SHASHANK R. KARANI, MUMBAI V. ITO WD 14(2)(2), MUMBAI

ITA 5427/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8828 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 24-09-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 20-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHRIC G K NAIR
• Assessee Lawyers: ASHOK AGARWAL
• Keywords: Capital asset; Gift; Income from undisclosed sources; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL, JUDICIAL MEMBER A ND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.5427/MUM/2011 ASSESSMENT YEAR-2003-04 SHRI SHASHANK R. KARANI, C/O M/S. CASA BLANCA APPARELS, KISHORE BLDG., 521, KALBADEVI ROAD, MUMBAI-400 002 PAN-ADBPK 7133N VS. THE ITO, WARD 14(2)(2), EARNEST HOUSE, NARIMAN POINT, MUMBAI-400 021 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHOK AGARWAL RESPONDENT BY: SHRIC.G.K. NAIR DATE OF HEARING :24.09.2012 DATE OF PRONOUNCEMENT: 26.9.2012 O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)- XIV, MUMBAI DT. 4.3.2009 PERTAINING TO ASSESSMENT Y EAR 2003-04. 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE AS SESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE SALE OF JEWELLERY AS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF CAPITAL GAI N. THE ASSESSEE IS FURTHER AGGRIEVED BY THE FINDING OF THE LD. CIT(A) THAT IT HAS FAILED IN PROVING THAT THE AMOUNT CLAIMED AS CAPITAL GAIN IS ACTUAL LY OUT OF SALE OF JEWELLERY BEQUEATHED THROUGH THE WILL . 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT FO R THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN LONG TERM CAP ITAL GAIN ON SALE OF JEWELLERY AT RS. 8,01,200/-. DURING THE COURSE OF THE ASSESSMENT IT A NO. 5427/M/2011 2 PROCEEDINGS, THE ASSESSING OFFICER SOUGHT CLARIFICA TION FROM THE ASSESSEE TO FURNISH THE PROOF OF OWNERSHIP OF JEWELLERY SOLD WE IGHING 1722.650 GMS AMOUNTING TO RS. 8,01,200/-. THE ASSESSEE REPLIED THAT THE SAID JEWELLERY BELONGED TO ASSESSEES FATHER WHO HAS BEQUEATHED TH E SAID JEWELLERY TO THE SON OF THE ASSESSEE BY WAY OF A WILL. TO SUBSTANTIA TE HIS CLAIM, THE ASSESSEE FURNISHED COPY OF THE LAST WILL OF SHRI RU PCHAND KARANI FATHER OF THE ASSESSEE. AFTER GOING THROUGH THE CONTENTS OF THE SAID WILL, THE AO WAS OF THE OPINION THAT THE JEWELLERY BEQUEATHED BELONG S TO THE SON OF THE ASSESSEE AND NOT TO THE ASSESSEE. THE AO FURTHER O BSERVED THAT THE ASSESSEE FAILED TO PRODUCE ANY OTHER SUPPORTING DOCUMENTARY EVIDENCES PERTAINING TO QUANTITY AND DESCRIPTION OF JEWELLERY INHERITED AN D SOLD. THE AO SOUGHT CLARIFICATION FROM THE ASSESSEE TO WHICH THE AUTHOR IZED REPRESENTATIVE OF THE ASSESSEE STATED THAT THE JEWELLERY BELONGS TO THE M INOR SON OF THE ASSESSEE AND THEREFORE AS PER THE CLUBBING PROVISION ANY CAP ITAL GAIN ARISING OUT OF THE SALE OF THE SAID JEWELLERY SHOULD BE TAXED IN THE H ANDS OF THE ASSESSEE. THE SUBMISSIONS MADE BY THE ASSESSEE DID NOT FIND ANY FAVOUR FROM THE AO WHO WAS OF THE OPINION THAT MERE FILING OF COPY OF SALE BILL CANNOT BE TAKEN AS PROOF AND WENT ON TO TAX RS. 8,01,200/- UNDER THE H EAD INCOME FROM OTHER SOURCES BEING INCOME FROM UNDISCLOSED SOURCES AND COMPLETED THE ASSESSMENT. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REIT ERATED HIS STAND THAT THE SAID JEWELLERY WAS RECEIVED THROUGH THE WILL OF ASSESSEES FATHER AND THEREFORE THE SALE OF THE SAME SHOULD BE RIGHTLY TA XED UNDER THE HEAD CAPITAL GAIN. THE LD COUNSEL FURTHER SUBMITTED THAT WHAT THE ASSESSEE HAS SOLD IS A CAPITAL ASSET AS THE ASSESSEE IS NEITHER A DEALER N OR A TRADER IN JEWELLERIES. THE COUNSEL CONCLUDED THAT THE SALE IS SUPPORTED BY THE SALE BILL WHICH WAS BEFORE THE LOWER AUTHORITIES. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF LOWER AUTHORITIES. IT A NO. 5427/M/2011 3 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE ORDERS OF THE LOWER AUTHORITIES. LET US SEE THE RELEVANT P ORTION OF THE WILL WHICH IS REPRODUCED AS UNDER: I GIVE & BEQUEATH ALL MY GOLD ORNAMENTS & JEWELLER Y WHETHER STUDDED WITH DIAMOND STONES OR OTHERWISE TO MY GRAN DSON VIDUR KARANT (SON OF SHASHANK KARANI) FOR HIS MARRI AGE AS A GIFT FROM ME. TILL HIS MARRIAGE, HIS MOTHER FIROZA S. K ARANI AND FATHER SHASHANK KARANI WILL HOLD THE SAME AS TRUSTE ES BEING A GUARDIAN AS MOTHER AND FATHER. IF IN CASE ANYTHING HAPPENS TO MY GRANDSON VIDUR, THEN ONLY MY DAUGHTER IN LAW, FI ROZA S. KARANI & SON SHASHANK WILL BE ENTITLED FOR THE JEWE LLERY & NONE ELSE. 7. A PERUSAL OF THE AFORESAID PARAGRAPH CLEARLY SHO W THAT THE OWNERSHIP OF THE JEWELLERY VESTED WITH THE GRANDSON OF THE TE STATOR WHEREAS THE ASSESSEE AND HIS WIFE WERE MERELY TRUSTEES. IT HAS TO BE NOTED THAT NOWHERE THE TESTATOR HAS MENTIONED THE QUANTITY OF THE JEWE LLERY WHICH HE HAS BEQUEATHED TO HIS GRANDSON NOR THE ASSESSEE HAS PRO DUCED ANY SUPPORTING EVIDENCE TO ESTABLISH THE QUANTITY OF THE JEWELLERY BEQUEATHED. BEFORE US ALSO THE ASSESSEE HAS NOT BROUGHT ANY TANGIBLE MATE RIAL EVIDENCE ON RECORD TO SHOW THAT THE SALE OF JEWELLERY IS OUT OF THE JEWEL LERY RECEIVED BY HIS SON THROUGH THE WILL OF HIS FATHER. IN ABSENCE OF ANY T ANGIBLE MATERIAL TO ESTABLISH THE OWNERSHIP OF 1722.650 GMS OF JEWELLE RY, WE DO NOT FIND ANY REASON TO TINKER WITH THE FINDINGS OF THE LD. CIT(A ) WHICH WE CONFIRMED. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS DI SMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S DISMISSED. ORDER PRONOUNCED ON THIS 26 TH DAY OF SEPTEMBER, 2012 SD/- SD/- (DINESH KUMAR AGARWAL) (N.K. BILLAIYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 26 TH SEPTEMBER, 2012 RJ IT A NO. 5427/M/2011 4 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI