE MERELY BECAUSE SUCH A PLEA WAS NOT MADE DURING THE COURSE OF SURVE Y OPERATION. THE QUANTUM OF SILVER JEWELLERY MAY DIFFER FROM PERSON TO PERSON WITH REGARD TO PERSONAL CAPABILITY OF EACH INDIVIDUAL. THE ASS ESSEE BEING IN THE BUSINESS OF JEWELLERY, THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT THE ASSESSEES WIFE MIGHT HAVE RECEIVED JEWELLERY VALUE D TO THE EXTENT OF 4 I.T.A. NOS.426 & 427/CHNY/18 8,79,820/-. AT THE TIME OF MARRIAGE, WHEN THE PARE NTS GIVE SRIDHAN IN THE FORM OF SILVER / GOLD JEWELLERY, THE GIRL CHILD MAY NOT HAVE ANY EVIDENCE OTHER THAN THE JEWELLERY. IN OTHER WORDS, EXPECTING MATERIAL EVIDENCE FOR THE GIFT RECEIVED BY THE ASSESSEES WI FE AT THE TIME OF MARRIAGE IS TANTAMOUNT TO ASKING FOR IMPOSSIBLE ONE TO PROVE BY THE ASSESSEE. IT IS NOT A PRACTICE PREVAILING IN THIS PART OF THE COUNTRY TO GIVE ANY EVIDENCE ALONG WITH THE GIFT TO THE GIRL CHILD AT THE TIME OF MARRIAGE WITH REGARD TO JEWELLERY. THEREFORE, EXPECTING EVI DENCE MAY NOT BE CORRECT AS FAR AS THE GIFT SAID TO BE RECEIVED BY T HE ASSESSEES WIFE AT THE TIME OF MARRIAGE. THEREFORE, THIS TRIBUNAL IS UNAB LE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, ORDERS OF B OTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ADDITION OF 8,79,820/- IS DELETED. 7. NOW COMING TO THE ASSESSMENT YEAR 2012-13, THE F IRST GROUND OF APPEAL IS WITH REGARD TO ADDITION OF 19,05,225/- BEING THE VALUE OF THE OPENING STOCK OF JEWELLERY. THE SECOND GROUND OF A PPEAL IS WITH REGARD TO ADDITION OF 9,36,041/- TOWARDS UNACCOUNTED PURCHASE OF JEWELLER Y. THE THIRD GROUND IS WITH REGARD TO ADDITION OF 6,40,000/- TOWARDS INVESTMENT IN REFINERY BUSINESS. 8. SHRI N. QUADIR HOSEYN, THE LD.COUNSEL FOR THE A SSESSEE SUBMITTED THAT DURING THE COURSE OF SURVEY OPERATIO N, THE ASSESSING OFFICER FOUND OPENING STOCK TO THE EXTENT OF 19,05,225/- AND UNACCOUNTED JEWELLERY TO THE EXTENT OF 9,36,041/- AND INVESTMENT IN THE 5 I.T.A. NOS.426 & 427/CHNY/18 REFINERY BUSINESS TO THE EXTENT OF 6,40,000/-. HOWEVER, THE SAME WERE NOT OFFERED IN THE RETURN OF INCOME EVEN THOUGH IT WAS UNEARTHED DURING THE COURSE OF SURVEY OPERATION. ACCORDING TO THE L D. COUNSEL, THE ASSESSEE HAS NOT PRODUCED ANY MATERIAL BEFORE THE A SSESSING OFFICER. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE FOR IN VESTMENT IN RESPECT OF THE ABOVE THREE ADDITIONS. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THESE ARE ALL THE MONEY RECEIVED ON REDEMPTION OF GOLD JEWELLERY BY THE RES PECTIVE PERSONS IN RESPECT OF THE ASSESSEES FATHERS BUSINESS. ACCOR DING TO THE LD. COUNSEL, DETAILS OF REDEMPTION WERE FOUND BY THE RE VENUE AUTHORITIES DURING THE COURSE OF SURVEY OPERATION. THE ASSESSI NG OFFICER CONVENIENTLY OMITTED THE MONEY RECEIVED BY THE ASSE SSEE WHICH WAS AVAILABLE FOR INVESTMENT, DURING THE COURSE OF SURV EY OPERATION. IN FACT, THE MATERIALS IMPOUNDED DURING THE COURSE OF SURVEY OPERATION ARE IN THE CUSTODY OF THE DEPARTMENT. ACCORDING TO THE LD. CO UNSEL, THE COPIES OF THOSE DOCUMENTS WERE FILED BEFORE THIS TRIBUNAL. R EFERRING TO THE PAPER- BOOK AND ALSO IMPOUNDED MATERIALS DURING THE COURSE OF SURVEY OPERATION, THE LD.COUNSEL SUBMITTED THAT THE ASSESS EE HAD 37,92,473.50 IN THE FORM OF CASH AS PER THE BOOKS, RECEIVED ON REDEMPTION OF JEWELLERY. ACCORDING TO THE LD. COUN SEL, WHEN THE DETAILS WERE AVAILABLE WITH THE DEPARTMENT IN THE FORM OF I MPOUNDED DOCUMENTS, THIS WAS NOT CONSIDERED BY THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS). 6 I.T.A. NOS.426 & 427/CHNY/18 9. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE SUBMITT ED BEFORE THE ASSESSING OFFICER THAT SOURCE FOR INVESTMENT IN JEW ELLERY BUSINESS AND REFINERY BUSINESS WAS FROM THE REDEMPTION OF MONEY RECEIVED FROM HIS LATE FATHERS PAWN BROKING BUSINESS. ACCORDING TO THE LD. D.R., THE ASSESSEE HAS NOT FILED THE COPIES OF RETURN FILED B Y THE ASSESSEES FATHER TO ASCERTAIN THE ACTUAL AVAILABILITY OF THE FUNDS. THE ASSESSEE HAS NOT FILED ANY WEALTH-TAX RETURN ALSO. DURING THE COURS E OF SURVEY OPERATION, THE ASSESSEE CLAIMED THAT THE OPENING STOCK REPRESE NTS HIS OWN OLD JEWELLERY. HOWEVER, ON EXAMINATION, ACCORDING TO T HE LD. D.R., THE ASSESSEE MADE STATEMENT THAT THE INITIAL CAPITAL WA S OUT OF THE REDEMPTION AMOUNT MADE FROM HIS FATHERS PAWN BROKI NG BUSINESS. THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FOUND THAT THE STAND TAKEN BY THE ASSESSEE IS AN AFTERTHOUGHT. 10. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEES FATHER WAS IN PAWN BROKING BUSINESS. THE ASSESSEE MADE A STATEMENT DURING THE COURSE OF EXAMINATION T HAT THE REDEMPTION AMOUNT RECEIVED FROM HIS LATE FATHERS PAWN BROKING BUSINESS WAS AVAILABLE FOR MAKING INVESTMENT IN THE JEWELLERY AN D REFINERY BUSINESS. THE MATERIAL FOUND DURING THE COURSE OF SURVEY OPER ATION, WHICH WAS IMPOUNDED BY THE REVENUE AUTHORITIES, DISCLOSES THE AVAILABILITY OF FUNDS 7 I.T.A. NOS.426 & 427/CHNY/18 TO THE EXTENT OF 37,92,473.50. THIS FACT IS NOT IN DISPUTE. THEREF ORE, THE REDEMPTION AMOUNT WAS VERY MUCH AVAILABLE WITH THE ASSESSEE FOR MAKING INVESTMENT IN THE JEWELLERY BUSINESS AND REF INERY BUSINESS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE AMOUNT RECEIVED BY THE ASSESSEE BY WAY OF REDEMPTION OF JE WELLERY FROM THE ASSESSEES FATHERS PAWN BROKING BUSINESS WAS AVAIL ABLE FOR MAKING INVESTMENT TO THE EXTENT OF 19,05,225/- WHICH WAS ADDED AS OPENING STOCK OF JEWELLERY AND ALSO UNACCOUNTED PURCHASE TO THE EXTENT OF 9,36,041/- APART FROM INVESTMENT TO THE EXTENT OF 6,40,000/- IN THE REFINERY BUSINESS. IN VIEW OF THE AVAILABILITY OF FUNDS ESTABLISHED BY THE ASSESSEE ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SURVEY OPERATION, WHICH WAS IMPOUNDED BY THE REVENUE AUTHO RITIES, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF BOTH THE AUTHORITIES BELOW. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ENTIRE ADDITION IS DELETED. 11. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE COURT ON 24 TH JULY, 2019 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 24 TH JULY, 2019 8 I.T.A. NOS.426 & 427/CHNY/18 KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A), PUDUCHERRY 4. PRINCIPAL CIT, PUDUCHERRY 5. 4#7 (- /DR 6. 8' 9 /GF.