Shri V.G.Selvaraj, CHENNAI V. ACIT, CHENNAI

ITA 49/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68912 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 18-12-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 08-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained investment; Question of law
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NOS. ASSESSMENT YEAR APPELLANT RESPONDENT 48/MDS/2013 2009 - 10 SHRI V .G.P.RAVIDAS VGP HOUSE, OLD NO.52, NEW NO.102, HOSPITAL ROAD, SAIDAPET, CHENNAI-600 015 PAN:ADGPV2861D THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-IV(3), CHENNAI. 49/MDS/2013 2009 - 10 SHRI V.G. SELVARAJ VGP HOUSE, OLD NO.52, NEW NO.102, HOSPITAL ROAD, SAIDAPET, CHENNAI-600 015 PAN:ASIPS0167N THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-IV(3), CHENNAI-34. APPELLANT BY : MR. S.SRIDHAR, ADVOC ATE RESPONDENT BY : MR. ANIRUDH RAI, CIT DATE OF HEARING : 18 TH DECEMBER, 2013 DATE OF PRONOUNCEMENT : 31 ST DECEMBER, 2013 O R D E R PER CHALLA NAGENDRA PRASAD, JM : THESE TWO APPEALS ARE FILED BY THE ASSESSEES FOR T HE ASSESSMENT YEAR 2009-10 AND THE ONLY COMMON ISSUE I N THE GROUNDS OF APPEAL OF THESE TWO APPEALS IS THAT COMM ISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING THE ADD ITION OF ` 2,32,670/- AND ` 4,70,018/- BEING THE VALUE OF 242.700 GMS AND 331.700 GMS OF GOLD JEWELLERY AS UNEXPLAINED INVESTMENT IN THE CASES OF V.G.P RAVIDAS AND V.G. S ELVARAJ ITA NO.48 & 49/MDS/2013 2 RESPECTIVELY. SINCE THE ISSUE INVOLVED IN THESE TWO APPEALS IS COMMON, THEY ARE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER. 2. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENTS NOTICED THAT DURING THE COURSE OF SEARC H EXCESS JEWELLERY OF 242.200 GMS AND 331.700 GMS OF GOLD WA S FOUND AND SEIZED IN THESE TWO ASSESSEES CASES RESPECTIVE LY. THE EXCESS JEWELLERY SEIZED WAS TREATED AS UNEXPLAINED INVESTMENT IN JEWELLERY AND COMPLETED THE ASSESSMEN TS. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) CO NFIRMED THE ASSESSMENTS MADE BY THE ASSESSING OFFICER. 3. THE COUNSEL FOR THE ASSESSEE SUPPORTING THE GROU NDS OF APPEAL PLEADS FOR DELETION OF ADDITION OR AT LEAST SOME RELIEF. 4. THE DEPARTMENTAL REPRESENTATIVE RELIED ON THE O RDERS OF LOWER AUTHORITIES. ITA NO.48 & 49/MDS/2013 3 5. HEARD BOTH SIDES. PERUSED THE ORDERS OF LOWER AUTHORITIES. THE COMMISSIONER OF INCOME TAX (APPE ALS) WHILE CONFIRMING THE ASSESSMENTS OBSERVED AS UNDER: - 3. THE APPELLANT AN INDIVIDUAL, WAS SUBJECTED TO SEARCH ON 3.3.2009 BEING PART OF THE VGP GROUP. CONSEQUENTLY, ASSESSMENT U/S.153A R.W.S 143(3) WAS COMPLETED ON 29.12.2010 FOR THE ASSESSMENT YEAR 200 9- 10 WITH AN ADDITION OF ` 4,70,018/- AGAINST WHICH THIS APPEAL HAS BEEN PREFERRED. 4. THE LEARNED AR MADE THE FOLLOWING WRITTEN SUBMISSIONS:- THE ASSESSMENT OF ` 2,32,670/- BEING THE VALUE OF 242.700 GMS OF GOLD JEWELLERY AS UNEXPLAINED INVEST MENT IS CHALLENGED IN THE PRESENT APPEAL AND NON-RECORDI NG OF REASONS TO MAKE THE SAID ADDITION WOULD VITIATE HIS ACTION IN THIS REGARD. THERE WAS ABSOLUTELY NO REASON GIVEN TO ARRIVE AT T HE FINDING OF EXCESS JEWLLERY FOUND AN SEIZED ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE AS UNEXPLAINED INVESTMENT AND IN THIS REGARD THERE WAS NO EXCESS JEWELLERY ASSESSABLE TO TAX AS UNEXPLAINED INVESTM ENT. THEREFORE THE ADDITION IN THIS REGARD DESERVES TO B E DELETED AND ACCORDINGLY THE APPELLANT PLEADS FOR TH E ACCEPTANCE OF SAID GROUND OF APPEAL IN THE INTEREST OF JUSTICE. ALTERNATIVELY IT IS PLEADED THAT CONSIDERING THE SO CIAL STATUS OF THE APPELLANT AS WELL AS THE FAMILY SIZE (2 SONS AND 1 DAUGHTER APART FROM HIS WIFE) COUPLED WITH TH E CIRCULAR/INSTRUCTION OF THE BOARD IN INSTRUCTION NO .1916 (F.NO.286/63/93-IT (INV-II) DATED 11.05.1994 THE ADDITION ON THE FACTS OF THE CASE IS NOT SUSTAINABL E AND ACCORDINGLY THE APPELLANT PRAYS FOR THE DELETION ON THE SAID DIFFERENT GROUND AND THUS RENDER JUSTICE. T H E DE CI S ION REPORT E D IN 3 39 I T R 351 AT PA GE 5 , THE ACTION OF TH E INC O M E TAX A PP E LLAT E T RIBUNAL IN DEL E TING TH E V ALU E OF TH E EXC ESS JEW E LLERY BASED ON TH E ABOVE M E NTI O N E D ITA NO.48 & 49/MDS/2013 4 B OA RD CIRCULAR I S APPRO VE D AND NOT FAULT E D WITH B Y THE HIGH C O URT . S IM IL ARL Y TH E DE C I S ION OF TH E MP.HI G H CO URT R E P O RT E D IN 11 DTR 169 H A D H E LD THAT I N T HE ABSENCE O F AN Y MATERIAL F O UND DURIN G TH E SE AR C H HA V ING N E XU S W I TH UNDI SC L OSE D IN COME, N O A D D ITI O N C OULD B E M A D E IN TH A T R EGA R D A ND FURTHER TH E A PP E LLAT E T RIBUNAL IN TH E SA I D CASE W A S H E LD TO BE JUSTIF IE D I N D E L E TIN G TH E ADDITI O N O N A CC OUNT OF J EWE LL E R Y O N T H E STRENGTH OF THE CBDT INSTRUCTION HEREIN BEFORE REFERRED TO. 5 I HAVE CONSIDERED T HE GR O U N D S RA I SED , T H E SUBMISSIONS MA D E AS WELL AS THE DECISIO NS RE L IE D ON. W ITH REGA R D T O TH E GR O UN D ON V A !I D IT Y BASE D ON TH E C AS E OF M . S . AGRAW AL( H U F ), 11 D TR (MP ) 169, T H E A S S E S SM EN T H AS B EEN F RA M ED CONSEQUENT TO SEARCH I N T HE PR EMI S ES OF T HE APPELLANT AN D AS HAS BE E N HELD IN THE CASE OF ANIL KUMAR BHATIA DATED 7- 8-2012, CONSEQUENT TO A S EARC H IT IS MANDATORY FOR ASSES S MENTS TO B E FRAMED FOR THE RELEVANT SI X Y EARS IN QUESTION TO DETERMINE .. T H E T AXABLE INCOME AND CONSIDERED W I TH THE DECISION IN THE CASE OF HARVE Y H E ART HOSPITALS IN ITA NO . 1842/MDS/2008 DATED 30 TH JANUARY 2009, THIS GROUND RAISED ON VALIDITY OF THE ASSESSMENT IS DISMISSED. 6. WITH REGARD TO THE GROUND ON PROPER OPPORTUNITY, I FIND FROM RECORDS THAT SHRI JOHN MORRIS, CA AND SHRI MOHD.GHOUSE, ACCOUNTANT FOR THE APPELLANT HAD APPEARED AND REPRESENTED THE APPELLANT BEFORE THE ASSESSING OFFICER. THEREFORE THIS GROUND IS WITHOUT ANY BASIS AND IS DISMISSED. 7. ON MERITS, THE GROUND IS THAT THE DETERM I NATION OF EXCESS JEWELLERY AT 242.700 GRAMS WAS WRONG, ITA NO.48 & 49/MDS/2013 5 INCORRECT, UNJUSTIFIED, ERRONEOUS AND NOT SUSTAINAB LE BOTH ON FACTS AND I N LAW, WITHOUT EXPLAINING AS TO HOW IT IS SO. ACCORDING TO THE APPELLANT, THERE IS NO EXCESS UNACCOUNTED JEWELLERY. THE ASSESSING OFFICER HAS CLEARLY STATED THAT EXCESS GOLD JEWELLE RY IS UNEXPLAINED. AS HAS BEEN STATED IN THE ASSESSMENT ORDER, THE APPELLANT HAS FURNISHED BANK GUARANTEE FOR THIS JEWELLERY, BUT HAS NOT FURNISHED AN EXPLANATION FOR THE SAME, MAKING IT UNEXPLAINED. 8. SO FAR AS THE RELIANCE PLACED ON THE CIRCULAR AS WELL AS THE DECISION OF HON'BLE HIGH COURT OF GUJAR AT IN THE CASE OF RATTANLAL VYAPARILAL JAIN, FIRSTLY T HE CIRCULAR REFERRED TO IS A GUIDELINE FOR SEIZURE OF JEWELLERY AND ORNAMENTS. IT DOES NOT AUTOMATICALLY LEAD TO A CONCLUSION THAT WHAT NEED NOT BE SEIZED CAN BE TAKEN AS EXPLA I NED. IN THE DECISION OF THE HON'BLE GUJARAT HIGH COURT RELIED UPON, IN THAT PARTICULAR CASE, THE ASSESSING OFFICER AFTER DEALIN G W I TH EXPLANATION RELAT I NG TO JEWELLERY PERSON-WISE, F O UND 800 GRAMS OF J EWELLERY TO BE EXPLA I NED AND 655 GRAMS WERE UNEXPLAINED . BEFORE THE C I T(A), 40 GMS B ELO NGING T O T H E AP P E LLANT'S W I FE A ND SISTER AND 2 2 3 . 4 G RAM S OF JEWELLERY B E LONGI NG TO ONE MS.BAD L I D EV I WA S F OU ND TO B E UN E X PL AINE D. H O N ' B L E H IGH CO U RT FO UND THA T A FACTU AL F IN D I NG HAD B EEN GI VE N BY T H E T R IBUNAL B ASED O N E X PLA N A T I ON S OFF E R E D WHIC H WE R E F O U N D TO B E I N CO NSONA N CE WITH TH E CI RC UL AR . T HE R EF O R E , IT U PH EL D THE D E C I S I O N O F TH E I TA T. 9. IN THIS CASE, I FIND THAT NO EXPLANATION HAD BEE N OFFERED BEFORE THE ASSESSING OFFICER. NO EXPLANATIO N WAS ITA NO.48 & 49/MDS/2013 6 OFFERED BEFORE ME BUT RELIANCE WAS PLACED ON THE CI RCULAR AND THE DECISION OF THE HONBLE HIGH COURT . WITHOU T AN EXPLANATION THE CIRCULAR CANNOT HELP THE APPELLANT AS THE CIRCULAR DOES NOT MAKE ALLOWANCE IN CALCULATION OF UNEXPLAINED JEWELLERY, AS IN THE NATURE OF A STANDA RD DEDUCTION. HONBLE HIGH COURT ALSO HAD FOUND THAT T HE DECISION OF THE HONBLE ITAT IS BASED ON FACTS AS W ELL AS THE CIRCULAR AND THERE IS NO QUESTION OF LAW. EXCES S IS ARRIVED AT ONLY AFTER ACCOUNTING FOR ALL THE JEWELL ERY FOR WHICH EXPLANATION HAS BEEN OFFERED AND ACCEPTED. IN THE ASSESSMENT ORDER, I FIND THAT 242.700 GMS HAS BEEN FOUND TO BE EXCESS JEWELLERY. CONSIDERING THE FACT THAT NO EXPLANATION HAS BEEN OFFERED EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS, IN MY OPINION, THE ADDITION MADE NEEDS TO BE SUSTAINED. 6. ON GOING THROUGH THE ORDER OF THE COMMISSIONER O F INCOME TAX (APPEALS), WE FIND THAT THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION EITHER BEFORE THE ASSESSING OFFICER OR THE COMMISSIONER OF INCOME TAX (APPEALS) FOR EXCESS JEWELLERY FOUND IN THE COURSE OF SEARCH AS TO WHY I T SHOULD NOT BE TREATED AS UNEXPLAINED INCOME. THE COMMISSIONER OF INCOME TAX (APPEALS) ALSO OBSERVED THAT EXCESS JEW ELLERY IS ARRIVED ONLY AFTER ACCOUNTING FOR ALL JEWELLERY FOR WHICH EXPLANATION HAS BEEN OFFERED AND ACCEPTED. IN THE ITA NO.48 & 49/MDS/2013 7 CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDERS PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ASSESSMENTS MADE BY THE ASSESSING OF FICER. 7. IN THE RESULT, APPEALS OF BOTH THE ASSESSEES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, THE 31 ST DAY OF DECEMBER, 2013 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY ) (CHALLA NAGENDRA PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI. DATED THE 31 ST DECEMBER, 2013. SOMU COPY TO: (1) APPELLANT (4 ) CIT(A) (2) RESPONDENT (5 ) D.R. (3) CIT (6 ) G.F.