Shri R.Srikabilan, CHENNAI V. Additional CIT, Madurai

ITA 489/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51959 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 04-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 11-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MDS; P R RAVIKUMAR I T A NOS
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 489 /MDS/2011 ASSESSMENT YEAR : 2007-08 SHRI R. SRIKABILAN, # 4/1, DHANASEKARAN NAGAR, TUTICORIN- 628 002. [PAN : AGUPS2963E] V. THE ADDL. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-III(CONC.), MADURAI. A N D I.T.A. NO. 490/MDS/2011 ASSESSMENT YEAR : 2007-08 SMT. S. MANJULA, THE ADDITIONAL COMMISSIONER # 4/1, DHANASEKARAN NAGAR, V. OF INCOME-TAX, CENTRAL TUTICORIN- 628 002. CIRCLE-III (CONC.), MADURAI. [PAN : ACJPM5858M] (APPELLANTS) (RESPONDENT) APPELLANTS BY : SHRI PHILIP GEORGE, ADVOCATE RESPONDENT BY : SHRI P. R. RAVIKUMAR, CIT-DR I.T.A. NOS.489 & 490/MDS/2011 2 DATE OF HEARING : 04-10 -2011 DATE OF PRONOUNCEMENT : 14-10-2011 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO. 489/MDS/2011 IS AN APPEAL FILED BY SHRI R. SRIKABILAN AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)II, MADURAI IN IT A NO. 237-B/2009-10 DATED 10-12-2010 FOR THE ASSESSMENT YEAR 2007-08 AND ITA NO. 490/MDS/2011 IS AN APPEAL FILED BY THE ASSESSEE, SMT. S. MANJULA AGAIN ST THE ORDER OF THE LEARNED CIT(APPEALS)-II, MADURAI IN ITA NO. 237A/2009-10 DA TED 10-12-2010 FOR THE ASSESSMENT YEAR 2007-08. AS BOTH THE APPEALS ARE I NTER-CONNECTED, THE SAME ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. SHRI PHILIP GEORGE, ADVOCATE REPRESENTED ON BEHA LF OF THE ASSESSEES AND SHRI P.R. RAVIKUMAR, LEARNED CIT-DR REPRESENTED ON BEHAL F OF THE REVENUE. 3. IT WAS THE SUBMISSION BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSEES ARE INDIVIDUALS. THE ASSESSEE SMT. S. MA NJULA IS THE WIFE OF SHRI R. SREEDHARAN ALIAS R. SRIKABILAN. BOTH THE ASSESSEES ARE PARTNERS IN A PARTNERSHIP FIRM M/S. M.V.M. SUBRAMANIA NADAR & SONS. THE PART NERSHIP FIRM IS DOING THE BUSINESS OF SELLING SALT PRODUCED OUT OF THE SALT P ANS. THERE WAS A SEARCH AND I.T.A. NOS.489 & 490/MDS/2011 3 SEIZURE OPERATION ON THE RESIDENTIAL PREMISES OF TH E ASSESSEE, SHRI R. SREEDHARAN ALIAS R. SRIKABILAN AND SMT. S. MANJULA ON 04-07-20 06. IN THE COURSE OF SEARCH 2328.900 GMS. OF GOLD WAS FOUND. THE ASSESSEE WAS QUESTIONED REGARDING THE SOURCE OF THE GOLD JEWELLERY AND THE ASSESSEE HAD E XPLAINED THAT 600 GMS. OF GOLD BELONGED TO SMT. RANJITHAM, MOTHER OF THE ASSESSEE. SMT. MANJULA OWNED 296 GMS. OF GOLD. PRASHANT AND NISHANTH, SONS OF THE A SSESSEE OWNED 11 SOVEREIGNS OF GOLD EACH. SHRI R. SRIKABILAN OWNED 2.5 SOVEREI GNS OF GOLD AND SMT. INBA SUDHA, SISTER OF THE ASSESSEE OWNED 125 SOVEREIGNS OF GOLD. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD TREATED 2 398.900 GMS. OF GOLD FOUND AT THE RESIDENCES OF THE ASSESSEES AS UNEXPLAINED INVE STMENT BY DISBELIEVING THE STATEMENTS OF THE ASSESSEES AND HAD ASSESSED THE SA ME IN THE HANDS OF BOTH SMT. S. MANJULA AND SHRI R. SREEDHARAN ALIAS R. SRI KABILAN AT 50% EACH. IT WAS THE SUBMISSION THAT BEFORE THE LEARNED CIT(A) THE ASSESSEE HAD PRODUCED THE WEALTH-TAX RETURNS OF SMT. RANJITHAM AS ON 31.3.199 2 AS ALSO OF SMT. MANJULA AND SHRI R. SRIKABILAN. THE PURCHASES OF GOLD JEWELLER Y DURING THE YEARS HAD ALSO BEEN PRODUCED BEFORE THE LEARNED CIT(A) BY SHOWING IN TH E CAPITAL ACCOUNT FOR THE ASSESSMENT YEAR 2006-07. THUS OUT OF THE TOTAL OF 2328.900 GMS. OF GOLD, THE ASSESSEE HAD PRODUCED THE WEALTH-TAX RETURNS AS ALS O THE CAPITAL ACCOUNT AND TRIAL BALANCES IN RESPECT OF THE 1138 GMS. THE ASSESSEE HAD ALSO PRODUCED THE AFFIDAVIT OF SMT. INBA SUDHA BEFORE THE ASSESSING O FFICER AS ALSO THE LEARNED CIT(A) FOR 125 SOVEREIGNS OF GOLD BUT THE SAME WAS NOT ACCEPTED. CONSEQUENTLY, I.T.A. NOS.489 & 490/MDS/2011 4 THE DIFFERENTIAL AMOUNT OF 1190 GMS. WAS DIRECTED B Y THE LEARNED CIT(A) TO BE ASSESSED IN THE HANDS OF EACH OF THE ASSESSEES AT 5 0% THUS RESULTING IN AN ADDITION OF 595 GMS. OF GOLD IN EACH HAND. 4. IT WAS THE SUBMISSION BY THE LEARNED AUTHORISED REPRESENTATIVE THAT SMT. INBA SUDHA IS THE SISTER OF THE ASSESSEE SHRI R. SR EEDHARAN ALIA R. SRIKABILAN. IT WAS THE SUBMISSION THAT IN THE COURSE OF SEARCH ON 04-07-2006 ITSELF IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT IN REPLY TO QUESTION NO.7 THE ASSESSEE HAD CATEGORICALLY ADMITTED THAT 125 SOVERE IGNS OF GOLD JEWELLERY WAS OWNED BY SMT. INBA SUDHA. IT WAS THE SUBMISSION TH AT AS THERE WERE FAMILY PROBLEMS IN THE FAMILY OF SMT. INBA SUDHA, THE JEWE LERY OF SMT. INBA SUDHA HAD BEEN KEPT IN SAFE CUSTODY WITH THE ASSESSEE SHRI R. SRIKABILAN. IT WAS THE FURTHER SUBMISSION THAT THE AFFIDAVIT FILED BY SMT. INBA SU DHA HAS ALSO NOT BEEN DISPROVED BY THE REVENUE. IT WAS THE SUBMISSION THAT THE ADD ITION MADE ON THIS COUNT WAS LIABLE TO BE DELETED. IT WAS THE FURTHER SUBMISSIO N THAT 190 GMS. OF GOLD JEWELLERY WHICH REMAINED TO BE EXPLAINED WAS THE JEWELLERY RE CEIVED AS GIFTS ON VARIOUS OCCASIONS FOR WHICH NO EVIDENCE WAS SPECIFICALLY AV AILABLE. IT WAS THE SUBMISSION THAT IN TAMILNADU RECEIVING JEWELLERY AS GIFTS FROM CLOSE RELATIVES WAS CUSTOMARY AND NO RECORDS COULD BE PRODUCED TO PROVE THE GIFTS . IT WAS THE SUBMISSION THAT THE ADDITION MAY BE DELETED. 5. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDER OF THE LEARNED CIT(A). IT WAS THE SUBMISSION THAT IN REGARD TO 19 0 GMS. OF GOLD JEWELLERY, IN I.T.A. NOS.489 & 490/MDS/2011 5 THE ABSENCE OF ANY EVIDENCE THE SAME COULD NOT BE D ELETED. IN REGARD TO THE CLAIM OF 125 SOVEREIGNS OF GOLD BELONGING TO SMT. I NBA SUDHA, IT WAS THE SUBMISSION THAT NO CORROBORATIVE EVIDENCE HAD BEEN PRODUCED. IT WAS THE FURTHER SUBMISSION THAT IN PARA 5.7 OF THE ORDER OF THE LEA RNED CIT(A), THE LEARNED CIT(A) HAS ALSO RECOGNIZED THAT THE CLAIM APPEARS TO BE AN AFTER-THOUGHT. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED CIT(A) WAS LIABLE TO BE UPHELD. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE STATEMENT RECORDED IN THE COURSE OF SEARCH UNDER SECTION 132( 4) OF THE ACT, MORE SPECIFICALLY IN REGARD TO QUESTION NO. 7, CLEARLY SHOWS THAT ON THE DATE OF SEARCH ITSELF THE ASSESSEE HAS CATEGORICALLY ADMITTED THAT 125 SOVERE IGNS OF GOLD JEWELLERY OWNED BY THE ASSESSEES SISTER, SMT. INBA SUDHA. THUS TH IS IS NOT A FRESH CLAIM MADE BY THE ASSESSEE. IT IS A STATEMENT MADE IN THE COURSE OF SEARCH ITSELF. THUS IT CANNOT BE SAID THAT THE CLAIM OF 125 SOVEREIGNS OF GOLD JEWELLERY BELONGED TO THE ASSESSEES SISTER, SMT. INBA SUDHA, WAS AN AFTER-TH OUGHT. A PERUSAL OF THE PROVISIONS OF SECTION 132(4) CLEARLY SHOWS THAT THE AUTHORIZED OFFICER IS ENTITLED TO RECORD A STATEMENT IN THE COURSE OF SEARCH AND SUCH STATEMENT CAN BE USED AS AN EVIDENCE IN ANY PROCEEDINGS UNDER THE INCOME TAX AC T, 1961. THUS THE STATEMENT GIVEN IN THE COURSE OF SEARCH UNDER SECTI ON 132(4) OF THE ACT ITSELF TAKES THE FORM OF AN EVIDENCE. THIS EVIDENCE, IT I S NOTICED, HAS BEEN REAFFIRMED BY SMT. INBA SUDHA IN HER AFFIDAVIT FILED BEFORE TH E ASSESSING OFFICER AND THE LEARNED CIT(A). THIS AFFIDAVIT HAS NOT BEEN DISPUT ED OR DISPROVED. ONCE IT IS I.T.A. NOS.489 & 490/MDS/2011 6 NOTICED THAT THE CLAIM IS NOT AN AFTER-THOUGHT AND THE SAME IS ALSO SUPPORTED BY THE AFFIDAVIT OF THE OWNER OF THE JEWELLERY WHICH H AS ALSO NOT BEEN DISPUTED OR SHOWN TO BE FALSE, THE CLAIM CANNOT BE REJECTED. T HIS IS BECAUSE THIS CLAIM HAS BEEN MADE RIGHT AT THE TIME OF THE SEARCH ITSELF. NORMALLY, THE FIRST STATEMENT GIVEN IN THE COURSE OF SEARCH REFLECTS THE TRUE AFF AIRS AND IT IS ONLY LATER THAT WITHDRAWALS FROM THE STATEMENTS ARE NORMALLY MADE. THIS IS NOT THE CASE IN THE PRESENT APPEAL. IN THE CIRCUMSTANCES, WE ARE OF TH E VIEW THAT THE CLAIM OF THE ASSESSEE THAT 125 SOVEREIGNS OF GOLD JEWELLERY BELO NGS TO SMT. INBA SUDHA IS A RELIABLE CLAIM AND CONSEQUENTLY THE ORDER OF THE LE ARNED CIT(A) ON THIS ISSUE STANDS MODIFIED AND THE ASSESSING OFFICER IS DIRECT ED TO DELETE THE ADDITION IN REGARD TO THE 125 SOVEREIGNS OF GOLD BELONGING TO S MT. INBA SUDHA. 7. IN REGARD TO 190 GMS. OF JEWELLERY, THOUGH IT IS TRUE THAT THE SOCIAL CUSTOM MIGHT PREVAIL IN REGARD TO GIVING OF GOLD JEWELLERY AS GIFTS, ONE CANNOT CLOSE ONES EYES TO THE FACT THAT IF ONE RECEIVES JEWELLERY IN THE FORM OF GIFT, ONE SHOULD ALSO RETURN JEWELLERY IN THE FORM OF GIFTS. KEEPING THI S VIEW IN MIND, WE ARE OF THE VIEW THAT THE ADDITION IN RESPECT OF THE 190 GMS. O F JEWELLERY IS LIABLE TO BE SUSTAINED. IN THE CIRCUMSTANCES, THE ORDER OF THE LEARNED CIT(A) IS MODIFIED TO THE EXTENT THAT 125 SOVEREIGNS OF JEWELLERY BELONGI NG TO SMT. INBA SUDHA IS DELETED FROM THE ADDITIONS MADE AND ONLY THE BALANC E OF 190 GMS. OF GOLD JEWELLERY IS TO BE TREATED AS UNEXPLAINED AND ASSES SED EQUALLY IN THE HANDS OF I.T.A. NOS.489 & 490/MDS/2011 7 BOTH THE ASSESSEES. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE PARTLY ALLOWED. 8. THE ORDER WAS PRONOUNCED IN THE COURT ON 14/10/2 011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 14 TH OCTOBER, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE