Smt. Rita Kumari, New Delhi V. DCIT, New Delhi

ITA 5296/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6934 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 11-12-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 24-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHAND
• Keywords: Unexplained investment; Search and seizure; Salary income; Principle of natural justice
• Section: 153A; 234B; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F : NEW DELHI BEFORE SHRI N.K. SAINI, AM & SMT. BEENA A. PILLAI, JM ITA NO.5296/DEL/2013 ASSESSMENT YEAR : 2011-12 RITA KUMARI, C/O M/S RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI. PAN: AAIPK4790M VS. DCIT, CENTRAL CIRCLE-4, NEW DELHI. ITA NO. 5369 /DEL/201 3 ASSESSMENT YEAR : 2011-12 DCIT, CENTRAL CIRCLE-4, NEW DELHI. VS. RITA KUMARI, E-1A (E-13), MAHARANI BAGH, NEW DELHI. PAN: AAIPK4790M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI, CA DEPARTMENT BY : S HRI RAMESH CHAND, CIT, DR DATE OF HEARING : 11.12 . 2015 DATE OF PRONOUNCEMENT : 12.02.2016 ORDER PER BEENA A. PILLAI, JM: THESE CROSS APPEALS HAVE BEEN FILED BY THE ASSESSEE AS WELL AS THE REVENUE AGAINST THE ORDER PASSED BY THE CIT(A)- HALDWANI VIDE ITA NOS.5296 & 5369/DEL/2013 2 ORDER DATED 11.6.2013 IN RELATION TO THE ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUNDS OF APPEAL:- ASSESSEES GROUNDS OF APPEAL ITA NO. 5269/D/13 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN CONFIRMING THE ACTION OF LD. AO IN MAKING DISALLOWA NCE OF RS.6,13,725/- CLAIMED BY THE ASSESSEE, MORE SO WHEN SUCH DISALLOWANCE COULD NOT HAVE BEEN MADE IN THE PROCEEDINGS U/S 153A OF THE ACT. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN NOT DELETING THE DISALLOWAN CE OF RS.6,13,725/- MADE BY LD. AO IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN NOT DELETING THE ADDITION OF RS.3,32,04,460/- FULLY AS MADE BY LD.AO ON ACCOUNT OF ALLEGED UNEXPLAINED JEWELLERY ULS 69A AND HAS FURTHER ERRED IN SUSTAINI NG THE ADDITION TO THE EXTENT OF RS.33,20,446/- (I.E. 10% OF RS.3,32,04.460/- ) ON ACCOUNT OF REMAKING CHARGES AND THAT TOO WITHOUT CONSIDERING THE SUBMISSION/EVIDENCES OF THE ASSESSEE. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN NOT REVERSING THE ACTION OF LD. AO IN FRAMING THE IMPUGNED ASSESSMENT ORDER U/S 153A/143(3) WITHOUT ASSUMING JURISDICTION AS PER LAW AND WITHOUT OBTAIN ING REQUISITE APPROVAL AS PER LAW AND WITHOUT COMPLYING WITH THE OTHER MANDATORY CONDITION ENVISAGED UNDER THE ACT, MORE SO WHEN NO INCRIMINATING MATERIAL HAV E BEEN FOUND AS A RESULT OF SEARCH. ITA NOS.5296 & 5369/DEL/2013 3 5. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, IMPUGNED ADDITION AND IMPUGNED ASSESSMENT ORDER ARE BAD IN LAW, ILLEGAL, UNJUSTIFIED, BARRED BY LIM ITATION, CONTRARY TO FACTS & LAW AND BASED UPON RECORDING OF INCORRECT FACTS AND FINDING, WITHOUT GIVING ADEQUAT E OPPORTUNITY OF HEARING, IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND THE SAME DESERVES TO BE QUASHED . 6. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD . AO IN FRAMING THE IMPUGNED ASSESSMENT ORDER IS CONTRAR Y TO LAW AND FACTS, VOID AB INITIO, BEYOND JURISDICTI ON AND THE SAME IS NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUAL GROUNDS. 7. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, NO ADDITION COULD HAVE BEEN MADE IN THE PRESENT APPEAL BECAUSE NO INCRIMINATING MATERIAL HAS BEEN FOUND AS A RESULT OF SEARCH. 8. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN NOT REVERSING THE ACTION OF LD. AO IN CHARGING INTE REST 234B OF THE INCOME TAX ACT, 1961. 9. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODI FY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHO UT PREJUDICE TO EACH OTHER. REVENUES GROUNDS OF APPEAL ITA NO. 5369/D/13 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT (A) HAS ERRED IN RESTRICTING THE ADDITION O F RS. 3,32,04,460/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT TO RS. 33,20,446/- AND DIRECTING THE AO TO DELETE 90% OF THE INVESTMENT MA DE BY THE ASSESSEE WHEN IT WAS CLEARLY ESTABLISHED THA T THE ASSESSEE COULD NOT SUBSTANTIATE THE SOURCE OF INVESTMENT. ITA NOS.5296 & 5369/DEL/2013 4 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT (A) HAS ERRED IN NOT APPRECIATING THE EVIDE NCE GATHERED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION WHICH VERY CLEARLY POINTED OUT THAT INVESTMENT IN JEWELLERY WAS FROM UNDISCLOSED SOURCE . 3. THE ORDER OF THE CIT (A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING T HE COURSE OF THE HEARING OF THE APPEAL. 2. THE FACTS IN BRIEF ARE THAT A SEARCH AND SEIZURE OP ERATION U/S 132 OF THE ACT WAS CARRIED OUT IN DS GROUP CASES. THE ASSESSEE HAD FILED HER RETURN OF INCOME ON 14.9.2011 FOR THE YEAR UNDER CONSIDERATION DECLARING TOTAL TAXABLE INCOME OF RS. 66,69,100/-. DURING THE ASSESSMENT PROCEEDINGS, THE LD. AO MADE THE FOLLOWING ADDITIONS:- (I) SALARY INCOME RS.6,13,725/- (II) UNEXPLAINED INVESTMENT IN JEWELLERY U/S 69A 3,32,04,460/-. 3. AGGRIEVED BY THE ORDER OF THE LD. AO, THE ASSESSEE WENT IN APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) RECORDE D THAT AS THE JEWELLARY SEIZED WAS LESS THAN THE JEWELLARY DECLAR ED BY THE ASSESSEE IN HER WEALTH TAX RETURNS, IT CANNOT BE HELD THAT T HE ASSESSEE HAS ITA NOS.5296 & 5369/DEL/2013 5 MADE UNEXPLAINED INVESTMENTS. HOWEVER LD.CIT(A) CON FIRMED THE ADDITIONS MADE BY THE LD. AO ON THE GROUND THAT IN THE PROCESS OF REMAKING, ASSESSEE MUST HAVE SPENT MONEY WHICH COUL D BE UNACCOUNTED FOR. 4. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US NOW. 5. THE LD. AR IN RESPECT OF GROUND NOS.1 AND 2 OF THE ASSESSEES APPEAL SUBMITTED THAT, AS THE ISSUE HAS BEEN SET AS IDE BY THE LD.CIT(A) TO THE LD. AO FOR VERIFICATION WITH CERTA IN DIRECTIONS, THE SAME ARE NOT BE PRESSED BEFORE US. ACCORDINGLY, WE ARE NOT INCLINED TO ADJUDICATE THESE GROUNDS. 6. WE SHALL FIRST TAKE UP THE APPEAL FILED BY THE ASSE SSEE IN; ITA NO.5296/DEL/2013 . 6.1. GROUND NO.3 OF THE ASSESSEES APPEAL RELATES TO THE ADDITION MADE BY THE AO IN RESPECT OF UNEXPLAINED INVESTMENT S IN JEWELLERY AMOUNTING TO RS.3,32,04,460/-. 6.2. THE LD. AR SUBMITTED THAT THE ADDITION HAS BEEN MAD E BY THE LD. AO ON THE BASIS THAT THE TOTAL JEWELLERY FOUND AT THE TIME OF SEARCH WAS RS.6,65,43,710/-, OUT OF WHICH JEWELLERY FOR RS.3,33,39,250/- REMAINED UNEXPLAINED. THE LD. AR S UBMITTED THAT ITA NOS.5296 & 5369/DEL/2013 6 THE TOTAL JEWELLERY BELONGED TO THE ASSESSEE, HER H USBAND AND THEIR DAUGHTER-IN-LAW, WHICH HAS BEEN EXPLAINED AT PAPER BOOK PAGE 44 TO 47. THE LD. AR FURTHER SUBMITTED THAT THESE ARE ACCOUNTED FOR AND THE ASSESSEE HER HUSBAND AND THEIR DAUGHTER-IN- LAW HAS FILED WEALTH-TAX RETURN WHICH IS ALSO PLACED AT PAGE 48-6 4, 65-71, 72-79, 80 AND 81-86. ON PERUSAL OF THESE WEALTH-TAX RETUR NS, AN AMOUNT OF RS.7,73,97,015/- HAS BEEN SHOWN AS THE TOTAL VAL UE OF JEWELLERY POSSESSED BY THE ASSESSEE, HER HUSBAND AND THEIR DA UGHTER-IN-LAW. 6.3. THE LD. AR SUBMITTED THAT THE TOTAL JEWELLERY DISCL OSED IN THE WEALTH-TAX RETURN BY THE THREE INDIVIDUALS ARE MUCH MORE THAN THE JEWELLERY SEIZED BY THE AO. THE LD. AR SUBMITTED T HAT THERE WAS NO JUSTIFICATION FOR HOLDING ANY JEWELLERY AS UNEXPLAI NED. 7. ON THE CONTRARY, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE PERUSED THE SUBMISSIONS AND THE WEALTH-TAX RETURNS FILED BY THE ASSESSEE IN THE PAPER BOOK PLACED BEFO RE US. THE ADDITION IN DISPUTE HAS BEEN MADE ON ACCOUNT OF VAR IATION IN DESCRIPTION OF JEWELLERY DISCLOSED IN THE REPORTS F ILED WITH THE REVENUE AUTHORITIES. ITA NOS.5296 & 5369/DEL/2013 7 8.1. IT IS OBSERVED THAT THE LD. AO HAS MADE THE ADDITIO N WITHOUT CONSIDERING THE LATEST REPORT. IN OUR VIEW, THE AS SESSEE IS ENTITLED TO THE BENEFIT OF WEIGHT OF JEWELLERY DISCLOSED IN THE RETURN, AS IT IS A WELL KNOWN FACT THAT INDIAN LADIES KEEP CHANGING TH E DESIGN OF JEWELLERY FROM TIME TO TIME. SIMPLY BECAUSE THE AS SESSEE COULD NOT LEAD ANY EVIDENCE FOR CONVERSION OR REMAKING OF THE JEWELLERY, THE POSSESSION OF WHICH WAS OTHERWISE ACCEPTED, IT COUL D NOT BE SAID THAT HOLDING OF THE JEWELLERY TO THAT EXTENT COULD NOT BE ACCEPTED. 8.2. IT IS FURTHER SUBMITTED THAT THE ASSESSEE HER HUSBA ND AND THEIR DAUGHTER-IN-LAW HAVE BEEN POSSESSING JEWELLAR Y IN THE PRECEDING AND SUBSEQUENT YEARS AND HAVE BEEN ALWAYS ASSESSED TO WEALTH TAX. THE FACT REMAINS THAT THE JEWELLARY FOU ND WAS MUCH LESS THAN THE JEWELLARY DISCLOSED IN THE WEALTH TAX RETU RNS ACCEPTED BY THE DEPARTMENT AND HENCE NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. IN THE PRESENT CASE, THE LD. CIT(A) S USTAINED THE ADDITION ON ACCOUNT OF MAKING CHARGES OF THE JEWELL ARY WITHOUT BRINGING ANY COGENT MATERIAL ON RECORD. THE LD. CI T(A) PRESUMED THAT ALL THE JEWELLARY WAS REMADE AND SUSTAINED THE ADDITION TO THE EXTENT OF 10% OF THE VALUE OF JEWELLARY WITHOUT ANY BASIS WHICH IN OUR OPINION IS NOT SUSTAINABLE. EVEN OTHERWISE, AD DITION MADE ON ITA NOS.5296 & 5369/DEL/2013 8 THE BASIS OF SUSPICION ALONE IS NOT SUSTAINABLE. SU SPICION HOWEVER STRONG IT MAY BE, CANNOT TAKE PLACE OF EVIDENCE THI S GROUND OF APPEAL, THEREFORE, STANDS ALLOWED. 9. GROUND NOS.4 TO 7 ARE ON THE VALIDITY OF THE JURISDICTION OF THE SEARCH ACTION WHICH HAS BEEN CONDUCTED BY THE LD. A O WITHOUT PROPER REQUISITE APPROVAL. AS THESE GROUNDS HAVE N OT BEEN ARGUED BEFORE US, WE ARE NOT INCLINED TO ADJUDICATE THE SA ME. 10. THE APPEAL, THEREFORE, STANDS PARTLY ALLOWED. 11. NOW, WE TAKE UP THE APPEAL FILED BY THE REVENUE; ITA NO. 5369/D/13 THE ISSUE RAISED BY THE REVENUE IS IN RELATION TO THE DELETION OF THE ADDITION MADE BY THE LD.AO, TO AN EXTENT OF 90% ON ACCOUNT OF UNEXPLAINED INVESTMENTS IN JEWELLERY. 8.3. WE HAVE DEALT WITH THIS ISSUE AT LENGTH IN THE ASSE SSEES APPEAL. WE ARE, THEREFORE, OF THE CONSIDERED OPINIO N THAT THE JEWELLERY FOUND BY THE ASSESSEE STANDS FULLY EXPLAI NED AND NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE F OR UNDISCLOSED INVESTMENT IN JEWELLERY. WE ACCORDINGLY HOLD THAT THERE CANNOT BE ANY ADDITION IN RESPECT OF THE JEWELLERY U/S 69A OF THE ACT. ITA NOS.5296 & 5369/DEL/2013 9 8.4. THE GROUND RAISED BY THE REVENUE IN THEIR APPEAL ST ANDS DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STAN DS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.2.2016 . SD/- SD/- [ N.K. SAINI ] [ BEENA A. PILLAI ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12.02.2016 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI. ITA NOS.5296 & 5369/DEL/2013 10 DATE 1. DRAFT DICTATED ON 2 8 .12. 20 15 2. DRAFT PLACED BEFORE THE AUTHOR 30 .12. 2015 3. DRAFT PLACED BEFORE THE OTHER MEMBER 4. APPROVED DRAFT COMES TO THE SR.PS/PS 12.2.16 5. FILE SENT TO THE BENCH CLERK 12.2.16 6. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 7. DATE ON WHICH FILE GOES TO THE AR 8. DATE OF DISPATCH OF ORDER.