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

ITA 5429/DEL/2014

• Counselvise Citation: 542920114 RSA 2014
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly 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: Partly Allowed
• 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. 5429 /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 : 17 .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 CASE, 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 ADDITION 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 IMPUGNED 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 HE ARD SH. SOMIL AGARWAL, ADVOCATE, ON BEHALF OF THE ASSESSEE AND MANOJ KR. CHOP R A, SR. DEPARTMENTAL REPRESENTATIVE ON BEHALF OF THE REVENUE. RA K ESH GUPTA, C/O RRA TAXINDIA, D - 28, SOUTH EXTENSION, PART - I PAN:ADLPG4061B VS. ACIT, CENTRAL CIRCLE - I, FARIDABAD (APPELLANT) (RESPONDENT) PAGE 2 OF 4 3. THE SOLE ISSUE THAT ARISES FOR THE CONSIDERATION, IS AN ADDITION OF RS.2,52,048/ - ON ACCOUNT OF UNEXPLAINED JEWEL LERY. 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 RELAT ING 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 (2011) 339 ITR 0351 HELD AS FOLLOWS: - THE TRIBUNAL FOUND THAT THE JEWELL ERY HELD BY THE ASSESSEE 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 T HE SAID CIRCULAR. THOUGH IT IS TRUE THAT THE CBDT INSTRUCTION NO. 1916, DT, LLTH 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 H ELD BY FAMILY MEMBERS 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 CUSTOMA RY 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 CIRC UMSTANCES, UNLESS 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 JEWELLER Y SPECIFIED UNDER 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. THE QUANTITY OF JEWELLERY FOUND IN THE POSSESSION OF SHRI R.K. GUPTA AND HIS FAMILY MEMBERS IS 804 GMS AND WHEREAS IF THE GUIDELINES OF THE CBDT VIDE INSTRUCTION 1916 DATED 11.05.1994 A S APPLIED, THE JEWELLERY , THAT CAN BE HELD BY SHRI R. K. GUPTA AND HIS FAMILY MEMBERS ARE AS FOLLOWS: - PAGE 3 OF 4 NAME AGE JEWELLERY PERMITTED NOT BE SEIZED AS PER BOARDS CIRCULAR. MR. R.K. GUPTA 48 YEARS 100 GMS MRS. RENU GUPTA, WIFE (HOMEOPATHIC DOCTOR 46 YEARS 500 GMS MASTER RAHUL GUPTA, SON 21 YEARS 100 GMS MISS MEHAK GUPTA, DAUGHTER 17 YEARS 250 GMS TOTAL 950 GMS 7 . AS THE QUANTITY OF GOLD JEWELLERY IS LESS THAN THE QUANTITY ALLOWED IN THE GUIDELINES GIVEN IN CBDT INSTRUCTION AND ALSO KEEPING IN VIEW THAT STATUS OF THE FAMILY , THE ADDITION IN QUESTION IS NOT CALLED FOR . HENCE THE ADDITION IS DELETED. 8 . IN THE RESULT GROUND NOS.3 AND 4 OF THE ASSESSEE ARE ALLOWED. 9 . COMING TO GROUND NOS.1 AND 2 AN AMOUNT OF RS.35.35 LACS CASH WAS FOUND AND SEIZED. THE AO ON THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED ANY PROOF IN SUPPORT OF HIS CLAIM THAT THE AMOUNT OF RS.94,010/ - BELONGS TO HIS WIFE MRS. RENU GUPTA AND THAT AMOUNT OF RS.1,91,000/ - B ELONGS TO HIS BROTHER MR. RAJES H GUPTA AND M/S. RAJESH KUMAR GUPTA, HUF , MADE THIS ADDITIONS. BEFORE ME THE LD COUNSEL FOR THE ASSESSEE MR. SOMIL AGARWAL PRODUCED THE PANCHNAMA DRAWN AT THE TIME OF SEARCH WHICH DEMONSTRATES THAT CASH BAL ANCE OF RS.1,91,000/ - WAS RELEASED AND HANDED OVER TO MR. RAJESH KUMAR GUPTA . SIMILARLY ANOTHER PANCHNAMA IN THE CASE OF R.K. GUPTA RECORDS THAT CASH OF RS.94 , 010/ - HAS BEEN FOUND WITH SHRI R.K. GUPTA. ON THE FACE OF THE RECORDINGS IN THESE PANCHNAMA IT IS CLEAR THAT AN ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE , FOR THE AMOUNT FOUND WITH MR. RAJESH KUMAR GUPTA. THUS THIS AMOUNT OF R S.1,91,000/ - IS TO BE DELETED F R OM THE ADDITION MADE. AS FAR AS THE AMOUNT FOUND WITH THE ASSESSEE IS CONCERNED , THE ASSESSEES WIFE IS A DOCTOR AND THE ASSESSEE IS AN EMPLOYEE OF M/S VEE GEE INDUSTRIAL ENTERPRISES . HAVING CASH BALANCE OF RS.50,000/ - HAS BEEN HELD AS REASONABLE BY THE AO. WE DO NOT WISH TO INTERFERE WITH THIS ESTIMATE . THE BALANCE OF RS.44,010/ - IS TREATED AS UNEXPLAINED CASH AND THE ADDITION IS CONFIRMED TO THIS EXTENT . IN THE RESULT THIS APPEAL OF THE ASSESSEE IS ALLOWED IN PART. PAGE 4 OF 4 10 . IN THE RESULT THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JULY, 2015 . - SD/ - ( J. SUDHAKAR REDDY ) ACCOUNTANT MEMBER DATED: 17 TH JULY, 2015 AKK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR