Krishanlal B. Nagpal, V. Asstt.CIT,Cir 2(4), Pune,

ITA 517/PUN/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49850 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 01-06-2011
• Assessment Year: misc
• Appeal Filed On: 30-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUKULESH DUBEY
• Assessee Lawyers: P D KUDWA
• Keywords: Opportunity of being heard; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES, PUNE B BEFORE SHRI I.C.SUDHIR, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.517/PN/2009 BLOCK PD: 1987-1988 TO 1997-98 SHRI KRISHANLAL B NAGPAL, PUNE. (PAN AABHN3498L) .. APPELLANT VERSUS ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(4), PUNE. .. RESPONDENT APPELLANT BY: SHRI P.D .KUDWA RESPONDENT BY: SHRI MUKUL ESH DUBEY CIT-DR O R D E R PER D.KARUNAKARA RAO, ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) II, PUNE DT 25 -2-2009 FOR THE BLOCK PERIOD 1987-88 TO 1997-98. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. 1. THE HONBLE CITA0 ERRED IN SUSTAINING THE ADDITION OF RS.1,31,000 MADE BY THE AO OF CASH FOUND AT THE TIM E OF THE SEARCH ON 27-2-1997 ON GROUNDS THAT THE SOURCE OF T HE CASH WAS NOT SATISFACTORILY EXPLAINED. THE APPELLANT PLEADS THAT THE FACTS HAVE NOT BEEN APPRECIATED REASONABLY AND THAT THE A DDITION OF RS1,31,000/- MADE TO INCOME IS NOT JUSTIFIED. 2. THE HONBLE.CIT(A) ERRED IN SUSTAINING ADDITION TO THE EXTENT OF 204.900 GMS. OF JEWELLERY VALUED AT RS.92,037 FOUND AT THE TIME OF SEARCH ON 71997 ON GROUNDS THAT THE ACQUISITION WAS NOT CONCLUSIVELY PROVED. THE APPELLANT PLEADS THAT THE FACTS HAVE NOT BEEN APPRECIATED REASONABLY AND THAT THE ADDITION O F RS.9037 MADE TO INCOME IS NOT JUSTIFIED. 2. BRIEFLY STATED, THE RELEVANT FACTS OF THE CASE A RE THAT THE ASSESSEE WAS SUBJECTED TO THE PROVISIONS OF SEC.132 OF THE INCOME TAX ACT, 1961 (THE ACT) AND THE BLOCK ASSESSMENT WAS CO MPLETED U/S 158BC OF THE ACT. A COUPLE OF ADDITIONS WHICH ARE S UBJECT MATTER OF APPEAL, WERE MADE IN THE ASSESSMENT AND THEY RELATE TO (I) THE 2 ADDITION ON ACCOUNT OF CASH AND (II) ON ACCOUNT OF JEWELLERY. AGGRIEVED BY THE SAME, THE ASSESSEE FILED APPEAL BEFORE THE F IRST APPELLATE AUTHORITY WHERE THE CIT(A) GRANTED PART RELIEF. ST ILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE ABOVE S AID GROUNDS. 3. AT THE VERY OUTSET, IN CONNECTION WITH GROUND NO 1, BOTH THE PARTIES REFERRED TO THE ADJUDICATION OF AN IDENTICA L ISSUE IN THE CASE OF D.B.NAGPAL WHERE THE MATTER TRAVELLED TO THE TRIBUN AL AND THE ISSUE WAS ADJUDICATED VIDE ITA NO.707/PN/003 DT.20-10-200 6. IT IS THE REQUEST OF THE PARTIES THAT THIS ISSUE MUST BE REFE RRED TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME IN THE LINE S OF THE DIRECTIONS OF THE TRIBUNAL IN THE CASE OF D.B. NAGPAL SUPRA. WE F EEL THAT THE REQUEST OF THE PARTIES BE CONSIDERED FAVOURABLY. ACCORDING LY, GROUNDNO.1 IS REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR A DJUDICATING THE ISSUE IN THE LIGHT OF THE OBSERVATIONS OF THE TRIBUNAL, AFTE R GRANTING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AS SESSEE IS DIRECTED TO FILE THE SAID ORDER OF THE TRIBUNAL BEFORE THE A SSESSING OFFICER FOR FACILITATING DISPOSAL OF THE CASE. AO IS DIRECTED T O EXCAMINE IF RS 4,35,460/- THE CASH FOUND DURING THE SEARCH ON 27.2 .1997 IS DECLARED AND ASSESSED IN THE HANDS OF BS NAGPAL-HUF AND IN T HAT CASE, IT CANNOT BE ASSESSED IN THE HANDS THE INSTANT CASE. F URTHER, HE SHALL EXAMINE IF THE IMPUGNED ADDITION OF RS 1.31 LAKHS I S WITHDRAWN FROM THE FIRM NATIONAL TEMPO HOUSE AND THE SAME INCOME I S ASSESSED U/S 158BC OF THE ACT IN THAT CASE. ACCORDINGLY, GROUND NO1 IS SET ASIDE 4. GROUND NO.2 RELATES TO SUSTENANCE OF AN ADDITION TO THE EXTENT OF 204.900 GMS OF JEWELLERY VALUED A RS.92,037. IN THI S REGARD, LD.COUNSEL FOR THE ASSESSEE ARGUED PREDOMINANTLY RE LYING ON THE JEWELLERY DISCLOSED TO THE DEPARTMENT BY WAY OF FIL ING OF THE WEALTH TAX RETURN IN THE CAPACITY OF THE HUF, WHEREIN ASSE SSEE DISCLOSURE IN HUF CAPACITY AMOUNTING TO 500 GMS OF JEWELLERY. T HE ASSESSEES COUNSEL HAS PLEADED THAT IF THE SET OFF IS GIVEN TO THE ABOVE 204.900 GMS TO THE SAID DISCLOSURE OF 500 GMS IN THE WEALT H TAX RETURN IN HUF CAPACITY, THERE SHALL NOT BE ANY ADDITION TO BE MAD E ON ACCOUNT OF JEWELLERY IN THIS CASE WHEREIN THE ASSESSEE IS AN I NDIVIDUAL. WITHOUT PREJUDICE TO THE ABOVE ARGUMENT, THE LD. COUNSEL ME NTIONED THAT WHILE DETERMINING THE ADDITION OF 204.900 GMS OF JEWELLER Y, THE REVENUE GRANTED THE SET OFF ONLY FOR 100 GMS TOWARDS PERSON AL JEWELLERY AND IT 3 IS ON LOWER SIDE. IN THIS REGARD, HE HAS MENTIONED THAT THERE IS NEED FOR ENHANCING THE SAME TO THE TUNE OF THE IMPUIGNED 204.900 GMS. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ARGUED S TATING THAT THE CIRCULAR OF THE BOARD PROVIDES FOR ONLY 100 GMS AND THE AO IS JUSTIFIED IN RESTRICTING TO THE SAME. REGARDING SET OFF OF THE JEWELLERY DISCLOSED IN THE WEALTH TAX RETURNS, THE LD.DR MENT IONED THAT THE ASSESSEE HAS TWO DISTINCT STATUS VIZ., INDIVIDUAL A ND HUF. THE JEWELLERY DISCLOSURE MADE IN THE WT RETURNS IN THE STATUS OF HUF IS NOT TO BE CONSIDERED IN THIS ASSESSMENT AS THE ASSESSMENTS OF THE ASSESSEE IN THE CAPACITY OF INDIVIDUAL AND HUF ARE DISTINCT AND DIFFERENT. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDE RS OF THE REVENUE AUTHORITIES AND FIND THAT THERE IS NO DISPU TE ON FACTS. BRIEFLY, THE ASSESSES COUNSEL HAS TWO CORE ARGUMENTS AND TH EY ARE (I) 204.900 GRAMS OF DISCREPANCY BECOMES EXPLAINED IF T HERE IS REASONABLE INCREASE ALLOWED BY THE AO ON ACCOUNT OF PERSONAL JEWELLERY BY LIBERALLY EXPLAINING THE BOARDS CIRCU LAR; AND (II) REQUEST FOR SET OF AGAINST THE 50GRAMS OF JEWELLERY DISCLOS ED IN THE WT RETURNS OF THE ASSESSEE IN HUF STATUS. 7. WITH REGARD TO THE ARGUMENT OF THE LEARNED DR ON THE ISSUE OF SET OFF OF THE JEWELLERY DISCLOSED IN THE HUF STATU S IN WT RETURNS, WE FIND THE SAME IS NOT TENABLE FOR THE REASON THAT TH E THESE TWO STATUS ARE LEGALLY DISTINCT AND SEPARATE PERSONS AS PER TH E PROVISIONS OF SECTION 2(31) OF THE ACT. HOWEVER, REGARDING THE PRAYER FOR GRANTING ADDITIONAL JEWELLERY OF 100 GRAMS IN ADDITION TO TH E ONE WHICH WAS ALREADY GRANTED BY THE REVENUE, WE HAVE PERUSED THE RELEVANT BOARDS GUIDELINES FOR THE SEIZURE PURPOSES AND THE CLAUSE (II) OF THE SAID GUIDELINES RESTRICTS IN CASE OF THE MALE MEMBER OF THE FAMILY SUCH AS THE PRESENT ASSESSEE TO ONLY 100 GRAMS. AO HAS NO DISCRETION ON THE MATTER. FURTHER, NOTHING ADDITIONAL INFORMATION IS BROUGHT TO OUR NOTICE BY THE ASSESSEE DURING THE PROCEEDINGS THAT THE ASS ESSEE GENERALLY WEARS THE JEWELLERY EXCEEDING THE LEVELS OF 100 GRA MS. THEREFORE, WE FIND THAT THAT ORDER OF THE CIT(A) DOES NOT CALL FO R ANY INTERFERENCE. ACCORDINGLY GROUND NO2 IS DISMISSED . 4 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 15-6-2011. SD/- SD/- ( I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 15-6-2011 *VNR C.C.TO: 1. SRI KRISHANLAL B.NAGPAL,M/S NATIONAL TEMPO HOUS E, 386, RASTA ETH, PUNE. 2. ACIT, CENTRAL CIRCLE 2(4), PUNE. 3. CIT(A) II, PUNE 4. CIT, PUNE 5. DR, ITAT, PUNE