DCIT, Jaipur V. SHRI PAWAN LASHKERY, Jaipur

ITA 452/JPR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74847 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 11-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: MRIDUL GOYAL
• Keywords: Gift; Additional evidence
• Section: 153A

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI H.M. MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER) I.T.A. NO. 452/JP/2012 ASSTT. YEAR- 2008-09 THE DEPUTY COMMISSIONER OF SHRI PAWAN LASHKARY, INCOME TAX, CENTRAL CIRCLE-2 VRS. B-304, JANTA COLONY, JAIPUR. JAIPUR. PAN NO. AAVPL3181E (APPELLANT) (RESPONDENT) I.T.A. NO. 348/JP/2012 ASSTT. YEAR- 2009-10 SHRI PAWAN LASHKARY, THE DEPUTY COMMISSIONER OF B-304, JANTA COLONY, VRS. INCOME TAX, CENTRAL CIRCLE-2 JAIPUR. JAIPUR. PAN NO. AAVPL3181E (APPELLANT) (RESPONDENT) DEPARTMENT BY :- SHRI D.C. SHARMA, D.R. ASSESSEE BY :- SHRI VIJAY GOYAL & SHRI MRIDUL GOYAL. DATE OF HEARING : 16/01/2014 DATE OF PRONOUNCEMENT : 26/02/2014 O R D E R PER: N.K. SAINI, A.M. THESE CROSS APPEALS BY THE DEPARTMENT AND THE ASSES SEE ARE DIRECTED AGAINST THE ORDER DATED 27/2/2012 OF LD. CIT(APPEAL S), CENTRAL, JAIPUR. IN THE DEPARTMENTAL APPEAL, THE ONLY EFFECTIVE GROUND RAIS ED READ AS UNDER:- ITA 452 & 348/JP/2012 2 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) (CENTRAL), JAIPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 25,11,684/- OUT OF TOTAL ADDITION O F RS. 48,11,437/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED JEWELLERY AND SILVER ARTICLES FOUND DURING THE COURSE OF SEAR CH. 2. THE APPELLANT CRAVES THE RIGHT TO AMEND ALTER OR ADD TO ANY OF THE GROUNDS OF APPEAL GIVEN ABOVE. 2. THE GROUNDS RAISED IN THE ASSESSEES APPEAL ARE FOLLOWING:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), CENTR AL, JAIPUR HAS ERRED IN CONFIRMING/SUSTAINING THE ADDITION OF RS. 22,99,753/- IN THE HANDS OF THE ASSESSEE IN RESPECT OF 2699.53 GRAMS G OLD JEWELLERY OUT OF THE TOTAL ADDITION OF RS. 48,11,437/- MADE B Y ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMEN T IN GOLD JEWELLERY AND SILVER ARTICLES UNDER SECTION 69B OF I.T. ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) CENTRA L, JAIPUR HAS ERRED IN NOT ALLOWING THE BENEFIT OF TELESCOPING, R ECYCLING AND ROTATION OF FUNDS. 3. THE ASSESSEE PRAYS FOR LEAVE TO ADD, TO AMEND, T O DELETE, OR MODIFY THE ALL OR ANY GROUNDS OF APPEAL ON OR BEFORE THE H EARING OF APPEAL. 3. FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE GRIEVANCE OF THE DEPARTMENT AND THE ASSESSEE RELATES TO DELETION/SUS TENANCE OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED JEWELLERY AND SILVER ARTICLES FOUND DURING THE COURSE OF SEARCH U/S 69B OF THE I. T. ACT, 1961 (HEREINAFTER REFERRED AS THE ACT). 4. FACTS OF THE CASE IN BRIEF ARE THAT A SEARCH WAS CONDUCTED ON 06/08/2008 ON THE LASHKARY GROUP TO WHICH THE ASSESSEE BELONGS . THE ASSESSEE FILED THE REQUISITE RETURN OF INCOME ON 30/9/2009 DECLARING A N INCOME OF RS. 8,14,210/-. THE ASSESSING OFFICER OBSERVED THAT IN THE STATEMEN T RECORDED U/S 132(4) OF THE ITA 452 & 348/JP/2012 3 ACT, THE ASSESSEE SURRENDERED RS. RS. 21 LACS ON AC COUNT OF UNDISCLOSED JEWELLERY. HOWEVER, THE SURRENDER OF RS. 21 LACS WA S DONE IN THE HANDS OF THE FIRM M/S PAWAN ENTERPRISES. HE FURTHER OBSERVED THA T WHILE FILING THE RETURN OF INCOME U/S 153A OF THE ACT IN SPITE OF THE FACT THA T THE SAID JEWELLERY WAS FOUND AND SEIZED FROM THE RESIDENTIAL PREMISES AND THE LO CKER IN SBI IN THE NAME OF THE ASSESSEE. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE UNDISCLOSED INVESTMENT IN THE HANDS OF THE FIRM SHO ULD NOT BE DISALLOWED AS THE DISCLOSURE WAS IN EXPRESS CONTRAVENTION OF SECTION 69B OF THE ACT AND 132(4A) OF THE ACT. THE ASSESSEE SUBMITTED THAT THE FIRM WA S COMPENDIOUS NAME FOR PARTNERS AND HAD NO LEGAL ENTITY LIKE COMPANY AND I T ALWAYS ACTED THROUGH THE PARTNERS, THEREFORE, THE NAME OF THE FIRM MAY BE UT ILIZED BY THE PARTNERS IN THE ASSETS OF THE FIRM ITSELF. THE ASSESSING OFFICER DI D NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE BY OBSERVING THAT THE A SSESSEE REMAINED MUM IN HIS REPLY ON THE PROVISIONS OF SECTION 69B AND 132(4A) OF THE ACT. HE WAS OF THE VIEW THAT THE JEWELLERY/ARTICLES MUST NECESSARILY B E TAXED IN THE HANDS OF THOSE IN WHOSE POSSESSION, IT HAD BEEN FOUND. THE ASSESSING OFFICER POINTED OUT THAT DURING THE SEARCH, TOTAL GOLD FOUND WAS VALUED AT R S. 52,86,863/- AND SILVER WAS VALUED AT RS. 5,36,534/-. THE ASSESSING OFFICER ALS O DENIED THE BENEFIT OF CBDT INSTRUCTION NO. 1916 BY HOLDING THAT THE INSTRUCTIO N WAS FOR SEIZURE AND DOES NOT TALK ABOUT THE ASSETS TO BE CONSIDERED EXPLAINED. . THE ASSESSEE EXPLAINED THE SOURCE OF JEWELLERY FOUND DURING THE SEARCH, WHICH HAS BEEN REPRODUCED BY THE ITA 452 & 348/JP/2012 4 ASSESSING OFFICER IN PARA 4 OF THE IMPUGNED ORDER. FOR THE COST OF REPETITION, THE SAME IS NOT REPRODUCED HEREIN. THE ASSESSING OFFICE R POINTED OUT THAT THE EXPLANATION OF THE ASSESSEE ON ACCOUNT OF UNEXPLAIN ED INVESTMENT WAS THAT RS. 21 LACS HAD ALREADY BEEN SURRENDERED AND JEWELLERY WORTH RS. 6,71,216/- PURCHASED BY SHRI SHYAM SUNDER LASHKARI BEFORE 01/4 /2002 WAS SHOWN IN THE BALANCE SHEET AND THAT THE FAMILY OF SHRI PAWAN LAS HKARI BEFORE 01/4/1997 HAD SHOWN IN THE BALANCE SHEET. THE VALUE OF WHICH SHOU LD HAVE BEEN RS. 3,59,440/- AND THE ASSESSEES FATHER SHRI SHYAM SUNDER LASHKAR YS BALANCE SHEET SHOWED TOTAL GOLD OF RS. 6,52,520/-. THE ASSESSING OFFICER ACCEPTED THE GOLD WORTH RS. 10,11,960/- (RS. 6,52,520/-+RS. 3,59,440/-) AS EXPL AINED SINCE THE SAME WAS SHOWN IN THEIR RESPECTIVE RETURNS OF INCOME AND THE REST OF THE GOLD JEWELLERY WORTH RS. 42,74,903/- AND SILVER WORTH RS. 5,36,534 /- WAS TREATED AS UNEXPLAINED. THE ASSESSING OFFICER DID NOT ACCEPT T HIS PLEA OF THE ASSESSEE THAT THE LADIES AND THE CHILDREN HAD RECEIVED GIFTS IN T HE FORM OF JEWELLERY, AS SUCH THE GIFTS COULD NOT HAVE BEEN SHOWN IN THE CAPITAL ACCOUNT. ACCORDINGLY, THE ADDITION OF RS. 48,11,437/- (RS. 42,74,903/-+ RS. 5 ,36,534/-) WAS ADDED TO THE INCOME OF THE ASSESSEE. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R TO THE LD. CIT(A) AND FURNISHED A CHART OF TOTAL JEWELLERY FOUND BY THE S EARCH PARTY FROM THE POSSESSION OF THE FAMILY MEMBERS OF THE ASSESSEE AN D OTHER MEMBERS OF LASHKARY GROUP WHICH READS AS UNDER:- ITA 452 & 348/JP/2012 5 ANN. NO. PARTICULARS NET WEIGHT OF METAL (IN GMS) WEIGHT OF STONES IN CTS TOTAL VALUE METAL + STONE ANNEXURE-1 (GOLD JEWELLERY) B-304, JANTA COLONY, JAIPUR 4782.730 89.65 4086685.00 ANNEXURE-JS (GOLD JEWELLERY) LOCKER NO. 109, SBI SANGANERI GATE, JAIPUR 1453.00 0.00 1200178.00 TOTAL GOLD 6235.73 89.65 5286863.00 IT WAS FURTHER STATED THAT THE ABOVE JEWELLERY WAS FOUND FROM THE POSSESSION OF DIFFERENT FAMILY MEMBERS WHICH MAINLY CONSISTS OF T HE FAMILY OF SHRI SHYAM SUNDER LASHKARY (FATHER OF THE ASSESSEE), FAMILY OF SHRI PAWAN LASHKARY (ASSESSEE) AND FAMILY OF SHRI MURARI LAL LASHKARY. THE DETAIL OF THE JEWELLERY FURNISHED WAS AS UNDER:- S. NO NAME FOUND DECLARED AS UNDISCLOSED INCOME IN THE HANDS OF FIRM M/S PAWAN ENTERPRISES CLAIMED AS EXPLAINED JEWELLERY WEIGHT (GMS) VALUE WEIGHT (GMS) VALUE WEIGHT (GMS) VALUE 1 SHRI SHYAM SUNDER LASHKARY AND SMT. PARWATI DEVI LASHKARY 2493.03 2057668 1019.50 856464 1473.53 1201204 2 SHRI PAWAN LASHKARY, SMT. HEMANT LASHKARY, LATE SMT. SAROJ LASHKARY, ARUN LASHKARY AND ARJUN LASHKARY 2248.40 1906811 953.00 787178 1295.40 1119633 3 SHRI MURARI LAL LASHKARY, NEELAM LASHKARY, DURGESH LASHKARY, KOMAL LASHKARY 1494.30 ` 1265584 545.70 457758 948.60 807826 TOTAL 6235.73 5230063 2518.20 2101400 3717.53 3128 663 ITA 452 & 348/JP/2012 6 THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING O FFICER MADE INDEPENDENT SEPARATE ASSESSMENT ORDERS U/S 153A/143(3) OF THE A CT IN THE CASE OF SHRI SHYAM SUNDER LASHKARY, SMT. PARWATI DEVI LASHKARY, SMT. H EMANT LASHKARY, SHRI ARUN LASHKARY, SHRI MURARI LAL LASHKARY AND SMT. NE ELAM LASHKARY AND THE JEWELLERY FOUND FROM THEM EXCEPT SHRI ARUN LASHKARY WAS CONSIDERED IN THE HANDS OF THE ASSESSEE WITHOUT HAVING ANY MATERIAL. IT WAS STATED THAT THE TOTAL JEWELLERY FOUND FROM THE POSSESSION OF THE ASSESSEE AND HIS FAMILY MEMBERS WAS 2248.40 GMS. HAVING VALUE OF RS. 19,06,811/- OUT OF WHICH JEWELLERY HAVING VALUE OF RS. 3,59,440/- WAS PURCHASED BY THE ASSESS EE BEFORE 01/4/1997, THEREFORE, AT THE WORST UNEXPLAINED JEWELLERY COULD BE OF RS. 15,47,371/- AGAINST WHICH THE ASSESSING OFFICER MADE THE ADDITION OF RS . 48,11,437/- IN THE HANDS OF THE ASSESSEE, WHICH SHOWS THAT THE ASSESSING OFFICE R COMPLETED THE ASSESSMENT WITHOUT APPLICATION OF MIND. IT WAS FURTHER STATED THAT THE ASSESSING OFFICER IGNORED THE STATEMENT OF SMT. HEMANT LASHKARY AND N EELAM LASHKARY RECORDED U/S 132(4) OF THE ACT WHEREIN THEY HAD ADMITTED THE RECEIPT OF JEWELLERY AT THE TIME OF MARRIAGE. IT WAS FURTHER STATED THAT AS PER CIRCULAR NO. 1916 DATED 11/5/1994, THE CBDT HAS PRESCRIBED THE LIMIT AT 500 GMS. GOLD IN THE CASE OF MARRIED LADY, 250 GMS. FOR UNMARRIED LADY AND 100 G MS. FOR MALE PERSONS IN THE FAMILY. THEREFORE, THE CLAIM OF THE BENEFIT OF THE CIRCULAR WAS TO BE GIVEN AS UNDER:- ITA 452 & 348/JP/2012 7 S. NO. NAME OF THE PERSONS STATUS FOR THE BENEFIT OF JEWELLERY CLAIMED FOR BENEFIT UNDER CBDT SOURCE INSTRUCTION NO. 1916 CBDT CIRCLE WEIGHT VALUE OF METAL 1. SHRI SHYAM SUNDER LASHKARI MALE 100.00 78000 RECEIVE ON THE OCCASION OF MARRIAGE ETC. 2. SMT. PARWATI DEVI LASHKARI MARRIED LADY 524.83 451988 RECEIVE ON THE OCCASION OF MARRIAGE ETC. 3. SHRI PAWAN LASHKARI MALE 93.20 80803 RECEIVE ON THE OCCASION OF MARRIAGE ETC. 4. LATE SMT. SAROJ LASHKARI (WIFE) MARRIED LADY (EXPIRED) 500.00 413000 BELONGING TO LATE SMT. SAROJ LASHKARI. 5. SHRI ARUN LASHKARI MALE 90.50 108600 RECEIVE ON VARIOUS OCCASION 6. SHRI ARJUN LASHKARI MALE 102.00 104040 RECEIVE ON VARIOUS OCCASION 7. SMT. HEMANT LASHKARI MARRIED LADY 509.70 413185 RECEIVE ON THE OCCASION OF MARRIAGE ETC. 8. SHRI MURARI LAL LASHKARI MALE 100.00 86700 RECEIVE ON THE OCCASION OF MARRIAGE ETC. 9. SMT. NEELAM LASHKARI MARRIED LADY 500.00 419422 RECEIVE ON THE OCCASION OF MARRIAGE ETC. 10. SHRI DURGESH LASHKARI MALE 100.00 90000 RECEIVE ON VARIOUS OCCASION 11. KUMARI KOMAL LASHKARI UNMARRIED LADY 248.60 211704 RECEIVE ON VARIOUS OCCASION TOTAL 2868.83 2457447 IT WAS STATED THAT AS PER CIRCULARS EVEN IN THE NOR MAL COURSE, THE CREDIT FOR JEWELLERY REQUIRED TO BE GIVEN AS UNDER :- MARRIED LADY 4 = 500 X 4 = 2000 UNMARRIED LADY 4 = 250 X 1 = 250 MALE = 100 X 6 = 600 2850.00 GRAMS ITA 452 & 348/JP/2012 8 IT WAS STATED THAT THE BENEFIT OF CBDT CIRCULAR AS REGARDS TO REASONABLE HOLDING OF JEWELLERY UP TO 500 GMS PER MARRIED LADY ETC. WA S DENIED WITHOUT APPRECIATING THE FACT THAT A PERSON, WHO IS DECLARI NG HUGE INCOME IN THE REGULAR RETURN COULD REASONABLY HOLD THE JEWELLERY UP TO TH E LIMIT PRESCRIBED BY THE CBDT AND THERE WAS NO BASIS TO PRESUME THAT THE ALL EGED UNEXPLAINED JEWELLERY WAS PURCHASED BY THE ASSESSEE HIMSELF JUST A DAY BE FORE THE SEARCH. IT WAS CONTENDED THAT THE GIFT OF SHRI ARUN LASHKARI WAS I N TERMS OF RUPEES, THEREFORE, IT HAS TO BE ACCOUNTED FOR IN ORDER TO RECORD THE B ANKING/CASH TRANSACTIONS IN THE BOOKS AND THE GIFT OF JEWELLERY ON MARRIAGE OR OTHE R OCCASIONS ARE MADE WITHOUT ASSIGNING THE VALUE OF THE JEWELLERY IN TERMS OF MO NEY. THEREFORE, THE GOLD JEWELLERY UP TO 2868.83 GMS VALUED FOR RS. 24,57,44 7/- STANDS FULLY EXPLAINED IN VIEW OF THE CBDT CIRCULAR. RELIANCE WAS PLACED ON T HE FOLLOWING CASE LAWS:- (I) COMMISSIONER OF INCOME TAX VS. M.S. AGRAWAL (H UF) (2008) 11 DTR (MP) 169. (II) COMMISSIONER OF INCOME TAX VS. RATANLAL VYAPA RILAL JAIN (2010) 45 DTR (GUJ) 290. (III) COMMISSIONER OF INCOME TAX VS. KAILASH CHAN D SHARMA (2005) 198 CTR (RAJ) 201: (2005) 146 TAXMAN 376 (RAJ.). (IV) SMT. PATI DEVI VS. ITO AND ANOTHER 240 ITR 7 27 (KARNATAKA). IT WAS FURTHER STATED THAT A SURRENDER OF RS. 21 L ACS IN THE STATEMENT RECORDED BY THE SEARCH PARTY WAS MADE. THE SAID SURRENDER WAS O N ACCOUNT OF JEWELLERY PURCHASED FROM THE INCOME DERIVED FROM M/S PAWAN EN TERPRISES, IN WHICH SHRI SHYAM SUNDER LASHKARY, SHRI PAWAN LASHKARY AND SHRI MURARI LAL LASHKARY ITA 452 & 348/JP/2012 9 ARE HAVING 40%, 40% AND 20% SHARES RESPECTIVELY AND THE FOLLOWING JEWELLERY WERE DECLARED IN THE HANDS OF THE PARTNERSHIP FIRM: - S. NO. NAME OF THE PERSON FROM WHOM POSSESSION JEWELLERY WAS FOUND DECLARED AS UNDISCLOSED INCOME IN THE HANDS OF FIRM M/S PAWAN ENTERPRISES. WEIGHT (GRAMS) VALUE 1 SHRI SHYAM SUNDER LASHKARY AND SMT. PARWATI DEVI LASHKARY 1019.50 856464 2. SHRI PAWAN LASHKARY, SMT. HEMANT LASHKARY, LATE SMT. SAROJ LASHKARY, ARUN LASHKARY AND ARJUN LASHKARY 953.00 787178 3. SHRI MURARI LAL LASHKARY, NEELAM LASHKARY, DURGESH LASHKARY, KOMAL LASHKARY 545.70 457758 TOTAL 2518.2 2101400 IT WAS STATED THAT THAT THE PARTNERSHIP FIRM M/S PA WAN ENTERPRISES HAD CONFIRMED THIS FACT AND HAS SHOWN INCOME OF RS. 21 LACS IN IT S RETURN FOR THE A.Y. 2009-10 ON ACCOUNT OF UTILIZATION OF UNDISCLOSED INCOME OF THE FIRM IN PURCHASES OF JEWELLERY BY THE PARTNERS BUT THE ASSESSING OFFICER REJECTED THE EXPLANATION MERELY ON SURMISES AND CONJECTURES AND CONVERTED GO OD PROOF INTO NO PROOF. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- (I) SHREELEKHA BANERJEE VS. CIT (1963) 49 ITR 112 (SC) (II) UMA CHARAN SHAW & BROS. CO. VS. CIT 37 ITR 27 1. (III) CIT VS. ANUPAM KAPOOR (2008) 299 ITR 179 (P& H). IT WAS FURTHER STATED THAT THE SEARCH PARTY HAD REC ORDED THE STATEMENT OF THE ASSESSEE WHEREIN HE STATED THAT THE JEWELLERY FOUND BY THE SEARCH PARTY SO INCLUDED THE JEWELLERY BELONGING TO HIS DECEASED WI FE SMT. SAROJ LASHKARY. AS REGARDS TO THE EXPLANATION OF THE GOLD JEWELERY, TH E ASSESSEE STATED AS UNDER:- (I) THE LD. ASSESSING OFFICER HAS NOT GIVEN THE BEN EFIT OF THE PURCHASES OF JEWELLERY OF RS. 295495/- SHOWN IN BAL ANCE SHEET FOR THE YEAR ENDED ON 31/03/2000. THE WEIGHT OF JEWELLE RY IS 111.83 GRAMS. THE VALUE AS ON THE DATE OF SEARCH COMES TO RS. 3,59,440/- ITA 452 & 348/JP/2012 10 (ON THE BASIS OF VALUATION OF GOLD AT THE AVERAGE R ATE TAKEN BY THE VALUER + ORIGINAL VALUE OF DIAMONDS STUDDED IN THE JEWELLERY). (II) THE BENEFIT OF CBDT INSTRUCTION NO. 1916 HAS N OT BEEN GIVEN. AS PER THIS CIRCULAR THE ASSESSEE IS ENTITLED FOR BENE FIT OF 2850 GRAMS JEWELLERY WHICH DESERVES TO BE CONSIDERED AS EXPLAI NED IN VIEW OF THE ABOVE SAID INSTRUCTION. (III) HAD THE BENEFIT OF THE PURCHASES OF RS. 29549 5/- RECORDED IN THE BALANCE SHEET AS ON 31/03/200 OF SHRI SHYAM SUNDER LASHKARY AND THE BENEFIT OF CBDT INSTRUCTION NO. 1916 WAS GIVEN, THE UNEXPLAINED JEWELLERY REMAINS OF WEIGHING 1999.53 G RAMS OF RS. 1512175/- AGAINST WHICH THE SURRENDER OF RS. 21,00, 000/- HAS BEEN MADE IN THE RETURN OF THE FIRM ON ACCOUNT OF JEWELL ERY PURCHASED BY THE PARTNERS FROM THE UNDISCLOSED INCOME OF THE FIR M. (IV) WITHOUT PREJUDICE TO THE ABOVE, WE SUBMIT THAT THE JEWELLERY WAS FOUND FROM THE POSSESSION OF DIFFERENT FAMILY MEMBE RS WHO WERE SEPARATELY ASSESSED BY THE SAME ASSESSING OFFICER. THE LD. ASSESSING OFFICER HAS NO MATERIAL TO PRESUME THAT A LL THE ALLEGED UNEXPLAINED JEWELLERY WERE PURCHASED BY THE ASSESSE E. REGARDING THE SILVER JEWELLERY, THE ASSESSEE STATED THAT THE SAME PERTAINED TO FAMILY MEMBERS, WHICH WAS RECEIVED BY THEM ON THE OCCASION OF THEIR MARRIAGE/ VARIOUS FUNCTIONS. THE DETAIL GIVEN WAS AS UNDER:- S NO. NAME OF PERSON FOUND DURING SEARCH DECLARED AS INCOME IN THE RETURN CLAIMED AS EXPLAINED WEIGHT VALUE WEIGHT VALUE WEIGHT VALUE 1. SMT. HEMANT LASHKARY 5136 106128 0.00 0.00 5136 106128 2. SMT. NEELAM LASHKARY 9280 132993 0.00 0.00 9280 132993 3. SMT. PARWATI DEVI LASHKARY 6450 92235 0.00 0.00 6450 92235 `4. LATE SMT. SAROJ LASHKARY 1800 25740 0.00 0.00 1800 25740 TOTAL 22666 357096 0.00 0.00 22666 357096 IT WAS CONTENDED THAT THAT THE ASSESSING OFFICER TR EATED THE ENTIRE SILVER ITEMS AS INVESTED BY THE ASSESSEE ALONE WITHOUT ASSIGNING AN Y REASON AND THAT THE ASSESSEE DID NOT MAKE ANY INVESTMENT IN SILVER ARTI CLES DURING THE PERIOD COVERED ITA 452 & 348/JP/2012 11 FOR ASSESSMENT U/S 153A OF THE ACT. THEREFORE, NO A DDITION WAS CALLED FOR ON THIS ACCOUNT. THE ASSESSEE ALSO FURNISHED COPY OF ONE BI LL OF THE JEWELLERY WORTH RS. 2,95,495/-, WHICH WAS ALREADY REFLECTED IN THE BALA NCE SHEET OF SHRI SHYAM SUNDER LASHKARY FOR THE A.Y. 2000-01, THE SAME WAS TECHNICALLY TREATED AS ADDITION EVIDENCE AND WAS SENT TO THE ASSESSING OFF ICER ALONGWITH WRITTEN SUBMISSIONS FILED BY THE ASSESSEE FOR HIS REMAND RE PORT. THE ASSESSING OFFICER VIDE LETTER DATED 22/2/2012 OBJECTED TO THE ADMISSI ON OF COPY OF BILL AS AN ADDITIONAL EVIDENCE. HOWEVER, ON MERITS, ACCEPTED T HE CLAIM OF THE ASSESSEE AS THE JEWELLERY STUDDED MISTAKENLY TAKEN AS DIAMOND. 6. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE FILED THE COPY OF BALANC E SHEET AS ON 31/3/2010 OF SHRI SHYAM SUNDER LASHKARY ALONGWITH ACKNOWLEDGEMEN T OF RETURN AND ALSO FILED COPY OF PURCHASE BILLS SHOWING PURCHASE OF DI AMOND STUDDED JEWELLERY WEIGHING 111.83 GMS VALUED AT RS. 2,95,435/- FROM M /S JKJ & SONS JEWELERS. THE LD. CIT(A) OBSERVED THAT THE NOTING OVER THE BI LLS SHOWS THAT THE PAYMENT OF THIS BILL WAS THROUGH CHEQUE NO. 378627 DATED 19 /11/1999 FROM SBI. HE, THEREFORE, ALLOWED THE BENEFIT OF JEWELLERY TO THE EXTENT OF 111.83 GMS. AS REGARDS TO THE BENEFIT OF THE CBDT INSTRUCTION NO. 1916 FOR THE JEWELLERY WEIGHING 2850 GMS HELD BY THE VARIOUS MEM BERS OF THE ASSESSEES FAMILY, THE LD. CIT(A) OBSERVED THAT THE ASSESSEE W AS CLAIMING THE BENEFIT OF THIS INSTRUCTION FOR HIMSELF, HIS FATHER AND HIS LA TE WIFE ALSO. HE FURTHER OBSERVED ITA 452 & 348/JP/2012 12 THAT THE ASSESSEE AND HIS FATHER SHRI SHYAM SUNDER LASHKARI CLAIMED SEPARATE DEDUCTION OF 970.33 GMS AND 415.87 GMS ON ACCOUNT O F JEWELLERY PURCHASED BY THEM AND SINCE THE BENEFIT WAS ALREADY CLAIMED ON T HE BASIS OF EVIDENCE AVAILABLE, THEREFORE, FURTHER BENEFIT OF 100 GMS EA CH WOULD NOT BE GIVEN TO THE ASSESSEE AND HIS FATHER SHRI SHYAM SUNDER LASHKARY. AS REGARDS TO THE BENEFIT OF 500 GMS JEWELLERY FOR THE DECEASED WIFE OF THE ASSESSEE, THE LD. CIT(A) WAS OF THE VIEW THAT T HE BENEFIT OF JEWELLERY COULD NOT BE GIVEN TO THE DECEASED PERSON. HE, THEREFORE, ALLOWED THE BENEFIT OF 2150 GMS JEWELLERY CONSIDERING THE INSTRUCTION NO. 1916 ISSUED BY THE CBDT AS PER THE FOLLOWING DETAILS:- 3 MARRIED LADIES (MOTHER, WIFE AND BROTHERS WIFE) 1500 GMS 1 UNMARRIED BROTHERS DAUGHTER 250 GMS 4 MALE MEMBERS (EXCLUDING ASSESSEE AND HIS FATHER 400 GMS 2150 GMS FOR THE AFORESAID VIEW, RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS :- I) CIT VS. RATANLAL VYAPARILAL JAI (2010) 45 DTR ( GUJ) 290. II) CIT VS. M.S. AGRAWAL (HUF) (2008) 11 DTR (MP) 169. III) CIT VS. KAILASH CHAND SHARMA (2005) 198 CTR ( RAJ) 201: (2005) 146 TAXMAN 376. AS REGARDS TO THE CONTROVERSY ON DECLARATION OF JE WELLERY WEIGHING 2518.20 GMS. VALUING RS. 21 LACS IN THE HANDS OF TH E FIRM M/S PAWAN ENTERPRISES, THE LD. CIT(A) OBSERVED THAT THE ASSES SEE HAD CLAIMED THAT HE AND HIS FAMILY MEMBERS HAD PURCHASED THE JEWELLERY WEIG HING 2518.20 GMS WORTH RS. 21 LACS OUT OF UNDISCLOSED INCOME OF THE FIRM M /S PAWAN ENTERPRISES BUT THIS FACT HAD NEVER BEEN STATED DURING THE COURSE OF SEA RCH. HE, THEREFORE, DID NOT ITA 452 & 348/JP/2012 13 ALLOW THE BENEFIT AS CLAIMED BY THE ASSESSEE ON ACC OUNT OF JEWELLERY DECLARED IN THE HANDS OF THE FIRM M/S PAWAN ENTERPRISES. REGARDING UNEXPLAINED SILVER ARTICLES WEIGHING 226 66 GMS VALUED AT RS. 3,57,156/- WHICH WERE FOUND FROM THE POSSESSION OF VARIOUS FAMILY MEMBERS OF THE ASSESSEE. THE LD. CIT(A) WAS OF THE VIEW THAT I T WAS CUSTOMARY TO RECEIVE SILVER UTENSILS AND ARTICLES IN THE MARRIAGE AND AU SPICIOUS OCCASIONS, THEREFORE, CONSIDERING THE FAMILY STATUS OF THE ASSESSEE, THE SILVER ARTICLES FOUND BY THE SEARCH PARTY WAS NOT UNREASONABLE. HE, ACCORDINGLY, WORKED OUT THE UNEXPLAINED GOLD JEWELLERY AS UNDER:- TOTAL PARTICULARS ATY IN GMS. TOTAL JEWELLERY FOUND 6235.73 PURCHASES SHOWN IN BALANCE SHEET SHOWN IN BALANCE SHEET OF SHRI SHYAM SUNDER LASHKAR Y GOLD AY 2002-03 RS. 165003/- WEIGHT 357.30 GRAMS 357.3 SHOWN IN BALANCE SHEET OF SHRI SHYAM SUNDER LASHKAR Y AY 1993-94 RS. 192022.11/- WEIGHT 501.200 501.2 SHOWN IN BALANCE SHEET OF SHRI SHYAM SUNDER LASHKAR Y GOLD AY 2000-01 RS. 295495/- WEIGHT 111.83 GRAMS 111.83 SHRI PAWAN LASHKARY JEWELLERY SHOWN IN BALANCE SHEE T 31/3/1997 RS. 196500/- RATE OF GOLD AS ON 31/3/1997 RS. 472.50 THUS WEIGHT COMES TO 415.87 GRAMS. 415.87 BALANCE 4849.53 BENEFIT AVAILABLE AS PER CBDT INSTRUCTION 2150.00 BALANCE UNEXPLAINED JEWELLERY 2699.53 VALUED ON THE BASIS OF AVERAGE RATE 2299753 ACCORDINGLY THE ADDITION OF RS. 25,11,684/- WAS DEL ETED AND THE REMAINING ADDITION OF RS. 22,99,753/- ON ACCOUNT OF UNEXPLAIN ED GOLD JEWELLERY WAS SUSTAINED. NOW BOTH THE PARTIES ARE IN APPEAL. ITA 452 & 348/JP/2012 14 7. THE DEPARTMENT IS AGGRIEVED FOR THE DELETION OF THE ADDITION OF RS. 25,11,684/- WHILE THE ASSESSEE IS IN APPEAL AGAINST SUSTENANCE OF ADDITION OF RS. 22,99,753/-. 8. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT T HE SEARCH ON 06/08/2008 WAS CONDUCTED ON ALL THE FAMILY MEMBERS AND BUSINESS PR EMISES OF THE ASSESSEE AND EACH AND EVERY THING WAS EXPLAINED. HOWEVER, THE AS SESSING OFFICER MADE ARBITRARY ADDITION AND THE LD. CIT(A) WAS ALSO NOT JUSTIFIED WHILE REJECTING THE BENEFIT OF THE JEWELLERY AMOUNTING TO RS. 21 LACS D ECLARED BY THE INDIVIDUAL PARTNERS IN THE HANDS OF THE FIRM. HE FURTHER SUBMI TTED THAT THE BENEFIT OF 100 GMS EACH GOLD JEWELLERY HELD BY THE ASSESSEE AND HI S FATHER SHRI SHYAM SUNDER LASHKARY IN ACCORDANCE WITH CIRCULAR OF THE CBDT WA S NOT ALLOWED AND THAT THE JEWELLERY FOUND IN THE LOCKER BELONGING TO THE DECE ASED WIFE OF THE ASSESSEE WAS ALSO NOT CONSIDERED AND NO BENEFIT WAS GIVEN IN ACC ORDANCE WITH THE INSTRUCTION NO. 1916 OF THE CBDT. IT WAS STATED THAT THE SHORT STOCK WAS FOUND IN THE PARTNERSHIP FIRM AND THE SALE PROCEEDS FROM THE SAI D STOCK WAS UTILIZED BY THE PARTNERS IN ACQUIRING THE JEWELLERY AND ACCORDINGLY SURRENDER WAS MADE IN THE HANDS OF THE FIRM AND THE CASH WAS AVAILABLE WITH T HE PARTNERS OF THE FIRM TO PURCHASE THE JEWELLERY. THEREFORE, THE LD. CIT(A) W AS NOT JUSTIFIED IN REJECTING THE BENEFIT OF THE JEWELLERY WEIGHING 2518.20 GMS T O THE ASSESSEE. ITA 452 & 348/JP/2012 15 9. IN HIS RIVAL SUBMISSIONS, THE LD. D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE CBDT INSTR UCTION NO. 1916 ARE ONLY FOR NOT MAKING SEIZURE OF THE JEWELLERY RELATING TO THE MARRIED LADIES, MALE MEMBER AND THE CHILDREN BUT ON THE BASIS OF THE SAI D INSTRUCTION, IT CANNOT BE PRESUMED THAT THE JEWELLERY WAS EXPLAINED. HE ACCOR DINGLY, SUBMITTED THAT THE BENEFIT GIVEN BY THE LD. CIT(A) FOR THE GOLD JEWELL ERY WEIGHING 2150 GMS WAS NOT JUSTIFIED. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN T HE INSTANT CASE, AS REGARDS TO THE BENEFIT OF JEWELLERY TO THE EXTENT OF 111.83 GM S PURCHASED BY SHRI SHYAM SUNDER LASHKARY IS CONCERNED, IT IS NOTICED THAT TH E SAID JEWELLERY WAS PURCHASED BY SHRI SHYAM SUNDER LASHKARY FROM M/S JK J AND SONS JEWELERS THROUGH CHEQUE NO. 378627 DATED 19/11/1999 OF SBI A ND IT WAS DISCLOSED IN THE BALANCE SHEET DATED 31/3/2000, THEREFORE, THE LD. C IT(A) WAS JUSTIFIED IN ALLOWING THE BENEFIT FOR THE SAID JEWELLERY. NOW TH E CONTROVERSY REMAINS ON ACCOUNT OF DECLARATION OF JEWELLERY WEIGHING 2518.2 0 GMS OF RS. 21 LACS DECLARED IN THE HANDS OF THE FIRM M/S PAWAN ENTERPR ISES. IN THE PRESENT CASE, IT IS NOTICED THAT THE STATEMENT OF THE ASSESSEE WAS RECO RDED DURING THE COURSE OF SEARCH AND THE ASSESSEE STATED THAT THE FIRM IS COM PENDIOUS NAME FOR PARTNERS AND ACTS THROUGH THE PARTNERS, THEREFORE, THE INCOM E MAY BE UTILIZED BY THE PARTNERS IN THE ASSETS OF THE FIRM ITSELF. THE COPY OF THE ASSESSMENT ORDER OF THE ITA 452 & 348/JP/2012 16 FIRM M/S PAWAN ENTERPRISES IS PLACED AT PAGE NOS. 9 0 TO 96 OF THE ASSESSEES PAPER BOOK WHEREIN IN PARA 5 IT HAS BEEN HELD THAT THE UNDISCLOSED INVESTMENT ON ACCOUNT OF JEWELLERY WAS NOT TO BE TAXED IN THE HAN DS OF THE ASSESSEE FIRM BUT IN WHOSE HANDS, IT WAS FOUND AND SEIZED. IT IS NOT IN DISPUTE THAT THE ASSESSEE SURRENDERED THE INCOME OF RS. 21 LACS IN THE HANDS OF THE FIRM AND CLAIMED THAT THE REALIZATION OF THE STOCK FOUND SHORT IN THE FIR M WAS UTILIZED FOR PURCHASING THE JEWELLERY. IN THE INSTANT CASE NOTHING IS BROUG HT ON RECORD TO SUBSTANTIATE THAT THE AMOUNT DISCLOSED BY THE PARTNERS OF THE FIRM WA S UTILIZED ELSEWHERE. THEREFORE, THE BENEFIT OF THE SAID SURRENDER WAS TO BE GIVEN FOR ACQUIRING THE JEWELLERY WEIGHING 2518.20 GMS, ACCORDINGLY THE ADD ITION TO THE EXTENT OF RS. 21 LACS MADE IN THE HANDS OF THE ASSESSEE DESERVES TO BE DELETED. WE ORDER ACCORDINGLY. 11. THE ANOTHER POINT OF THE CONTROVERSY RELATES T O THE BENEFIT OF CBDT INSTRUCTION NO. 1916 FOR THE JEWELLERY FOUND IN THE LOCKER BELONGING TO THE DECEASED WIFE OF THE ASSESSEE SMT. SAROJ LASHKARY A ND IN POSSESSION OF MALE MEMBERS I.E. SHRI SHYAM SUNDER LASHKARY AND THIS AS SESSEE. IT IS NOTICED THAT IN THE ANSWER TO THE QUESTION NO. 26, THE ASSESSEE CAT EGORICALLY STATED THAT THE JEWELLERY ALSO INCLUDE THE JEWELLERY OF HIS DECEASE D WIFE SMT. SAROJ LASHKARY, THEREFORE, THE BENEFIT OF 500 GMS GOLD JEWELLERY WA S TO BE GIVEN ON ACCOUNT OF JEWELLERY BELONGING TO DECEASED WIFE OF THE ASSESSE E, PARTICULARLY WHEN IT WAS FOUND FROM THE LOCKER WHICH WAS IN HER NAME. THEREF ORE, THE JEWELLERY WEIGHING ITA 452 & 348/JP/2012 17 500 GMS SHOULD HAVE BEEN TREATED AS EXPLAINED IN VI EW OF THE FOLLOWING JUDGMENT OF THE VARIOUS HON'BLE HIGH COURTS:- I) CIT VS. RATANLAL VYAPARILAL JAI (2010) 45 DTR (G UJ) 290. II) CIT VS. M.S. AGRAWAL (HUF) (2008) 11 DTR (MP) 169. III) CIT VS. KAILASH CHAND SHARMA (2005) 198 CTR ( RAJ) 201: (2005) 146 TAXMAN 376. SIMILARLY THE LD. CIT(A) WAS NOT JUSTIFIED IN DENY ING THE BENEFIT TO THE MALE MEMBERS FOR 100 GMS GOLD JEWELLERY EACH I.E. T O SHRI SHYAM SUNDER LASHKARY, FATHER OF THE ASSESSEE AND THE ASSESSEE H IMSELF, PARTICULARLY WHEN THE SIMILAR BENEFIT WAS ALLOWED IN IDENTICAL CIRCUMSTAN CES TO OTHER MEMBERS OF THE FAMILY, THEREFORE, BY KEEPING IN VIEW THE RATIO LAI D DOWN IN THE VARIOUS JUDICIAL PRONOUNCEMENTS AS MENTIONED HEREINABOVE AND THE INS TRUCTION NO. 1916 OF THE CBDT, THE BENEFIT OF 200 GMS GOLD JEWELLERY IS ALSO DIRECTED TO BE GIVEN AS PER THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS KAILASH CHAND SHARMA (2005) 198 CTR (RAJ) 201 (S UPRA) WHEREIN IT HAS BEEN HELD AS UNDER:- THE TRIBUNAL REACHED ITS FINDING ON TWO-FOLD GROUN DS. FIRSTLY, IT ACCEPTED THE EXPLANATION SUBMITTED BY THE ASSESSEE ABOUT ACQUISITION OF POSSESSION OF GOLD JEWELLERY AND SILVER IN EXCES S OF WHAT WAS DECLARED IN WT RETURNS OF TWO LADIES. SECONDLY, IT ALSO REFERRED TO THE CIRCULAR ISSUED BY CBDT. IT WAS FOUND BY THE TRIBUN AL THAT THERE IS NO DISPUTE THAT ASSESSEE WAS AND HIS WIFE ALSO IN T HEIR STATEMENT AT THE TIME OF SEARCH TOLD THAT THE JEWELLERY WAS RECE IVED IN THE MARRIAGE AND SOME JEWELLERY WAS ALSO RECEIVED IN OT HER CEREMONIES FROM TIME TO TIME. THE TRIBUNAL ALSO FOUND THAT THE BENEFIT OF CBDT ITA 452 & 348/JP/2012 18 INSTRUCTIONS NO. 1916 DATED 11 TH MAY, 1994, WAS NOT ALLOWED TO TWO LADIES ON THE GROUND THAT THE SAID INSTRUCTION IS N OT APPLICABLE IN THE CASE OF A PERSON, WHO IS BEING ASSESSED TO WEALTH-T AX AND THEREFORE, THE EXEMPTION WAS ALLOWED ONLY TO THE EXTENT OF GO LD ORNAMENTS AND JEWELLERY SHOWN IN THE WT RETURN. AFTER CONSIDERING THE FACT THAT BOTH THE LADIES WERE ASSESSED TO WEALTH-TAX MUCH PR IOR TO THE BLOCK PERIOD AND THEY WERE NOT ASSESSED TO WEALTH-TAX AT THE TIME OF SEARCH, IN VIEW OF THE STATUS OF THE ASSESSEE AND HIS FAMIL Y MEMBERS, INCLUDING MOTHER AND IN VIEW OF CBDT INSTRUCTION, T HE ADDITION SUSTAINED BY THE CIT(A) ON ACCOUNT OF UNEXPLAINED J EWELLERY IS NOT VALID AND DIRECTED TO BE DELETED. THE EXCLUSION HAS NOT BEEN FOUND MERELY ON THE BASIS OF CIRCULAR OF CBDT, BUT THE TR IBUNAL ALSO ACCEPTED THE EXPLANATION SUBMITTED BY THE ASSESSEE, WHICH PRIMARILY RELATES TO THE FACTS OF THE CASE THAT TWO LADIES WE RE ASSESSED FOR WEALTH-TAX AND DECLARATION OF THE WEALTH IS ONLY IN RESPECT OF SUCH JEWELLERY WHICH WAS IN THEIR POSSESSION WHICH THEY ACQUIRED ON CERTAIN CEREMONIES, OCCASION OF MARRIAGE OF THE BRO THER BY THE WIFE OF THE ASSESSEE. LOOKING TO THE STATUS OF THE FAMIL Y, THE TRIBUNAL FOUND EXPLANATION TO BE PLAUSIBLE FOR THE INCOME IN THE HANDS OF THE FAMILY. THESE JEWELLERY HAVE NOT BEEN TREATED TO BE INVESTED AS UNDISCLOSED INCOME OF THE ASSESSEE, THEREFORE, IT M AY NOT BE THE INCOME RECEIVED IN THE HANDS OF THE ASSESSEE. IN TH E CIRCUMSTANCES OF THE CASE, NOTWITHSTANDING ONE OF THE REASONS IS NOT SUSTAINABLE, THE FINDING IS NOT REQUIRED TO BE DISTURBED. 12. AS REGARDS TO THE SILVER ARTICLES IS CONCERNED, IN OUR OPINION, THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADDITION BY HOLDING THAT IT WAS CUSTOMARY TO RECEIVE SILVER UTENSILS AND ARTICLES I N THE MARRIAGE AND OTHER ITA 452 & 348/JP/2012 19 AUSPICIOUS OCCASIONS, THEREFORE, CONSIDERING THE FA MILY STATUS OF THE ASSESSEE, THE SILVER ARTICLES FOUND BY THE SEARCHED PARTY WAS NOT UNREASONABLE. WE DO NOT SEE ANY INFIRMITY IN THE ABOVE OBSERVATIONS OF THE LD. CIT(A) AND ACCORDINGLY, WE DO NOT SEE ANY MERIT IN THE GROUNDS OF APPEAL BY TH E DEPARTMENT FOR THIS ISSUE, HENCE IT IS REJECTED AND GROUNDS RAISED IN THE APPE AL OF THE ASSESSEE ARE ALLOWED. 13. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED AND APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 26/02/2014. ) SD/- SD/- (HARI OM MARATHA) (N.K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26/02/2014 * RANJAN COPY FORWARDED TO :- 1. APPELLANT THE DCIT, CENTRAL CIRCLE-2, JAIPUR 2. RESPONDENT- SHRI PAWAN LASHKARY, JAIPUR. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NOS. 452 & 348/JP/2012) BY ORDER, AR ITAT JAIPUR.