Sh. Rajesh Gupta, New Delhi V. ACIT, Faridabad

ITA 5428/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91471 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 13-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 08-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KR CHOPRA
• Keywords: Gift; Opportunity of being heard; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - II , NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 5428 /DEL/201 4 ASSESSMENT YEAR : 2007 - 08 APPELLANT BY : SH. SOMIL AGARWAL, ADV RESPONDENT BY : SH. MANOJ KR. CHOP R A, SR. DR DATE OF HEARING : 13.07.2015 DATE OF PRONOUNCEMENT : 16 .07.2015 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 16.05.2014 OF LD.CIT(A) (CENTRAL), GURGAON PERTAINING TO THE ASSESSMENT YEAR 2007 - 08 ON THE FOLLOWING GROUND WHICH READS AS UNDER: - 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE C ASE, LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING THE ACTION OF THE LD. A.O. IN MAKING AN ADDITION OF RS. 2,52,0487 - ALLEGEDLY ON ACCOUNT OF UNEXPLAINED JEWELLERY. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ADD ITION OF RS. 2,52,048/ - IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. C1T (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN PASSING THE IMPU GNED ORDER WITHOUT GIVING ADEQUATE OPPORTUNITY OF BEING HEARD. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, ALTER OR AMEND THE GROUNDS OF APPEAL AT ANY STAGE AND ALL THE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. WE HAVE HEARD SH. SOMIL AGARWAL, LD ADVOCATE, ON BEHALF OF THE ASSESSEE AND MANOJ KR. CHOP R A, LD SR. DEPARTMENTAL REPRESENTATIVE ON BEHALF OF THE REVENUE. 3. THE SOLE ISSUE THAT ARISES FOR THE CONSIDERATION, IS AN ADDITION OF RS.2,52,048/ - ON ACCOUNT OF UNEXPLAINED JEWELLERY. RAJESH GUPTA, C/O RRA TAXINDIA, D - 28, SOUTH EXTENSION, PART - I VS. ACIT, CENTRAL CIRCLE - I, FARIDABAD (APPELLANT) (RESPONDENT) PAGE 2 OF 3 4. DURING THE COURSE OF SEARCH ON 16.01.2007 , JEWELLERY TO THE TUN E OF 1017 GMS VALUING RS.9.69 LAKHS WAS FOUND AND JEWELLERY TO THE TUNE OF 405 GMS WAS SEIZED. 5. THE CENTRAL BOARD OF DIRECT TAXS VIDE INSTRUCTION NO.1916 DATED 11.05.1994 LAID DOWN GUIDELINES RELATE TO EXEMPTIONS FROM SEIZURE OF JEWELLERY AND ORNAMENTS IN THE COURSE OF SEARCH. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RATANLAL VYAPARILAL JAIN (201 1 ) 339 ITR 0351 HELD AS FOLLOWS: - THE TRIBUNAL FOUND THAT THE JEWELLERY HELD BY THE AS SESSEE AND HIS FAMILY MEMBERS WAS WEL L , WITHIN THE LIMIT LAID DOWN UNDER THE CBDT CIRCULAR AND ACCORDINGLY, DELETED THE WHOLE ADDITION ON THE GROUND THAT THE JEWELLERY HELD BY EACH OF THE FAMILY MEMBERS WAS BELOW THE LIMITS SPECIFIED IN THE SAID CIRCULAR. THOUGH IT IS TRUE THAT THE CBDT INSTRUCTION NO. 1916, DT, 11 TH MAY, 1994 LAYS DOWN GUIDELINES FOR SEIZURE OF JEWELLERY AND ORNAMENTS IN THE COURSE 0) SEARCH, THE SAME TAKES INTO ACCOUNT THE QUANTITY OF JEWELLE RY WHICH WOULD GENERALLY BE HELD BY FAMILY M EMBERS OF AN ASSESSEE BELONGING TO AN ORDINARY HINDU HOUSEHOLD. THE APPROACH ADOPTED BY THE TRIBUNAL IN FOLLOWING THE SAID CIRCULAR AND GIVING BENEFIT TO THE ASSESSEE, EVEN FOR EXPLAINING THE SOURCE IN RESPECT OF THE JEWELLERY BEING HELD BY THE FAMILY IS I N . CONSONANCE WITH THE GENERAL PRACTICE IN HINDU FAMILIES WHEREBY JEWELLERY IS GIFTED BY THE RELATIVES AND FRIENDS AT THE TIME OF SOCIAL FUNCTIONS, VIZ., MARRIAGES, BIRTHDAYS, MARRIAGE, ANNIVERSARY AND OTHER FESTIVALS. THESE GIFTS ARE CUSTOMARY AND CUSTOMS PREVAILING IN A SOCIETY CANNOT BE IGNORED. THUS ALTHOUGH THE CIRCULAR HAD BEEN ISSUED FOR THE PURPOSE OF NON - SEIZURE OF JEWELLERY DURING THE COURSE OF SEARCH, THE BASIS FOR THE SAME RECOGNIZES CUSTOMS PREVAILING IN HINDU SOCIETY. IN THE CIRCUMSTANCES, UNL ESS THE REVENUE SHOWS ANYTHING TO THE CONTRARY, IT CAN SAFELY BE PRESUMED THAT THE SOURCE TO THE EXTENT OF THE JEWELLERY STATED IN THE CIRCULAR STANDS EXPLAINED. THUS, THE APPROACH ADOPTED BY THE TRIBUNAL IN CONSIDERING THE EXTENT OF JEWELLERY SPECIFIED UN DER THE SAID CIRCULAR TO BE OF REASONABLE QUANTITY, CANNOT BE FAULTED WITH. IN THE CIRCUMSTANCES, IT IS NOT POSSIBLE TO STATE THAT THE TRIBUNAL HAS COMMITTED ANY LEGAL ERROR SO AS TO GIVE RISE TO A QUESTION OF LAW. 6. IN THE CASE AT HAND AT PG. 2 OF THE A SSESSMENT ORDER , THE ASSESSING OFFICER RECORDED THE ARGUMENT OF THE ASSESSEE , AS TO THE QUANTUM OF JEWELLERY , THAT WOULD BE HELD AS REASONABLE BY THE FAMILY AS PER CBDT INSTRUCTION. THIS IS EXTRACTED AND FOR READY REFERENCE : - MR. RAJESH KUMAR GUPTA, BROTHER 50 YEARS 100 GMS MRS. ANJU GUPTA, BROTHER'S WIFE 47 YEARS 500 GMS MISS RUCHI GUPTA, BROTHER'S DAUGHTER 23YEARS 250 GMS MASTER VAIBHAV GUPTA BROTHER'S SON 20 YEARS 100 GMS TOTAL 950 GRAMS PAGE 3 OF 3 7. THE DIFFERENCE IN THIS CASE IS ABOU T 67 GRMS AS THE QUANTITY OF JEWELLERY FOUND WAS 1.017 GMS . KEEPING THE STATUS OF THE FAMILY AND THE FACT THAT SUBSTANTIAL AMOUNT OF CASH WAS FOUND, I AM OF THE CONSIDERED OPINION THAT EXCESS OF 67 GRMS IS NEGLIGIBLE AND NO ADDITION IS CALLED FOR UNDER THE HEAD UNEXPLAINED JEWELLERY . THUS I DELETE THIS ADDITION AND ALLOW THIS GROUND OF THE ASSESSEE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 6 T H JULY, 2015 . - S D / - ( J. SUDHAKAR REDDY ) ACCOUNTANT MEMBER DATED: 1 6 T H JULY, 2015 AKK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR