DCIT, Jaipur V. SHRI AJIT SINGH, Jaipur

ITA 453/JPR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1545 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 11-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Keywords: Unexplained investment; Gift; Search and seizure; Loose papers; Valuation report
• Section: 143(3); 133A; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI B.R. MITTAL AND SHRI B.R. JAIN) ITA NO. 453/JP/2012 ASSESSMENT YEAR : 2009-10 PAN: AGCPS 5660 G THE DCIT VS. SHRI AJIT SINGH CENTRAL CIRCLE- 2 24, GANGA PATH JAIPUR SURAJ NAGAR (W), JAIPUR (APPELLANT) (RESPONDENT) C.O. NO.41/JP/2012 (ARISING OUT OF ITA NO. 453/JP/2012) ASSESSMENT YEAR : 2009-10 PAN: AGCPS 5660 G SHRI AJIT SINGH VS. THE DCIT 24, GANGA PATH CENTRAL CIRCLE- 2 SURAJ NAGAR (W), JAIPUR JAIPUR (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI D.C. SHARMA ASSESSEE BY : SHRI MANISH AGARWAL DATE OF HEARING: 15-01-2013 DATE OF PRONOUNCEMENT: 23-01-2013 ORDER PER B.R. MITTAL, JM:- THE DEPARTMENT HAS FILED THIS APPEAL FOR THE ASS ESSMENT YEAR 2009-10 AGAINST THE ORDER OF THE LD. CIT(A), CENTRAL, JAIPUR DATED 29-0 2-2012 ON FOLLOWING GROUNDS. 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) (CENTRAL), JAIPUR HAS ERRED IN LAW AND ON FA CTS IN DELETING THE ADDITION OF RS. 4,70,015/- MADE BY THE AO ON AC COUNT OF UNEXPLAINED CASH FOUND DURING THE COURSE OF SEARCH 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) (CENTRAL), JAIPUR HAS ERRED IN LAW AND ON FA CTS IN DELETING 2 THE ADDITION OF RS. 2.00 LACS OUT OF TOTAL ADDITION OF RS. 5.00 LACS MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMEN T IN FURNITURE. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) (CENTRAL), JAIPUR HAS ERRED IN LAW AND ON FA CTS IN DELETING THE ADDITION OF RS. 1,31,44,804/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY. 4. THE APPELLANT CRAVES THE RIGHT TO AMEND ALTER OR ADD TO ANY OF THE GROUNDS OF APPEAL GIVEN ABOVE. 2.1 THE ASSESSEE HAS FILED THE CROSS OBJECTION DIS PUTING THE ORDER OF THE LD. CIT(A) IN SUSTAINING THE ADDITION OF RS. 3.00 LACS OUT OF ADD ITION OF RS. 5.00 LACS MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FURNITURE AND FIXTURE INSTALLED AT HOUSE OF THE ASSESSEE. 2.1.1 IT IS RELEVANT TO STATE THAT THE GROUND OF C. O. OF THE ASSESSEE IS RELATED TO GROUND NO. 2 OF THE APPEAL FIELD BY THE DEPARTM ENT. 2.2 THE RELEVANT FACTS ARE THAT THERE WAS SEARCH AN D SEIZURE ACTION U/S 132 OF THE ACT AND /OR SURVEY ACTION U/S 133A OF THE ACT ON THE ME MBERS OF UNIQUE GROUP ON 28-01- 2009 AND THE ASSESSEE IS ONE OF THE MEMBER OF THE S AID GROUP. DURING THE COURSE OF SEARCH AND SEIZURE, CASH, JEWELLERY, STOCK IN TRADE, VALUA BLES, DOCUMENTS BOOKS OF ACCOUNTS AND / OR LOOSE PAPERS WERE FOUND AND / OR SEIZED FROM THE PREMISES OF THE MEMBERS OF THE UNIQUE GROUP. THE ASSESSEE FILED THE RETURN OF INCO ME FOR THE PREVIOUS YEAR 2008-09 RELEVANT TO ASSESSMENT YEAR 2009-10 DECLARING A TO TAL INCOME OF RS. 1,28,55,850/- ON 20- 09-2010, WHICH INCLUDED A SUM OF RS. 1,16,31,103/-, OFFERED BY THE ASSESSEE AS AN ADDITIONAL INCOME AS A RESULT OF SEARCH TOWARDS UNE XPLAINED INVESTMENT. THE AO MADE AN ASSESSMENT U/S 143(3) OF THE ACT ON 29-12-2010 AT A TOTAL INCOME OF RS. 2,71,20,669/-. THE ASSESSEE DISPUTED THE SAID ASSESSMENT BEFORE TH E FIRST APPELLATE AUTHORITY. 3 2.3 THE LD. CIT(A) BY THE IMPUGNED ORDER DATED 29-0 2-2012 ALLOWED ASSESSEE'S APPEAL IN PART. HENCE THIS APPEAL BY THE DEPARTMEN T AND THE C.O. BY THE ASSESSEE. 3.1 IN RESPECT OF GROUND NO. 1 OF THE APPEAL OF TH E DEPARTMENT, THE RELEVANT FACTS ARE THAT DURING THE COURSE OF SEARCH, CASH AMOUNTING TO RS. 1,48,530/- WAS FOUND FROM THE PREMISES OF THE ASSESSEE AND RS. 3,21,485/- WAS FOU ND AT HIS SECOND RESIDENCE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE STA TED THAT THE CASH WAS FOUND OUT OF HIS SAVINGS AS WELL AS SOME OF THE CASH RELATED TO THE CONCERN IN WHICH HE IS EITHER MEMBER OR THE PARTNER. THE ASSESSEE ALSO FURNISHED BALANCE SHEET OF CASH AVAILABLE WITH SUCH CONCERN AND THE DETAILS OF WHICH ARE ALSO MENTIONED BY THE LD. CIT(A) IN PARA 3.2.2 AT PAGE 4 OF HIS ORDER AS UNDER:- DETAILS OF CASH BALANCES AS PER BOOKS OF A/C AS O N 27-01-2009 S.N. NAME OF CONCERN AMOUNT (RS.) 1. UNIQUE BUILDERS & DEVELOPERS (AJIT) 658893 2. UNIQUE BUILDWELL 172060 3. UNIQUE BUILDERS & DEVELOPERS (REALTY) 3302544 4. UNIQUE ENCLAVES 253863 5. UNIQUE COLONIZERS 275268 6. UNIQUE BUILDERS (REALTY) 594681 7. UNIQUE BUILDERS (RAMA) 149108 8. UNIQUE BUILDERS (AJIT) 567175 9. UNIQUE BUILDCON 585176 10. MILESTONE DWELLERS (P) LTD. 162970 TOTAL 67,21,738 HOWEVER, THE AO DID NOT ACCEPT THE SUBMISSIONS OF T HE ASSESSEE AND ACCORDINGLY ADDED THE SAID AMOUNT OF RS. 4,70,015/- TO HIS INCOME ON ACCOUNT OF UNDISCLOSED INCOME. 3.2 THE LD. CIT(A) CONSIDERED THE SUBMISSIONS OF TH E ASSESSEE AND RELEVANT STATEMENT RECORDED U/S 132(4) OF THE ACT AND DELETED THE ADDI TION VIDE PARA 3.3 OF HIS ORDER BY OBSERVING AS UNDER. 4 3.3 I HAVE CONSIDERED THE SUBMISSION OF LD. AR AN D HAVE PERUSED MATERIAL ON RECORD. THE AO HAS MERELY ADDED THE CASH FOUND IN SPITE OF THE FURNISHING OF THE DETAILS REGARDING SU FFICIENT CASH BALANCES WITH THE VARIOUS CONCERNS BEFORE THE AO TOTALING TO R 67.21 LACS, AS PER THE CHART GIVEN IN THE WRITTEN SUBMISSION OF THE A.R., ALSO SUBMITTED BEFORE ME, AO WAS OF THE VIEW, THAT AS DURING THE COURSE O F SEARCH, THE APPELLANT DID NOT SAY ANYTHING RELATED TO THE FACT THAT CASH OF THE FIRM/ CONCERNS WAS LYING IN THE HOUSE, ACCORDINGLY, ARGUMENT OF A.R, I S NOT ACCEPTABLE AND THEREFORE, AO MADE THE ADDITION. IT IS SEEN THAT AO HAS NOT ADVERSELY COMMENTED ABOUT THE CASH BALANCES OF THE VARIOUS CO NCERNS. MOREOVER SUCH CASH WAS ALSO NOT FOUND AT THE VARIOUS BUSINES S CONCERNS OF THE APPELLANT. IT IS NOT UNCOMMON THAT PART OF THE CASH OF BUSINESS CONCERNS IS BROUGHT TO THE RESIDENCE BY THE BUSINESSMAN IN GENE RAL. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, IT WILL NOT BE JUSTIFIED T O SUSTAIN THE ADDITION REGARDING THE CASH FOUND, SO MADE BY THE AO AND ACC ORDINGLY THE ADDITION IS HEREBY DELETED. HENCE, THIS APPEAL BY THE DEPARTMENT. 3.3 AT THE TIME OF HEARING, THE LD. DR RELIED ON TH E ORDER OF THE AO AND ON THE OTHER HAND, THE LD. AR SUPPORTED THE ORDER OF THE LD. CIT (A). 3.4 CONSIDERING THE REASONINGS GIVEN BY THE LD. CIT (A) AND IN THE ABSENCE OF ANY CONTRARY FACTS BROUGHT ON RECORD BY THE LD. DR , WE UPHOLD HIS ORDER AND REJECT THE GROUND NO. 1 OF THE APPEAL TAKEN BY THE DEPARTMENT. 4.1 AS MENTIONED HEREINABOVE, THE GROUND NO. 2 TAKE N BY THE DEPARTMENT IS CONNECTED WITH THE GROUND OF THE C.O. OF THE ASSESS EE. 4.2 THE RELEVANT FACTS ARE THAT DURING THE COURSE O F SEARCH, SEVERAL FURNITURE AND FIXTURES INCLUDING ELECTRONIC CONSUMER DURABLES AND GADGETS WERE FOUND FROM / IN THE HOUSE OF THE ASSESSEE. THE INVENTORY OF THE ITEMS P REPARED DURING THE COURSE OF SEARCH IS 5 STATED BY THE AO AT PAGE 5 IN THE ASSESSMENT ORDE R. THE AO ASKED THE ASSESSEE TO FURNISH THE SOURCE OF EXPENDITURE INCURRED ON SUCH ITEMS AND TO FURNISH CASH BOOK, IF THE PAYMENTS WERE MADE IN CASH. SINCE THE ASSESSEE FAIL ED TO FURNISH THE DETAILS OF SOURCE OF PAYMENTS MADE FOR PURCHASE AND INSTALLATION OF THE FURNITURE AND FIXTURES ITEMS, THE AO ADDED A SUM OF RS. 5.00 LACS TO THE INCOME OF THE A SSESSEE FOR THE YEAR UNDER CONSIDERATION. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4.3 ON BEHALF OF THE ASSESSEE, IT WAS CONTENDED THA T THE AO HAS NOT ASSIGNED INDIVIDUAL VALUE TO EACH AND EVERY ITEM AS WELL AS HAS NOT CONSIDERED THE RELEVANT DATE WHEN THE SAME WAS PURCHASED AND IF THE SAME ARTICLE S ARE EVALUATED AS ON CURRENT DATE THEN THEIR PRICE WOULD COME MUCH LESSER THAN THE AD DITION MADE BY THE AO. IT WAS ALSO CONTENDED THAT THE AO GROSSLY IGNORED THE FACT THAT SOME OF THE FURNITURE WERE PURCHASED BEFORE THE BLOCK PERIOD AND THE SAME FACT WAS ALSO MENTIONED IN THE LIST WHICH WERE PREPARED AT THE TIME OF SEARCH. IT WAS CONTENDED TH AT THE AO DID NOT TAKE PAIN TO LOOK AFTER ACTUAL WORTH OF THE ARTICLES AND SIMPLY MADE AN ADDITION FOR THE AMOUNT WHICH SUITED TO HIM. IT WAS CONTENDED THAT SAID ITEMS WER E PURCHASED AT DIFFERENT POINT OF TIME BY THE ASSESSEE AND HIS FAMILY MEMBERS FROM THE AMO UNT WITHDRAWN BY THEM FOR HOUSE HOLD PURPOSES AND THE ASSESSEE HAS MADE SUFFICIENT AMOUNT OF WITHDRAWAL TO MEET OUT SUCH EXPENSES. IT WAS ALSO CONTENDED THAT THE ASSES SEE ALSO OFFERED ADDITIONAL INCOME OF RS. 1,16,31,103/- ON ACCOUNT OF UNEXPLAINED INVEST MENT IN JEWELLERY, HOUSE HOLD EXPENDITURE ETC. TO PURCHASE PEACE OF MIND AND TO A VOID PROLONGED LITIGATION AND DUE TAX ON THE SAME HAS ALREADY BEEN PAID BY THE ASSESSEE. THEREFORE, THE AO WAS NOT JUSTIFIED IN MAKING A SEPARATE ADDITION OF RS. 5.00 LACS. 6 4.4 THE LD. CIT(A) CONSIDERED THE ABOVE SUBMISSIONS OF THE ASSESSEE VIDE PARA 4.3 OF HIS ORDER AND SUSTAINED THE ADDITION TO RS. 3.00 LA CS BY GIVING RELIEF OF RS. 2.00 LACS AFTER OBSERVING AS UNDER:- 4.3 I HAVE CONSIDERED THE SUBMISSION OF LD. AR AN D HAVE PERUSED THE MATERIAL ON RECORD. THE A.R, HAS TAKEN GENERAL ARGUMENT THAT THE ITEMS HAVE BEEN PURCHASED AT DIFFERENT DIFFER ENT POINT OF TIME BY THE APPELLANT AND HIS FAMILY MEMBERS FROM THE AMOUNT WI THDRAWN FOR HOUSE HOLD PURPOSES. ON THE PERUSAL OF CHART OF HOUSE HOL D WITHDRAWALS FURNISHED BY THE A.R. IT IS SEEN THAT THOUGH THE W ITHDRAWAL IN PERIOD RELEVANT TO ASSESSMENT YEAR 2008-09 AND ASSESSMENT YEAR 2009-10 ARE RS. 10.95 LACS AND RS. 14.37 LACS WHICH HAS BEEN CONSID ERED REASONABLE BY THE UNDERSIGNED WHILE DELETING HE ADDITION MADE ON ACCO UNT OF INADEQUATE HOUSE HOLD WITHDRAWAL. HOWEVER, THE TOTAL HOUSE HOL D WITHDRAWALS FOR PERIOD RELEVANT TO ASSESSMENT YEAR 2006-07 AND ASSE SSMENT YEAR 2007-08 ARE JUST RS. 5.07 LACS AND RS. 5.37 LACS RESPECTIVE LY. IN THE EARLIER YEARS, THE WITHDRAWALS ARE EVEN LOWER. ACCORDINGLY ARGUMEN T OF A.R. CANNOT BE ACCEPTED FULLY THAT ALL THESE ITEMS HAVE BEEN PURCH ASED OUT OF HOUSE HOLD WITHDRAWALS. SOME OF THE ITEMS CAN BE CONSIDERED TO HAVE BEEN PURCHASED IN LAST TWO YEARS OUT OF THE WITHDRAWALS WHICH ARE COMPARATIVELY HIGHER. IN ABSENCE OF EXACT PURCHASE PRICE OF VARIOUS ITEMS BEING GIVEN BY THE A.R. OR OTHERWISE AVAILABLE WITH AO, THE AO WAS JUS TIFIED IN MAKING ESTIMATED ADDITION. HOWEVER, CONSIDERING SOME PURCH ASES TO BE MADE OUT OF HOUSE HOLD WITHDRAWALS FOR LAST TWO YEARS (RS.50 ,000/- AND RS. 1.5 LACS RESPECTIVELY), IT WILL BE APPROPRIATE AND REASONABL E TO SUSTAIN THE ADDITION OF RS. 3 LACS HENCE THE APPEAL BY THE DEPARTMENT AND THE C.O. BY THE ASSESSEE. 4.5 AT THE TIME OF HEARING, THE LD. DR RELIED ON TH E ORDER OF THE AO. 7 4.6 ON THE OTHER HAND, THE LD. AR THE LD. AR CONTEN DED THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION OF RS. 3.00 LACS AS SUSTAINED BY THE LD. CIT(A) IS ALSO NOT JUSTIFIED. HE SUBMITTED THAT THE ASSESSEE HAS MADE SUFFICIENT WITHDRAWAL IN THE PRECEDING ASSESSMENT YEARS WHICH COULD SUFFICIENTLY EXPLAIN THE ITEMS PURCHASED BY THE ASSESSEE OUT OF HOUSE HOLD WITHDRAWALS. IT IS FURT HER SUBMITTED THAT THE ASSESSEE ALSO OFFERED A SUM OF RS. 1.16 CRORES TOWARDS UNDISCLOSE D INVESTMENT AND DUE TAX WAS PAID THEREON, IT SHOULD TAKE CARE OF HOUSE HOLD ITEMS FOUND. 4.7 WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW. WE OBSERVE THAT THE ASSESSEE HAS MADE SUFFICIENT WITHDRAWALS IN THE PRECEDING ASSESSMENT YEARS, THE DETAILS OF WHICH ARE MENTIONED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. HOWEVER, IT IS A FACT THAT AT THE TIME OF PREPARING INVENTORY NO VALUATION REPORT WAS OBTA INED BY THE DEPARTMENT AND ONLY AN ESTIMATED ADDITION HAS BEEN MADE FOR RS. 5.00 LACS BY THE AO WHICH HAS BEEN REDUCED TO RS. 3.00 LACS BY THE LD. CIT(A) . THE SAID ADDITION HAS BEEN MADE ON AN ADHOC BASIS. IT IS ALSO OBSERVED THAT THE ASSESSEE HAS MADE DISCLOSURE OF RS. 1.16 CRORES TOWARDS UNDISCLOSED INVESTMENT INTER ALIA IN FURNITURE(S) A ND FIXTURE(S). AFTER CONSIDERING THE OTHER ADDITIONS MADE, WE ARE OF THE CONSIDERED VIEW THAT ELECTRONICS ITEMS AND/OR FIXTURES FOUND AT THE PREMISES OF THE ASSESSEE COULD BE SAID TO HAVE BEEN PROCURED FROM THE SAID UNDISCLOSED INCOME DECLARED AND/ OR WITHDRAWAL MADE IN THE PRECEDING ASSESSMENT YEARS. SINCE ASSESSEE COULD NOT FURNISH DETAILS AS TO WHEN THOSE ITEMS WERE PURCHASED AND VALUED THEREOF, WE ARE OF THE CONSIDERED VIEW T HAT IT WILL BE FAIR AND REASONABLE TO SUSTAIN THE ADDITION TO RS. 50,000/- AS AGAINST RS. 3.00 LACS SUSTAINED BY THE LD. CIT(A). 8 HENCE, GROUND NO. 2 OF THE APPEAL TAKEN BY THE DEPA RTMENT IS REJECTED AND C.O. OF THE ASSESSEE IS ALLOWED IN PART. 5.1 IN RESPECT OF GROUND NO. 3 OF THE APPEAL OF TH E DEPARTMENT, THE RELEVANT FACTS ARE THAT DURING THE COURSE OF SEARCH GOLD JEWELLERY HAV ING GROSS WEIGHT OF 8723.60 GMS AND VALUE OF RS. 1,10,37,139/- WAS FOUND AT VARIOUS PRE MISES INCLUDING LOCKERS OF THE ASSESSEE AS WELL AS MEMBERS OF HIS FAMILY. BESIDES ABOVE, SILVER JEWELLERY ITEMS HAVING GROSS WEIGHT OF 523 GMS VALUING OF RS. 7,845/- AND 184 CARAT OF STONES HAVING VALUE OF RS. 20,99,820/- WERE FOUND. THUS THE GOLD, SILVER JEWELLERY/ITEMS AND STONES AGGREGATING TO RS. 1,31,44,804/- WERE FOUND DURING THE COURSE O F SEARCH. THE AO STATED THAT THERE IS NO MENTION OF ANY GOLD AND/ OR SILVER JEWELLERY AND /OR UTENSILS IN THE BALANCE SHEET OF THE ASSESSEE / STATEMENT OF AFFAIRS FURNISHED TO THE D EPARTMENT. THE ASSESSEE HAS ALSO NOT FILED HIS OWN RETURN OF WEALTH IN THE PAST. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE RELYING ON CBDT INSTRUCTION NO. 1916 D ATED 11-05-1994 STATED THAT 500 GMS OF GOLD JEWELLERY IN THE CASE OF MARRIED LADY, 150 GMS GOLD JEWELLERY IN THE CASE OF UNMARRIED LADY AND 100 GMS GOLD JEWELLERY IN THE CA SE OF MALE MEMBER BE TREATED AS EXPLAINED BESIDES 25 KG OF SILVER JEWELLERY. THE AO DID NOT ACCEPT THE SAID CONTENTION OF THE ASSESSEE AND STATED THAT CIRCULAR DOES NOT IN A NY WAY STATE THAT JEWELLERY AND THE AMOUNTS REFERRED TO THEREIN BE TREATED AS EXPLAINED . IT IS RELEVANT TO STATE THAT THE ASSESSEE GAVE THE EXPLANATION OF THE TOTAL JEWELLERY FOUND W HICH IS TABULATED BY THE LD. CIT(A) IN PARA 5.2.4 AT PAGES 14 AND 15 OF THE IMPUGNED ORDE R AND THE SAME IS REPRODUCED AS UNDER. PARTICULARS GOLD JEWELLERY (GMS) SILVER JEWELLERY (GMS) STONES (CTS) JEWELLERY AS PER WEALTH TAX 1015.65 2500 - 9 RETURN OF ASSESSMENT YEAR 1992-93 OF SMT. BALJEET KAUR (ASSESSEE WIFE) (APB 31-11) JEWELLERY RECEIVED BY SMT. HARLEEN THAKKAR (ASSESSEE'S SON-IN-LAW) BY GIFT IN THE YEAR 1998 (APB 75-76 623.98 - - JEWELLERY PURCHASED (APB 70-74) SMT. HARLEEN THAKKAR VIDE BILL NO. 414 ON 11-11-2008 SMT. HARLEEN THAKKAR VIDE BILL NO. 425 ON 22-11-2008 SMT. HARLEEN THAKKAR VIDE BILL NO. 437 ON 03-12-2008 1000 1000 1000 - - JEWELLERY DECLARED AS PER VDIS IN THE YEAR 1997 SMT. BALJEET KAUR (APB 32-45) SHRI HARVINDER SINGH (APB 55-65) SHRI RAVINDER SINGH (APB 46-54) SHRI BALVINDER SINGH (APB 64-69) 2486.27 (30-04-1986 50.58 (30-04-1986) 41.57 (30-04-1086) 53.40 (03-04-1986) 21725 (01-04-1964) - - 15.127 (01-04-87) 56.775 (01-04-87) 58.46 (01-04-87) 51.92 (01-04-87) TOTAL DISCLOSED JEWELLERY 7371.45 10943.00 282.28 2 BALANCE UNEXPLAINED JEWELLERY 1356.81 - - HOWEVER, THE AO DID NOT ACCEPT THE CONTENTIONS OF T HE ASSESSEE STATING THAT JEWELLERY WEIGHING ABOUT 1015 GMS SHOWN IN THE WEALTH TAX RE TURN OF SMT. BALJIT KAUR FOR ASSESSMENT YEAR 1991-92. THE ASSESSEE HAS NOT FURNI SHED ANY EVIDENCE OF SUCH A RETURN OF WEALTH. THE AO ALSO REJECTED THE CONTENTION OF T HE ASSESSEE THAT SMT. HARLEEN THAKKAR RECEIVED JEWELLERY IN GIFT IN THE YEAR 1998 ON THE GROUND THAT DOCUMENTS FILED BY THE ASSESSEE OF GIFT DEED AND VALUATION REPORT WERE SUS PICIOUS. IN RESPECT OF JEWELLERY DISCLOSED UNDER VDIS-1997 IN THE RESPECTIVE HANDS O F THE MEMBERS OF THE FAMILY, THE AO 10 STATED THAT NO DISCLOSURE OF JEWELLERY WAS MADE BY THE ASSESSEE HIMSELF AND THEREFORE, THE SAME IS NOT ACCEPTED. HE FURTHER STATED THAT THERE IS NO GUARANTEE THAT THE JEWELLERY DISCLOSED UNDER VDIS 1997 WAS NOT DISPOSED OFF BY T HE ASSESSEE'S FAMILY MEMBERS OR GIFTED OR IN A WORST CASE SOLD IT FOR SAKE OF MONET ARY BENEFITS. FURTHER IN RESPECT OF JEWELLERY STATED TO BE BOUGHT BY SMT. HARLEEN THAKK AR, THE AO STATED THAT THE ASSESSEE COULD NOT FURNISH DETAILS IN RESPECT OF THE PAYMEN TS MADE FOR SUCH PURCHASES. FURTHER, SMT. HARLEEN THAKKAR HAS NOT SHOWN JEWELLERY IN ANY WEALTH TAX RETURN FILED BY HER. 5.2 THE AO CONCLUDED THAT THERE IS NO OFFICIAL RECO RD OR EVIDENCE OF THE POSSESSION OR THE OWNERSHIP OF THE JEWELLERY BY THE ASSESSEE. THE REFORE, THE AO STATED THAT CLAIM OF THE ASSESSEE THAT JEWELLERY FOUND IN HIS POSSESSION FRO M HIS PREMISES / LOCATION AS EXPLAINED IS REJECTED AND MADE ADDITION OF RS. 1,31,44,804/- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED JEWELLERY. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 5.3 ON BEHALF OF THE ASSESSEE, IT WAS CONTENDED THA T MOST OF THE JEWELLERY WAS EITHER ACQUIRED BY THE ASSESSEE AND HIS FAMILY MEMBERS AT THE TIME OF THEIR MARRIAGES AND OTHER SOCIAL FUNCTIONS AND THE SAME WAS EITHER DISCLOSED IN THE WEALTH TAX RETURN OR DECLARED IN VDIS 1997. IT WAS CONTENDED THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE DETAILS REGARDING THE TOTAL JEWELLERY FOUND DURING THE COURSE OF SEARCH AT THE RESIDENCE AND IN THE BANK LOCKERS OF THE ASSESSEE AND HIS FAMILY MEMBERS WAS SUBMITTED BY THE ASSESSEE. THE AO HAS NOT APPRECIATED THE STATEMENT MADE; AND MADE THE ADDITION OF ENTIRE JEWELLERY FOUND DURING THE COURSE OF SEARCH. ON BEHALF OF THE ASSESSEE, THE LD. AR PLACED RELIANCE IN THE CASE OF CIT VS. KAILASH CHAN D SHARMA, 146 TAXMAN 376 (RAJ.) AND SUBMITTED THAT IT WAS HELD THAT THE ASSESSEE AND HI S FAMILY MEMBERS WERE ENTITLED TO GET 11 FURTHER EXEMPTION OF GOLD JEWELLERY AFTER GIVING TH E BENEFIT OF CBDT INSTRUCTION DATED 11-05-1994. RELIANCE WAS PLACED ON THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RATAN LAL VYAPARILAL JAIN, 45 DTR 290 THAT CBDT CIRCULAR NO. 1916 DATED 11-5-1994 WHICH LAYS DOWN GUIDELINES FOR SEI ZURE OF JEWELLERY AND ORNAMENTS IN THE COURSE OF SEARCH TAKES INTO THE QUANTITY OF JEW ELLERY WHICH WOULD GENERALLY BE HELD BY THE FAMILY MEMBERS OF AN ASSESSEE, UNLESS ANYTHING CONTRARY IS SHOWN, IT CAN BE SAFELY PRESUMED THAT THE SOURCE TO THE EXTENT OF THE JEWEL LERY STATED IN THE CIRCULAR STANDS EXPLAINED. IT WAS ALSO CONTENDED THAT WITHOUT PREJU DICE TO THE ABOVE, THE ASSESSEE OFFERED ADDITIONAL INCOME OF RS. 1,16,31,103/- ON ACCOUNT OF UNEXPLAINED INVESTMENT JEWELLERY, HOUSE HOLD EXPENDITURE ETC TO PURCHASE THE PEACE OF MIND AND TO AVOID PROLONGED LITIGATION AND THE DUE TAX ON THE SAME HAS ALREADY BEEN PAID BY THE ASSESSEE. THEREFORE, MAKING SEPARATE ADDITION OF RS. 1,31,4,804/- ON ACC OUNT OF UNEXPLAINED JEWELLERY WILL AMOUNT TO DOUBLE ADDITION. 5.4 THE LD. CIT(A) CONSIDERED THE SUBMISSIONS OF TH E ASSESSEE AND DELETED SAID ADDITION VIDE PARA 5.3 AND 5.4 OF THE IMPUGNED ORDE R WHICH READS AS UNDER: 5.3 I HAVE CONSIDERED THE SUBMISSION OF LD. A.R. AND HAVE PERUSED THE MATERIAL ON RECORD. THE AO HAS TREATED THE ENTIRE JEWELLERY FOUND TO BE UNEXPLAINED WITHOUT TREATING EVEN ONE G M OF JEWELLERY AS EXPLAINED, WHICH IS HIGHLY UNJUSTIFIED. THE A.O. RE JECTED THE ARGUMENT OF A.R. OF JEWELLERY WEIGHING 1015 GM SHOWN IN THE W.T . RETURN OF SMT. BALJEET KAUR FOR A.Y. 1992-93 ON THE GROUND THAT TH E APPELLANT HAS NOT FURNISHED ANY EVIDENCE OF SUCH A RETURN OF WEALTH/D UE TO ABSENCE OF RETURN BEING OFFICIALLY VERIFIABLE. ON THE OTHER HAND, THE A.R. HAS FURNISHED BEFORE ME THE NOTICE U/S 16(2) OF THE WEALTH TAX FO R A.Y. 1992-93 IN THE CASE OF SMT. BALJEET KAUR ALONGWITH THE VALUATION R EPORT SHOWING GOLD JEWELLERY WEIGHING 1015.65 GMS (NET WEIGHT OF METAL EXCLUDING STONE). THIS EVIDENCE IS OF THE DEPARTMENT ITSELF WHICH CAN NOT BE IGNORED. REGARDING JEWELLERY RECEIVED BY SMT. HARLEEN THACKE R (APPELLANTS DAUGHTER-IN-LAW) BY THE GIFT IN THE YEAR 1998, THE A.O. HAS JUST REJECTED THE 12 GIFT DECLARATION AND VALUATION REPORT FURNISHED BEF ORE HIM ON THE PLEA THAT LANGUAGE OF THE VALUER AND AS MENTIONED BY THE NOTA RY IS SAME, WHICH CASTS SUSPICION ABOUT THE SAID DOCUMENTS. FROM THE PERUSAL OF THE GIFT DECLARATION, IT IS NOTICED BY THE UNDERSIGNED THAT THE PARENTS AND GRANDMOTHER OF MRS. HARLEEN KAUR HAVE STATED THAT J EWELLERY ITEMS MENTIONED THEREIN WERE GIVEN ON THE OCCASION OF THE WEEDING OF SMT. HARLEEN KAUR WITH SH. RAVINDER SINGH. THIS DOCUMENT HAS BEEN ATTESTED BY THE NOTARY PUBLIC. THE VALUER REPORT IS JUST A S UPPORTING OF THIS DOCUMENT AND MERELY BECAUSE LANGUAGE/DESCRIPTIONS O F THE ITEM IN BOTH IS SAME, IT CANNOT MAKE THESE DOCUMENTS INVALID. ON TH E CONTRARY IF DESCRIPTION OF THE JEWELLERY ITEMS IN BOTH DOCUMENT S WOULD HAVE BEEN DIFFERENT, THESE DOCUMENTS WOULD HAVE BEEN POSSIBLY REJECTED. IN ANY CASE, THE GIFT DOCUMENT IS NOT WRITTEN BY THE NOTA RY. IT HAS BEEN PUT ON RECORD BY GRANDMOTHER, FATHER, MOTHER AND BROTHER O F SMT. HARLEEN KAUR. IT IS QUITE USUAL THAT AT THE TIME OF WEEDING PAREN TS AND GRANDPARENTS AND OTHER FAMILY MEMBERS GIVE/GIFT JEWELLERY TO THE BRI DE. ABOVE DOCUMENTS ARE JUST DOCUMENTATION OF SUCH GIFTING OF JEWELLERY TO SMT. HARLEEN KAUR AT THE TIME OF HER MARRIAGE. A.O. WAS NOT JUSTIFIED IN JUST REJECTING THESE DOCUMENTARY EVIDENCES. THIRDLY, THE A.O. HAS REJECT ED THE JEWELLERY BOUGHT BY SMT. HARLEEN THAKKAR VIDE THREE BILLS FUR NISHED BEFORE THE A.O. ONLY ON THE GROUND THAT THE APPELLANT COULD NOT FUR NISH DETAILS IN RESPECT OF PAYMENT MADE FOR SUCH PURCHASES. HOWEVER, ON PERUSA L OF THE PHOTO COPIES OF THE BILLS ALSO FURNISHED BEFORE THE UNDER SIGNED AT P.B. PAGE 70 TO 74 THAT IN TWO BILLS, ONE BILL NO.425 DATED 22.11.0 8 FOR RS.13,35,200/- AND ANOTHER BILL NO. 437 DATED 3.12.2008, THE CHEQUE NO . ARE ALREADY MENTIONED BELOW THE BILL. MOREOVER, THE A.R. HAS ALSO FURNISH ED THE COPY OF BANK ACCOUNT OF SMT. HARLEEN THAKKAR EVIDENCING DEBITING THE BANK ACCOUNT IN FAVOUR OF M/S ALANKAR, WHICH WAS AVAILABLE ON RECOR D OF THE AO AS THE SAME WAS SUBMITTED IN THE ASSESSMENT PROCEEDINGS OF SMT. HARLEEN THAKKAR. 3 GOLD BARS WERE ALSO INTER-ALIA INCLUDED IN TOTAL GOLD FOUND. HENCE THE CLAIM OF THE APPELLANT IS ACCEPTABLE ON T HE FACE OF IT. WITHOUT FURTHER GOING INTO THE MERITS OF THE CLAIM, AS DISC USSED HEREIN BELOW, THE APPELLANT HAS SURRENDERED RS. 1 CRORE UNDER MISC. PROVISIONS WHICH INCLUDE JEWELLERY, HOUSEHOLD EXPENSES ETC AND THIS AMOUNT IS MORE THAN SUFFICIENT TO TAKE CARE OF ADVERSE INFERENCE, IF AT ALL DRAWN WHILE GOING DEEPER INTO THE MERITS OF THE ISSUE OF PURCHASE OF JEWELLERY BY SMT. HARLEEN THAKKAR. FOURTHLY, THE A.O. HAS ALSO REJECT ED THE VDIS DECLARATION OF THE FAMILY MEMBERS DISCLOSING THEREI N THE GOLD JEWELLERY AND SILVER ORNAMENT, ON THE PLEA THAT THERE IS NO V DIS DISCLOSURE OF THE APPELLANT AND MOREOVER WHAT IS THE GUARANTEE THAT J EWELLERY DISCLOSED IN VDIS 1997 IS STILL AVAILABLE WITH THE FAMILY MEMBER S. THE GOLD ORNAMENTS OF THE ENTIRE FAMILY MEMBER WERE TAKEN TOGETHER AND THE TOTAL GOLD JEWELLERY FOUND WAS 8723.60 GMS HAS TO BE CONSIDERE D. HENCE ARGUMENT OF A.O. THAT NO JEWELLERY HAS BEEN DISCLOSED UNDER VDIS BY THE APPELLANT HIMSELF, IS NOT RELEVANT. MOREOVER IN ABSENCE OF AN Y CONTRARY EVIDENCE REGARDING JEWELLERY BEING DISPOSED OFF, IT IS REASO NABLE TO PRESUME THAT THE 13 JEWELLERY CONTINUED TO BE WITH THE FAMILY MEMBERS. EVEN IF PART OF IT MIGHT BE GIVEN ON THE OCCASION OF MARRIAGE OF SON O R ON THE BIRTH OF GRANDSONS/GRANDDAUGHTERS, SAME STILL REMAINS IN THE FAMILY. CONSIDERING THESE FACTS AND CIRCUMSTANCES, THE TOTAL JEWELLERY WHICH CAN BE CONSIDERED EXPLAINED IS 7371.45 GMS, WHICH LEAVES UNEXPLAINED JEWELLERY WEIGHING 1356.81 GMS. MOREOVER FURTHER CREDIT OF NORMAL AND GRADUAL ACQUISITION OF THE JEWELLERY WHICH HAS BEEN MENTIONED IN INSTRUCTI ON NO.1916 DATED 11.5.94 FOR THE PURPOSE OF SEIZURE BUT HAS BEEN HEL D TO BE APPLICABLE FOR CONSIDERING EXPLAINED JEWELLERY AS PER THE DECISION OF RAJ. HIGH COURT IN THE CASE OF CIT VS. KAILASH CHAND SHARMA 146 TAXMAN 376 AND FURTHER SUPPORTED BY DECISION IN THE CASE OF CIT VS. RATAN LAL VYAPARI LAL 45 DTR 290 (GUJ), HAS ALSO TO BE GIVEN IN RESPECT OF M EMBERS FOR WHICH THERE IS NO DOCUMENTARY EVIDENCE. THE AVERAGE RATE OF GOLD JEWELRY INCLUDING VALUE OF STONE COMES TO RS.15,059/- PER 1 0 GM (RS.1,31,36,959/- DIVIDED BY 8723.60 GMS). EVEN WITHOUT QUANTIFYING S UCH CREDIT, THE VALUE OF UNEXPLAINED JEWELLERY WEIGHING 1356.81 GMS COMES TO RS.20,43,220/-. 5.4 IN GROUND NO.5, THE AR. HAS MENTIONED THAT A.O. HAS GROSSLY ERRED IN IGNORING THE FACT THAT THE ASSESSEE HAS ALREADY OFFERED A SUM OF RS.1 CRORE TOWARDS THE INVESTMENT MADE IN THE JEWELLERY AND OTHER HOUSEHOLD ITEMS OUT OF HIS UNDISCLOSED INCOME DECLARED THROUG H FUND FLOW STATEMENT, MORE PARTICULARLY WHEN THE A.O. HAS ACCEPTED THE AD DITIONAL INCOME DECLARED BY THE ASSESSEE. THE A.R. HAS ARGUED THAT WITHOUT PREJUDICE TO ALL THE VARIOUS ARGUMENTS ABOUT EXPLANATION OF THE JEWE LLERY, IN ANY CASE, APPELLANT HAS OFFERED ADDITIONAL INCOME OF RS.1,16, 31,103/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY, HOUSEHOLD EXPE NDITURE ETC. IN A.Y. 2009-10 TO PURCHASE PIECE OF MIND AND AVOID PROLONG ED LITIGATION. IT IS SEEN BY THE UNDERSIGNED THAT PEAK UNACCOUNTED MONEY REQUIRED HAS BEEN DISCLOSED BY THE APPELLANT IN VARIOUS YEARS I.E. A. Y. 2006-07, A.Y. 2008- 09 AND A.Y. 2009-10 BY DRAWING FUND FLOW STATEMENT. IN A.Y. 2009-10, RS.1 CRORE HAS BEEN SHOWN AS ADDITIONAL INCOME AS M ISC. PROVISIONS- UTILIZED FOR JEWELLERY, HOUSEHOLD EXPENDITURE ETC. AFTER INCLUDING THIS UNACCOUNTED REQUIREMENT OF RS.1 CRORE, FURTHER PEAK UNACCOUNTED MONEY REQUIRED IN A.Y. 2009-10 COMES TO RS.1,16,31,103/-, WHICH HAS BEEN OFFERED FOR TAXATION IN RETURN FILED FOR A.Y. 2009- 10 BY THE APPELLANT. THE A.O. HAS ACCEPTED THESE DETAILS INCLUDING THE ADDIT IONAL INCOME SO DECLARED. MOREOVER, THE AO. HAS NOT COUNTERED THIS ARGUMENT OF THE A.R. OF THE APPELLANT IN THE ASSESSMENT ORDER. FURTHER, NOTHING HAS BEEN BROUGHT OUT ON RECORD BY THE A.O., WHICH CAN LEAD TO THE CO NCLUSION THAT THE RS.1 CRORE INCLUDED IN THE ADDITIONAL INCOME OF RS.1,16, 31,103/- HAS BEEN INVESTED/UTILIZED ELSEWHERE BY THE APPELLANT. CONSI DERING THESE FACTS, IT WILL BE UNJUSTIFIED TO MAKE FURTHER ADDITION OF AFO RESAID AMOUNT OF RS.20,43,220/-, EVEN THOUGH THE APPELLANT HAS ALREA DY SURRENDERED/OFFERED RS.1 CRORE INTER-ALIA, INCLUDING MAINLY THE JEWELLE RY ITEMS, OTHERWISE IT WILL LEAD TO DOUBLE TAXATION ON THE SAME ISSUE. SIL VER JEWELLERY/ORNAMENTS VALUING RS.7845/- CAN BE CONSIDERED TO THE REASONAB LY ACQUIRED FROM TIME 14 TO TIME AND ACCORDINGLY, IS TREATED AS EXPLAINED. A T THE WORST, SAME IS INCLUDABLE IN THE ADDITIONALLY OFFERED INCOME OF RS .1 CRORE. IN BRIEF, THE ADDITION OF RS.1,31,44,804/- IS HEREBY DELETED. HENCE, THIS APPEAL BY THE DEPARTMENT. 5.5 AT THE TIME OF HEARING, THE LD. DR DID NOT MAKE ANY SUBMISSION SAVE AND EXCEPT RELYING ON THE ORDER OF THE AO. 5.6 ON THE OTHER HAND, THE LD. AR SUPPORTED THE ORD ER OF THE LD. CIT(A). 5.7 WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF TH E AUTHORITIES BELOW AND SUBMISSIONS OF THE LD. REPRESENTATIVES. THE GOLD JE WELLERY/ SILVER JEWELLERY / STONES HAVE BEEN FOUND DURING THE COURSE OF SEARCH AT VARIOUS P REMISES INCLUDING LOCKERS OF THE ASSESSEE AS WELL AS MEMBERS OF HIS FAMILY. WE ALSO OBSERVE THAT THE ASSESSEE STATED THAT JEWELLERY TO THE EXTENT OF 7371.450 GMS AND SILVER JEWELLERY TO THE EXTENT OF 10943.00 GMS AND STONES TO THE EXTENT OF 282.282 HAVE BEEN D ISCLOSED IN THE HANDS OF VARIOUS MEMBERS OF FAMILY EITHER BY WAY OF WEALTH TAX RETUR N, RECEIPT OF JEWELLERY BY GIFT DEED, PURCHASE OF JEWELLERY OR DISCLOSURE UNDER VDIS IN T HE YEAR 1997, THE DETAILS OF WHICH ARE MENTIONED HEREINABOVE IN TABULATED FORM WHICH HAS B EEN REPRODUCED IN PARA 5.1 THE AO DID NOT ACCEPT THE SAID CONTENTION OF THE ASSESSEE MERELY ON THE GROUND THAT SAID JEWELLERY HAS NOT BEEN SHOWN IN ASSESSEE'S HANDS. IT IS NOT T HE CASE OF THE DEPARTMENT THAT ENTIRE JEWELLERY WAS FOUND FROM THE POSSESSION OF THE ASSE SSEE. THE JEWELLERY HAVE BEEN FOUND AT VARIOUS PLACED AND BANK LOCKERS FROM THE POSSESS ION OF THE ASSESSEE AS WELL AS FROM HIS FAMILY MEMBERS. THEREFORE, THE ACTION OF THE AO TO MAKE ADDITION OF THE ENTIRE JEWELLERY IN THE HANDS OF THE ASSESSEE MERELY BECAUSE NO GOLD JEWELLERY, UTENSILS MENTIONED IN THE BALANCE SHEET OF THE ASSESSEE OR STATEMENT OF AFFAI RS FURNISHED BY THE ASSESSEE TO THE DEPARTMENT IS NOT JUSTIFIED. FURTHER, THE LD. CIT(A ) HAS RIGHTLY STATED THAT BALANCE 15 UNEXPLAINED JEWELLERY WEIGHING 1356.81 GMS COMES TO RS. 20,43,220/. HOWEVER, THE ASSESSEE HAS OFFERED THE ADDITIONAL INCOME OF RS. 1 ,16,31,103 /- (UNEXPLAINED INVESTMENT) ON ACCOUNT OF UNEXPLAINED JEWELLERY, HOUSE HOLD EX PENDITURE ETC. IN ASSESSMENT YEAR 2009-10. IN ASSESSMENT YEAR 2009-10, RS. 1.00 CRORE HAS BEEN SHOWN AS ADDITIONAL INCOME AS MISC. PROVISIONS, UTILIZED FOR JEWELLERY, HOUSE HOLD EXPENSES ETC. THE LD. CIT(A) HAS RIGHTLY HELD THAT CONSIDERING THE FACTS, IT WILL BE UNJUSTIFIED TO MAKE ADDITION OF RS. 20,43,220/- WHEN THE ASSESSEE HAS ALREADY SU RRENDERED / OFFERED RS. 1.00 CRORE INTER ALIA INCLUDING JEWELLERY OF THE ITEMS OTHERWI SE IT WILL LEAD TO DOUBLE TAXATION ON THE SAME ISSUE. 5.8 IN VIEW OF THE ABOVE FINDINGS OF THE LD. CIT(A) , WE HOLD THAT THERE IS NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). HENCE, WE UPHOLD HIS ORDER AND REJECT GROUND OF APPEAL TAKEN BY THE DEPARTMENT. 3.0 IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED AND S C.O. OF THE ASSESSEE IS ALLOWED IN PART. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 23-01 -2013. SD/- SD/- (B.R. JAIN) (B.R. MITTAL) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 23 RD JAN 2013 *MISHRA COPY FORWARDED TO:- BY ORDER 1. THE DCIT, CENTRAL CIRCLE- 2, JAIPUR 2. SHRI AJIT SINGH, JAIPUR 3.THE LD. CIT 4.THE LD. CIT(A) 5.THE LD. DR 6.THE GUARD FILE (IT NO.453/JP/12) A.R. ITAT: JA IPUR 16 17