Balasubramanian, CHENNAI V. ACIT, Madurai

ITA 451/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9091 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: D ANAND

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.451/MDS/2016 ' (' / ASSESSMENT YEAR : 2008-09 SHRI G. BALASUBRAMANIAN, C/O M/S PASS ASSOCIATES, NO.90, ARMENIAN STREET, 4 TH FLOOR, ORIENT CHAMBERS, CHENNAI - 600 001. PAN : AAXPB 7299 R V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, MADURAI. (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NO. 453/MDS/2016 ' (' / ASSESSMENT YEAR : 2008-09 SHRI G. MURUGAN, C/O M/S PASS ASSOCIATES, NO.90, ARMENIAN STREET, 4 TH FLOOR, ORIENT CHAMBERS, CHENNAI - 600 001. PAN : ABIPM 5319 F V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, MADURAI. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANTS BY : SHRI D. ANAND, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT 0 . 1$ / DATE OF HEARING : 03.05.2016 2!( . 1$ / DATE OF PRONOUNCEMENT : 17.06.2016 2 I.T.A. NO.451 & 453/MDS/16 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS FILED BY DIFFERENT ASSESSEES AR E DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER O F INCOME TAX (APPEALS) 19, CHENNAI, DATED 17.12.2015 AND PERTA IN TO ASSESSMENT YEAR 2008-09. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN BOTH THE APPEALS, WE HEARD THESE A PPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. SHRI D. ANAND, THE LD.COUNSEL FOR THE ASSESSEES, SUBMITTED THAT BOTH THE ASSESSEES ARE PARTNERS IN M/S SRI GAN APATHY SILKS, ENGAGED IN TEXTILE BUSINESS. ACCORDING TO THE LD. COUNSEL, THERE WAS A SEARCH OPERATION IN THE PREMISES OF ONE OF TH E PARTNERS AT COIMBATORE. SIMULATANEOUSLY, SEARCH WAS ALSO CONDU CTED AT THE GODOWN OF THE PARTNERSHIP FIRM AT RAJA STREET, COIM BATORE. ACCORDING TO THE LD. COUNSEL, REVENUE AUTHORITIES F OUND 617.19 GMS OF GOLD JEWELLERY IN THE RESIDENCE OF THE ASSES SEE, SHRI BALASUBRAMANIAN AND 679.43 GMS OF GOLD JEWELLERY IN THE RESIDENCE OF SHRI G. MURUGAN. JEWELLERIES OF BOTH THE ASSESS EES WERE EXAMINED. THE LD.COUNSEL FURTHER SUBMITTED THAT DU RING THE COURSE OF MARRIAGE, THE RESPECTIVE SPOUSES OF THE ASSESSEE S RECEIVED 3 I.T.A. NO.451 & 453/MDS/16 SRIDHAN PROPERTY IN THE FORM OF GOLD JEWELLERY. TH EY HAVE ALSO PURCHASED SOME OF THE JEWELLERY AFTER THEIR MARRIAG E. THE ASSESSING OFFICER FOUND THAT NO EVIDENCE WAS FILED BY THE ASSESSEES TO SUPPORT THE CLAIM OF GOLD JEWELLERY. THEREFORE, AN ADDITION WAS MADE TO THE EXTENT OF ` 4,66,115/- IN THE HANDS OF SHRI BALASUBRAMANIAN AND ANOTHER SUM OF ` 5,76,772/- IN THE HANDS OF SHRI G. MURUGAN. THE LD.COUNSEL SUBMITTED THAT IT IS A CUSTOMARY PRACTICE TO GIVE GOLD JEWELLERY AT THE TIME OF MARR IAGE AND CEREMONIAL OCCASIONS BY THE PARENTS TO THE DAUGHTER S. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. 3. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT ADMITTEDLY, THERE WA S SEARCH IN THE RESIDENTIAL PREMISES OF THE ASSESSEES AND GOLD JEWE LLERY WAS FOUND AT THE RESIDENCES OF BOTH THE ASSESSEES. IN THE AB SENCE OF ANY EVIDENCE TO SHOW THAT THE RESPECTIVE SPOUSES OF THE ASSESSEES RECEIVED SRIDHAN PROPERTY AT THE TIME OF MARRIAGE A ND THEY HAVE ALSO ACQUIRED PART OF JEWELLERY AFTER THEIR MARRIAG E, THE ASSESSING OFFICER FOUND THAT THE CLAIM OF THE ASSESSEES CANNO T BE ACCEPTED. THEREFORE, ACCORDING TO THE LD. D.R., THE SAME WAS FOUND TO BE 4 I.T.A. NO.451 & 453/MDS/16 UNDISCLOSED INVESTMENT OF THE ASSESSEES. THE CIT(A PPEALS) CONFIRMED THE ADDITION IN THE ABSENCE OF ANY MATERI AL EVIDENCE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. BOTH THE ASSESSEES ARE PARTNERS IN A PARTNERSHIP FIRM, WHICH ENGAGED IN THE TEXTILE BUSINESS. DURING THE COURSE OF SEARCH OPER ATION AT THE RESIDENTIAL PREMISES OF THE ASSESSEES, GOLD JEWELLE RY TO THE EXTENT OF 617.19 GMS WAS FOUND IN THE CASE OF SHRI BALASUBRAM ANIAN AND 679.43 GMS IN THE CASE OF SHRI MURUGAN. THE ASSESS ING OFFICER FOUND THAT THE VALUE OF GOLD JEWELLERY WAS UNDISCLO SED INVESTMENT IN THE ABSENCE OF ANY MATERIAL EVIDENCE TO SUPPORT THE PURCHASES. IT IS CUSTOMARY PRACTICE IN THIS PART OF COUNTRY TO GI VE GOLD JEWELLERY TO THE DAUGHTERS BY THE RESPECTIVE PARENTS, DEPENDING UPON THEIR FINANCIAL AND SOCIAL STATUS IN THE LOCALITY. BOTH THE ASSESSEES ARE ENGAGED IN THE BUSINESS OF TEXTILE AND THEY ARE PAR TNERS IN THE PARTNERSHIP FIRM. THEREFORE, ACQUISITION OF GOLD J EWELLERY BY THEIR WIVES CANNOT BE RULED OUT TOTALLY. BOTH THE AUTHOR ITIES BELOW MADE ADDITION ON THE GROUND THAT NO MATERIAL IS AVAILABL E ON RECORD TO SUPPORT THE ACQUISITION OF GOLD JEWELLERY. WHEN TH E JEWELLERY WAS GIVEN AS SRIDHAN PROPERTY AT THE TIME OF MARRIAGE, THE PARENTS OF THE 5 I.T.A. NO.451 & 453/MDS/16 DAUGHTERS DO NOT GIVE ANY EVIDENCE TO THEIR DAUGHTE RS FOR ACQUISITION OF THE JEWELLERY. THE DAUGHTERS ALSO W OULD NOT DEMAND EVIDENCE FOR ACQUISITION. IT IS A CUSTOMARY PRACTI CE TO GIVE GOLD JEWELLERIES AT THE TIME OF MARRIAGE. THIS CUSTOMAR Y PRACTICE PREVAILING IN THIS PART OF COUNTRY CANNOT BE IGNORE D BY THE AUTHORITIES BELOW WHILE FRAMING ASSESSMENT IN THE INCOME-TAX PR OCEEDING. THE ASSESSING AUTHORITY HAS TO EXAMINE WHETHER THE SPOU SES OF THE RESPECTIVE ASSESSEES WOULD HAVE RECEIVED SO MUCH OF JEWELLERY FROM THEIR RESPECTIVE PARENTS AFTER CONSIDERING THE FINANCIAL AND SOCIAL BACKGROUND OF THE RESPECTIVE PARENTS. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEES ARE ENGA GED IN THE BUSINESS OF TEXTILE AT COIMBATORE AND SANKARANKOVIL , THEY WOULD COMMEND SOCIAL RESPECT IN BOTH THE LOCALITIES. THE REFORE, RECEIPT OF SRIDHAN PROPERTY BY THE RESPECTIVE WIVES OF THE ASS ESSEES CANNOT BE TOTALLY RULED OUT. WHAT WAS FOUND AT THE RESIDE NCES OF THE ASSESSEES WERE ONLY 617.19 GMS OF GOLD JEWELLERY IN THE CASE OF SHRI BALASUBRAMANIAN AND 679.43 GMS OF GOLD JEWELLE RY IN THE CASE OF SHRI MURUGAN. THIS TRIBUNAL IS OF THE CONSIDERE D OPINION THAT IT IS QUITE NATURAL THAT WIVES OF THE RESPECTIVE ASSESSEE S WOULD HAVE RECEIVED THE SAME AT THE TIME OF THEIR MARRIAGE. I T IS ALSO POSSIBLE THAT SOME OF THE JEWELLERY WOULD HAVE BEEN ACQUIRED BY THEIR 6 I.T.A. NO.451 & 453/MDS/16 SPOUSES IN DUE COURSE AFTER THEIR MARRIAGE. UNDER ORDINARY CIRCUMSTANCES, NO ONE MAINTAINS THE SUPPORTIVE EVID ENCE / VOUCHERS FOR PURCHASE OF JEWELLERY. THIS CUSTOMARY PRACTICE PREVAILING IN THE SOCIETY CANNOT BE TOTALLY IGNORED BY THE AUTHORITIES BELOW. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT BY TAKING INTO CONSIDERATION THE SOCIAL STATUS AND FINANCIAL BACKG ROUND OF RESPECTIVE ASSESSEES AND PARENTS OF RESPECTIVE WIVE S, THEY WOULD HAVE RECEIVED SRIDHAN FROM THEIR PARENTS. THEREFOR E, CONSIDERATION OF THE GOLD JEWELLERIES AS UNDISCLOSED INVESTMENT I N THE HANDS OF THE ASSESSEE IS NOT JUSTIFIED. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ADDITION MADE TO WARDS THE COST OF GOLD JEWELLERY IS DELETED IN THE CASE OF BOTH TH E ASSESSEES. 5. IN THE RESULT, APPEALS OF BOTH THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED ON 17 TH JUNE, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 17 TH JUNE, 2016. KRI. 7 I.T.A. NO.451 & 453/MDS/16 . ,156 76(1 /COPY TO: 1. *+ /APPELLANTS 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-19, CHENNAI-34 4. PRINCIPAL CIT, CENTRAL-2, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.