K .PALANISAMY, KARUR V. COMMISSIONER OF INCOME TAX, COIMBATORE

ITA 48/CHNY/2021

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The case involves K. Palanisamy, who appealed against the additions made by the Income Tax Department following a search operation under section 132 of the Income Tax Act. The search, conducted on 12.08.2017, resulted in the seizure of Rs. 80 Lacs in cash and 3180.50 grams of jewellery. The Assessing Officer added Rs. 40 Lacs as unexplained cash and valued the jewellery at Rs. 75.97 Lacs, adding it as unexplained investment. The Commissioner of Income Tax (Appeals) partially granted relief on the jewellery but upheld the cash addition. The Tribunal's decision partly allowed the appeal, granting additional credit for the jewellery but maintaining the cash addition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134022 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 12-12-2022
• Assessment Year: 2018-2019
• Appeal Filed On: 28-02-2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 132; 143(3); 153A; 250

Judgement Text

आयकर अपीलीय अिधकरण ‘सी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI माननीय +ी महावीर िसंह, उपा01 एवं माननीय +ी मनोज कु मार अ6वाल ,लेखा सद9 के सम1। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.48/Chn y/2021 (िनधाBरण वषB / Asse ssment Year: 2018-19) K. Palanisamy No.126, KPS Complex, Karur – 639 002. बनाम/ V s. DCIT Central Circle-3, Coimbatore. थायी लेखा सं. /जीआइ आर सं. /P AN / G I R No . AF JP P - 93 50- C (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Ms. N.V. Lakshmi (Advocate)-Ld. AR थ की ओरसे/Respondent by : Shri M. Rajan (CIT) –Ld. DR सुनवाई की तारीख/Date of Hearing : 13-12-2022 घोषणा की तारीख /Date of Pronouncement : 18-01-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. In the aforesaid appeal by assessee for Assessment Year (AY) 2018-19, the grievance of the assessee is two-fold i.e., (i) Confirmation of addition of Rs.32.50 Lacs being cash found and seized during search operations; (ii) Confirmation of addition on account of Jewellery. The order under challenge is order passed by learned Commissioner of Income Tax (Appeals)-19, Chennai [CIT(A)] on 31-12-2020 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 153A r.w.s. 143(3) of the Act on 31-12-2019. Having heard rival ITA No.48/Chny/2021 - 2 - submissions and upon perusal of case records, both the issues are adjudicated as under. 2. The assessee is stated to be engaged in running finance business. The assessee group was subjected to search action u/s 132 on 12.08.2017 and subsequently, notices u/s 153A were issued for AYs 2012-13 to 2018-19 on 30.07.2019. During the course of search operations, certain incriminating documents were founds along with cash of Rs.40 Lacs found from bank locker as held with UCO Bank, Karur. Another cash of Rs.40 Lacs was also found from the business premises of the assessee group. The cash was seized by the search team. The Jewellery weighing 3180.50 grams was found. The net weight was 2700 grams. The jewellery was valued at Rs.75.97 Lacs which was added as unexplained investment in the hands of the assessee. Out of cash found for Rs.80 Lacs, credit was given to the extent of Rs.40 Lacs and the balance amount of Rs.40 Lacs was added as unexplained money since the assessee admitted in statement u/s 132(4) that there were no proper accounts for sum of Rs.40 Lacs. 3. During appellate proceedings, the assessee filed explanation and attributed cash of Rs.12.50 Lacs to gift received from assessee’s mother. Another sum of Rs.20 Lacs was attributed to assessee’s daughter Ms. Namratha. However, it was noted that no return of income was filed by the mother except for AY 2018-19 and accordingly, this claim was not accepted. The daughter was married and living with her family in Erode. The assessee did not offer any such explanation during search proceedings. The affidavit of the daughter was held to be self-serving proposition and accordingly, the addition to ITA No.48/Chny/2021 - 3 - that extent was also not accepted. Part relief was granted against jewellery. Aggrieved the assessee is in further appeal before us. 4. We find that the assessee admitted in statement u/s 132(4) that there were no proper accounts with respect to cash found for Rs.40 Lacs. The cash was found from the Bank locker. At any stage of assessment and appellate proceedings, the assessee could not file satisfactory / proper explanation for availability of cash. Therefore, the impugned order, in this regard, could not be faulted with. The corresponding grounds thus raised by the assessee stand dismissed. 5. Regarding Jewellery, Ld. CIT(A) provide benefit of CBDT instruction No.1916 dated 11.05.1994 and held that considering the family status, it would be reasonable to grant credit for 500 grams of gold jewellery for wife, 400 grams of jewellery for mother, 400 grams for daughter, 75 grams for self and 75 grams each for two grand- daughters. The balance unexplained jewellery to the extent of 1655 grams and 7.7 carats of diamonds was to be added as unexplained jewellery. Still aggrieved, the assessee is in further appeal before us. The Ld. AR pleaded for full benefit of quantities as mentioned in the Circular. 6. We find that the cited CBDT instructions provides concession of jewellery to the extent of 500 grams per a married lady, 250 grams per an unmarried lady and 100 grams per male member of the family. Therefore, concession to that extent could be granted to the assessee. Accordingly, we grant additional credit of 100 grams each for mother and daughter, 25 grams for self, 175 grams for each of the two grand- daughters. In other words, the impugned disallowance would stand restricted to the extent of 1080 grams (1655 grams-575 grams) of ITA No.48/Chny/2021 - 4 - jewellery and 7.7 carats of diamonds. We order so. The grounds thus raised stand partly allowed. 7. The appeal stand partly allowed. Order pronounced on 18 th January, 2023. Sd/- (MAHAVIR SINGH) उपा01 /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद9 / ACCOUNTANT MEMBER चे+ई / Chennai; िदनांक / Dated : 18-01-2023 EDN/- आदेश की Vितिलिप अ 6ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आय ु त (अपील)/CIT(A) 4. आयकर आय ु त/CIT 5. वभागीय त न ध/DR 6. गाड फाईल/GF